New homes, highways boost flood risk on Turkey’s northern coast

A residential area partially submerged by floodwaters in the province of Giresun in northern Turkey, where seven people died and others remain missing. (AFP)
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Updated 16 September 2020
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New homes, highways boost flood risk on Turkey’s northern coast

  • Cheap building on streambeds and lowlands sees devastation along Black Sea

ISTANBUL: When Mahmut Talic left his small hardware shop one summer evening, its displays of tools, insulation supplies and window frames were all neatly in their places.

One hour later, floodwaters rampaged through the shop in the town of Dereli, near Turkey’s Black Sea coast, smashing the storefront, filling it with mud and sweeping its contents into the street.

“Everything is gone,” Talic, 28, told the Thomson Reuters Foundation. “I couldn’t get back to the shop that night because the rain was so heavy. But it’s a good thing I didn’t, or I’d be dead now.”

At least 11 people were killed when heavy rain, followed by flash floods and landslides, hit the province of Giresun last month.

Environmentalists and engineers have warned for years about poor urban development in the Black Sea’s coastal cities and the thickly forested mountains that rise up steeply behind them.

Combined with the effects of climate change, they say, this has left the rain-prone region with its population of more than 7 million highly vulnerable to floods.

Four people are still missing after the storm in Dereli, which wrecked dozens of roads and hundreds of buildings.

“This is the first time I’ve seen such a flood,” Turkish Agriculture and Forestry Minister Bekir Pakdemirli said while visiting the area after the disaster.

Just a month earlier, six people had died in two days of storms further east in Rize and Artvin.

“These kinds of disasters cannot occur because of one mistake,” said Mikdat Kadioglu, a meteorological engineer and disaster management expert at Istanbul Technical University.

“All the activities that destroy the area’s natural structure play a role.”

When Kadioglu was growing up in Macka, a mountain town in the Black Sea province of Trabzon, “the older people would tell the younger ones where to build their houses, the places where they would be safe from landslides or floods,” he recalled. “But, once the government began constructing roads through the streambeds, where it was cheaper and easier to build, people started putting their houses there too.” 

The Black Sea region began changing rapidly in the 1980s, a period of economic liberalization in Turkey. State subsidies were eliminated for agriculture and livestock husbandry, encouraging migration to lowland urban centers.

In 1987, construction began on a new 540 kilometer (336 mile) coastal highway from the city of Samsun to the border with Georgia.

Completed two decades later, it cut off access to the sea and facilitated more development along the coast as well as on the streambeds leading up into the mountains.




Turkish Interior Minister Suleyman Soylu inspects the damage after flash floods in Dereli. (Reuters)

“Apartment buildings have been built in the yaylalar (upland mountain plateaus), with highways built up to them, covering the river valleys with asphalt and cement,” said Onder Algedik, a mechanical engineer and independent climate consultant.

While visiting Dereli after the floods in August, Forestry Minister Pakdemirli asserted that the government has “always said that we need to avoid building houses on streambeds.”

But Algedik said in a phone interview that “if people are still constructing buildings in the streambeds, that means there is no regulation, no monitoring, no effective government policy.”

One zoning amnesty for illegal construction announced prior to the country’s 2018 general election drew more than 10 million applications nationwide, according to government data.

“We are seeing much bigger storms because of climate change, and worse floods because all the asphalt and cement prevents water from being absorbed into the soil,” said Algedik.

According to a report by environmental group 350 Ankara, Turkey experienced 328 flood disasters in 2018, a sharp rise from 25 in 2000. During that same period, the amount of asphalt and concrete poured each year nationwide more than doubled.

Recent deluges in Turkey’s two largest cities, Istanbul and Ankara, have created surreal scenes over the past few years of water-logged subways, floating cars and people swimming across the street.

In the Black Sea region, environmental experts say the risks are compounded by the mountainous topography and the hundreds of dams and hydropower stations, quarries, mines and roads built there.

A project to connect the region’s ecologically fragile highlands with a 2,600-km (4,184-mile) highway has continued to move forward despite court rulings against it on environmental grounds, activists and local officials say.

Environmentalists have spoken out against the highway, saying such projects cause deforestation and soil erosion, contributing to the destructiveness of floods and landslides.

Trees help to soak up rainwater, shield the land from heavy rainfall and hold soil in place, they note.

Government officials, including President Recep Tayyip Erdogan, have promised to help Dereli and other affected communities rebuild in a more sustainable way.

A week after the floods, the government announced it would relocate homes and businesses away from the streambed. It also pledged to build 250 houses in a traditional regional style incorporating high stone foundations as part of a province-wide recovery and redevelopment effort that also includes cash grants to residents.

“Thanks to our president, the state has said it will support us. If it doesn’t, I will have to close my business,” said Talic, who estimates that the shop he opened just six months ago has sustained up to $13,500 in damages.

But the country needs to start thinking longer term if it wants to protect its people from flooding in the future, said Kadioglu, the disaster management expert.

“Turkey is very good at response and recovery, but we need to shift from crisis management to risk management,” he said. “We can’t just clean up and keep going as if nothing happened.”


More than two-thirds of UAE retail investors hold stocks in AI companies: eToro survey

Updated 49 sec ago
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More than two-thirds of UAE retail investors hold stocks in AI companies: eToro survey

RIYADH: More than 70 percent of retail investors in the UAE have stocks of companies developing artificial intelligence, according to a survey by trading platform eToro.

The 71 percent mark underscores a widespread understanding of AI’s potential as a catalyst for innovation and a source of competitive edge.

UAE retail investors’ interest in AI goes beyond holding stocks. When asked about their use or plans to use AI tools like ChatGPT to guide investment decisions, 39 percent reported that they already employ these technologies.

Global Markets Strategist at eToro, Ben Laidler, said: “Microsoft’s recent $1.5 billion investment in Abu Dhabi’s G42 is a big endorsement of the UAE’s potential as a global AI hub, which is reflected in the survey results showing widespread AI adoption by local investors and consumers.”

Millennials lead the charge when it comes to generational users, with 40 percent of those aged 25-44 using AI tools.

Baby Boomers and Gen X investors follow closely, with 39 percent and 38 percent, respectively.

Underlining the critical role that artificial intelligence might play in future investment strategies, an additional 52 percent of respondents, beyond those already using AI tools, said they are willing to adopt the technology to guide or adjust their portfolios in the future.

This trend defies generational stereotypes, with the older cohorts of investors directing the charge.

Baby Boomers lead in interest in integrating AI into investment planning, with 60 percent showing enthusiasm, followed by Gen X at 58 percent.

Laidler said: “AI stocks were the performance juggernauts of 2023, leading the tech sector revival and propelling the S&P 500 into bull market territory. AI trends helped make NVIDIA and Meta the best S&P 500 stock performers of last year, with their share prices tripling.”

He added: “Whilst we’re unlikely to see a repeat performance in 2024, the benefits of AI’s rapid adoption are broadening across the stock market and economy as it rapidly moves from hype to reality.”

Furthermore, eToro analyzed which companies experienced the highest proportional increase in UAE-based investors on its platform from quarter to quarter, revealing that AI stocks were the most popular theme during the first three months of the year.


Omani officials forge economic alliances with Saudi Arabia, Japan, and US

Updated 25 April 2024
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Omani officials forge economic alliances with Saudi Arabia, Japan, and US

RIYADH: Oman’s industrial infrastructure is set to receive a boost following a new agreement with Saudi Arabia, fostering private sector participation in the country’s economic growth. 

A memorandum of understanding, aimed at financing the infrastructure of several industrial zones in Oman, was signed during a meeting between Minister of Finance Sultan bin Salem Al-Habsi and Sultan Abdulrahman Al-Marshad, CEO of the Saudi Fund for Development, the Oman News Agency reported. 

Discussions centered on cooperation mechanisms between Oman and the fund, along with updates on collaborative development projects. 

The aim is to develop the industrial and logistical sectors by providing all necessary basic services, thereby encouraging the private sector to contribute to Oman’s economic development in line with Oman Vision 2040, as reported by the agency. 

This memorandum falls within the framework of cooperation between the two parties to support developmental areas in Oman. These encompass infrastructure, higher and vocational education programs, and water, along with the industry and mining sectors. Additionally, it includes transportation and communications sectors, as well as developmental projects in the energy sector. 

On another note, Ali bin Masoud Al-Sunaidi, chairman of the Public Authority for Special Economic Zones and Free Zones, met with Ken Saito, minister of economy, trade and industry of Japan, and his accompanying delegation in Tokyo. 

During the meeting, they reviewed the business cooperation between the two countries and the major projects under construction in the economic and free zones and industrial cities in Oman, notably the low-carbon iron production project in the Special Economic Zone in Duqm. 

The visit also included meetings with officials from companies engaged in iron and its derivatives production, and renewable energy equipment manufacturing companies, as well as a visit to Yokohama Port to learn about its experience in receiving ships specialized in energy and petroleum product transportation. 

Also on April 24, Oman and the US explored ways to enhance trade, investment, and address challenges comprehensively during the second strategic dialogue held in Washington. 

The Omani side was chaired by Sheikh Khalifa bin Ali bin Issa al-Harthy, undersecretary for Diplomatic Affairs, Ministry of Foreign Affairs, while the US side was chaired by Jose Fernandez, undersecretary of state for Economic Growth, Energy, and the Environment.

Both sides discussed opportunities for American companies in Oman, focusing on ICT, semiconductors, and clean energy services, expressing commitment to enhancing cooperation in clean energy solutions and mineral investments.  

They addressed environmental priorities under the Omani-American cooperation memorandum, fostering communication between researchers from both countries for clean energy research. 


Saudi NHC, Spain’s Urbas to construct almost 600 housing units in Al-Fursan suburb 

Updated 25 April 2024
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Saudi NHC, Spain’s Urbas to construct almost 600 housing units in Al-Fursan suburb 

RIYADH: Saudi Arabia’s Al-Fursan suburb will soon be home to 589 new residential units worth around SR1 billion ($266 million) thanks to a deal sealed by the National Housing Co.

Inked with Urbas Middle East Real Estate Co., a subsidiary of the Spanish Urbas Group, the agreement involves the development as well as construction of the housing units on an area spanning 150,000 sq. m, the Saudi Press Agency reported. 

This collaboration marks a significant milestone in the development of the Al-Fursan suburb. It also promises to set new standards in property development. 

“This agreement complements the efforts of the recent visit to Spain and continues to attract international investments with major companies to provide various housing products that fulfill and meet the desires of citizens,” Saudi Minister of Municipal and Rural Affairs and Housing Majid Al-Hogail said in a post on X.

“As an extension of our journey in attracting the best international experiences and expertise in the real estate development industry, I was pleased to meet the CEO of the Spanish company Urbas, which is planned to be one of the companies developing the Al-Fursan neighborhood project in Riyadh,” Al-Hogail added. 

The minister also highlighted how this step will contribute to providing innovative housing options and facilitate the exchange of experiences between Saudi and international developers.


IMF surcharges on borrowings exacerbate global inequities: report 

Updated 25 April 2024
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IMF surcharges on borrowings exacerbate global inequities: report 

BENGALURU: Countries, mostly middle and lower-income, have been burdened by surcharges on top of interest payments on their borrowings from the International Monetary Fund, widening global inequities, according to a report by US think tanks. 

WHY IT’S IMPORTANT 

Indebted member countries paid about $6.4 billion in surcharges between 2020-2023, the report from Boston University’s Global Development Policy Center and Columbia University’s Initiative for Policy Dialogue released on Tuesday showed. 

And the number of countries paying these surcharges has more than doubled in the last four years. 

The IMF is expected to charge an estimated $9.8 billion in surcharges in the next five years, according to an earlier report by the Center for Economic and Policy Research. 

Critics of the policy argue that surcharges do not hasten repayment and instead punish countries already struggling with liquidity constraints, increase the risk of debt distress and divert scarce resources that could be used to boost the struggling economies. 

BY THE NUMBERS 

Countries such as Ukraine, Egypt, Argentina, Barbados and Pakistan pay the most in surcharges, the report showed, accounting for 90 percent of the IMF’s surcharge revenues. 

These surcharges, levied on top of the fund’s increasingly steeper basic rate, are IMF’s single largest source of revenue, accounting for 50 percent of total revenue in 2023. 

KEY QUOTES 

“IMF surcharges are inherently pro-cyclical as they increase debt service payments when a borrowing country is most need of emergency financing," Global Development Policy Center’s Director Kevin Gallagher said. 

“Increasing surcharges and global shocks are compounding the economic pressure on vulnerable countries.” 

CONTEXT 

Data published by the Institute of International Finance earlier this year showed global debt levels hit a record of $313 trillion in 2023, while the debt-to-GDP ratio — a reading indicating a country’s ability to pay back debts — across emerging economies also scaled fresh peaks. 

IMF shareholders agreed last week on the importance of addressing challenges faced by low-income countries, Managing Director Kristalina Georgieva said on Friday.


China’s wealth fund joins with Bahrain’s Investcorp for $1bn Middle East investment

Updated 25 April 2024
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China’s wealth fund joins with Bahrain’s Investcorp for $1bn Middle East investment

RIYADH: China’s growing interest in the Middle East continues as the country’s sovereign wealth fund partnered with Bahrain’s Investcorp to establish a $1 billion investment pot. 

According to a press statement, Investcorp Golden Horizon fund will assist companies across Saudi Arabia, the wider Gulf Cooperation Council region and China. 

The reserve will be anchored by reputable institutional and private investors from the GCC, as well as China Investment Corp. 

The press statement revealed that target companies are expected to have high growth potential in sectors including consumer, health care, logistics and business services.

“During the past couple of years, we have built several bilateral funds with leading financial institutions to facilitate industrial cooperation between China and major economies in the world,” said Bin Qi, executive vice president and chief information officer at CIC. 

He added: “Currently, we are working closely with Investcorp to build a similar bilateral fund to strengthen financial and industrial ties between China and GCC countries.” 

This commitment from CIC comes when the GCC’s appeal to institutional investors is gathering pace, thanks to its stable regulatory environment and pro-business policies, driven by economic diversification efforts in the region and strategic privatization mandates. 

“This commitment by CIC, one of the world’s largest sovereign wealth funds, is a testament to Investcorp’s unparalleled franchise in the GCC and reinforces the trust placed in the firm’s global platform and teams. We are looking forward to building on this relationship and growing our partnership in the future,” said Mohammed Al-Ardhi, executive chairman of Investcorp. 

Co-CEO of Investcorp Hazem Ben-Gacem said the launch of the new fund will facilitate cross-border cooperation and investments between the GCC and China. 

Trade and economic relationships between the Middle East and China have always been strong. 

In 2023, China’s exports to Saudi Arabia and the UAE amounted to $42.86 billion and $55.68 billion respectively. 

On the other hand, the Asian giant’s imports from Saudi Arabia totaled $64.36 billion in 2023. 

In November, Saudi Arabia’s central bank, also known as SAMA, and the People’s Bank of China signed a local currency swap agreement worth $6.93 billion. 

SAMA, in a statement, said that the three-year agreement “has been established in the context of financial cooperation between the Saudi Central Bank and the People’s Bank of China.”

The Asian country’s central bank said that the agreement will help strengthen financial cooperation between Saudi Arabia and China, promote the use of local currencies, and strengthen trade and investments between nations.