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

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

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

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.”

Qatar sovereign fund discloses 4.69% stake in Gates-backed battery startup Quantumscape

Qatar sovereign fund discloses 4.69% stake in Gates-backed battery startup Quantumscape
Updated 30 min 49 sec ago

Qatar sovereign fund discloses 4.69% stake in Gates-backed battery startup Quantumscape

Qatar sovereign fund discloses 4.69% stake in Gates-backed battery startup Quantumscape
  • Size of stake down from 6.5% in November after shares diluted
  • Quantumscape backed by Bill Gates and Volkswagen

DUBAI: Sovereign wealth fund Qatar Investment Authority (QIA) holds a 4.69 percent stake in Quantumscape Corp, which is developing batteries for electric cars, a Securities and Exchange Commission filing by the company showed.
QIA was an early investor in the company before its IPO and had a stake of 6.5 percent as of November last year, based on a previous filing.
However the new filing does not show any change in the number of shares it owns, but a dilution in its stake due to an increase in the number of shares outstanding. QIA’s stake in Quantumscape is worth around $446 million at the company’s current market value of $9.5 billion, according to Refinitiv Eikon data on Monday.
Quantumscape was listed last year after a merger with a special purpose acquisition company (SPAC).
Shares of Quantumscape are down over 70 percent year-to-date. It closed up 0.7 percent at $23.08 on Monday.
Volkswagen AG is the company’s biggest shareholder with a 26 percent stake.
San Jose-based Quantumscape is a 2010 spin-out from Stanford University whose early investors included Bill Gates-backed venture funds. It formed a joint venture with VW to produce solid-state battery cells, starting in 2024, for VW’s electric vehicles, and eventually for other carmakers.
Gulf sovereign funds have stepped up investments in electric cars, new technologies and renewables, as they diversify their investments away from fossil fuel.
The Public Investment Fund, the sovereign wealth fund of neighboring Saudi Arabia, recently made huge gains through the listing of Lucid Group after it initially invested in the company in 2018. PIF owns 62.7 percent of Lucid.

Emirati-Swiss consortium creates MENA remittance giant with Bahrain acquisition

Emirati-Swiss consortium creates MENA remittance giant with Bahrain acquisition
Updated 03 August 2021

Emirati-Swiss consortium creates MENA remittance giant with Bahrain acquisition

Emirati-Swiss consortium creates MENA remittance giant with Bahrain acquisition
  • Prism Group and Royal Strategic Partners to acquire BFC Group Holding
  • BFC to be merged with Finablr and rebranded WizzFinancial

DUBAI: An Emirati-Swiss consortium is acquiring Bahrain’s BFC Group Holding, which owns the Gulf country’s largest money transfer and exchange company.

Switzerland’s Prism Group AG and Abu Dhabi’s Royal Strategic Partners have signed a deal to acquire BFC and its subsidiaries – BFC Bahrain, BEC Exchange (Kuwait), BFC Payments and BFC Forex and Financial Services (India).

BFC will be merged with WizzFinancial, formerly Finablr, the Abu Dhabi-based payments company acquired by the same consortium in December.

The deal creates one of the largest remittance and currency exchange groups in the Middle East and North Africa region, home to millions of migrants who regularly sending money home and vice versa.

“The acquisition creates a regional powerhouse with licenses to operate in over 30 countries,” the consortium said in a press statement.

The move comes amid a period of intense change for the financial sector as it adopts new technologies to create better user experiences.

“Everybody in the financial services arena is embarking on a digital transformation of some kind,” Anthony Wagerman, an adviser at Prism Group told Arab News. “It’s not really a matter of if, it’s a matter of when, and it’s a matter of how long that takes and ensuring your customers are with you.”

While a large part of the remittance market continues to rely on “tried and tested methodology,” the traditional money-sending sector has been disrupted by COVID-19, which “undoubtedly acted as a form of catalyst or accelerator for this digital journey,” he said.

The consortium’s investment in the businesses it is acquiring will help speed their digital transformation, but it is important to recognize that some customers will continue to use traditional methods, said Wagerman.

“We want to create a seamless service that’s completely omnichannel, from walk-up to online to mobile, because that is really the way the market is going now,” he said.

The deal comes amid evidence of impressive resilience in the sector during the COVID pandemic with remittance flows of $540 billion in 2020, just 1.6 percent below 2019 levels, according to World Bank data. That compares with a 4.8 percent decline during the global financial crisis.

Moreover, the remittance industry is set to almost double to $930.44 billion by 2026, according to Allied Market Research.

“The reports we’re seeing of the first coming up to the first half of 2021 is really quiet encouraging, and have shown a lot of businesses snapping back rather more quickly than people originally envisaged,” Wagerman said.

Asked how blockchain technology plays a role in the remittance industry’s digital journey, he said there is still a strong need for regulation in this area given the variation in countries’ different rules.

“There’s an overall attractiveness about having frictionless payments that avoided intermediaries, of course there is. The reality however is not so simple, not least because when money crosses borders, there’s all kind of issues particularly from a regulatory perspective,” Wagerman explained.

Saudi Arabia sees record IPOs requests, 50% rise in managed assets, says CMA chief

Saudi Arabia sees record IPOs requests, 50% rise in managed assets, says CMA chief
Updated 03 August 2021

Saudi Arabia sees record IPOs requests, 50% rise in managed assets, says CMA chief

Saudi Arabia sees record IPOs requests, 50% rise in managed assets, says CMA chief
  • Elkuwaiz says assets under management by financial institutions have increased by 50 percent

RIYADH: Saudi Arabia is seeing a record interests from companies to sell shares to the public, while the size of the assets under management by financial institutions increased by 50 percent to SR600 billion over 3 years, the chairman of the country’s capital market authority said.

The increase in the volume of assets under management (AUM) had impact on the financial market and has contributed to opening new investments areas such as the launch of financial derivatives market, which made a debut last year, Mohammed Elkuwaiz said in panel hosted by the Financial Academy.

The authority received recently 30 requests to sell shares in initial public offerings and this is the highest number the authority, known as CMA, got since its establishment, he added. 

Mohammed Elkuwaiz, CMA chairman

Saudi Arabia is implementing a huge program to modernize and develop its financial sector under the country’s vision 2030 plan. Under this program the CMA had a target to list 20 new companies in 2021 on the Saudi index through public offerings, and the authority had achieved half of this target by the end of the first half of the year, Elkuawiz said.

Interests from companies to sell shares to the public increased over the past few years with the introduction of the parallel market, known as Nomu. Elkuwaiz explained that the main market, Tadawul, targets larger and more mature companies with the ability and willingness to bear big loads in terms of disclosure data, governance, while smaller companies prefer to list on Nomu.

“Listing on Nomu is an exciting window for the small and medium size and entrepreneurs in Saudi Arabia as we see the increase in IPOs interest and this is the result of the CMA strategy,” said Mohammed Ramady, an independent economic analyst and former senior banker told the Arab News in comments on Saudi financial development.

Another area where Saudi Arabia is venturing and advancing is Fintech. “We have more than 15 companies licensed as financial technology companies, which facilitates the availability of other types of financing that did not exist in the past, such as crowdfunding, which has become a boost for the financial market,” Elkuwaiz added.

The chairman of CMA also noted that foreign investments in the Saudi stock market have been positive and steady since they were allowed several years ago, with more than SR20 billion has entered Tadawul market since it was included in global indexes.

“The system of governance and disclosure in the financial market has been developed, making the Kingdom one of the world’s top 4 countries in terms of governance – something we are very proud of,” he added.

Fitch revises Egyptian bank’s outlook to stable

Fitch revises Egyptian bank’s outlook to stable
Updated 03 August 2021

Fitch revises Egyptian bank’s outlook to stable

Fitch revises Egyptian bank’s outlook to stable

RIYADH: Fitch Ratings has revised Commercial International Bank (Egypt) S.A.E.’s (CIB) outlook to stable from negative while affirming the bank’s long-term issuer default rating at “B+” and viability rating at “b+.” 

According to the ratings firm, pressures on the domestic environment have eased since the end of the third quarter of 2020 moderating downside risks to Egyptian banks’ credit profiles.

It said this reflects improving foreign currency liquidity, with the banking sector’s net foreign assets reaching $3.5 billion in April 2021, a reversal of a net foreign liability position of $5.3 billion at the end of April 2020. This was supported by a strong increase in foreign holdings of Egyptian treasuries to $29 billion in May 2021.

Fitch expects real GDP growth to accelerate to 6 percent in 2022.

Egypt’s domestic liquidity exceeds $213.9 billion

Egypt’s domestic liquidity exceeds $213.9 billion
Updated 02 August 2021

Egypt’s domestic liquidity exceeds $213.9 billion

Egypt’s domestic liquidity exceeds $213.9 billion

CAIRO: Egypt’s domestic liquidity rose to EGP 5.36 trillion ($213.9 billion) at the end of June 2021.

According to the official data, liquidity grew by 1.9 percent monthly. Domestic liquidity increased by 18.3 percent annually, compared to EGP 4.53 trillion in June 2020.

The money supply rose during June to EGP 1.25 trillion, compared to EGP 1.22 trillion in May 2021.  Money supply includes deposits in local currency and cash in circulation outside the banking system.

Last November, the Central Bank of Egypt decided to reduce both the overnight deposit and lending rate and its main operation rate by 50 basis points, to 8.25 percent, 9.25 percent, and 8.75 percent, respectively.

Last month, the central bank froze the interest rate for the fourth time this year.