An avoidable civil war in Yemen that has already begun


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The scenes coming to us out of Yemen appear as raw and bloody chaos: running gun-battles through the streets, protesters screaming fiercely and the president, Ali Abdullah Saleh, apparently wounded in a mortar attack at the weekend (and rumoured to be headed to Saudi Arabia for treatment).

But while it looks like madness, the falling apart of Yemen is deeply rooted in the inexorable logic of its own history, the personalities of the major players and a looming generational shift. While civil war is not inevitable, circumstances have made it likely, and it may be too late to prevent the country from violently tearing apart its own seams.

Probably the biggest question swirling around the fighting is why? Not why is President Saleh clinging to power, but why has he established a series of feints and dodges that would appear to propel unrest rather than restore stability?

For instance, why did the president offer to sign a GCC-sponsored transfer of power, only to back away multiple times? If he had no intention of signing, why even bother with the pretence?

The answer to these questions is one of the keys to understanding why Yemen is where it is.

Mr Saleh has ruled parts or all of Yemen for over 30 years. But even the "all" in that sentence is misleading. Mr Saleh has never ruled all of Yemen, even if he has arguably the longest reach in his country's ancient history. Yemen is governed by negotiation and appeasement, by the carrot and the stick, by squeezing one party while massaging the other.

Rule in Yemen is very personal; the president, like the Imam before him, is intimately involved in tribal politics - a game of swirling alliances.

But keeping competing power centres straight is far from the only problem. Yemen, as is now well-known, faces essentially every economic and social problem a country can face, from running out of water to a massive youth explosion with no jobs forthcoming. Throw in the political problems, and you can see how running the country is a constant game of spinning plates. Spin one and rush off to spin the other, never having time to balance anything.

Mr Saleh has been a master of this, constantly applying bandages without tending to the suppurating wounds underneath. In a way, this is understandable; there are enormous problems to deal with. But thinking in the long-term takes your eyes off immediate survival (Mr Saleh's two immediate predecessors were murdered). But it has caught up, and all the issues have come to a head.

Mr Saleh still thinks he can buy himself more time. He thinks if he offers to sign any GCC deal to step aside, it will give him some breathing room which he can use to game the system yet again. Yet he doesn't seem to realise that the ecstasies and agonies of the Arab Spring have caused the game to change.

There may be something deeper in Mr Saleh's calculation. For a time it appeared he believed he was the only one who could keep Yemen together, that he was the nation. And in a way he was right, though it is clear that he is now a singular source of instability.

Perhaps part of him was actually looking forward to stepping down, on his own terms. It is a very hard thing to realise that you are going to be remembered as the tyrant.

Mr Saleh's madness now - shooting protesters, and by some accounts allowing al Qa'eda in the Arabian Peninsula to take over a town - is just another way to buy himself time. Yet this time, Mr Saleh may not be able to control the demons he has unleashed.

Mr Saleh's biggest foes are the al Ahmar brothers, leaders of the Hashed tribal federation, Yemen's largest. (It's important to recognise that this is a federation, not a single tribe. The president's tribe is also in the Hashed federation, so there are civil wars within civil wars). The brothers are the sons of Abdullah al Ahmar, who until his death in 2007 was the second-most powerful figure in Yemen.

The elder al Ahmar was older than Mr Saleh, but they were both part of what could be called Yemen's heroic epoch, those who overthrew the Imam and forged a republic.

For years there has been speculation about the next generation, particularly the rivalry between Mr Saleh's family and the al Ahmar boys. Sadeq al Ahmar is the leader of the Hashed, but Hamid al Ahmar is a link between tribal and business leaders, and is Mr Saleh's top critic.

The rivalry that has been playing behind the scenes has now exploded onto the streets. The al Ahmars sensed that Mr Saleh has been weakened fatally by the protests, and either fired first or goaded Mr Saleh into firing. War is propaganda; the truth doesn't matter.

The al Ahmar boys also wanted to step in to take the initiative away from any other potential rivals. Hamid al Ahmar has suggested he'd want the presidency to go to a southerner, in the name of inclusion, but even if he is sincere there is little doubt where the power would lie.

Against this backdrop many are asking whether civil war is inevitable. Yet it seems to have already started. The media might use the terms "civil war" and "tribal war" interchangeably. In this case, they will be correct to do so, stumbling backwards into wisdom. Both sides are rallying support from family and tribes.

It isn't too late to pull back from the brink, if the parties agree that a chilly peace is less disastrous than an outright war. The Yemeni tradition of dealing with your enemy provides far more leverage than any outside power can. But if weakness is sensed, this could quickly escalate and spiral into the war we've feared for years.

Brian O'Neill is a former writer and editor for the Yemen Observer. He is currently an independent analyst in Chicago

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THE BIO:

Favourite holiday destination: Thailand. I go every year and I’m obsessed with the fitness camps there.

Favourite book: Born to Run by Christopher McDougall. It’s an amazing story about barefoot running.

Favourite film: A League of their Own. I used to love watching it in my granny’s house when I was seven.

Personal motto: Believe it and you can achieve it.

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Multitasking pays off for money goals

Tackling money goals one at a time cost financial literacy expert Barbara O'Neill at least $1 million.

That's how much Ms O'Neill, a distinguished professor at Rutgers University in the US, figures she lost by starting saving for retirement only after she had created an emergency fund, bought a car with cash and purchased a home.

"I tell students that eventually, 30 years later, I hit the million-dollar mark, but I could've had $2 million," Ms O'Neill says.

Too often, financial experts say, people want to attack their money goals one at a time: "As soon as I pay off my credit card debt, then I'll start saving for a home," or, "As soon as I pay off my student loan debt, then I'll start saving for retirement"."

People do not realise how costly the words "as soon as" can be. Paying off debt is a worthy goal, but it should not come at the expense of other goals, particularly saving for retirement. The sooner money is contributed, the longer it can benefit from compounded returns. Compounded returns are when your investment gains earn their own gains, which can dramatically increase your balances over time.

"By putting off saving for the future, you are really inhibiting yourself from benefiting from that wonderful magic," says Kimberly Zimmerman Rand , an accredited financial counsellor and principal at Dragonfly Financial Solutions in Boston. "If you can start saving today ... you are going to have a lot more five years from now than if you decide to pay off debt for three years and start saving in year four."

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Employees: Nine

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Key figures in the life of the fort

Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.

Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.

Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.

Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.

Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.

Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.

Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.

Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.

Sources: Jayanti Maitra, www.adach.ae

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Based: Kuwait with offices in other GCC countries

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