Somali pirates move towards the UAE in hunt for easier prey


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In recent years, Somali piracy has moved from isolated incidents to become the main talking point in the shipping industry. The pirates have constantly been evolving their strategy and reacting to the developing security measures being brought against them.

In the last two weeks, two UAE-owned vessels have been hijacked while trading with Somalia. This is just a small indication of how the Arabian Gulf has been and continues to be affected by the phenomenon.

Piracy is in no way limited to the shores of Somalia and the Indian Ocean. Piracy and armed robbery at sea is a global phenomenon. Hijacking vessels is not a unique tactic of Somali gangs; West African pirates target small tankers to offload their cargo and occasionally members of the crew. Some South-East Asian criminal gangs target barge-towing tugs for their value on the international market. But Somali piracy has seen the highest-profile hijacking for ransom model, which last year generated nearly $200 million (Dh735 million) in payments.

The Middle East has always been affected by the growth of these hijacking groups; however, piracy has gradually targeted vessels on more and more trading routes, so that any vessel leaving the Arabian Gulf is now threatened by Somali gangs.

Piracy is, of course, motivated by profit and financial gain. In a disturbing development for the Middle East, last year saw a more focused approach by pirates on the Arabian Sea. The expanse of ocean east of the Gulf of Aden has the highest concentration of shipping routes in the region, and pirates have begun converging on this area to improve their chances of hijacking ships for ransom.

There is the additional bonus that over a dozen oil tankers pass through the Strait of Hormuz every day and successfully seizing just one of these vessels could provide a ransom of over $10 million. Some groups have changed their operating area to hunt the waters south of the Gulf of Aden. The majority of vessels hijacked last year and all the vessels hijacked so far this year have been in this area.

In March 2011, the vessel Sinar Kudus was hijacked in the southern Arabian Sea. Within a very short space of time, reports indicated that dozens of pirates had joined the vessel, which transported them north along the Omani coast and into the Gulf of Oman, which leads to the Strait of Hormuz. So far this year, while attack numbers have fallen, the groups have continued to push further north.

This shift in focus is demonstrated by the planned routes of hijacked vessels. Not counting fishing boats or local dhows, the percentage of merchant ships that were hijacked while travelling to or from ports within the Arabian Gulf rose from 33 per cent in 2010 to 40 per cent last year. Of the seven merchant vessels currently held, four were transiting to or from ports within the Arabian Gulf.

This spread of pirate activity is a result of never-ending adaptation to evolving security measures. Their diminished success rate is because of several factors: gangs have struggled through unusually bad weather for months, and are also encountering increasingly effective naval strategy and ship-security measures, most notably the increased deployment of armed guards on-board vulnerable vessels. This has pushed pirates to different areas of operation of which the area of greatest concern is the Gulf of Oman.

Also of concern is the vulnerability of anchorages in the region, most notably that of Fujairah, where about 600 vessels use the port each month. In August, the chemical tanker Fairchem Bogey was hijacked from the anchorage at Salalah in an ambitious operation. To date, this has been the only such incident, but if the prevalence of armed guards continues to neutralise pirate operations, the congested anchorage of Fujairah may present a tempting target. This type of hijacking is eminently achievable, as pirates' repeated successes off the coast of Benin last year and Lagos this year have demonstrated. So far this year, two attacks have occurred just 100 kilometres east of Fujairah.

The majority of the shipping industry and media focus is on merchant ships trading internationally. But the local dhow and fishing trades often get forgotten. Dhows are frequently targeted, not simply for their monetary value but to be adapted as mother-ships. This adds an additional, terrifying risk to those on-board, who may be forced to launch attacks to capture larger vessels.

This brings dhows into contact with increasingly aggressive naval forces, which have been hesitant to stop some of the larger mother-ships fearing the risk to hostages. Naval forces have been more active against the more commonly used hijacked dhows.

Additionally, Iran has been active against piracy in recent months as part of a demonstration of military strength aimed at the West and Israel. Given that the US navy is also extensively involved in counter-piracy operations in the area, this brings two antagonistic naval forces together in a limited theatre fraught with international tensions.

These factors make the commercial operations of dhows in the region extremely dangerous. The Italian navy's recent killing of two Indian fishermen, after they were mistakenly identified as pirates, highlights the risks being run by smaller trading vessels.

With sanctions on Iran restricting local trade even further, and now impending sanctions against Somalia's Al Shabaab-controlled charcoal trade, the strain on both local and international shipping for the Middle East is not likely to ease anytime soon. As better conditions have returned to the area where pirates have had the most recent success, they will continue to put themselves in the most advantageous position to hijack vessels.

Tim Hart and Ruari Dowds are security analysts with Maritime and Underwater Security Consultants based in London

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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.”

Key findings of Jenkins report
  • Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
  • Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
  • Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
  • Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
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HIV on the rise in the region

A 2019 United Nations special analysis on Aids reveals 37 per cent of new HIV infections in the Mena region are from people injecting drugs.

New HIV infections have also risen by 29 per cent in western Europe and Asia, and by 7 per cent in Latin America, but declined elsewhere.

Egypt has shown the highest increase in recorded cases of HIV since 2010, up by 196 per cent.

Access to HIV testing, treatment and care in the region is well below the global average.  

Few statistics have been published on the number of cases in the UAE, although a UNAIDS report said 1.5 per cent of the prison population has the virus.

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