Back from the brink in Bahrain


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For the first time in months, demonstrators were back on the streets of Bahrain at the weekend, and in large numbers. The difference this time was that demonstrations were peaceful and passed without incident.

More than 31 people were killed in protests that swept the country beginning in February. But less than two weeks after the government's lifting of its emergency law, 10,000 protesters took to the streets north of Manama on Saturday, as the country's opposition reiterated its demands for political reform.

Government forces, which in the past clashed violently with these same protesters, this time kept their distance. It is the strongest indication yet that the Bahraini government is prepared for genuine negotiations with the opposition parties, and is serious about discussing ways to reform the country's political system.

This comes in the wake of other encouraging signs. The labour ministry has ordered sacked Bahrainis to be given their jobs back. The UN says Bahrain has agreed "in principle" to a human rights investigation. And the recent appointment of Khalifa al Dhahrani, speaker of the Council of Representatives, to lead a national dialogue suggests that calls for such a conversation might actually proceed.

Of course, many challenges remain. Opposition leaders are facing prosecution, and the main opposition party al Wefaq says it is sceptical about the willingness of the government to effect change. The party has publicly opposed Mr al Dhahrani's appointment, insisting that the king or the crown prince - not a parliamentarian - handle the negotiations. "What we are discussing is a pivotal issue of difference between the ruling family and the people," Khalil al Marzooq, an al Wefaq leader, told al Jazeera.

The fact that disagreements are now centred on dialogue and not blood shows a degree of progress in the stalemate. We hope these overtures continue.

With war raging in Libya, and reports of Syrian troops firing on retreating civilians and ambulance workers, events of the past week in Bahrain show that the country has a chance to pull back from the brink. Now, the time has come for real talks to begin.

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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