Would be immigrants stand in a closed detention camp in Hal Safi on July 15, 2008. The closed detention centre, run by the armed forces of Malta currently houses 860 single males in four blocks for a mandatory 12 to 18 months while being processed, openned its door to the media for the first time. Hundreds of boat people arrive each year in the Mediterranean island, the EU's smallest member state, mainly from Libya and north Africa. AFP PHOTO / Ben Borg Cardona
Would be immigrants stand in a closed detention camp in Hal Safi on July 15, 2008. The closed detention centre, run by the armed forces of Malta currently houses 860 single males in four blocks for a mandatory 12 to 18 months while being processed, openned its door to the media for the first time. Hundreds of boat people arrive each year in the Mediterranean island, the EU's smallest member state, mainly from Libya and north Africa. AFP PHOTO / Ben Borg Cardona
Would be immigrants stand in a closed detention camp in Hal Safi on July 15, 2008. The closed detention centre, run by the armed forces of Malta currently houses 860 single males in four blocks for a mandatory 12 to 18 months while being processed, openned its door to the media for the first time. Hundreds of boat people arrive each year in the Mediterranean island, the EU's smallest member state, mainly from Libya and north Africa. AFP PHOTO / Ben Borg Cardona
Would be immigrants stand in a closed detention camp in Hal Safi on July 15, 2008. The closed detention centre, run by the armed forces of Malta currently houses 860 single males in four blocks for a

Maltese economy hit by refugee crisis


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MALTA // Hussein Abdirahman is reluctant to venture too close to the entrance of the large detention block surrounded by barbed wire and guarded by soldiers that is located near Malta's International Airport.

The Somalian refugee, who says he is 19, claims he spent 16 months detained there after he arrived on Malta's shores in a small boat from Libya more than four years ago in the hope of getting to mainland Europe in search of a better life.

He now lives in a refugee camp just over the road from the Hal Far detention centre.

"We have nothing," says Mr Abdirahman. "We don't have lives, we don't have jobs."

The latest influx of illegal immigrants fleeing the Libyan conflict has put a huge economic strain on Malta. Over the past 10 years the tiny Mediterranean island nation has struggled under the burden of thousands of illegal immigrants. The country, with a GDP of just €6.1 billion (Dh32.43bn) and an unemployment rate of 6.2 per cent, is finding it difficult to absorb these people into its economy and has to finance their welfare at great cost.

Two weeks ago 816 African refugees arrived by boat in one day from Libya, located about 290km away.

"This puts the island under considerable financial pressure," says Dr John Paul Grech, the permanent secretary at Malta's ministry of foreign affairs.

"When we speak about 816 coming to a population of 400,000, it's like saying 120,000 at one go landing in Italy, if we put into consideration the proportionality, the population and the land mass."

The detention centre, closed off from the public, is housing hundreds of immigrants who have just fled the conflict in Libya. All are from sub-Saharan African countries including Somalia and Eritrea. Scores of migrants, who have been in Malta for years, are living just outside the centre in the camp.

On their arrival, usually in small boats, illegal immigrants are taken to detention centres, which former occupants describe as "jail", as their papers are processed and status is determined.

Local reports say a further 171 refugees from Libya arrived on Friday.

"There is a whole procedure of identifying possibilities of identification," says Dr Grech. "This is a whole process which involves the country, not just manpower to take care of the procedures involved, but it is also stressful economically. The country has, throughout their stay in Malta, to provide them with all the amenities, whether it is a place to reside in, or food, clothing, shelter."

About 10 years ago, migrants started arriving in Malta in the hope of getting to mainland Europe. But following a bilateral agreement between Italy and Libya to jointly patrol Libya's coast, illegal immigrants had not been arriving in Malta from the North African nation for the past couple of years, with the exception of a boatload of 16 people in 2009, Dr Grech says.

"For two years this phenomenon had been postponed quite efficiently. This gave us hope that with the agreement in place this would prevail across a number of years, which was not to be. Our detention centres were practically empty in the lapse of those two years, where no irregular migrants had been coming from Libya. That gave us … respite from the situation we had in 2008 and before. Now, with another 816, the situation is back where it was."

The Maltese government is calling for help from the rest of Europe to manage the problem.

"We have called on the European Union to consider mandatory burden sharing … we happen to be at the forefront of the impact of this problem simply because geographically we are situated where we are," Dr Grech says. "Secondly, we believe this is not a problem of Malta but a problem that the EU should be facing because these migrants are heading towards mainland Europe and that is their intended destination."

He says European countries have voluntarily accepted just 300 migrants in the past two and a half years, with France and Germany leading the way.

The concern now is more and more of these migrants will keep arriving at Malta's shores.

Hassan Abdullah, 25, a Somalian refugee who arrived in Malta in 2004, says he left to escape fighting in his home country, but does not seem much happier with his situation now, cut off from easy access to the rest of Europe on the island.

"I don't like it here," he says. "All the people here, they wanted to go to Italy."

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.”

UAE currency: the story behind the money in your pockets
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NYBL PROFILE

Company name: Nybl 

Date started: November 2018

Founder: Noor Alnahhas, Michael LeTan, Hafsa Yazdni, Sufyaan Abdul Haseeb, Waleed Rifaat, Mohammed Shono

Based: Dubai, UAE

Sector: Software Technology / Artificial Intelligence

Initial investment: $500,000

Funding round: Series B (raising $5m)

Partners/Incubators: Dubai Future Accelerators Cohort 4, Dubai Future Accelerators Cohort 6, AI Venture Labs Cohort 1, Microsoft Scale-up