SANAA // Yemen's minister of tourism said he was targeting expatriates from South East Asia amid travel warnings from western countries as the country slowly recovers from two years of political turmoil.
The minister has been participating in international exhibitions in China, India and Turkey, as well as Malaysia and Indonesia, two countries with a large number of immigrant Yemenis from the 19th century and earlier, to lure tourists and businessmen who could bring much-needed revenue for the impoverished country.
"I understand the concerns that the world has about Yemen's security environment, but I want to provide assurance that we will do everything in our power to protect any guest that comes here," said Kassim Sallam Said, the Yemeni tourism minister.
This week Etihad Airways launched services to Sanaa.
The number of foreign visitors to Yemen has dropped by 50 per cent, from 600,000 a year to 300,000, since the removal of the former president Ali Abdullah Saleh last year.
The ministry is also calling for foreign investment to set up tourism companies, and operate hotels and chalets tax-free for the first five years.
Sanaa used to be a favoured destination for western travellers until the 1970s, lured by the old city's labyrinth of narrow streets that tuck away gingerbread-like buildings decorated with geometric shapes and stained glass.
But today, the city is shunned. Kidnappings of foreigners by Islamist militants under the umbrella of Al Qaeda have been on the rise.
Last month, threats of an Al Qaeda-sponsored attack triggered the closure of US diplomatic missions across the Middle East, including Yemen.
Yemen's national reconciliation phase is expected to herald a new beginning for the Middle East's poorest nation as it tackles pressing issues such as youth unemployment.
There are close to 500,000 young people without jobs in Yemen, said Mr Said.
Tackling this issue will lure young people away from rebellion, terrorism and chaos, he added.
Mr Said is a member of Yemen's National Dialogue Conference, a UN-backed body formed from a number of political parties to draft the country's new constitution and to tackle current challenges.
A positive outcome would pave the way for US$8 billion worth of donor money. "Here, we meet at the Mövenpick Hotel as if there aren't any rivalries. It's a real achievement that we have got to this point," he said.
Yemen's economy is forecast to grow 4.4 per cent this year, according to IMF estimates, from a 0.1 per cent increase last year.
The country's central bank governor, Mohammed bin Hammam, this year said he expected a budget deficit of $3.2bn, that will be partly financed by foreign aid.
"If we managed to maintain stability and completed the six-month long dialogue conference with new decisions, a new government, a new leadership and a new state that's united and allows the Yemeni people to work together, then we will be able to combat the fears about our country abroad," Mr Said said.
halsayegh@thenational.ae
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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.”
