Central Asia grasps at a security lifeline



There were plenty of handshakes in Ashgabat at the weekend as Turkmenistan's neighbours rallied around the common goal of economic prosperity. In a region so often shaped by conflict, joint revelry for a mutually beneficial gas pipeline was a welcome sight.

The challenge now will be maintaining the momentum. Revival of the proposed Turkmenistan-Afghanistan-Pakistan-India gas pipeline, known as Tapi, was the reason for the weekend backslapping. Conceived in the mid-1990s, the ambitious effort aims to transport Turkmen gas through Afghanistan and Pakistan, and eventually on to India.

There are many reasons to root for Tapi's completion. For one, any endeavour that brings Pakistan and India to the same table must be greeted warmly. It's not often these nuclear-armed rivals cooperate so openly.

Equally positive are the opportunities to bolster the region's economic and political stability. As supporters see it, Tapi could bring security and jobs to Afghanistan while linking energy-deficient economies with hydrocarbon-rich Central Asian states. It's easy to envision such a future if the project's taps are ever opened.

Unfortunately, that remains a big "if". While the rough outlines have been inked, engineers must now find a way to lay a pipe through Taliban-controlled Afghanistan and Pakistan's tribal areas. Details on how this would be accomplished, or who will pay for it, remain vague.

Even the project's main backers have expressed scepticism. "The realisation of the project faces significant political and technical challenges," the Asian Development Bank conceded in a May 2008 assessment, "considering the volatility of the relationships among the concerned countries and the security situation in Afghanistan".

One can only hope these relationships will become less fraught over time. As a US diplomat told officials in Turkmenistan last month, the benefits of a completed pipeline are "worthy of the diligence demonstrated by these four countries so far". The US may have its own reasons to support the Tapi project - namely that it bypasses Iran, which Washington has worked hard to isolate over its nuclear programme.

But in this volatile region, sovereign interests often trump regional concerns. Common ground, no matter how tenuous, should be celebrated and encouraged.

Mia Man’s tips for fermentation

- Start with a simple recipe such as yogurt or sauerkraut

- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.

- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.

- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.

 

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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.”

In Praise of Zayed

A thousand grains of Sand whirl in the sky
To mark the journey of one passer-by
If then a Cavalcade disturbs the scene,
Shall such grains sing before they start to fly?

What man of Honour, and to Honour bred
Will fear to go wherever Truth has led?
For though a Thousand urge him to retreat
He'll laugh, until such counsellors have fled.

Stands always One, defiant and alone
Against the Many, when all Hope has flown.
Then comes the Test; and only then the time
Of reckoning what each can call his own.

History will not forget: that one small Seed
Sufficed to tip the Scales in time of need.
More than a debt, the Emirates owe to Zayed
Their very Souls, from outside influence freed.
No praise from Roderic can increase his Fame.
Steadfastness was the Essence of his name.
The changing years grow Gardens in the Sand
And build new Roads to Sand which stays the same.
But Hearts are not rebuilt, nor Seed resown.
What was, remains, essentially Alone.
Until the Golden Messenger, all-wise,
Calls out: "Come now, my Friend!" - and All is known

- Roderic Fenwick Owen

COMPANY PROFILE
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