Houthi militias in Yemen launched ballistic missiles at Abu Dhabi and Saudi Arabia on Monday in the latest attack on neighbouring states.
Two missiles were destroyed in mid-flight during the attempted terrorist attack on Abu Dhabi, while in Saudi Arabia, one was shot down and another missile wounded two civilians in an industrial area.
The northern Yemeni militia has, over the past seven years, developed an increasingly sophisticated ballistic missile arsenal, despite a UN arms embargo on the country.
The bulk of the Houthis' arsenal today appears to be made up of the Burkan-3 for longer-range strikes up to 1,200 kilometres, the shorter range Badr P-1 rockets, with a 150km range and the Soviet-era Frog-7, which Houthis call the Zelzal, with a 65km range.
Today, they are known to possess a number of medium-range ballistic missiles — these are weapons defined by the US Centre for Arms Control as having a range of between 1,000km and 3,000km.
Experts and officials have said this can only have happened with external help from Iran and Hezbollah.
What ballistic missiles do the Houthis in Yemen have?
The longest-range ballistic missile in Houthi possession is the Burkan-3.
The Burkan-3 missile is a modified Iranian Qiam missile that can hit targets 1,200km away, the Washington Institute for Near East Policy think tank says.
That estimate is based on analysis by Ralph Savelsberg, a ballistic missile expert at the Netherlands Defence Academy.
It is also inaccurate, especially at the furthest extent of its range, Mr Savelsberg says.
While the Burkan is very similar to the Qiam, the latter is based on a Soviet-era Scud C missile, once feared by US-led coalition forces during the First Gulf War in 1991.
Modern air defence systems such as the US-made Patriot Air Defence and Terminal High Altitude Air Defence systems are highly capable of intercepting such missiles.
These systems have been perfected with more advanced radar and guidance systems over several decades.
The Houthi missiles may sound high-tech, having such a long range, but their ancestry is relatively primitive. The Scud C traces its evolution back to the Nazi V-2 rocket, 1,400 of which hit London in 1944.
The V-2s were terrifying but thankfully the Houthis don't have anything like this number of missiles. Furthermore, the Burkan has a much smaller warhead than the V-2, although the blast would be capable of levelling a house.
In 1947, Joseph Stalin ordered Russian engineers to work with captured Nazi scientists and surviving examples of the V-2 to develop a new Soviet missile.
The V-2 design was reworked into the R1 missile, known by Nato as the SS-1, which was then upgraded with new engines to the R11.
The concept evolved into the Scud missile family, which entered service in the 1970s.
Various countries, including Iran, Iraq (under the Saddam Hussein regime) and North Korea, have all modified Scuds and the Houthi use of the Burkan is only the latest example of this trend.
They, in effect, remain an imprecise projectile that can be fired a long way but with little or no certainty of where they will land.
But attacks have taken a terrible toll within Yemen, where the Houthis have used them at shorter range against civilians.
On October 13, a missile struck a petrol station near the contested city of Marib, killing “dozens”, one of several similar attacks this year. A later attack struck a tribal meeting, killing at least 13 people while another in Marib struck a mosque.
The strikes may seem random but Yemeni government officials say they are aimed at influential local leaders and vital economic infrastructure, breaking international humanitarian law – the Geneva Conventions, for example, prohibits the targeting of civilian infrastructure, or "civilian objects".
How do the Houthis obtain their missiles?
Numerous reports, including a comprehensive UN Panel of Experts investigation in 2020, show strong links between the Houthi missile programme and weapons designed and supplied by Iran.
Tehran has long displayed expertise in building ballistic missiles but in recent years it has improved its accuracy dramatically.
So, too, have the Houthi rebels, who have gone from firing relatively unreliable projectiles blindly towards government-held areas to being able to strike with greater accuracy, as seen in the homing in on specific targets around the government’s last northern stronghold of Marib.
But at greater range, accuracy suffers and warhead size has to be reduced to accommodate more fuel.
The Houthis' missile arsenal
UN weapons inspectors, ballistics experts and the Saudi Arabia-led coalition have analysed evidence, including debris left after strikes and the Yemeni rebels' regular displays of projectiles in propaganda videos, to gain a fair picture of the situation.
During the opening phases of the war in 2014 and 2015 as the rebels seized Sanaa and the international coalition intervened at the request of the government of Yemen, much of the group's weapons systems came from raided military stockpiles and modifications to the plentiful munitions on the battlefield.
However, that has changed over time and experts have increasingly spoken of Iran's hand in helping the Yemeni rebel group to develop and build increasingly sophisticated missiles.
Missiles are modelled on known Iranian weapons and were most likely made in Iran in pieces, smuggled by boat into Yemen then reassembled.
This was confirmed by a US briefing in February 2020 on the seizure of a dhow, which was loaded with missile components bound for Yemen.
"Several components in the interdicted SAMS include the air data computer, the INS, and the vertical gyro, which have all been identified on other Iranian weapons systems," said Centcom, the US general headquarters for the Middle East.
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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.
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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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