Displaced Yemenis ride a truck through a camp for Internally Displaced Persons (IDPs) on the outskirts of Sana'a, Yemen, 14 June 2022. EPA
Displaced Yemenis ride a truck through a camp for Internally Displaced Persons (IDPs) on the outskirts of Sana'a, Yemen, 14 June 2022. EPA
Displaced Yemenis ride a truck through a camp for Internally Displaced Persons (IDPs) on the outskirts of Sana'a, Yemen, 14 June 2022. EPA
Displaced Yemenis ride a truck through a camp for Internally Displaced Persons (IDPs) on the outskirts of Sana'a, Yemen, 14 June 2022. EPA

Yemen truce is real opportunity for peace despite violations, says GCC ambassador


Nada AlTaher
  • English
  • Arabic

The UN-brokered truce in Yemen, and its extension, provide a “real opportunity” for peace in the country despite Houthi violations in Marib, said the GCC ambassador to Yemen on Saturday.

Speaking exclusively to The National on the sidelines of the first Yemen International Forum in Stockholm, Sarhan Al Minaikher also said political peace cannot be reached while war is raging in the country.

“Political dialogue among the warring sides cannot take place except against the backdrop of a truce,” he said.

Earlier this month, Information Minister Muammar Eryani accused the Houthis of exploiting the first nationwide truce since the war began in 2015 to “catch a breath and compensate human losses in preparation for a new round [of violence]”.

This is a view shared by several current and former Yemeni officials at the forum organised by the Sanaa Centre for Strategic Studies in collaboration with the Swedish government.

“The GCC views the truce as an opportunity to bring peace and dialogue - not to buy Houthis more time. Violations committed by the Houthis in Marib are being recorded by a special team under the legitimate government — and presenting these findings to the UN.”

Mr Al Minaikher also said the government has demonstrated signs of “good faith” despite known Houthi transgressions such as issuing passports for people in areas under their control.

“The government has not stopped those travelling with Houthi-issued passports — despite this being its right as a sovereign state — because allowing people to travel abroad through Sanaa Airport for medical treatment is in the best interests of civilians.”

He also noted that the Houthis have yet to comply with some of the conditions stipulated in the truce agreement, including the reopening of roads around Taez, which would significantly ease movement for civilians.

Stabilisation aid

Mr Al Minaikher also said a Saudi-Emirati injection of over $2 billion into the Central Bank of Yemen, now based in Aden, is under way to help the country deal with continuing economic shocks.

The announcement made in April was welcomed by the US government.

“This economic support will help stabilise the economy, improve Yemenis’ access to basic services, and ease the economic crisis that causes so much suffering,” the State Department said at the time.

Mr Al Minaikher said of the transfer, “so long as the money was pledged, consider it as good as deposited.”

International and regional assistance to Yemen has been widely documented, the official said, but the Yemeni government lacks the “capacity to absorb” the incoming funds.

“They don’t have the know-how to execute plans. So, the Executive Bureau for the Acceleration of Aid Absorption handles these issues including fighting corruption and filtering development projects which deserve aid.”

“Ordinary Yemenis see the impact of this assistance on the ground but should ask themselves where the money is coming from when they travel through Aden airport, for example, which was destroyed by the Houthis and rebuilt through donor state assistance.”

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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