The UN's senior official in Yemen has warned that the Arab world's poorest country will remain a powder keg for renewed war unless its rival factions work out a new ceasefire deal.
Hans Grundberg, UN special representative for Yemen, said the situation in the country was fragile nearly a year after the internationally recognised government and the Iranian-backed Houthi rebels failed to renew a UN-brokered ceasefire.
The conflict has been restrained since then, with only sporadic clashes, but Mr Grundberg said there was a risk of a resumption of all-out fighting.
“The risk of a flare-up is always there,” he told the Associated Press.
“The situation remains fragile and will remain fragile until we have reached an agreement that offers a ceasefire agreement.”
The end to the ceasefire arrangement was a blow to UN efforts to find a negotiated settlement to the conflict, which has devastated Yemen and created one of the world’s worst humanitarian crises.
Yemen’s war began when the Houthis seized the capital of Sanaa in 2014.
Speaking after meeting with Egyptian Foreign Minister Sameh Shoukry in Cairo, Mr Grundberg noted Yemen's warring parties have separately been involved in peace efforts in recent months.
However, more effort is needed to establish a firm nationwide ceasefire and restart political talks on ending the conflict, he said.
The envoy welcomed international and regional efforts to end the conflict, including direct discussions between Saudi Arabia and the Houthis.
He said such efforts would help the UN to come up with a proposal for a nationwide ceasefire and the start of political talks between Yemeni factions to end the war.
“The fact that there's direct discussions continuing between the Houthis and the Saudis can be of support … to the UN mediation efforts,” Mr Grundberg said.
The Saudi-Houthi talks gained momentum after the kingdom reached an agreement with Iran in March to restore diplomatic ties after a seven-year rift.
Saudi Arabia and the Houthis agreed to a draft deal to revive a ceasefire and usher in a return to direct Yemeni political talks under the auspices of the UN, Saudi and Houthi officials have said.
Yemen’s government has said it was briefed on the Saudi-Houthi talks and had given initial approval to an earlier draft deal.
However, the move towards peace has been stalled by several points of dispute, including the payment of salaries for military personnel and civilians in Houthi-held areas, and guarantees that the rebels will engage in a political process with the other Yemeni factions, officials said.
“There is a unity among the international actors on the need for the Yemeni conflict to be resolved, and also about the fact that the United Nations is the main the mediator,” Mr Grundberg said.
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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.”
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Global state-owned investor ranking by size
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1.
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United States
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2.
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China
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3.
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UAE
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4.
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Japan
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5
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Norway
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6.
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Canada
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7.
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Singapore
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8.
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Australia
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9.
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Saudi Arabia
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10.
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South Korea
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