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The latest US-led naval coalition will "do little" to deter Houthi attacks on vessels in the Red Sea, analysts have said, warning of further escalation in the strategic waters.
The warnings came as the US pushes forward with plans to use force against the Iran-backed rebels, who continue to attack ships in support of their ally Hamas in the Gaza Strip where thousands have been killed in the Israeli offensive against the militant group.
Several countries, led by the US, agreed on Monday to jointly carry out patrols in the southern Red Sea and Gulf of Aden to safeguard commercial shipping after many companies decided to halt their operations in the region.
Some of the countries had already been part of existing task forces in the region.
"I don’t think the Houthis can be deterred," Michael Horowitz, head of intelligence at Le Beck International, a Bahrain-based think tank, told The National.
"If anything, the presence of a coalition that includes mostly countries outside the region will boost the group domestically and allow it to quell domestic unrest.
"This coalition may be purely defensive but if it does take some more offensive actions, I expect the goal will not be deterrence."
US Defence Secretary Lloyd Austin, during a visit to Bahrain on Monday and Tuesday, said countries including the UK, Canada, France, Italy, the Netherlands, Norway, Seychelles and Spain will take part in Operation Prosperity Guardian, also known as the new Combined Task Force 153 (CTF-153).
Bahrain is the only Arab country in the international force as part of CTF-153.
US warships have in recent days shot down Houthi missiles and drones and rushed to the aid of commercial ships under attack. At the same time, Western officials told The National that Washington was discussing the possibility of striking Houthi targets in the war-torn Yemen.
The Iran-backed group has waded into the Israel-Hamas conflict by attacking vessels in vital shipping lanes and even firing drones and missiles at Israel, more than 1,600km from their seat of power in the Yemeni capital of Sanaa.
Mr Horowitz said the end goal would be to gradually reduce Houthi capabilities, including by striking weapons depots, its fleet of fast attack boats and rocket launchers.
However, the heavily armed militia responded to the announcement regarding the task force by emphasising this would not stop it from continuing its attacks.
"The American-formed coalition is to protect Israel and militarise the sea without any justification, and will not stop Yemen from continuing its legitimate operations in support of Gaza," Houthi spokesman Mohammed Abdelsalam said on Tuesday.
Gulf-based analysts told The National the US could be "misguided" in its policy regarding the Houthis, choosing to be reactionary rather than having challenging discussions with Gulf allies regarding the group's recent actions as part of the Israel war on Gaza.
"The US is shooting itself in the foot and I have not seen this degree of misguided US policies in a successive manner," Bader Alsaif, a history professor at Kuwait University, told The National.
"All they need to do is listen to the stakeholders on the ground. Listen to the people, to policymakers and go after the root cause of the issue. The issue is you're not calling for a ceasefire. This is the main issue."
News of the new task force has reassured shipping companies, who believe US naval forces must safeguard maritime navigation regardless of political developments.
"Previously, we saw assets in the region operating independently against the threat, whereas now we have a co-ordinated effort across a large number of military assets that will provide a significant suppressive response," John Stawpert, senior manager at the International Chamber of Shipping, told The National.
"That said, we still believe those powers that can bring pressure to bear on the Houthis should do so to de-escalate what is an unacceptable security situation in the region."
Mr Alsaif said the naval task force expansion feeds into the Houthi rebels' plans and narrative.
"If anyone is going to be celebrating this task force, it's going to be the Houthis more than anyone else, because they're calling for the fight."
Dr Yoel Guzansky, a senior researcher at Israel’s Institute for National Security Studies, said Israel "wisely decided to outsource the effort against the Houthis.
“If Israel attacked the Houthis, it would immediately be labelled an Israeli issue and could start an escalation with the group that would be hard to stop. That in turn would risk opening up another front.
"Israel should focus on Gaza right now and not divert attention and capabilities elsewhere.”
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Arsenal 4
Monreal (51'), Ramsey (82'), Lacazette 85', 89')
West Ham United 1
Arnautovic (64')
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
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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How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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