Libya begins to move beyond militia mentality



Even before Muammar Qaddafi was killed, it was clear that his legacy had left Libya in tatters. He had co-opted every civil and social institution over the space of four decades. Little wonder that his successors now struggle to erect a political tent that can accommodate everyone in the country.

Two months after Qaddafi's death, the same fighters who risked their lives for a new Libya, and there are thousands of them under arms, now threaten stability. The interim prime minister, Abdurrahman Al Keib, made this point on Tuesday: "It is time for [militia fighters] to return to their families and friends to help rebuild their own cities and lives."

From the start, Libya's National Transitional Council made the right overtures, calling for order and urging rebel fighters to forego revenge attacks. Now it faces the immediate challenge of the post-Qadaffi era: getting the guns off the streets. In Tripoli, local officials have given armed groups two weeks to lay down their weapons or leave the capital.

Popular sentiment is also turning against militia fighters who have overstayed their welcome. "They are occupying public buildings … looting and breaking stuff," one member of a Tripoli-based military council told Al Jazeera. "They won't leave."

Clashes at the weekend between armed groups and military leaders near Tripoli left one government official dead, and large-scale structural damage. It was just one in a series of recent skirmishes between former allies.

As the United Nations Security Council noted last month, security consolidation and bringing the "large number of armed revolutionary brigades" under control is a serious security challenge. The nation faces a related long-term political project - tribes such as the Qaddafa and Warfalla have to be included, and rivalries addressed through the political process.

But there is also an outlaw element - too many men armed with too many guns raided from regime stockpiles - that needs to be reined in now. Forcing Libyans, many of whom say they need the weapons for personal security, to disarm will not be easy. The plan is for 50,000 fighters to be brought into the state security forces, but disarming the street cannot wait for that long-term goal.

Libya's democratic experiment, won at the cost of so many lives, depends on this transition. The leaders represented in the NTC have made the right statements; it is up to the former militia members to lay down their arms. If they do so, Libya can leave the Qaddafi legacy behind.

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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