New Libya's first task is solidifying national security


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In late July, when Libya's then-deputy prime minster, Mustafa Abushagur, hosted a live online discussion with constituents, the issue of security was a popular concern. Mr Abushagur's answer: "We have already started the process of building a credible police force. However, it will take some time."

Time is not on Libya's side. The assassination of the US ambassador, Chris Stevens, in the eastern city of Benghazi on Tuesday underscored the urgent need for sweeping security improvements, and how much work the new government must do to impose federal authority across the country.

Since Muammar Qaddafi was killed in Sirte last October, signalling the end of the old regime, holding Libya together has been the first priority. The new government has never had a monopoly on force, a necessary prerequisite of a sovereign state. The militias that fought and won the rebellion pose a serious threat. So too do extremist groups that may have been responsible for the attack on the US consulate.

For Mr Abushagur, the moment is now. On Wednesday, he defeated the wartime rebel leader Mahmoud Jibril by just two votes in second-round voting in parliament to become Libya's first democratically elected prime minister. "There is so much to do," he told Reuters after his win. "It makes security high among my priorities."

But security has been high on Libya's list of priorities for months. The government remains unable to disarm rival factions, especially in the eastern region of Cyrenaica, or to incorporate them into a formalised security force. An example from the north-west was a showdown between Misurata and Bani Walid militias just after the election, when national forces kept their distance. The tribes had to negotiate their own truce.

Libya's police and army remain weak and ill-equipped, while local militias, in theory put under the ministries of interior and defence during the war, now seem to answer to no one. Without incentives, these groups will not disarm, and the state cannot force the issue. This must change.

Tuesday's attack should not overshadow the strides Libya has made since Qaddafi. General National Congress elections in July were by and large free and peaceful, and the interim legislature had already elected a president. In many parts of the country, life has returned to normal, with water and electricity restored, and the economy is rebounding.

Libya can maintain this momentum, despite this week's tragedy. International partners, including the US, have signalled continued support. But most importantly, Libyans need leaders willing to do the hard work, and take the risks, to build a political consensus that will get the guns off the street. Will Mr Abushagur be one such leader?

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Rating: 4.5/5

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Ballon d’Or (Men’s)
Ousmane Dembélé (Paris Saint-Germain / France)

Ballon d’Or Féminin (Women’s)
Aitana Bonmatí (Barcelona / Spain)

Kopa Trophy (Best player under 21 – Men’s)
Lamine Yamal (Barcelona / Spain)

Best Young Women’s Player
Vicky López (Barcelona / Spain)

Yashin Trophy (Best Goalkeeper – Men’s)
Gianluigi Donnarumma (Paris Saint-Germain and Manchester City / Italy)

Best Women’s Goalkeeper
Hannah Hampton (England / Aston Villa and Chelsea)

Men’s Coach of the Year
Luis Enrique (Paris Saint-Germain)

Women’s Coach of the Year
Sarina Wiegman (England)

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Founders: Eslam Hussein and Pulkit Ganjoo

Based: Dubai

Sector: Transport

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Investment: $1,275,000

Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri

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Dubai College A 50-12 Dubai College B

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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.”