US-backed Kurdish militias have agreed with the Syrian military on an outline deal brokered by Russia to end week-long hostilities in eastern Syria, the centre of the country's oil and wheat production, two officials in the Kurdish-dominated administration told The National on Tuesday.
The deal indicates Russia's influence in an area regarded as the core of the US presence in Syria, and Moscow's desire to maintain its ties with Kurdish militias despite their reliance on Washington, as well as protecting a significant presence of forces loyal to President Bashar Al Assad in the divided area.
“The pressure we have been applying on the regime helped,” said one of the officials.
The fragmentation of Syria's east into Russian, Iranian, and US zones of control is a result of the civil war. It started in late 2011, after security forces suppressed a peaceful protest movement in March of that year demanding the removal of Mr Al Assad.
A week ago, Arab tribal forces loyal to Iran and to Damascus launched a surprise offensive on areas held by Kurdish-led armed groups called the SDF and Asayish.
Both are led by the People Protection Units, accused by Turkey of being affiliated with the Kurdistan Workers Party (PKK) which is designated as a terrorist group by Ankara.
They captured from the SDF two towns in Deir Ezzor province, near a US-held oilfield. The SDF later cut its losses, but the hostilities, which left up to two dozen people dead, ended the understanding between Damascus and the Kurdish militias.
Among them is freedom of movement for forces loyal to Mr Assad in the centre of Qamishli and Hasakah, two cities in the east that are mostly controlled by the Kurdish militias.
Part of the Kurdish armed response was Asayish besieging government forces in the centres of the two cities. Asayish also detained several Syrian army officers as they travelled to a security compound in Hasakah from their base outside the city.
For the last several days, Russian officers have been shuttling between the compound and Kurdish militia commanders based in the city to solve the impasse, the sources said.
The deal, reached late on Monday, stipulates that the Arab tribal forces halt their attacks, which have been mostly in Deir Ezzor province. Part of these forces, called the Lions of the Okeidat, are regarded as loyal to Iran, while the other component, the Hafl forces, are held to be proxies of Syria.
“The Iranians will be still robbed of tribal strength without the Hafl forces neutralised,” the source said.
The deal also stipulates an exchange of the officers and other government-linked prisoners for 15 Kurdish militia fighters who were captured by tribal forces over the last week.
As of Tuesday morning, Asayish were still preventing the exit of forces loyal to the government out of the centre of Qamishli and Hasakah, but the restrictions are expected to end soon, said the sources.
The unrest had amounted to a challenge to US influence in the area, coming amid an escalation in tension in the region over the war in Gaza, particularly between allies of Iran and the US.
The challenge to the grip of Kurdish groups in the area also came amid increased attacks in recent days against US bases in Syria and Iraq. The attacks, suspected of having been carried out by Shiite militias loyal to Tehran, are seen as shot across the bows of Washington, which had sent reinforcements to the Middle East to help defend Israel.
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.”
Company profile
Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
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