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Ten months into the Houthi blockade of the Red Sea, industry experts are again asking if the Iran-backed militia has defeated two international naval coalitions trying to keep open the vital shipping route through which about $1 trillion of goods pass every year.
One of those forces is led by the EU and aimed at shooting down Houthi missiles and drones launched at civilian ships and the other is led by the US and UK that has bombed Houthi positions. But the efforts of the US and EU would need to be more robust, said Salvatore Mercogliano, an expert on military and commercial shipping at Campbell University, North Carolina.
The Houthis can expend missiles and drones attacking ships, or lose them in US-led air strikes, but Iran is able to resupply them.
“You would be talking about something akin to the Maritime Interdiction Operations of Iraq from 1991 to 2003. This will require a sizeable naval presence and be another requirement on the world's navies,” Mr Mercogliano said, highlighting how the US navy has also been stretched by Pacific deployments to counter China.
“It would also slow the arrival of cargo into Yemen which could cause a stir from humanitarian groups if it impacts food. This, of course, does not stop shipments by air direct to Yemen from Iran," he told The National.
Iran has used small civilian vessels to move rocket motors and guidance systems into remote, rocky inlets on Yemen’s coast. While some ships have been halted by the US and UK navies, stopping them entirely would be a significant commitment.
The question over which side has “won” was posed last week by Elliot Abrams in an article for the Council on Foreign Relations, a think tank. Mr Abrams, once deputy national security adviser to former US president George Bush, said the US navy hasn’t upheld part of its mission statement to “defend freedom, preserve economic prosperity, and keep the seas open and free".
The debate is in sharper focus amid a delayed attempt to salvage the stricken MV Sounion oil tanker. The vessel, laden with half a million barrels of oil, was struck by Houthi missiles, boarded and rigged with bombs, and is now smouldering in the Red Sea. Civilian salvage teams are reluctant to mount a recovery operation due to the continuing conflict, the EU’s naval mission said. Several more attacks on shipping followed the August 21 strike on the Soumian.
Mr Mercogliano contends the US could achieve better results by striking Iranian assets, perhaps naval vessels of the group’s key backer, if the Houthis continue attacks on shipping in the Red Sea, transit point for about 30 per cent of the world’s container trade. The Houthis say they are maintaining their campaign, which has sunk two ships, damaged dozens and killed three sailors, until Israel ends its devastating war in Gaza.
So far, the attacks have been effective, although Israeli retaliation for direct Houthi strikes on Israel saw fuel and power infrastructure devastated at the port of Hodeidah on July 20. The group has also been hit with fresh western sanctions.
Global trade damage
Despite these setbacks, the campaign has cut transit through the Red Sea by more than 60 per cent, according to a report last month by shipping giant Maersk, raising the cost of maritime trade and causing billions of dollars in losses for Egypt through declining Suez Canal revenue. Financial losses for Israel are unknown, although the port of Eilat has taken a heavy financial blow after months of no revenue.
Meanwhile, the Houthis seem almost impervious to the US and UK air campaign to bomb its hideouts and missile and drone arsenal. This is not a sustained campaign but instead described by Centcom, the US military headquarters in the Middle East, as acting in “self defence.” Mr Abram’s article contends that the US has not “lost” the conflict, but that Washington is too timid amid fears of wider escalation.
US Rear Admiral Marc Miguez, who led a carrier strike group in the Red Sea, recently told naval veteran and YouTuber Ward Carroll that more "aggressive" action was being considered, without elaborating.
Craig Picken, a former US navy pilot and aviation expert who runs Northstar Group, an executive search firm in aerospace, says the dilemma the US now faces should spur a rethink of its military commitment in the region. The US, he says, is spending billions protecting shipping lanes like the Red Sea.
“If it’s international shipping, it should be everybody's job,” he says, highlighting how countries such as China could do more to protect vessels.
China has escorted some of its ships through the waterway, vessels the Houthis appear to be avoiding with their targeting, although a Chinese tanker was damaged in late march, likely a case of poor intelligence.
US navy under strain
Mr Picken explained to The National the difficulty of a full-scale US naval effort to stop Iranian resupply of the Houthis. Even a prolonged non-combat operation intercepting Iranian smuggling boats to the Houthis would place immense strain on ships and aircraft, dragging on for many months, adding billions in cost to naval deployments. A US aircraft carrier, its aircraft and supporting ships can cost up to $8 million a day to deploy.
The aircraft carriers come with E-2 Hawkeye airborne radar planes, capable of surveying hundreds of vessel over hundreds of thousands of square kilometres of ocean in one mission.
The USS Eisenhower aircraft carrier, which was deployed to the Red Sea for nine months, was “ flying the wings off their F-18s, to protect naval assets, to protect their own assets, to shoot down drones.
Millions and millions of dollars in wear and tear on the planes,” said Mr Picker, a veteran E-2 airman. During deployments over Iraq and Somalia in the early 1990s, his squadron “flew 2,000 hours in six months. So that's 500 hours per aeroplane, for a six month cruise,” he said.
Today, 500 hours of flight would cost $20,000,000, at $40,000 per hour, based on US government estimates for the Hawkeye. Add submarine deployments and other assets that could be used to counter other US adversaries, such as satellite reconnaissance, and even action short of war costs billions.
“What’s happening in the Red Sea is unprecedented and it may require a new way of thinking from the western navy forces," said Noam Raydan, a senior fellow at the Washington Institute for Near East Policy, a think tank.
"The Houthis are learning fast and improving their attacks. However, it’s understandable that some western forces like the US may need to be present in different areas in the Middle East at the moment due to the Gaza war," she told The National.
“Meanwhile, some regional Arab countries probably need to start thinking, if they aren’t already about confronting similar maritime threats in the future and under different circumstances. As for vulnerable commercial ships, some are still taking risks and sailing in the region. Others have been forced to take the longer route around the Cape of Good Hope,” she said.
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
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Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
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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.”
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
Omar Yabroudi's factfile
Born: October 20, 1989, Sharjah
Education: Bachelor of Science and Football, Liverpool John Moores University
2010: Accrington Stanley FC, internship
2010-2012: Crystal Palace, performance analyst with U-18 academy
2012-2015: Barnet FC, first-team performance analyst/head of recruitment
2015-2017: Nottingham Forest, head of recruitment
2018-present: Crystal Palace, player recruitment manager
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
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Warn others to prevent further harm
Courtesy: Crystal Intelligence
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Engine: Dual-motor all-wheel-drive electric
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Torque: 985Nm
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Scores
Rajasthan Royals 160-8 (20 ov)
Kolkata Knight Riders 163-3 (18.5 ov)
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Honeymoonish
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RESULTS
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Winner: SS Jalmod, Antonio Fresu (jockey), Ibrahim Al Hadhrami (trainer)
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