Fighting between Syria's government and Druze fighters in southern Sweida subsided on Wednesday after a US-brokered peace deal, although troops were still encircling the area.
The internal strife, which has drawn an Israeli military intervention and affected Jordan, broke out in Sweida in July amid resistance by Druze spiritual leader Sheikh Hikmat Al Hijri to government attempts to impose control and appoint local officials. Since then, the area has been cut off from the outside world.
The agreement signed in Damascus on Tuesday provides for measures to calm tensions, improve humanitarian conditions and partially integrate Sweida into the post-Bashar Al Assad state. Hayat Tahrir Al Sham, a splinter group from Al Qaeda, ousted Mr Al Assad at the end of 2024.
Sources in Sweida and Jordan reported a last exchange of machinegun fire in western Sweida overnight, particularly near the village of Arneh. The rural area forms a front line between the Druze on one side and government forces and allied militia on the other.
“The clashes stopped by the morning. The ceasefire part of the deal appears to be holding,” a source in Jordan said.
The kingdom's Foreign Minister, Ayman Safadi, was in Damascus for the signing of the deal. It stipulates the withdrawal of pro-government militias to the administrative borders of Sweida, the opening of the main road from Sweida to Damascus, and the creation of a local police force with a commander appointed by Damascus.
The Druze and the Sunni-dominated government are supposed to “agree on a road map for reconciliation”, but the deal did not set any deadlines.
Suhail Thebian, a prominent civil figure in Sweida, said government roadblocks around the province showed no signs of being dismantled. He said pro-government fighters had not moved from dozens of villages west and north of Sweida city.
“It is crucial that the military and the [government] militias withdraw so that tens of thousands of the displaced can go back,” said Mr Thebian. Shortages of basic goods continue in the province, especially bread, he said. “Most bakeries are still not operating because there is no wheat."
Sweida is on the border with Jordan, which has a small Druze population as well as Bedouin tribes who extend into Syria.
The government said it sent troops to Sweida in response to clashes in July between the Druze and Sunni inhabitants of Bedouin origin. Israeli air strikes halted their advance. The thrust of the government offensive has given way to low-intensity warfare.
Hundreds of civilians, mostly Druze, were killed in the fighting. The UN said there was a humanitarian crisis in the area because of shortages of food, medicine, fuel and electricity.
More than 161,000 people have been displaced as a result of the conflict, most of them from the Druze population, the UN said last month. However, at least 30,000 Bedouin have been uprooted as a result of the conflict and are now mostly living in schools in neighbouring Deraa province.
A so-called Legal Council, comprised mainly of judges and lawyers loyal to Mr Al Hijri, runs civil affairs in Sweida province. Late on Tuesday, the council said it rejected the deal's clauses about Damascus having a say over the police in Sweida, and that Sweida should have local councils to negotiate with Damascus instead of a full-fledged political leadership.
Sweida will keep “the right of self determination … either through administration or separation from Syria”, the council said.
Axios reported this week that Israel has presented Syria with proposals for demilitarised zones south of Damascus, as part of continuing security talks between the two sides, which Washington is also brokering. It is not clear whether these zones would include front lines between the government and the Druze.
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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.”
UAE currency: the story behind the money in your pockets
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