Afghan children take their last classes at a facility funded by the UN and others, before its closure due to a ban by Taliban that bars Afghan women working for NGOs. EPA
Afghan children take their last classes at a facility funded by the UN and others, before its closure due to a ban by Taliban that bars Afghan women working for NGOs. EPA
Afghan children take their last classes at a facility funded by the UN and others, before its closure due to a ban by Taliban that bars Afghan women working for NGOs. EPA
The US presidency has famously been called “the loneliest job in the world”. But the supreme leader of Afghanistan, Taliban jurist Haibatullah Akhundzada, could give any American leader a run for their money.
Mr Akhundzada’s isolation is entirely self-inflicted. Since coming to power in August 2021, he has not met with foreign officials. Although he has, allegedly, attended some religious gatherings – both in Kandahar, where he is thought to be based, and in the capital Kabul – he has never been photographed in public. Like a black hole, his presence is not detected visually, but instead by the way it warps everything around it. His Afghanistan is one warped to shut women out of public life, prohibit criticism of the leadership and deny any capable, inclusive governance.
Afghans who want to question the decrees being issued by Mr Akhundzada in Kandahar have no formal means of doing so, and any informal means (such as airing their views on television or social media) risk landing them in a detention room.
UN officials and foreign envoys do not have to suffer such indignities, but they cannot meaningfully raise any objections either. Mr Akhundzada’s decisions, made unilaterally, have reportedly caused plenty of dissent within Taliban ranks, with some of the movement’s junior leaders in lock-step with the supreme leader’s extreme ideology and others wishing their fledgling government were more pragmatic. After all, at this point the Taliban has everything to gain in the way of public support and international aid money from even the smallest concession.
Nonetheless, there is no mechanism in the Taliban system to appeal against the supreme leader’s decisions. So when foreign representatives complain to Taliban officials in Kabul, they are met with either sympathy or rage, depending on which camp the official falls in. But the conclusion is always the same: there is nothing anyone can do about it.
The Taliban’s opaque leadership is the first of three major political problems that are standing in the way of a solution to Afghanistan’s deepening economic and humanitarian crisis.
The Taliban has been in power in Afghanistan since August, 2021. AP
Like a black hole, the supreme leader's presence is not detected visually, but instead by the way it warps everything around it
The second problem is the near-complete paralysis of the country’s civil society. The loudest voices advocating resistance against the Taliban right now are coming from outside the country – from exiled officials of the old republic, diaspora activists and an assemblage of ex-warlords and their militiamen, many of whom seem to want a return to civil war. This state of affairs has made it easy for Taliban officials to get into the rather cliched habit of dismissing any campaign for reform as “foreign interference”.
The emergence of a grassroots civil society movement that engages in non-violent resistance would certainly help send a message that there is nothing foreign about opposition to the supreme leader’s most draconian writs, and perhaps even encourage his silent detractors within Taliban ranks to speak up. But collective resistance and collective bargaining are, as things currently stand, not viable options for a very simple reason: the economy is structurally a shambles and everyone in it is too poor. There are no unions who could go on strike, for example, because there is barely any industry, commerce or economic development. There are no internal levers powerful enough to push for reform.
Addressing this requires solving the third problem: the international community’s incoherent and unconstructive strategy for engaging with Afghanistan and the Taliban. It is the most vexing problem of the three, if only because it should be the easiest to solve.
Afghanistan’s institutions are not strong enough, at present, to support a well-functioning economy. But they cannot get even halfway there as long as the international sanctions that prevent banking, investment and trade persist. The obstacle to lifting these sanctions is entirely political; western powers, the primary enforcers, are first and foremost afraid of facing accusations (many of them from the aforementioned diaspora and ex-republic activists) of empowering the Taliban if they take any steps that could be seen as normalising relations with Afghanistan. Second, they want to save face; western countries were left humiliated by the Taliban’s rise to power and subsequent posturing, and they appear unable to stomach doing anything that could increase the Taliban’s tax revenues, or that the Taliban could spin as a “win”.
The logic of this stance was dismantled very capably by former UN official Mukesh Kapila in a recent op-ed for The National, in which he wrote: “Pragmatic realpolitik, not bruised ego, is the better basis for relations with the Taliban.” A large win for Afghanistan – and its civil society – in the form of a functioning economy outweighs a small win for the Taliban.
An even more troubling aspect of the international community’s Afghanistan strategy, however, is the fact that, after 20 years and considerable sacrifice dealing with the Taliban, it still seems to fundamentally misunderstand the group’s own allergy to pragmatism. This is best showcased in the ongoing saga over the country’s $9 billion of reserves, stored overseas and withheld by the US and European countries. The international community’s present solution for getting this money back into Afghan hands is to transfer part of it to a trust in Switzerland, whence it is to be disbursed to Afghanistan on an ad hoc basis, in tranches, for projects vetted by the trust’s American, Swiss and diaspora-Afghan board members.
The plan is, so far, not working because it overlooks a rather obvious problem: getting so much money into Afghanistan is difficult to do without the Taliban’s acquiescence, and the group is not giving it. And that is because the Taliban will not take any amount of money – even billions of dollars of Afghanistan’s own money – if it is at the expense of the group’s principle that it is the country’s sovereign government and should have the right to decide how the funds are spent.
Giving the Taliban that kind of recognition is emotionally difficult. The steps the international community is having to take to avoid doing so, however, are bordering on farce. And they affect more than just money; last year, the International Criminal Court was trying to notify Afghanistan’s “competent authorities” (i.e. the Taliban) that it was proceeding with an investigation into Afghan war crimes, only for its letter to be forwarded by UN officials to the Afghan mission in New York, an office staffed by the republican government-in-exile. All of this theatre over what is essentially a semantic point (whether or not to call the Taliban a government) prevents anything meaningful from getting done for the benefit of Afghans.
It would be convenient to pretend that these three problems – Afghanistan’s opaque government, the paralysis of civil society and the inefficacy of the international community response – are a Gordian knot that no one can untangle. But they are not. They can be solved, step by step. The first step is for the international community, where reason ostensibly still matters, to unlock the gears of the Afghan economy, even at a moral cost. The second is to use those gears to build an Afghan society that is capable of demanding things from its government in non-violent, but still extremely effective ways. And the third is for that society to force changes, on Afghanistan’s own terms, and to show Mr Akhundzada's camp that progress cannot be achieved in supreme isolation.
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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.”