Hayat Tahrir Al Sham’s march to power in Syria late last year took everyone, including the militant group itself, by surprise. However, now that it finds itself as the governing authority, the group is faced with the daunting task of ensuring that the country has the stability required to move forward.
Over a couple of weeks from late December to early January, I travelled to Syria to meet civil society leaders, analysts, NGO leaders, researchers and ordinary citizens. The aim was to walk away with a better lay of the land regarding several themes, including the challenges in consolidating stability and security in a country that has just emerged from a nearly-14-year civil war. The conflict has torn at the nation’s social fabric, leaving it in some of the most dire economic conditions imaginable.
The thoughts of those I met are instructive to understand the key threats facing stability in Syria as it moves into the post-Assad and post-Baath era (this not even counting the conflict between the Syrian Democratic Forces and the Turkish-backed Syrian National Army [SNA] in the north and north-east).
The first of the two main risks is that of different armed factions of the SNA, and some armed factions from the south, resisting HTS demands placed upon them to disarm and integrate into the new Syrian armed forces.
Many of these factions appear to desire stability, yet some don’t accept HTS as the state. They consider it to be just another faction, and indeed one in which about 25 per cent of its fighters are foreigners. Accordingly, they are unlikely to hand over their weapons and integrate into a future national army without retaining the power to act as independent units within that army. In a similar vein, Druze fighters are refusing to hand over their weapons because they argue that no state currently exists, and therefore no source of protection exists for them.
Many of these factions appear to desire stability, yet some don’t accept HTS as the state
The trajectory of this impasse will largely come down to two factors. First is the manner in which the new Syrian security apparatus is formed in the coming months. Second is the speed and extent to which reconstruction funding enters the country.
Regarding the first dynamic, HTS, despite continuing to assert that the new security apparatus will be centralised, has in practice seemingly begun to allow a level of decentralisation to occur. Over the course of January, a notable number of SNA factions from Aleppo were integrated into the new Ministry of Defence in what appeared to be their pre-existing form, as opposed to having to dissolve. There were also reports of a similar process being under way with some of the southern armed groups in Deraa, although this was then denied by HTS officials. If this opportunity were to be extended to the Druze and remaining SNA factions, this could solve some of the impasse.
As for the second dynamic, SNA factions will need funds that are expected to come in for reconstruction, for them to sustain their authority in the areas they continue to control. Given that HTS will almost inevitably be the gatekeeper of this funding process, any financing that comes in will give Damascus leverage over the remaining SNA factions in trying to integrate them into the armed forces.
This future equation presents a more compelling set of incentives for the factions in question to what currently exists.
The second of the two main risks pertains to tensions between the Alawites – the sect to which Mr Al Assad’s family belongs and which constituted the majority of the former regime – and HTS as well as the rest of society.
Many Alawites now feel threatened, disenfranchised and humiliated due to the sharp decline in their fortunes since the fall of the Assad government and the absence of a leader or armed group representing their interests. Some of them are said to be keeping lines of communication with Iran open, with a view to restore Tehran’s greatly reduced influence in Syria. In a similar vein, numerous Syrian mafias remain tightly connected to Hezbollah.
Revenge killings against Alawites are a further destabilising factor. Until there is a transitional justice or reconciliation pathway presented to provide an alternative method for Syrians’ grievances to be pursued vis-a-vis the Assad loyalists, these revenge killings will be hard to eradicate.
Aside from being too small to lead this transitional justice process, the HTS-led administration lacks the legitimacy and mandate to do so because it wasn’t elected. Interim President Ahmad Al Shara has pledged to form a technocratic government that represents Syria's diverse communities. Such an administration will then need to work with the spectrum of civil society to establish a legitimate process.
The ability to tackle the two aforementioned challenges will lie in the nature of the transitional government. If it is truly representative and inclusive, and is formed in consultation with a national dialogue mechanism – such as the prospective National Dialogue Conference that Mr Al Shara has set in motion – this will expedite the process to reach a point where the necessary foundations of a legitimate, inclusive state are met to assuage the above mentioned concerns of the many militias.
It will also speed up the process of reaching a stage where foreign entities feel satisfied enough to start allocating reconstruction funding, thus mollifying the various armed factions. Furthermore, it will mean creating the foundations needed to start pursuing a viable reconciliation process, thus beginning to mend the fissures in society that have become so destabilising.
For relevant regional and international states desirous of Syrian stability, influencing HTS to enable such a representative and inclusive transitional government is, therefore, critical.
THE APPRENTICE
Director: Ali Abbasi
Starring: Sebastian Stan, Maria Bakalova, Jeremy Strong
Rating: 3/5
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.”
Spain drain
CONVICTED
Lionel Messi Found guilty in 2016 of of using companies in Belize, Britain, Switzerland and Uruguay to avoid paying €4.1m in taxes on income earned from image rights. Sentenced to 21 months in jail and fined more than €2m. But prison sentence has since been replaced by another fine of €252,000.
Javier Mascherano Accepted one-year suspended sentence in January 2016 for tax fraud after found guilty of failing to pay €1.5m in taxes for 2011 and 2012. Unlike Messi he avoided trial by admitting to tax evasion.
Angel di Maria Argentina and Paris Saint-Germain star Angel di Maria was fined and given a 16-month prison sentence for tax fraud during his time at Real Madrid. But he is unlikely to go to prison as is normal in Spain for first offences for non-violent crimes carrying sentence of less than two years.
SUSPECTED
Cristiano Ronaldo Real Madrid's star striker, accused of evading €14.7m in taxes, appears in court on Monday. Portuguese star faces four charges of fraud through offshore companies.
Jose Mourinho Manchester United manager accused of evading €3.3m in tax in 2011 and 2012, during time in charge at Real Madrid. But Gestifute, which represents him, says he has already settled matter with Spanish tax authorities.
Samuel Eto'o In November 2016, Spanish prosecutors sought jail sentence of 10 years and fines totalling €18m for Cameroonian, accused of failing to pay €3.9m in taxes during time at Barcelona from 2004 to 2009.
Radamel Falcao Colombian striker Falcao suspected of failing to correctly declare €7.4m of income earned from image rights between 2012 and 2013 while at Atletico Madrid. He has since paid €8.2m to Spanish tax authorities, a sum that includes interest on the original amount.
Jorge Mendes Portuguese super-agent put under official investigation last month by Spanish court investigating alleged tax evasion by Falcao, a client of his. He defended himself, telling closed-door hearing he "never" advised players in tax matters.
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