The UN is a body designed to accomplish the difficult task of promoting diplomacy over conflict, with the ultimate aim of maintaining global peace. For eight years, it has failed to do so in Yemen. This is not for want of trying. There have been multiple representatives to the country and many attempts at dialogue.
Next week, the issue will once again be up for discussion. And in recent days, there have even been some tentative signs of an improvement on specific issues to do with the conflict. But after so many terrible years, it is important to define what "progress" might resemble, and how likely it actually is, even in spite of the odd good sign.
Indeed, as the UN prepares for new talks to find a political settlement to the conflict, its special envoy to Yemen, Hans Grundberg, is trying to manage expectations. "Trust is low and ending this war will require uncomfortable compromises," he says, encouraging "every possible effort to impress upon parties that there is no sustainable military solution". One of the UN's limitations has been to equate all sides of the conflict, when in reality there is an internationally recognised government on the one hand, a terrorist group that seized power by force on the other, as well as yet more parties trying to fill the vacuum due to that seizure.
Without pressure to negotiate in good faith, the Houthis have previously used talks as a stalling tactic. Their recent attacks on the UAE, Saudi Arabia, and on areas within Yemen have made their intentions clear.
In anticipation of an underwhelming result, the UAE's envoy to the UN, Lana Nusseibeh, is holding groups involved in discussions to account, criticising on Tuesday some efforts as an “appeasement” of Houthi rebels. Ms Nusseibeh called for tougher measures, including sanctions, against the group.
“Stopping the Houthis' aggressive behaviour requires the international community to take serious, decisive and tangible steps, all of which keep in mind the nature of the Houthis' extremist ideology and their true intentions,” she said.
It is with this clear-eyed attitude that isolated, but nonetheless important, recent developments should be viewed. The most immediate crisis that could be on track to a resolution is FSO Safer, an abandoned oil tanker drifting off the coast of Yemen that could quite literally explode at any moment. Now, UN humanitarian chief Martin Griffiths has revealed that an agreement has been reached "in principle" to transfer more than one million barrels on to another ship.
Even the slightest progress on the matter is important. An explosion would spell disaster for the Red Sea's marine life, desalination plants and shipping lanes. Greenpeace has said it has the potential to cause one of the biggest oil spills in history. Despite this huge risk, the Houthis have for years been happy to use it as a bargaining chip. For them to give way, however tentatively, can only be welcome.
It is also a sign that their positions are not necessarily intransigent, despite appearances. Parties countering the Houthis can continue to find room for movement through collective resolve. The Houthis' tenuous situation will not be helped by news that the Yemeni army has retaken areas south of the strategic Marib province in central Yemen.
If this next cycle of activity at the UN is to be different from previous ones, harnessing positions of strength, not appeasement, should be the way forward. The past few years have provided enough evidence that the Houthis are not interested in a rules-based international order. For those working on bringing Yemen back into that fold, stronger approaches of the kind being advocated by the UAE and its regional allies will be needed.
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.”
Specs
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Fuel economy, combined: 11.3L / 100km
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