Insight and opinion from The National’s editorial leadership
October 06, 2022
Sometimes it comes hidden in a crate of tea. At others it’s disguised to look like a fava bean, or delicately moulded into the shape of a hummus bowl. No matter the method of concealment, for years millions of pills of Captagon, a highly addictive drug from the amphetamine family, have found their way into ports across the Arab world. For authorities in the region the scale of the problem has demanded constant vigilance. Captagon-related busts frequently make headlines in Saudi Arabia and the UAE.
This week, the sense of urgency spread to the US, where Members of Congress are urging President Joe Biden to increase American support for Middle East allies combatting the Captagon trade. The drug, known to pharmacologists as fenethylline, was developed in the 1960s as a treatment for ADHD and depression. But its addictive nature and negative side effects quickly became known, and the US took steps to ban it in 1981, with most other countries following suit.
Nearly a decade ago, however, the drug gradually re-emerged as an illicit stimulant of choice in the Middle East, where it was first introduced by criminal gangs from South-East Europe. Its manufacture and distribution was swiftly co-opted by an established nexus of militants and drug runners.
The problem is particularly severe in Syria, where civil war has left huge swathes of the country in the hands of corrupt officials and organised crime, as The National highlighted in an in-depth investigation last year. Thomas Pietschmann, an expert at the UN Office on Drugs and Crime (UNODC), warned that the Captagon trade had become a hallmark of business in government-held Syrian territory. The drug is thought to be one of Syria’s largest exports, valued at more than $3 billion a year, giving the government in Damascus little incentive to crack down.
“The problem is,” one Jordanian official told The National last year, “there is no security partner on the [Syrian] side of the Jordanian border.”
Captagon-related busts frequently make headlines in Saudi Arabia and the UAE
The drug’s connections to Syrian regime-held areas are the primary impetus for the Captagon Act, a bill introduced by US Congressman French Hill, which was passed in the House of Representatives in September and is awaiting a vote in the Senate.
The aim of the Captagon Act, Mr Hill told The National, is “to think through how do we…cut off the funding as a result of Captagon to [the Syrian] regime?”
But the challenges posed by Captagon extend far beyond Syria. The web of middlemen with a hand in the trade features a wide array of terrorist groups.
Smuggling routes reach deep into Iraq, and sometimes follow tortuous paths that lead to ports in Europe before doubling back to the Middle East. Hezbollah, the militant political party controlling much of Lebanon, is an especially influential player; it has been a force in the regional drug trade since the 1980s.
While America’s sudden attention towards the Middle East’s Captagon crisis is driven largely by its security concerns in Syria, greater efforts on the part of the US, the region’s largest security partner, towards getting to the root of the problem and helping to bring criminal enterprises to justice will be welcome. For Washington’s allies in the Middle East, the problem has always been much more intimate than geopolitics – a matter, first and foremost, of public safety and public health.
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.”
Three ways to boost your credit score
Marwan Lutfi says the core fundamentals that drive better payment behaviour and can improve your credit score are:
1. Make sure you make your payments on time;
2. Limit the number of products you borrow on: the more loans and credit cards you have, the more it will affect your credit score;
3. Don't max out all your debts: how much you maximise those credit facilities will have an impact. If you have five credit cards and utilise 90 per cent of that credit, it will negatively affect your score.
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