Houthi supporters shout slogans and brandish guns during a protest in Sanaa. EPA
Houthi supporters shout slogans and brandish guns during a protest in Sanaa. EPA
Houthi supporters shout slogans and brandish guns during a protest in Sanaa. EPA
Houthi supporters shout slogans and brandish guns during a protest in Sanaa. EPA


The world ignores the Yemen crisis at its peril


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March 02, 2023

In August, The National reported on an unlikely commodity being sold by impoverished Yemenis – landmines.

When one of the world’s most heavily mined countries was hit by flooding, which unearthed thousands of the lethal devices, civilians risked their lives to gather them for sale on the black market. In one weapons market, landmines were going for an average of 5,000 Yemeni rials, or $20, each.

Such desperation is just one illustration of the dire situation and need to help Yemenis, and to find a political solution. It should have also been top of people's minds at the UN donor conference held in Geneva earlier this week. However, amid waning interest in the long-running conflict and the intense global focus on Ukraine, an aid target of $4.3 billion was missed.

This lack of financial engagement is not only ruinous for the estimated 17.3 million Yemenis in urgent need of assistance, it also reveals a wider failure to prioritise a conflict that is a source of serious regional instability and cross-border terrorism.

This week a study released by the Middle East Institute described how the main stumbling block to ending the conflict – the violent and disruptive Houthi militia – had late last year engaged in economic warfare to exhaust the Yemeni government’s financial resources “and provoke social unrest in government-held areas”.

It also described how the Houthis’ attacks on infrastructure revealed “the same strategic use of Iranian-supported non-conventional warfare tactics seen in their previous cross-border attacks into Saudi Arabia and the United Arab Emirates”.

A worker carries a sack of wheat flour during the distribution of food aid in Sanaa, Yemen, last April. Reuters
A worker carries a sack of wheat flour during the distribution of food aid in Sanaa, Yemen, last April. Reuters

In light of the movement’s attempts to destabilise those parts of Yemen outside its control, finding a way to even begin the process of reconstruction seems challenging. The rebels’ current demand for money, ostensibly to pay Yemeni civil servants’ salaries – despite stuffing the institutions under their control with loyalists – is perhaps only slightly less obstructive to peace than their call for Houthi fighters and fellow travellers to receive payments, something that would, according to the Middle East Institute “perpetuate the cycle of conflict and bolster both their forces and their transnational allies”.

The Houthis’ behaviour, like that of other Iran-backed militants elsewhere in the region, reveals a propensity to thrive on conflict but falls abysmally short when it comes to the difficult business of making peace or even helping the people living under their rule.

Some countries have shown a commitment to helping Yemenis and the institutions under the control of their legitimate government. The UAE has so far provided Yemen with $6.6 billion in aid and a $300 million deposit for the Central Bank in Aden to bolster the country's economy. Last week Saudi Arabia deposited $1 billion into the Central Bank to support an economic reform programme and has provided billions of dollars of support for years.

What this week’s donor conference has made clear is that a sticking-plaster approach to Yemen – in which aid conferences do not tackle the root of the problem – is not enough. Some participants in the Geneva talks made clear the need for a change in approach.

Yemeni Prime Minister Maeen Abdulmalek Saeed told attendees that “ending the humanitarian crisis starts with ending the war.” UN Secretary General Antonio Guterres said the aid being pledged “saves lives but it cannot resolve the conflict itself”.

And Minister of State Noura Al Kaabi told the Geneva event that the time had come “to shift our focus from managing the conflict to finding a solution to it”.

This month will mark the eighth anniversary of the Arab coalition’s intervention into Yemen in response to calls from its government for help. With a clear-sighted view of the Houthis being a roadblock to peace, and a renewed commitment to end the festering instability on the Arabian Peninsula, with luck this year’s donor conference could be one of the last.

Small Victories: The True Story of Faith No More by Adrian Harte
Jawbone Press

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.”

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Updated: March 02, 2023, 3:00 AM