The Houthi rebels have launched several attacks on civilian vessels since November. EPA
The Houthi rebels have launched several attacks on civilian vessels since November. EPA
The Houthi rebels have launched several attacks on civilian vessels since November. EPA
The Houthi rebels have launched several attacks on civilian vessels since November. EPA


Yemen's Houthis are baiting the world in the Red Sea, risking all progress towards peace


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January 02, 2024

In the past two months, the Houthi rebel group has seized a cargo ship, attacked several other commercial vessels and fired at least half a dozen missiles hundreds of kilometres from its base in western Yemen. In the past nine years since it emerged from northern Yemen and mounted a violent takeover of Sanaa, the Yemeni capital, the group has carried out more than 1,000 attacks against infrastructure important to the global economy – most of it oil facilities and airports in Saudi Arabia. The Houthis may control less than half of Yemen’s territory, but their aggression leaves an outsized footprint on the world stage.

The latest instance occurred in the Red Sea early on Sunday morning, when Houthi militants mounted an attack against a container vessel operated by Danish shipping giant Maersk. They were repelled by two US naval helicopters, which had responded to a distress call from the vessel’s security team. The resulting battle saw the choppers sink three Houthi ships, killing 10 militants.

Later that day, UK Defence Secretary Grant Shapps said his government would not hesitate to take “direct action” against the group – a phrase widely interpreted to mean London is considering air strikes on Yemeni soil.

By attacking ships and launching missiles, the Houthis claim to be helping to defend innocent Palestinians against Israel, which undertook a deadly ground campaign in the Palestinian enclave of Gaza in October. Given that the attacks have not only failed to move the dial in favour of Palestinians, but have in fact added to the number of innocent civilians in the region put at risk, the claim is at best dangerously naïve and at worst threatening a regional war without an end in sight. If the militants’ actions draw western powers into a new battlefront, ongoing peace talks in Yemen could unravel, injecting deep uncertainty into the country’s future – and risking even the Houthis’ own position.

The Houthis may control less than half of Yemen’s territory, but their aggression leaves an outsized footprint on the world stage

The failure of the international community to end the onslaught on Gaza, largely due to full American support of Israel’s tactics, has only emboldened the Houthis further. And while the Houthis' own tactics may often appear strategically senseless, these are not rebels without a cause. Seizing control of Yemen is only part of the picture; the group’s objectives are expansive and pernicious. As a core member of the Iran-led, so-called “axis of resistance” that aims to remake the Middle East in a more extremist image, the Houthis are part of a transnational agenda.

Diplomatic efforts over the past two years to bring an end to Yemen’s conflict and establish an inclusive government were aimed, in part, at containing the influence of that agenda on the Arabian Peninsula and, eventually, releasing Yemen from its grip entirely so that all Yemenis – including those living in the Houthi stronghold areas – could prosper in peace. These efforts were going relatively well; Hans Grundberg, the UN’s Yemen envoy, spent much of last year shuttling between warring parties to build out an agreement. On December 23, he announced that both the rebels and the Yemeni government had committed to steps towards a ceasefire.

A conflagration in the Red Sea that raises shipping costs to Yemeni ports, brings western sanctions or reignites an international conflict would pull Yemenis back into their most desperate days. By gambling with their fellow citizens’ lives, the Houthis are gravely miscalculating. The challenge for the rest of the world is to respond strongly enough to show them this while avoiding its own miscalculations, too.

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Children who witnessed blood bath want to help others

Aged just 11, Khulood Al Najjar’s daughter, Nora, bravely attempted to fight off Philip Spence. Her finger was injured when she put her hand in between the claw hammer and her mother’s head.

As a vital witness, she was forced to relive the ordeal by police who needed to identify the attacker and ensure he was found guilty.

Now aged 16, Nora has decided she wants to dedicate her career to helping other victims of crime.

“It was very horrible for her. She saw her mum, dying, just next to her eyes. But now she just wants to go forward,” said Khulood, speaking about how her eldest daughter was dealing with the trauma of the incident five years ago. “She is saying, 'mama, I want to be a lawyer, I want to help people achieve justice'.”

Khulood’s youngest daughter, Fatima, was seven at the time of the attack and attempted to help paramedics responding to the incident.

“Now she wants to be a maxillofacial doctor,” Khulood said. “She said to me ‘it is because a maxillofacial doctor returned your face, mama’. Now she wants to help people see themselves in the mirror again.”

Khulood’s son, Saeed, was nine in 2014 and slept through the attack. While he did not witness the trauma, this made it more difficult for him to understand what had happened. He has ambitions to become an engineer.

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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.”

Updated: January 02, 2024, 3:00 AM