Rule of law must prevail in Pakistan

Pakistan’s response to the killing of 134 children and 18 adults at a Peshawar school two weeks ago has been swift and deadly. In the past few days, its military has killed a Taliban commander blamed for the school attack and has unleashed air strikes and a ground offensive in the Orakzai and Khyber tribal districts near the Afghan border, which claimed the lives of at least 55 suspected militants. Prime minister Nawaz Sharif has vowed to eliminate terrorism, and while Pakistan is right to target those who have visited death and destruction on the innocent, it should do so with caution.

Despite being weakened by a sustained army offensive, the Tehreek-e-Taliban remains a real and present danger to Pakistan. With the right will and resources, it can be defeated – along with its poisonous ideology that would prevent girls from being educated, women from working or engaging in public life and children from being vaccinated against the preventable scourge of polio.

The Peshawar school massacre has been described as Pakistan’s “September 11 moment” – a defining act of terror that has galvanised a nation. But it is important that Pakistan learn the lessons of America’s response to the 2001 attacks. It must have a clear strategy that precisely targets those who perpetrate and support criminal acts. The rule of law, which has been greatly diminished in Pakistan in recent years, must be applied and must be seen to apply. In addition to military strikes where necessary, the authorities should make arrests – including pursuing the court warrant against the hate preacher Maulana Abdul Aziz.

According to some accounts, the attack in Peshawar was an act of desperation by a group that was already on the run. Offenders must be brought to justice, but the official action must be measured. Any missteps, “collateral damage” or overreach of the kind that characterised the United States’s decade of war in Iraq and Afghanistan will risk turning the tide of public opinion and thwarting Mr Sharif’s stated aim of ridding Pakistan of terror from within.

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.”

Rule of law must prevail in Pakistan

Caution should be used in pursuing those who are attacking the country from within