After Monday’s terrorist attack against the UAE, which killed three people and wounded six, international attention is once again focused on low-cost drones: how to stop them, and how to prevent their acquisition by terror groups.
This follows the UAE's announcement that drones were a suspected method behind the attack, but an investigation is ongoing.
Explosive drones, or the “loitering munitions” suspected in this case, have become a challenge to advanced militaries around the world.
But what exactly are these weapons, frequently used by the Houthis and other Iran-backed groups to attack Saudi Arabia and Iraq?
Iranian drones
Iran has proliferated unmanned aircraft originally designed for target practice in the 1980s. They typically have a rear-mounted “pusher propeller” system and are constructed from cheap material, sometimes including wooden components.
As cameras evolved, drones such as Iran’s Ababil were used for reconnaissance, but in recent years the flimsy looking planes have been rigged with bombs and are sometimes referred to as “Kamikaze drones”.
Notoriously, they were used in an attack that shocked the world at Abqaiq in Saudi Arabia in September 2019, when critical oil infrastructure was destroyed.
Drones such as the Houthi Qasef-2K and Sammad 3, propeller-driven aircraft, are slow moving but have a long range.
They have high endurance petrol engines, often made from strong, lightweight material such as titanium and carbon fibre, to reduce weight. The Houthis also have a small cruise missile fitted with turbojet engines, copied from European designs.
Many of these captured and shot down drones, including the Quds-1 missile, were found to have components made in Iran, according to a January 2020 UN Panel of Experts report.
And because of their slow speed, small size, low and unpredictable flight path, they are difficult to detect for ground-based radar systems.
If you have heard the phrase “flying under the radar” – a dangerous job for any pilot – this is roughly the concept used for attack drones, except the risk to a human pilot is removed.
Much of the technology transfer for these aircraft has been sent to Iran through front companies such as Tehran Hobby Ltd, which has illegally obtained engine components from foreign civilian companies.
Indeed, the Qasef drone and similar variants, frequently used to attack Saudi Arabia, is based on the Iranian Ababil drone and built from foreign parts used on commercial drones, plus parts that have been reverse engineered.
These unmanned aircraft are sometimes referred to as “loitering munitions” because they can fly on an unpredictable pattern for long periods and sometimes change course, unlike most missiles that fly on a fixed course.
The concept is often thought of as low tech – and the Iranian designs and Houthi variants often are.
But loitering munitions – as opposed to Iran’s target drones such as the Ababil – were first developed by the US in the 1980s.
The most recent variants, such as the Israeli Harop, are far deadlier than Houthi drones, with much more sophisticated guidance systems and autonomous capability.
By contrast, Iran-designed drones should be easy to intercept, but it has proven challenging because modern air defences are designed to shoot down missiles, including ballistic missiles that travel on a predictable arc high in the atmosphere, or enemy aircraft, which have a large radar signature.
These air defense systems are a legacy of the Cold War when many existing systems were developed, including the US Patriot system and the Russian S-300 family of systems.
Russia and America simply did not expect drones to be used in this way — low level kamikazes that fly under the radar horizon— and therefore did not design air defences accordingly.
This problem is quickly being solved; the US Patriot missile system PAC-3 variant is designed to shoot down drones with 360-degree radar coverage configured to detect the small objects.
Israel’s Iron Dome, which has powerful AI-assisted targeting computers, has proven similarly capable against drones, and the US is now developing a similar system, while Russia’s new S-500 system is also designed to take down drones.
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MATCH INFO
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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.
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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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