Analysts say firearms not likely bound for rebels

DUBAI // The shipment of 16,000 pistols headed for Yemen but seized by Dubai Police may have been tribal gifts or bound for an "international arms superhighway", but would not have helped rebels succeed against government forces with bigger and more powerful weapons, analysts said yesterday.

Nevertheless, the guns would have further destabilised a nation already wracked with unrest and overloaded with weaponry, the analysts said.

"The shipment is of a significant size, especially given the current situation in Yemen," said Paul Burke, a former British counter-terrorism officer who operated in Iraq and Afghanistan and who is now based in Abu Dhabi.

But Mr Burke cast doubt on whether the weapons could be useful to anti-government forces in the country, which must contend with separatist movements, al Qa'eda militants, Houthi rebels and an uprising that has threatened the long rule of the country's president, Ali Abdullah Saleh.

"Pistols are not an effective weapon choice for conducting an insurgency, as they are very close-range by nature," said Mr Burke. "They are unsuitable for operations such as group ambushes; neither are they suitable for engaging the security forces in battles. I'd be surprised if a shipment consisting solely of pistols would be destined for rebel groups to conduct anti-government attacks."

Other analysts agreed.

"For the kind of warfare we see in Yemen, pistols are not the first choice. Pistols are more personal-defence weapons, short-range," said Pieter Wezeman, a Middle East expert at Sipri, an arms control think tank. "They are not very effective in combat against anyone with a rifle or anything bigger."

Dr Mustafa Alani, the director of security and terrorism studies at the Gulf Research Centre in Dubai, agreed. "Pistols will not change the military balance in the country," he said.

Mr Wezeman said the apparent cheap make of the weapons probably indicated they were not very reliable "and therefore even less useful to anyone involved in a serious rebellion". He said they may have been intended as a "sort of cheap male jewellery", like the traditional Jambiya daggers worn by many Yemeni males.

Mr Burke said it was possible the weapons were intended for distribution among tribes as gifts to reinforce patronage.

It remains unclear exactly who was likely to use the weapons, which Dubai Police said were bound for Sa'dah, a stronghold of the Houthi rebel movement.

The pistols might have been for internal use or part of an "international arms superhighway" responsible for the proliferation of illegal small-arms sales in Yemen, the Gulf and East Africa, said Dr Theodore Karasik, the director of research and development at the Institute for Near East and Gulf Military Analysis. "It's a fact this type of ungovernable territory is conducive to this kind of trade."

There is no shortage of guns in Yemen. A report published last year by the Small Arms Survey, a Geneva-based research group, estimated the number of small arms and light weapons in Yemen to be about 10 million - nearly one weapon for every two civilians.

Mr Wezeman said photographs of the cache showed they were small pistols with gold and chrome details, which "have very little to no value for rebel forces fighting Yemeni and Saudi military, and would make little difference in Yemen, where there are plenty of much more powerful weapons around".

He said the police interception of the weapons was a sign that Dubai is taking its responsibility in controlling arms flow seriously, even if it is unlikely to make any difference in conflicts within Yemen. "My sense is that the UAE really have improved their controls on shipments of arms in recent years."

Dr Alani said Yemen's neighbours had a responsibility to restrict arms flow to the private sector in Yemen, particularly since they could be re-exported to other countries, fuelling instability across the region.

"Once these people have the capability, and arms is one of those capabilities, it will end up on our door sooner or later," he said.

kshaheen@thenational.ae

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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.”