The West needs to accept it lost the war in Afghanistan and start working with the Taliban to prevent mass starvation, a former head of the British military has said.
Gen Lord David Richards urged governments to be “magnanimous in defeat” and show compassion for the welfare of 40 million people living under the extremist regime.
Former British foreign secretary David Miliband also warned that innocent civilians were being punished by the denial of aid.
Gen Richards, who commanded Nato troops in Afghanistan in 2006, said there were people within the Taliban regime that Britain and other countries could deal with.
“I think the West is going to end up recognising the Taliban government,” he told the BBC's Panorama programme. “If that's the case, then we'd better get on with it quicker, sooner rather than later. There's a great phrase to be magnanimous in victory. I think this is an occasion for us to be magnanimous in defeat.”
In early August last year, the former Chief of the Defence Staff told The National that if Britain and America did nothing to stop the insurgents' advance “a return to Taliban rule” was inevitable.
But in his latest interview he urged governments to accept the reality of a Taliban victory. “The fact is, they defeated us,” he said. “And we have to come to terms with that inconvenient fact. They are now the government of Afghanistan. They are responsible for about 40 million people.”
Out of that population it is estimated that eight million are at risk of starvation, including one million children.
With 40 per cent of the country’s gross domestic product reliant on foreign aid, the restriction of cash has led to the economy collapsing since the Taliban took control six months ago.
With some Taliban members still classified by the US as terrorists the international community has frozen billions in assets.
But Western powers now face a “catastrophe of choice in Afghanistan” with the freeze on payments condemning ordinary working people, said Mr Miliband, now president of the International Rescue Committee.
“It's been a freeze on the payments to Afghan civil servants, teachers, nurses and engineers and there are ongoing sanctions that are putting a chill on the private sector's activity,” he told BBC Radio 4. “There's a freeze on the $9 billion worth of international assets of the Afghan Central Bank.”
He said the country was on a “downwards economic escalator that threatens to overwhelm the humanitarian effort” which the UN has stated requires $4 billion of immediate funding.
Without the money there will be a greater crisis next year, he added, which will cost an estimated $10bn to remedy “unless we can get the economy going”.
“It's essential to get that economy going to give Afghan people the chance to feed themselves,” he said.
Sir Mark Lowcock, a former UN humanitarian affairs secretary, called for a policy change, saying sanctions were harming Afghans. “The world does have to work out what its way of engaging with the Taliban is going to be, but whatever the solution to that question is, it can't be the collective punishment into starvation of a population of 40 million,” he said.
The Foreign Office said Britain is committed to the Afghan people and is providing £286 million in aid this year.
“If the Taliban wants international acceptance, then they need to abide by international norms, to ensure safe passage for those who wish to leave the country, respect the rights of women and girls and prevent Afghanistan from again becoming a place where terrorism flourishes,” a spokesman said.
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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.”
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