Pakistan elected Shehbaz Sharif to be the country’s 23rd prime minister on Monday, a day after incumbent Imran Khan was ousted by a vote of no confidence brought by opposition parties.
Mr Sharif received 174 votes from the house’s 342 MPs after days of political drama that saw Mr Khan, the former cricketer-turned-politician, removed just after midnight on Sunday.
In his maiden speech as prime minister, Mr Sharif called for unity to tackle Pakistan's economic crisis.
"If we have to save the sinking boat, what we all need is hard work, and unity, unity and unity. We are beginning a new era of development today," he said.
Ahead of Monday’s vote, members of Mr Khan’s Pakistan Tehreek-e-Insaf had resigned in protest and demanded a national election.
"We boycott this election according to the decision of our party, and we are resigning," said Shah Mahmood Qureshi.
Mr Qureshi had been the PTI candidate to be the new leader and his name remained on the ballot, but after the boycott, he received no votes.
The PTI action followed a night of large protests across the country where tens of thousands of Mr Khan's supporters marched on Sunday evening in cities across the country, with big gatherings in Karachi and Lahore.
The PTI party has pledged to keep up pressure on any new administration with additional marches in the coming days.
Mr Khan insists he is the victim of an American-led conspiracy because of his determination to pursue friendly ties with China and Russia. Washington says the accusations are baseless.
On Sunday night, Mr Khan, 69, said he was the victim of “US-backed regime change” abetted by local traitors “to bring into power a coterie of pliable crooks”.
Mr Sharif is widely expected to win the parliamentary vote on Monday afternoon, when he runs against Shah Mahmood Qureshi, Mr Khan's former foreign minister.
Mr Sharif, 70, the younger brother of Mr Khan's predecessor, Nawaz Sharif, had three spells as chief minister of Pakistan's Punjab province and has acquired a reputation for being a shrewd and pragmatic administrator.
He is also one of the dynastic political elite that Mr Khan vowed to drive from Pakistan's politics and he is currently on bail as part of a money-laundering investigation. He denies wrongdoing and says the investigation is politically motivated.
He ousted Mr Khan with a broad coalition of opposition parties that range from centre-leftists to the religious right. It is unclear how long he will be able to maintain unity among such a diverse group.
Michael Kugelman, deputy director of the Asia programme at Washington's Wilson Centre, a think tank, said: “These mass mobilisations of Imran Khan supporters will be fuelled by a narrative around the new government being a bunch of traitors and US-backed provocateurs that ousted Mr Khan.
“Pakistan’s political environment in the weeks ahead will be partisanship and polarisation on steroids.”
Mr Khan's swift fall from power came after his government was blamed for bungling an already weak economy and falling out with the country's military, who wield formidable political clout.
Mr Sharif will inherit an economy with high inflation, a sliding rupee and a balance of payments crisis.
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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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Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
