A recent spike in migrant arrivals to the Italian island of Lampedusa has created a new sense of urgency for the 27 members of the EU to finalise years-long discussions on a migration pact.
Home affairs ministers were meeting in Brussels on Thursday to discuss a so-called crisis regulation that gives more flexibility and time to countries to process asylum applications when numbers are exceptionally high.
Concern is high not only over how to distribute the high numbers of arrivals but also their potential weaponisation: a surge in arrivals of mostly Iraqi migrants via Belarus in 2021 was widely viewed as an attempt by Belarusian authorities to destabilise the bloc.
The crisis regulation was part of a number of proposals made in 2020 by the European Commission, the bloc's legislative arm, to address imbalances in the distribution of asylum seekers.
It has only recently started to be discussed within the European Council, a body in which government representatives define key priorities for the union, where it had faced strong opposition from some politicians in Germany.
However, Chancellor Olaf Scholz appeared to overrule objections from within his own cabinet on Thursday by saying Germany "will not stand in the way" of a pact being adopted.
Germany's Foreign Affairs Minister Annalena Baerbock had criticised the crisis regulation on Sunday, claiming that it would create an incentive for large numbers of refugees to move to Germany.
Negotiations are expected to be difficult and officials said they were unsure whether a deal would be struck this week.
A similar home affairs meeting in June ended in an acrimonious row between member states, with Poland and Hungary refusing the obligation to share the hosting of asylum seekers.
Other countries opposing the crisis regulation reportedly include Poland, the Czech Republic, Hungary and Austria.
Disagreements threaten to derail further the adoption of the EU's new migration pact which has been under discussion for the past three years. Officials still hope it will be adopted before the next European elections in June.
The EU is on track to receive more than one million asylum seekers this year – the biggest number since 2015 and 2016 when it saw a huge influx of migrants, mainly Syrians fleeing the war in their country.
Top on the agenda of discussions between home affairs ministers is also an agreement signed in July with Tunisia which aims to curb the arrival of migrants by sea.
Earlier this month, European Commission President Ursula von der Leyen travelled to Lampedusa in a show of solidarity with Italian Prime Minister Giorgia Meloni.
More than 127,000 migrants have arrived in Italy so far this year, according to government data, almost double the figure for the same period last year.
Ms von der Leyen announced a 10-point plan to fight irregular migration, including an acceleration of the implementation of the commission's agreement with Tunisia.
Last week, the commission unlocked a first disbursement of $42 million to Tunisia as part of the agreement, which will in part be used to revamp search and rescue boats.
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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