Sudan and South Sudan ink deal on oil and security



ADDIS ABABA // The presidents of Sudan and South Sudan signed economic and security agreements yesterday that will allow a resumption of oil exports from South Sudan.

The two countries also reached deals for a demilitarised zone between their borders and a cessation of all hostilities that brought the countries to the brink of all-out war just a few months ago.

The Sudan president, Omar Al Bashir, and the South Sudan president, Salva Kiir, signed the agreement in Ethiopia's capital, where they have been holding talks since Sunday. The talks were originally scheduled to last only a day. The sides could not agree on a shared border or on how to address the disputed region of Abyei.

Both sides had been under pressure from the UN Security Council to resolve the outstanding issues or risk sanctions. South Sudan broke away from Sudan last year after an independence vote that was the culmination of a 2005 peace treaty that ended decades of war that killed more than 2 million people. But the border was never defined, and South Sudan suspended oil production in January after accusing Sudan of stealing its crude, which is transported in pipelines through Sudan. Border clashes escalated in April when South Sudan troops took over an oil town in a region Sudan claims as its own.

With the deal sealed yesterday, officials said only "technical works" remain for oil exports to resume soon. Some officials have said it will take months to clear the pipelines and get oil flowing again. The security agreement was signed by the two countries' defence ministers, while lead negotiators inked economic and trade agreements. African Union (AU) mediators said the two sides also signed a deal to let their citizens freely move between, reside in and work in both countries.

Mr Bashir and Mr Kiir spent four days in an apparent effort to overcome the most contentious issues - finalising a border and determining the status of the border region of Abyei - but failed.

The freeze on oil production has cost both countries millions of dollars in lost revenue. An economic crisis sent inflation soaring and pushed food prices beyond the reach of ordinary citizens, said Jose Barahona, the top official for the aid group Oxfam in South Sudan, who called the agreements encouraging.

"But the two nations will continue to face an uncertain future until there is agreement on Abyei and the other contested areas, and efforts are stepped up to resolve the conflicts in Southern Kordofan and Blue Nile," he said, referring to two areas in Sudan where residents are seen to be sympathetic to South Sudan. Fighting in the region has sent 170,000 refugees fleeing over the border into South Sudan.

Samson Wasara , a professor of economics at Juba University in South Sudan, said the resumed oil exports - from which Sudan will take transport fees - would help ease tensions but that the new demilitarised buffer zone will provoke more conflict if the borders are not clearly defined. He noted that the demilitarised zone between North and South Korea has been a source of tension for decades.

"Proper border demarcation will reduce the chance of encroachment by both countries. But in order to do this, the international community must pressure Sudan and South Sudan to agree to something definite. If this is not sorted out quickly it will lead to later tension," Mr Wasara said.

African Union mediator Thabo Mbeki, Ethiopia's communications minister, Bereket Simon, and diplomats witnessed the agreement's signing ceremony at the Sheraton Addis hotel. The ceremony started with a minute of silence for the late Ethiopian prime minister, Meles Zenawi, whom Mr Mbeki credited with being instrumental in facilitating the talks.

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Jordan cabinet changes

In

  • Raed Mozafar Abu Al Saoud, Minister of Water and Irrigation
  • Dr Bassam Samir Al Talhouni, Minister of Justice
  • Majd Mohamed Shoueikeh, State Minister of Development of Foundation Performance
  • Azmi Mahmud Mohafaza, Minister of Education and Minister of Higher Education and Scientific Research
  • Falah Abdalla Al Ammoush, Minister of Public Works and Housing
  • Basma Moussa Ishakat, Minister of Social Development
  • Dr Ghazi Monawar Al Zein, Minister of Health
  • Ibrahim Sobhi Alshahahede, Minister of Agriculture and Minister of Environment
  • Dr Mohamed Suleiman Aburamman, Minister of Culture and Minister of Youth

Out

  • Dr Adel Issa Al Tawissi, Minister of High Education and Scientific Research
  • Hala Noaman “Basiso Lattouf”, Minister of Social Development
  • Dr Mahmud Yassin Al Sheyab, Minister of Health
  • Yahya Moussa Kasbi, Minister of Public Works and Housing
  • Nayef Hamidi Al Fayez, Minister of Environment
  • Majd Mohamed Shoueika, Minister of Public Sector Development
  • Khalid Moussa Al Huneifat, Minister of Agriculture
  • Dr Awad Abu Jarad Al Mushakiba, Minister of Justice
  • Mounir Moussa Ouwais, Minister of Water and Agriculture
  • Dr Azmi Mahmud Mohafaza, Minister of Education
  • Mokarram Mustafa Al Kaysi, Minister of Youth
  • Basma Mohamed Al Nousour, Minister of Culture
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Name: The Protein Bakeshop

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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.

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“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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