Asia

Gandhi not part of India PM Singh's cabinet reshuffle

Seven new ministers and 15 junior ministers took the oath of office at a brief ceremony to mark the changes aimed at bringing in younger faces into the Cabinet.

Associated Press

28 October, 2012

NEW DELHI // India's Prime Minister Manmohan Singh reshuffled his Cabinet on Sunday in a bid to overhaul his government's image ahead of state and national elections over the next 18 months.

Seven new ministers and 15 junior ministers took the oath of office at a brief ceremony to mark the changes aimed at bringing in younger faces into the Cabinet.

However, Congress Party star campaigner Rahul Gandhi was not part of the new Cabinet. Congress party leaders said he would concentrate on reviving the fortunes of the party before the national elections in 2014.

The 42-year-old Gandhi, whose father, grandmother and great-father all served as prime ministers, had decided to remain in his post as a secretary general of the main ruling Congress party, Mr Singh said as he unveiled a cabinet reshuffle.

"I wanted Rahul Gandhi in government, but he wants to strengthen the party," Mr Singh said after a ceremony at the presidential palace.

The portfolios of the new ministers were not announced immediately. Traditionally, responsibilities of the ministers are announced several hours after they are sworn in.

Five senior ministers had resigned over the weekend to allow the introduction of younger new faces in the ministerial line-up.

The long-awaited Cabinet changes gained urgency after the Congress Party-led coalition government was hit by a wave of corruption scandals. The revamp also filled several vacancies after a key ally opposed to recent economic reforms quit the coalition.

"This reshuffle is to bring in fresh faces and is an important step keeping in view the general elections in 2014," Milind Deora, a junior minister said Sunday.

The induction of younger lawmakers and the shuffling of ministerial portfolios were being viewed as a major makeover for Singh's government that has been hit by charges of corruption and lethargy even as provincial elections are due in 11 states in the coming year.

Several ministers were facing corruption charges stemming from scandals over the hosting of the 2010 Commonwealth Games, the sale of mobile phone rights and allocation of coal fields that auditors said lost the country of billions of dollars.

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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