Myanmar protesters residing in Japan stand on pictures of Myanmar's army chief Min Aung Hlaing as they rally against the country's military after it seized power from a democratically elected civilian government. Reuters
Myanmar protesters residing in Japan stand on pictures of Myanmar's army chief Min Aung Hlaing as they rally against the country's military after it seized power from a democratically elected civilian government. Reuters
Myanmar protesters residing in Japan stand on pictures of Myanmar's army chief Min Aung Hlaing as they rally against the country's military after it seized power from a democratically elected civilian government. Reuters
Myanmar protesters residing in Japan stand on pictures of Myanmar's army chief Min Aung Hlaing as they rally against the country's military after it seized power from a democratically elected civilian

Joe Biden threatens US sanctions in response to Myanmar coup


Taylor Heyman
  • English
  • Arabic

US President Joe Biden led international calls to reverse a military coup in Myanmar on Monday which saw democratically elected leader Aung San Suu Kyi detained and a one-year state of emergency imposed.

Ms Suu Kyi and President Win Myint were detained in the capital Naypyidaw before dawn. The ruling junta removed 24 ministers and deputies and named 11 replacements on the same day.

In the wake of the coup, the military moved quickly to stifle dissent, severely restricting the internet and mobile phone communications across the country.

"The international community should come together in one voice to press the Burmese military to immediately relinquish the power they have seized, release the activists and officials they have detained, lift all telecommunications restrictions, and refrain from violence against civilians," Mr Biden said in a statement.

He threatened to reinstate sanctions lifted over the past decade as Myanmar made progress towards democracy.

"The reversal of that progress will necessitate an immediate review of our sanction laws and authorities, followed by appropriate action," he added.

US Senate minority leader Mitch McConnell called the coup “horrifying” and urged action.

The UN Security Council said it would discuss developments on Tuesday, and European Council President Charles Michel called for the democratic process to be restored.

British Prime Minister Boris Johnson said on Monday he condemned the coup, saying Aung San Suu Kyi and other civilian leaders must be freed.

"The vote of the people must be respected and civilian leaders released," he said.

Britain's foreign ministry said it had summoned Myanmar's ambassador and told him that "the UK would work with like-minded partners and pursue all necessary diplomatic levers to ensure a peaceful return to democracy."

The 75 year old Ms Suu Kyi won the Nobel Peace Prize in 1991 while under house arrest during the previous dictatorship. She was released in 2010 and went on to established the first civilian government in 50 years in 2015.

Her ousters claimed the November election was a “terrible fraud” despite international poll watchers backing the landslide victory of Ms Suu Kyi’s National League for Democracy.

They were only the second democratic election to occur since Myanmar wrestled free of a 49-year dictatorship in 2011.

Monday’s putsch was widely seen as an attempt to consolidate power in the hands of the country’s powerful military, which constitutionally holds 25 per cent of the seats in parliament.

The 2008 constitution barred Ms Suu Kyi from becoming president and ensures military control of key ministerial portfolios like defence and the interior.

Ms Suu Kyi is a popular figure in Myanmar, despite drawing international condemnation for defending a military crackdown on the country’s minority Rohingya people.

The attacks in 2017, deemed a genocide by UN investigators, killed 6,500 people in one month and forced 750,000 to flee into neighbouring Bangladesh.

The news of Suu Kyi's arrest spread quickly in the crowded refugee camps in Bangladesh, with reports of celebrations.

"She is the reason behind all of our suffering. Why shouldn't we celebrate?", community leader Farid Ullah told AFP from Kutupalong, the world's largest refugee settlement.

Maung Kyaw Min, the spokesman for the influential Rohingya Student Union, said there was now increased hope that Rohingya might return to their villages in Myanmar.

"Unlike an elected government, this military (government) will need international support to sustain. So we hope they will focus on the Rohingya issue to reduce international pressure," he 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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UAE Division Two
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