Srinagar, India // India's relationship with Pakistan is once again under strain in the aftermath of the terrorist strikes in Mumbai. In his TV address to the nation after the attacks last week, Manmohan Singh, the prime minister, came close to threatening retaliation against Pakistan if its involvement can be proved.
Thousands of miles away from the scene of the attack, the thought that it may push the two South Asian neighbours into an eyeball-to-eyeball situation along their frontiers has chilled the people of Kashmir, the site of two of the three wars India and Pakistan have fought since their independence from Britain in 1947.
Yet while the average citizen is keeping his fingers crossed, Kashmir analysts have refused to fall for any knee-jerk analysis. They see the possibility of a fourth war breaking out between the two countries in the immediate future as improbable.
"The Mumbai incidents may well prove to be a watershed in their relations - bad or good - but I don't think war or air strikes on Pakistan, as some right-wing Hindu political groups are asking for, is an option," said Mohammed Aslam, a law professor at the University of Kashmir. "No wonder, if they rise to the occasion and agree to become allies in the war on terror. After all, both are victims of this menace."
Violence in Indian-administered Kashmir has been on the decline, and India and Pakistan have been trying to overcome difficulties, particularly on the issue of Kashmir. In spite of recent incidents of firing along their borders, the two countries have displayed self-restraint as they abide by a Nov 2003 ceasefire. Both sides openly promise to do all they can to ensure no confrontations occur.
But in contrast to the perceptible bonhomie, all does not seem well between the two neighbours as far as the use of river waters goes. In fact, South Asian watchers believe, the two are more likely to go to war over the waters of this scenic, disputed Himalayan region.
Pakistan's Indus water commissioner, Jamaat Ali Shah, said last week that India would turn Pakistan into a barren country by 2014 by blocking its waters.
Islamabad claims that New Delhi recently stopped the flow of water into Pakistan from rivers from Indian Kashmir on which it has constructed dams. It also claimed that Pakistan had, because of the water storage in the Baglihar dam on Chenab River, faced water losses of more than 0.2 million cusecs, which is a violation of the Indus Water Treaty (IWT) of 1960. (A cusec is the flow of water equal to one cubic foot per second.)
New Delhi denies the charge and insists that it was a temporary occurrence that lasted for only 10 days in August this year to fill the dam of the recently constructed Baglihar hydroelectric project.
The IWT divides control between India and Pakistan of several rivers draining into the Indus River basin and was signed by Jawaharlal Nehru, the Indian prime minister, and the Pakistani president, Field Marshal Ayub Khan, on Sept 19 1960 in Karachi. It awarded the three eastern rivers - Ravi, Sutlej and Beas - exclusively to India and the three western rivers - Indus, Jhelum and Chenab - exclusively to Pakistan except for limited uses by India in upstream areas in Indian-administered Kashmir, Punjab and Himachal Pradesh. As per the treaty, the construction of storage dams in upstream Jhelum within the Kashmir Valley is not allowed. That is why the hydroelectric projects on the Jhelum have to be run-of-the-river schemes.
Islamabad has accused New Delhi of often violating the treaty. Mr Singh, however, has assured that the treaty will be implemented in letter and spirit while sharing the river waters. "Pakistan's genuine concerns will be taken care of," he said while inaugurating the 450-megawatt Baglihar hydropower project recently.
* The National
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What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421, Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day.
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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.”
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
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