Peshmerga Col Srud Barzinji climbs out of a tunnel dug by ISIL in the village of Khanash, Iraq. Florian Neuhof for The National
Peshmerga Col Srud Barzinji climbs out of a tunnel dug by ISIL in the village of Khanash, Iraq. Florian Neuhof for The National

ISIL tunnels show challenges that lie ahead in Mosul battle



KANASH, IRAQ // The missile pierced the concrete roof before exploding, charring the walls and sending the contents of the room flying. Metal bed frames lie twisted, kitchen utensils and machine-gun cartridges litter the floor.

Arabic scrawls on the wall are barely visible but leave no doubt as to the building’s last occupants. ISIL fighters had turned the house into a base, cooking on a simple gas stove in the adjacent kitchen, reading propaganda literature and condensing its content into simple slogans on the fading paint of the wall.

The scene of destruction does not reveal the fate of the militants who were stationed in the village of Kanash, where they faced off with the peshmerga on the Gwer front until the Kurds overran their positions in August. A leather jacket still hanging next to a fridge in another room points to an untimely end, or perhaps to a hasty departure.

If the extremists managed to escape before the building was hit, they could have done so without emerging into the open: a few metres from the fridge, a hole in the floor leads into a deep tunnel cut into stony earth.

The warmth of the bright autumn day has not permeated into this cool, narrow shaft, nor is there a source of light. A wire connects a few unlit bulbs that have somehow been attached to the brittle surface.

The dark tunnel winds through the earth until it ascends to a nearby building, allowing the insurgents to move unseen from one defensive position to another, shielded from air strikes by the surrounding earth.

As the operation to liberate Mosul from ISIL unfolds, Iraqi and Kurdish forces are becoming all too familiar with such tunnels, which form an integral part of ISIL’s defences. A shortage of manpower and relentless coalition air strikes have forced the militants underground and to adopt guerrilla tactics to try to stall their opponents’ advance.

In the villages and towns that have been taken since the Mosul operation officially got under way on October 17, a web of tunnels allowed the insurgents to shift positions, popping up unexpectedly to ambush the advancing troops. The underground network also offers protection from the bombardment that typically precedes an attack.

Often, militants wait until their enemies believe that a town or village has been secured before emerging to launch suicide attacks or snipe at unsuspecting soldiers. The danger is compounded by improvised explosive devices that litter streets and buildings.

“Taking the village was very difficult. We had to be careful about the IEDs, the snipers and the tunnels,” says Col Srud Barzinji, the commander who led the peshmerga capture of Kanash.

The colonel recounts one incident during the fighting that left his troops puzzled.

“We followed a guy to a house and he disappeared. Then we killed him further down at the river. Only later did we find out it was because of the tunnels,” he says.

With the front lines around Mosul almost static for the past two years, the militants have had ample time to prepare their defences on the Nineveh plains surrounding the city.

The lethal mix of tunnels, roadside bombs, booby traps and suicide bombers will also constitute the defence of the city itself. At present, ISIL seeks only to delay the overwhelming forces that are descending on Mosul, leaving only a skeleton defence on the approaches to the city.

That will change once Iraqi forces enter the city, where the extremists’ resistance is expected to be much fiercer. If the liberation of the city is to succeed, the attackers will do well to adapt to this way of fighting, and remember the lessons learnt on the long road to Mosul.

foreign.desk@thenational.ae

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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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