Abu Dhabi // Key regional conflicts topped the agenda as US secretary of state John Kerry arrived in Bahrain on Thursday to meet his Gulf counterparts ahead of a summit between GCC leaders and Barack Obama later this month.
Mr Kerry, who is the first cabinet-level US official to visit Bahrain since the Arab Spring, held bilateral meetings with King Hamad bin Isa Al Khalifa and foreign minister Sheikh Khalid bin Ahmed Al Khalifa, before sitting down with GCC foreign ministers.
A US official said Mr Kerry was set to ask them to use their leverage with Syrian opposition rebels to adhere to a shaky truce that has come under increasing strain since it came into force on February 27.
Renewed fighting between Syrian regime forces – backed by Shiite militias and Iranian military officers – and rebels supported by Saudi Arabia, Qatar and Turkey have jeopardised the US and Russia-led peace talks scheduled to restart next week.
In addition to Syria, the Gulf foreign ministers and Mr Kerry also planned to discuss the Yemen conflict, the fight against ISIL extremists, “the situation in Iraq, Lebanon, and elsewhere in the region”, a US official told Agence France-Presse.
Mr Obama’s summit with GCC leaders will be held in Riyadh on April 21, a day after US defence secretary Ash Carter meets with his Gulf counterparts there.
Mr Kerry’s meetings on Thursday were also a chance for both sides to review the progress on enhanced regional security cooperation agreed to at a summit with GCC leaders convened by Mr Obama last May. This includes integrated GCC missile defence, cyber and maritime security and counter terrorism cooperation.
The US commitments are aimed at countering security threats posed by Iran, and were an attempt to reassure the Gulf countries over the nuclear deal signed with world powers and Tehran in July.
Gulf countries have generally been happy with the progress on the various lines of enhanced cooperation, a source close to Gulf officials said recently.
US naval ships have helped interdict three separate shipments of arms from Iran bound for Tehran-backed Houthi rebels in Yemen in recent weeks, and the US military has been supplying Gulf warplanes in Yemen and Syria with munitions from its own stocks as supplies run low.
A number of major defence sales have also been approved, although fighter jet sales to Kuwait and Qatar have stalled.
But the increased weapons sales and enhanced tactical cooperation do not appear to have addressed Gulf Arab concerns over the Obama administration’s perceived detente with Tehran and diminished role in the Middle East.
Speaking in Manama before meeting the GCC foreign ministers, Mr Kerry called on Iran to “help us end the war in Yemen [and] help us end the war in Syria, not intensify, and help us to be able to change the dynamics of this region”.
He added that Iran should “prove to the world that it wants to be a constructive member of the international community and contribute to peace and stability”.
During his bilateral talks with Bahraini officials, including foreign minister Sheikh Khalid, Mr Kerry discussed human rights in the kingdom which has a disenfranchised Shiite majority.
“Here, as in all nations, we believe that respect for human rights and an inclusive political system are essential,” Mr Kerry said at a joint press conference with Sheikh Khalid, adding that they “had the chance to discuss the ongoing effort to address and to reduce sectarian divisions here in Bahrain and elsewhere”.
“I appreciate the seriousness with which he [Sheikh Khalid] considers this issue,” Mr Kerry said.
“We all welcome steps by sides to create conditions to provide for greater political involvement for the citizens of this great country.”
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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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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Ads on social media can 'normalise' drugs
A UK report on youth social media habits commissioned by advocacy group Volteface found a quarter of young people were exposed to illegal drug dealers on social media.
The poll of 2,006 people aged 16-24 assessed their exposure to drug dealers online in a nationally representative survey.
Of those admitting to seeing drugs for sale online, 56 per cent saw them advertised on Snapchat, 55 per cent on Instagram and 47 per cent on Facebook.
Cannabis was the drug most pushed by online dealers, with 63 per cent of survey respondents claiming to have seen adverts on social media for the drug, followed by cocaine (26 per cent) and MDMA/ecstasy, with 24 per cent of people.
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Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
