Arab Coalition seizes massive drugs shipment in Yemen linked to Hezbollah

The Arab Coalition supporting the Yemeni government said on Tuesday it had seized a Hezbollah-linked shipment of drugs destined for the Houthi rebels in northern Yemen.

A security source in Aden told The National that the coalition, in co-ordination with the security authorities in Aden, foiled drugs smuggling to the Houthi-held areas in Yemen's north.

“The shipment was sent by a smuggling network linked with Lebanese Hezbollah,” Saudi news channel Al Arabiya reported, quoting a coalition source.

Col Mohammed Al Qommaly told The National that coalition forces "seized a half tonne of cocaine and heroin hidden within sugar sacks shipped in containers".

“Based on the intelligence we received, we kept tracking the ship for more than a month until it docked in Aden harbour carrying tonnes of the sugar bags in which the drug shipment was hidden,” Col Al Qommaly said.

“The drugs shipment was entirely collected and officially handed over to the Public Prosecution in Aden to carry on the investigation process."

Security officials in Yemen have thwarted several similar attempts to smuggle large quantities of drugs to Houthi-held territory in recent years.

According to a report issued by the Yemeni Interior Ministry in July 2019, massive drug smuggling operations were under way in the northern provinces of Al Jawf, Hajjah, Marib and Al Baydha.

There, pro-government security forces have captured hundreds of smugglers and seized large amounts of cannabis and other drugs.

The ministry report said most of the confiscated drug shipments were heading to Houthi-held areas.

In June 2019, the security forces in Marib seized a shipment destined for the Houthi-held capital Sanaa.

Later, in March 2020, the ministry said the authorities in Marib province had seized 200 kilograms of cannabis from a vehicle travelling on the road linking Marib with Sanaa.

Experts say smugglers use the Yemeni routes to smuggle drugs northwards to Saudi Arabia and the Gulf states.

“Not many Yemeni smugglers target the Yemeni market," said Fernando Carvajal, a former member of the UN panel on Yemen. "There is really no money in Yemen.”

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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