Politicians from Iraq’s southern oil producing province of Basra are calling for autonomy in a region that has endured deadly protests over political corruption and the government’s failure to provide adequate public services.
More than 20 of Basra’s provincial council members voted on Tuesday for the establishment of a federal state, the head of the council, Sabah Al Bazzouni said.
"Only 12 votes are required for an absolute majority in the council," Mr Al Bazzouni said. The vote will now be presented to the parliament in Baghdad to be put in motion, he added.
"We are now awaiting for the approval of the prime minister and the parliament, if they reject our request then it will be a disaster," Mr Al Bazzouni said.
The council also called for neighbouring provinces to join the proposed federation.
According to Article 119 of the Iraqi constitution, any of its 19 provinces can hold a referendum on independence if a petition is put forward to the parliament in Baghdad.
The petition must be supported by 10 per cent of voters and council members.
Last July, thousands of citizens poured onto the streets demanding for clean water and proper services in a wave of unrest that saw protesters torch a number of buildings, including the Iranian consulate and the provincial council.
Residents in Basra feel neglected by Baghdad and blame corruption among officials for the lack of clean drinking water, power shortages and high unemployment rates, even though its ports account for more than 80 per cent of Iraq’s oil export revenues.
"We are paying the price for corruption, the majority of people are unemployed, nothing has changed since last year. Our situation is getting worse everyday," Ahmed Ali, a resident of Basra, told The National.
"The government in Baghdad has done nothing for us, the only that we can avoid any further devastation is through independence," Mr Ali said.
Some residents believe that federalism would grant politicians in Basra the power to run the city and resolve its outstanding issues.
“I will never give up, today or tomorrow, I will keep up supporting Basra until it becomes a federal region as the government has failed in running the country,” Muhannad Mohsin Khudhair, a 42-year-old resident said.
A federal system depends on the direct management of human resources and funds, Mohammed Al Qurainiy, a political activist in Basra said.
“Citizens will be in direct contact with federal authority and will be aware of the decisions taken that concerns the province,” Mr Al Qurainiy said.
“From 2003 until now, political parties have dominated Basra’s wealth, with federalism we will keep fighting corruption and militia’s control,” he said.
Ali Kareem, a human rights activist, said:"We were disappointed by the central government when we see our city, it’s the richest city in Iraq, in natural resources and oil, but it’s so hard to get a job.”
But the calls for independence has not been supported by all.
“Federalism is a new experiment and we are not ready for it,” Safa Al Tamimi, president of Al Amin Association for Relief and Development in Basra, said.
“There is a growing fear that change will bring about conflict,” she said.
Residents in Basra have periodically called for independence since 1921 and have made repeated calls for secession but their requests have been denied by the central government in Baghdad.
The calls for independence have been compared to the Kurdistan Region of Iraq, a semi-autonomous part in the north of the country where a failed bid for secession in 2017 resulted in a backlash from Baghdad and diminished the region's autonomy.
Baghdad responded by seizing disputed territories held by Kurdish forces and temporarily banning international flights to the region.
As well as a lack of safe drinking water, Basra and its oil-rich province suffer from constant power cuts, a stagnant economy, poor health services, widespread corruption, unemployment and an agricultural sector devastated by drought.
Lack of transparency and unreliable governance has been at the heart of Iraq’s woes, made worse by the effects of a costly war against ISIS.
The demands for greater autonomy in Basra comes at a time where anti-government anger is increasing, following the capsizing of a ferry in Mosul that killed at least 90 people earlier this month.
The ferry, which was carrying families to an amusement park on an island in the Tigris River, was the single most deadly incident in Mosul since the city was recaptured from ISIS in 2017.
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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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