Egypt's generals reluctant to cede power


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CAIRO // Egypt's military-controlled government is being squeezed from both sides of the political spectrum just two weeks before voters go to the polls for the first time since February's uprising.

The outcry against the Supreme Council of the Armed Forces (Scaf) came after the November 1 release of a draft of constitutional principle. This would include preventing the parliament from overseeing the military's budget and guaranteeing it semi-autonomy.

The document confirmed fears the military was reluctant to cede power to a civilian government after taking control of the country after the resignation of the president, Hosni Mubarak, in February.

A bloc of mainly Islamist political parties, called the Democratic Alliance, was leading the attack.

The groups, including the Freedom and Justice Party, which is backed by the Muslim Brotherhood, gave the Scaf until tomorrow to back down from the proposal.

If not, there were plans for a mass protest in Tahrir Square against the military on Friday.

Elections for the lower house of parliament begin on November 28.

"The real test for Egypt, more so than anything else, will be the showdown between the military and the Islamist forces," said Ramy Yaccoub, a political strategist involved in Cairo. "When a group of Islamist forces imposes a deadline on the military, they mean business."

Meanwhile, liberal protests were held on Sunday against the detention of two prominent bloggers, Alaa Abdel-Fattah and Maikel Nabil Sanad, who were detained by order of the military courts. About 12,000 Egyptians have faced military trials this year, a bone of contention between activists and the interim government.

The human rights office of the UN has called on the Scaf to release all prisoners jailed for what some say were expressions of free speech. A former military official said yesterday that the Scaf was facing unprecedented pressure to make concessions.

"This problem came at the right time," said a retired air force major general, Mohamed Kadry Said, a military analyst at the state-funded Al Ahram Centre for Political and Strategic Studies in Cairo.

"The military has been adopting a strategy to start from the highest position, asking for the most it can get," he said. "But, facing pressure, they will go down to some middle point" in the coming weeks.

A military court ordered on Sunday that Mr Abdel-Fattah be kept in custody for another 15 days after his initial 15-day detention, which began on October 30.

Military prosecutors allege he played a role in inciting October's sectarian clashes that left 27 people dead, mostly Coptic Christians.

A statement on Sunday from the military said Mr Abdel-Fattah was accused of stealing a military weapon, destroying military property and attacking security forces.

Mr Abdel-Fattah has denied the allegations but has refused to speak to military prosecutors because of his belief that he should not be tried in a military court.

His case has become symbolic of the military trials because of the perceived similarities to his previous arrest by the Mubarak regime in 2006.

He has published blog posts through his wife, a fellow activist, describing his experiences in jail.

On Monday, he described spending Eid in his cell with his family only able to visit him and other detainees briefly "in the presence of a number of informants - twice the number of parents".

In a previous post on the couple's shared blog, www.manalaa.net, he wrote of his shame at asking to be taken to a different prison facility.

"I could not take the difficult circumstances of the appeal detention, the darkness, the filth, the cockroaches that crawl over my body day and night, there is no break and we don't see the sun, darkness again," he wrote. "I didn't know how to man up and take [the conditions], even though thousands are bearing such conditions and worse, even though I haven't experienced the agonies of a military jail and wasn't tortured like other colleagues of military trials."

Mr Sanad was arrested on March 28 and jailed for three years for spreading false information about Egypt's military on his blog.

An appeal hearing was adjourned on Sunday until November 27 after Mr Sanad, who is also reportedly on a hunger strike and has been placed in a psychiatric institution by the military, refused to attend.

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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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The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


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