Egypt's political crisis will continue long past constitution vote


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Egypt's latest political crisis has offered a glimpse of what lies ahead for the world's most populous Arab nation as its Islamists and Liberals fight it out, now over a draft constitution and likely the country's identity later.

The crisis began three weeks ago when the president, Mohammed Morsi, issued decrees, since rescinded, that placed him above judicial oversight and gave him almost unrestricted powers. The crisis now centres on the draft charter on which Egyptians are voting today and on December 22. Mr Morsi's liberal opponents say the document gives religious authorities too much influence over legislation, threatens to restrict freedom of expression and opens the door to Islamist control over day-to-day life.

Islamists, on the other hand, have embraced the draft as a victory for Islam.

On the face of it, the conflict is merely a difference of opinions. But, in reality, it is much more than that. It is a fight that has left Egypt more divided than anyone can remember, pushing it to the brink of civil strife. Law and order is near collapse and the economy is being pushed to disastrous new lows.

Just as importantly, the crisis has exposed the lengths to which Islamists, led by the Muslim Brotherhood- the political party in which Mr Morsi was mentored - are prepared to go to control the country and realise their long-time goal of creating an Islamic state. For the rest of the nation, it has shown that the liberals and leftists who engineered the uprising against Hosni Mubarak last year are much stronger than sceptics had been led to believe and enjoy the depth of popular support needed to sustain mass street protests, although persistent divisions within their movement's leadership and lack of organisation continue to hamper its effectiveness.

Egypt's crisis is a far cry from the optimism that swept the nation on February 11 last year, after a stunning, 18-day uprising forced Mr Mubarak to step down, ending his authoritarian rule and ushering in a new era many had hoped would be defined by freedom, respect of human rights and economic prosperity.

Today, there has been talk of a possible civil war, a prospect that was unthinkable just a month ago.

Sensing the danger of widespread and sustained violence - at least 10 people have been killed and nearly 1,000 wounded since the crisis began - Egypt's most prominent reform leader, Mohamed ElBaradei, made an emotional appeal to Mr Morsi on Thursday to postpone the referendum on the draft constitution. He said the vote would raise the "spectre of civil war".

Mr ElBaradei was not being alarmist. The Nobel peace laureate's warning was rooted in the events of the past three weeks when Mr Morsi, top figures from the Brotherhood and their supporters behaved with almost total disregard for the law.

Opponents and supporters of Mr Morsi fought deadly street battles outside his palace in Cairo, a bout of violence initiated by Morsi supporters who set upon peaceful protesters staging a sit-in outside the presidential palace. During fighting that lasted several hours, Mr Morsi's Brotherhood supporters were accused of operating detention and torture centres just outside the palace walls, where dozens of opposition protesters were taken before being released later into police custody. Police stood by without intervening.

The nation's highest court, meanwhile, has been besieged by Islamists to prevent its judges from issuing a ruling on December 2 that was widely expected to dissolve the constitution-drafting panel, which was packed with Islamists. On the western outskirts of Cairo, ultraconservative Salafis who support Mr Morsi have been staging a sit-in outside a media complex housing several influential television networks critical of the Islamists. They are threatening to storm the complex and have singled out several talk-show hosts as possible targets for violence and kidnapping.

Curiously, Mr Morsi has not commented in public about the siege of the Supreme Constitutional Court or the media complex. Instead, rights groups say, he infringed on the due process rights of dozens of suspects detained for questioning about the violence outside his palace, saying they had confessed to being "paid thugs" linked to the Mubarak regime.

It was a throwback to the Mubarak years when the hated and feared security apparatus was accused of human-rights violation and, armed with emergency laws, had little or no regard for the rights of suspects.

Worse still, Mohammed Badie, the leader of the Brotherhood, and the group's chief tactician, Khairat El Shater, jumped into the fray, with each offering the public a rare glimpse of their behind-the-scenes influence on how the country is run.

Mr Badie publicly scolded prosecutors who ordered the release of most detainees because of lack of evidence. Later, the prosecutor-general, a Morsi appointee, removed the judge in charge of the investigation. When the judges union reacted angrily to the decision, the attorney general on Thursday rescinded the decision.

Following up on Mr Morsi's cryptic talk since the crisis began about a "conspiracy" against his rule, Mr El Shater said he was in possession of audio recordings of some of the conspirators. He did not say how he got the recordings, nor what they contained.

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.”

Essentials
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How to apply for a drone permit
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