Sweden's new prime minister Stefan Lofven announces his new government in the Swedish Parliament in Stockholm on October 3 Jonas Ekstromer, / AP
Sweden's new prime minister Stefan Lofven announces his new government in the Swedish Parliament in Stockholm on October 3 Jonas Ekstromer, / AP
Sweden's new prime minister Stefan Lofven announces his new government in the Swedish Parliament in Stockholm on October 3 Jonas Ekstromer, / AP
Sweden's new prime minister Stefan Lofven announces his new government in the Swedish Parliament in Stockholm on October 3 Jonas Ekstromer, / AP

Sweden to recognise Palestinian state


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GAZA CITY // Sweden will become the first major European country to recognise the state of Palestine, prime minister Stefan Lofven said on Friday.

The UN General Assembly approved the de facto recognition of the sovereign state of Palestine in 2012 but the European Union and most EU countries, have yet to give official recognition.

“The conflict between Israel can only be solved with a two-state solution, negotiated in accordance with international law,” Swedish PM Stefan Lofven said during his inaugural address in parliament.

“A two-state solution requires mutual recognition and a will to peaceful coexistence. Sweden will therefore recognise the state of Palestine.”

For the Palestinians, Sweden’s move will be a welcome boost for its ambitions.

With its reputation as an honest broker in international affairs and with an influential voice in EU foreign policy, the decision may well make other countries sit up and pay attention at a time when the Palestinians are threatening unilateral moves towards statehood.

However, there is likely to be strong criticism of Sweden from Israel, as well as from the United States and the EU, which maintain that an independent Palestinian state should only emerge through a negotiated process.

Meanwhile, it was announced that Palestinian president Mahmoud Abbas will ask donor countries for $4 billion for Gaza reconstruction after a summer war between Israel and Hamas damaged or destroyed tens of thousands of homes and more than 5,000 businesses.

During the 50-day war, Israel launched several thousand air strikes and unleashed artillery barrages at what it said were Hamas-linked targets in Gaza, flattening entire neighbourhoods. Hamas fired thousands of rockets and mortar shells at Israeli communities during the fighting.

According to a 72-page reconstruction report, the Palestinian government will request $4 billion in emergency relief and reconstruction funds. It will also ask donors to pledge an additional $4.5 billion in support for the Palestinian government’s budget through 2017.

The Gaza pledging conference will be held in Cairo on October 12.

Meanwhile, Israel’s army chief said in comments published Friday that it would serve Israeli security interests to allow construction materials to enter blockaded Gaza.

Israel and Egypt have sharply restricted movement and trade in and out of Gaza since the Islamist militant Hamas seized the territory from Mr Abbas in 2007.

Lt Gen Benny Gantz said that Hamas suffered military setbacks during the war, but that Israel can only secure long-term quiet on its border with Gaza if “an economic anchor backs up what was achieved in the fighting.”

“We need to permit the opening of the strip to goods,” Gen Gantz was quoted as saying. “In the end, there are 1.8 million people there, with Israel and Egypt surrounding them. These people need to live.”

The Israel-Hamas war that ended in late August killed more than 2,100 Palestinians, three-fourth of them civilians, according to UN figures. Israel lost 66 soldiers and six civilians.

Hamas had ruled Gaza with an iron grip since it seized the coastal strip. However, earlier this year, the militant movement found itself in a severe financial crisis, largely because Egypt tightened its closure, shutting virtually all smuggling tunnels into Gaza and cutting off a key source of Hamas revenues.

The pressure eventually forced Hamas to hand over some powers to a temporary unity government of independent experts who report to Mr Abbas and who are to oversee the reconstruction effort.

The reconstruction would also require Israel to permit the import of large quantities of cement, steel and other construction materials. Under a recent deal between Israel, the Abbas government and the United Nations, Israel would allow such imports, provided Palestinian and UN inspectors make sure they are not diverted by Hamas for military use.

During the war, Israel had uncovered and partially destroyed a network of cement-lined Hamas military tunnels.

Palestinian government officials have said security forces loyal to Abbas would be deployed on the Gaza side of crossings with Israel after the Muslim holiday of Eid Al Adha, which starts Saturday, as a first step in the process.

However, no date was given for their deployment, seen as key by many in the international community for getting ambitious reconstruction projects off the ground.

The Palestinian report asked for more than $1.1 billion to rebuild 20,000 homes or apartments that were destroyed or severely damaged and to repair more than 40,000 housing units with lesser damage. Close to $600 million would be required for more than 5,000 damaged or destroyed businesses and factories, the report said.

* Reuters and Associated Press

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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When: 7pm kick off

Where: Rugby Park, Dubai Sports City

Admission: Free

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