Yemeni vice-president Abed Rabbo Mansour Hadi (right), pictured with the US ambassador to Yemen, Gerald Feierstein (left). Mr Hadi has taken on executive duties in the president's absence. Yemen Presidential Palace / EPA
Yemeni vice-president Abed Rabbo Mansour Hadi (right), pictured with the US ambassador to Yemen, Gerald Feierstein (left). Mr Hadi has taken on executive duties in the president's absence. Yemen Presidential Palace / EPA
Yemeni vice-president Abed Rabbo Mansour Hadi (right), pictured with the US ambassador to Yemen, Gerald Feierstein (left). Mr Hadi has taken on executive duties in the president's absence. Yemen Presidential Palace / EPA
Yemeni vice-president Abed Rabbo Mansour Hadi (right), pictured with the US ambassador to Yemen, Gerald Feierstein (left). Mr Hadi has taken on executive duties in the president's absence. Yemen Presi

West says seriously wounded Saleh will not return to Yemen


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SANA'A // Western diplomats have told opponents of Ali Abdullah Saleh that the president is seriously wounded and will not return from Saudi Arabia to govern Yemen, while a Saleh spokesman says he may be back as soon as Friday.

The US ambassador to Yemen, Gerald Feierstein, told members of the opposition Joint Meeting Parties (JMP) that they should start preparing for a post-Saleh Yemen and work with the vice president, Abdo Rabu Hadi, on a transition of power.

"The ambassador told the JMP to stop thinking about Saleh," said Hasan Zaid, the general secretary of the Haq party. "He said his health will not allow him to be back soon."

US officials said yesterday that Mr Saleh was more seriously injured than originally thought in a rocket attack on his compound last week. Three US officials said Mr Saleh had burns covering 40 per cent of his body and was suffering from bleeding inside his skull.

An aide to Mr Saleh said that his condition was critical. "His injuries are serious and his health is more important to us than rule. He has not commented because he is not healthy to do so," said the aide.

However, Abdu Ganadi, a government spokesman, said yesterday that Mr Saleh would return to Yemen as early as Friday.

A Gulf Cooperation Council official in Sana'a said yesterday that the GCC was stepping aside and letting the Americans and Europeans take the lead in convincing Mr Saleh not to return to Yemen. GCC diplomatic efforts have been mostly ineffective so far.

Abdul Latif al Zayani, the GCC general secretary, visited Yemen five times in the past two months and did not succeed in making Mr Saleh sign the GCC proposal that would have guaranteed him immunity.

Mohammed Sabri, the spokesman for the opposition dialogue committee, said: "We tried everything, and in return Saleh did not sign and said that al Zayani was impolite and not treating him like a president of a republic."

Violence in Sana'a has ebbed since Mr Saleh left the country for Saudi Arabia. Mr Hadi has agreed to halt fighting in Sana'a and persuaded tribal fighters to hand over the government buildings they had seized.

Abdul Qawi Qaisi, the spokesman for the Hashed leader, Sheikh Sadeq al Ahmar, said: "Hashed tribes handed everything over to the vice president." Mr Qaisi said the tribe made the same offer to Mr Saleh earlier but he rejected it. "Saleh was the reason for clashes in Yemen," he said, "and if he comes back Yemenis will continue killing one another and destroy the country."

Despite the relative calm in Sana'a, violence continued throughout Yemen yesterday. At least 45 people were killed in an al Qa'eda-held town. The army said it had killed 30 Islamist militants, including an al Qa'eda leader, in Zinjibar. An official said 15 soldiers had been killed in the battles for control of the town seized by militants about 10 days ago. Gunmen took control of much of Zinjibar in late May. Security officials said the militants were al Qa'eda fighters but Mr Saleh's opponents claimed the government was inventing a jihadist threat to head off western pressure on his 33-year rule.

In a separate incident yesterday, Saudi Arabia said its border guards killed a Yemeni gunman who opened fire while trying to cross into Yemen in a jeep at a crossing near Najran, 100 kilometres inland from the Red Sea. The Saudi statement said two guards were killed. No further details about the gunman were given. Infiltration in both directions along the 1,300-kilometre desert border is common.

During the four months of the Yemen revolution, Mr Saleh has controlled only parts of the country. The provinces of Jawf, Mareb, Abyan, and Sa'ada have almost no government presence. Militants took over Taiz city after clashing with government forces for more than a week. But the government insists the country is stable.

"The fall of cities and provinces are planned tactics used by Yemen's opposition to show the world that Saleh is not fit to rule, but in reality they are lies," said Ahmed Soufi, an adviser to Mr Saleh.

The international community is threatening to cut financial support to Yemen if Mr Saleh does not co-operate, said Zaid Thari, a government official. "Saleh will have no option but to bow and accept stepping down, not in favour of Yemen's opposition but the sake of Yemen."

Yemen receives billions of dollars every year in financial support, according to the ministry of planning and international co-operation.

Mohammed Abulahoum, the president of the Justice and Building party, believes that the pressure on Mr Saleh is designed to restore some stability.

"People are dying and the region needs to be stable. Yemen is key for stability in the gulf and that is why Saleh is not fit to rule Yemen anymore," Mr Abulahoum said.

Sources close to General Ali Mohsen Ahmar, who defected to the opposition, said that the general has promised the JMP that he would take care of Mr Saleh if he returns to Yemen.

The promise of military support gave the opposition the power to announce that they will do all they can to ensure that Mr Saleh does not return.

The source also confirmed that General Mohsen met on Monday with British and European Union ambassadors and discussed the transition.

The Saudi government has remained silent so far on what its attitude will be towards Mr Saleh's return. One reason for that may be that Mr Saleh is in no condition to speak about his future, given that his burns are apparently more extensive than previously reported.

After its weekly meeting on Monday, the Saudi cabinet of ministers issued a statement in which it expressed the hope that the GCC initiative would be signed by "all parties to help end the crisis and bring a return to stability, security and unity", the Saudi Gazette newspaper reported.

Despite all the pressure on Mr Saleh to step aside, experts do not expect him to leave easily, especially because the Republican Guard and central security forces are in the hands of his son and nephew. More than 60,000 troops are still loyal to Mr Saleh.

Mohammed Allow, the president of the human rights organisation HOOD, said: "Saleh will seek to fight to the last breath and this is what is worrying the international community. It's time to end the dictatorship rule of Saleh and start the rule of the people."

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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