Yemen summit to roll out ideas, not cash



SANA'A // The United States and 20 other countries will meet in London on Wednesday to discuss the growing instability in Yemen, following increasing threats by al Qa'eda in the Arabian Peninsula.

The meeting, which the British prime minister Gordon Brown called for, is to focus on shared analysis of the challenges faced by Yemen, including the reasons for radicalisation and instability, according to Tim Torlot, the British ambassador to Yemen. Discussions about political and economic reform in Yemen and how foreign nations can best assist the country as it faces pressure to crack down on al Qa'eda while battling armed rebellion in the north and a growing separatist movement in the south are also expected

The meeting comes in the aftermath of the Christmas Day attempt of Umar Farouk Abdulmutallab, a Nigerian, to blow up a Northwest Airlines flight over Detroit, Michigan. Mr Abdulmutallab had attended Arabic language classes at a school in Sana'a and had been in contact with al Qa'eda operatives in the country. Al Qa'eda in the Arabian Peninsula claimed responsibility for his unsuccessful attack. "We are deeply concerned about the situation - and there is real effort to mobilise the international community to help address these concerns," a western diplomat said on condition of anonymity.

Gregory Johnsen, a Yemen specialist at Princeton University in the United States, warned that if the conference solely focuses on al Qa'eda and security issues and neglects Yemen's other challenges, it will be a failure. "Dealing with al Qa'eda in isolation from Yemen's other challenges is neither sustainable nor desirable. Instead, it is a recipe for disaster," Prof Johnsen said. "A narrow focus on counterterrorism may alleviate the problem for a short period of time, but it will do nothing to eradicate al Qa'eda within the country over the long term. Indeed, such a shortsighted approach will have exceedingly high long-term costs.

"Any Yemen strategy will require a co-ordinated effort between the US, its allies and regional partners. Success in Yemen demands a localised, nuanced and multifaceted response to the country's many problems," Prof Johnsen added. Mr Torlot said during a press conference in Sana'a on Wednesday that Yemen is facing a set of serious challenges that require sustained international support. "Our message to the conference will be presenting the economic, development and security challenges that we are facing and we need the international community to support us. I think the event is an alarm to the world that it should work with us to face these challenges," said Hisham Sharaf, Yemen's vice minister for planning and international co-operation.

The London conference will not be about making new financial pledges. Out of US$5.5 billion (Dh20bn) pledged by donors at a London conference in 2006, Yemen has managed to spend only a fraction as the ability of the government to absorb financial support properly due to inefficiency and corruption is in question. "By accepting our money, you should accept our conditions for how this money should be used," the diplomat said. "We will not tolerate the misuse of our money. This is a critical moment in our relationship with Yemen.

"It is the Yemeni government's responsibility to carry out political and economic reforms to give us the confidence to work together. Corruption is a major epidemic. "Such issues will be discussed and the government has to be prepared to answer ... It has to tell us its view of the situation and how these issues will be addressed," The Houthi insurgents, who have been fighting a sporadic war against the central government since 2004, have not commented on the conference. But The Peaceful Movement Council for South Liberation, one of the southern groups that is pushing for autonomy in the region, urged in a statement that participants in the London conference support their demands.

Mr Torlot, the British ambassador, said splitting Yemen would have catastrophic consequences. Western diplomats here, however, have said that settlement of the insurgency in the north, a battle the government has failed to win militarily, is vital to the country's future. malqadhi@thenational.ae

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Saturday, September 16 – 1.45pm, v New Zealand
Sunday, September 17 – 10.30am, v Australia; 3.45pm, v South Africa
Monday, September 18 – 2pm, v England; 7.15pm, v India
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Monday, September 18 – 5.30pm, v England
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Thursday, September 21 – 12.15pm, v Australia
Friday, September 22 – 1.30pm, semi-final
Saturday, September 23 – 1pm, grand final

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German intelligence warnings
  • 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
  • 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
  • 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250 

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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.”

Teaching your child to save

Pre-school (three - five years)

You can’t yet talk about investing or borrowing, but introduce a “classic” money bank and start putting gifts and allowances away. When the child wants a specific toy, have them save for it and help them track their progress.

Early childhood (six - eight years)

Replace the money bank with three jars labelled ‘saving’, ‘spending’ and ‘sharing’. Have the child divide their allowance into the three jars each week and explain their choices in splitting their pocket money. A guide could be 25 per cent saving, 50 per cent spending, 25 per cent for charity and gift-giving.

Middle childhood (nine - 11 years)

Open a bank savings account and help your child establish a budget and set a savings goal. Introduce the notion of ‘paying yourself first’ by putting away savings as soon as your allowance is paid.

Young teens (12 - 14 years)

Change your child’s allowance from weekly to monthly and help them pinpoint long-range goals such as a trip, so they can start longer-term saving and find new ways to increase their saving.

Teenage (15 - 18 years)

Discuss mutual expectations about university costs and identify what they can help fund and set goals. Don’t pay for everything, so they can experience the pride of contributing.

Young adulthood (19 - 22 years)

Discuss post-graduation plans and future life goals, quantify expenses such as first apartment, work wardrobe, holidays and help them continue to save towards these goals.

* JP Morgan Private Bank 

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