WASHINGTON // The image of an American GI with a cigarette dangling from his lips, or a pack of Marlboros strapped to his helmet, could one day be a thing of the past as the US military mulls over the negative health effects of smoking and considers a ban on the use of tobacco products.
But do not expect such a ban to come anytime soon. A Pentagon spokesman this week said Robert Gates, the US secretary of defence, had no plans to prohibit US soldiers, currently engaged in two foreign wars, from lighting up.
Mr Gates "knows that the situation they are confronting is stressful enough as it is, and I don't think he is interested in adding to their stress levels by taking away one of the few outlets they may have to relieve stress," Geoff Morrell, the Pentagon press secretary, said last week during a briefing with reporters.
"It's not our preference to have a force that is using tobacco products. It's enormously expensive," he added, citing reports showing that health-related costs may be close to US$1 billion (Dh3.67bn).
However, the secretary of defence "is not prepared ... to restrict the use of tobacco products in combat zones".
Last month, an Institute of Medicine report, requested by the Pentagon and the Department of Veterans Affairs (VA), showed that about one third of active-duty military personnel use tobacco, compared to just a fifth of civilians.
Smoking rates among military personnel returning from Iraq and Afghanistan may be 50 per cent higher than rates among non-deployed military personnel, the report showed, noting that the habits harm "operational readiness".
In 2008, the VA spent more than $5bn to treat veterans with chronic, obstructive pulmonary disease, which the report says is "strongly associated with tobacco use". The defence department spent $564 million in 2006 treating tobacco-related illness in the military, the findings showed.
The report suggested the military gradually institute anti-tobacco measures such as ending discounts on tobacco products at military commissaries and exchanges, and ultimately ban the sale of the products altogether. It also recommended that the military prohibit the use of tobacco on military installations.
Such restrictions would be the latest anti-tobacco measures in the United States, where in recent years major cities have banned smoking in enclosed public places such as restaurants, bars and airports.
In April, the federal government put a 62-cent tax hike on cigarettes, the largest-ever single increase. Last month Congress voted to give the Food and Drug Administration broad powers to regulate the tobacco industry, allowing it to control everything from the ingredients of cigarettes to the marketing of certain brands.
But some say forcing tobacco restrictions on US soldiers, who are grappling with the rigours of war, is simply going too far.
"With all the issues facing our military today and the risks our troops take to protect our freedom, banning smoking should not even be on the radar screen," Brian Wise, the executive director of Military Families United, a national military family organisation, said last week.
"Nobody doubts the effects of smoking but it is not an illegal substance and should not be banned. Our troops make enough sacrifices to serve our nation," he added. "Perhaps more than anything, smoking in the field is more about comfort and coping with an often hostile environment."
There was no comment last week from the White House, where Barack Obama, the US president, is going through his own battle with nicotine addiction. Mr Obama refers to himself as a "former smoker", but also admits to occasionally indulging his habit. "I would say that I am 95 per cent cured, but ? there are times where I mess up," he told reporters in a news conference last month.
The new report on military smoking acknowledged the difficulty of instituting a long-term smoking ban, noting that the habit had "long been associated with the image of a tough, fearless warrior".
"By the end of World War I, tobacco use was collectively viewed as patriotic and as a staple for the American soldier," the report said.
It also cited some recent positive changes in the "culture of smoking" and applauded a 1987 ban on tobacco use during basic training. Still, it concluded: "The time has come for DOD and VA to assign high priority to tobacco control."
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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.”