A UN donor conference to help fund aid operations for drought stricken Horn of Africa raised on Wednesday about $1 billion – far below the $7 billion the world body was seeking.
The UN humanitarian body said in a statement that “famine has been averted” thanks to the funds, but additional resources were urgently required to assist nearly 32 million people in Ethiopia, Kenya and Somalia who are facing acute food insecurity and the most severe drought in four decades.
With the latest pledges and the $1.4 billion the UN had already received from the US, it brings the total to about $2.4 billion.
Speaking at the onset of the donor conference in New York, UN Secretary General Antonio Guterres said only 20 per cent of the UN's regional humanitarian response plan had been financed to date.
“This is unacceptable,” Mr Guterres stated, underscoring the need for immediate action to prevent the crisis that is threatening the lives and livelihoods of millions across the region.
The UN chief warned that without an immediate, “major injection” of funding, emergency operations will “grind to a halt” and people will die.
Somalia, Ethiopia and Kenya have borne the brunt of the devastating drought, resulting in five consecutive failed rainy seasons.
David Miliband, president of the International Rescue Committee, said man-made climate change has increased the likelihood of drought in the region by 100 times.
Lana Nusseibeh, the UAE's ambassador to the UN, told delegates the Horn of Africa's “complex” humanitarian situation requires “bold intervention”.
Ms Nusseibeh highlighted the UAE's “strong partnership” with the countries in the region, which involves direct and indirect humanitarian support, with the Emirates contributing $1.6 billion in aid to the region over the past five years.
This year alone, she said, the UAE has allocated $20 million to assist with humanitarian and stabilisation programmes in Somalia, and stressed that her country remains committed to a “multifaceted approach” to the region and the importance of long-term resilience-building initiatives within communities.
Linda Thomas-Greenfield, Washington’s top envoy to the UN, announced an additional humanitarian aid package of nearly $524 million for the Horn of Africa, bringing the total US contribution for fiscal year 2023 to $1.4 billion.
“In a world abundant with food, entire communities should never, never starve to death,” Ms Thomas-Greenfield said.
Correction: A previous version of this story said that the UN had raised $2.4 billion through the donor drive.
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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