Elections alone will not help Libyans



Even though Libya went to the polls last week, the lack of enthusiasm among the electorate was apparent in the paltry turnout, which was even lower than in July 2012, the first free national vote in more than 40 years. According to officials, about 630,000 people cast their ballots, fewer than half of the 1.5 million people who were eligible to vote.

Given the widespread frustration over the outgoing General National Congress, which the new parliament will replace, the question is this: why are Libyans reluctant to vote? The simple answer is that they have grown weary of politics three years after the fall of Muammar Qaddafi in 2011 and, more instructively, they think that real power lies in the hands of the many militias now at large around the country. These groups have never allowed any government to do its work unimpeded and it is unlikely they will do so now.

As the elections began, at least four people were killed in clashes between Islamists and government forces in Benghazi. And, as The National reported, one of the country's most prominent activists, Salwa Bughaigis, was assassinated at home hours after casting her ballot. Bughaigis, a lawyer, was among the most outspoken voices against militias and extremists.

Although Libyans have expressed shock and anger at the killing, the incident is increasingly common in a country where secular activists, judges, moderate clerics and policemen are frequent targets.

Libyans understand the advantages of democracy, but they also crave security. The violence that has recently pulsed across the country has been some of the worst Libya has experienced in the post-Qaddafi period and hardly encourages the electorate to believe these elections are a meaningful exercise in democratic rule.

The problem now is that the low turnout will neither make the various militias accept the legitimacy of the new parliament nor hasten them to disarm in favour of the emerging political arrangement.

Unless a compromise is reached, stability and progress will remain impossible. Worse still, political stalemate will encourage the militias to believe they, rather than politicians, will shape the destiny of this conflict-ravaged country.

Prophets of Rage

(Fantasy Records)

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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