RAMALLAH // The European Union’s financial assistance to public servants in the Gaza Strip should be halted because much of it goes to people who do not work, European auditors have said.
The EU pays about 20 per cent of the salaries of teachers, physicians and public officials in the besieged Palestinian territory, but many recipients of that aid do not actually hold down jobs, according to an investigation by the European Court of Auditors.
The auditors called for diverting EU funding, which is an important means of support for many Gazans, to the West Bank.
“Our suggestion is to discontinue the programme for employees in Gaza,” said Gustaf Wessberg, who led the inspections over the last 16 months. “The payment of civil servants who do not work does not meet one of the EU’s main objectives to provide public services to the Palestinian people.”
The European auditors disclosed a number of findings at a news conference in Brussels on Tuesday, including one in which some 40 per cent of public servants in Gaza do not work.
The auditors examined about €1 billion (Dh5.06bn) of EU funding to the West Bank and Gaza between 2008 and 2012.
Gaza’s residents have struggled for seven years under an Israeli-blockade, the Islamist group Hamas having wrested control over Gaza in 2007 from the Fatah faction that controls Palestinian areas in the West Bank.
The investigation raises questions about oversight by the EU Commission, which runs EU aid programmes in the Palestinian territories.
Peter Stano, an EU Commission spokesman, defended the Gaza programmes, arguing that the money helps people who may be prevented from working in the territory because of the feud between Hamas and Fatah.
“If the Palestinian Authority is not paying these people, who is going to provide for them? If you have people running around without income, then of course, they are more prone to be taken by extremists,” he said.
The disclosure of the findings comes ahead of another visit to the region by the US secretary of state, John Kerry, who was expected to arrive yesterday in an attempt to resolve a crisis in the Israeli-Palestinian peace talks that he helped restart in July.
Palestinian officials have reacted angrily to a reported US plan that reportedly allows Israeli troops to remain deep inside a Palestinian state. Mr Kerry reportedly broached the idea during a visit to the region last week as a way to satisfy Israeli security concerns and thereby encourage concessions during the peace talks from the Israeli prime mister, Benjamin Netanyahu.
Yasser Abed Rabbo, a confidant of Palestinian Authority president Mahmoud Abbas, on Monday rejected the idea, saying it had produced a “crisis” in the negotiations.
hnaylor@thenational.ae
* With additional reporting by Reuters and Agence France-Presse
Leap of Faith
Michael J Mazarr
Public Affairs
Dh67
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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Queens of the Stone Age
Matador
UAE currency: the story behind the money in your pockets
Pakistan squad
Sarfraz (c), Zaman, Imam, Masood, Azam, Malik, Asif, Sohail, Shadab, Nawaz, Ashraf, Hasan, Amir, Junaid, Shinwari and Afridi
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MATCH INFO
Manchester City 1 (Gundogan 56')
Shakhtar Donetsk 1 (Solomon 69')
Short-term let permits explained
Homeowners and tenants are allowed to list their properties for rental by registering through the Dubai Tourism website to obtain a permit.
Tenants also require a letter of no objection from their landlord before being allowed to list the property.
There is a cost of Dh1,590 before starting the process, with an additional licence fee of Dh300 per bedroom being rented in your home for the duration of the rental, which ranges from three months to a year.
Anyone hoping to list a property for rental must also provide a copy of their title deeds and Ejari, as well as their Emirates ID.