Hungarian Foreign Affairs and Trade Minister Peter Szijjarto says the country is recalling its ambassador to the Netherlands and suspending high-level diplomatic ties in response to critical remarks by the Dutch ambassador about Hungary
Hungarian Foreign Affairs and Trade Minister Peter Szijjarto says the country is recalling its ambassador to the Netherlands and suspending high-level diplomatic ties in response to critical remarks bShow more

Hungary severs diplomatic ties with the Netherlands



Hungary is suspending high-level diplomatic ties with the Netherlands in a row over the relocation of asylum-seekers from Greece and Italy.

The country is recalling its ambassador to the nation following remarks made by the Dutch ambassador which criticised Hungary for its stance.

The Hungarian foreign minister said his country’s decision was "one of the most radical steps in diplomacy" and that it would ask the Dutch foreign ministry for its position on the statements of Ambassador Gajus Scheltema, published Thursday in Hungary by the 168 Ora magazine.

Peter Szijjarto said Scheltema - already scheduled to leave Hungary soon - was no longer welcome at any Hungarian ministry or state institution.

"We won't settle for an explanation behind closed doors," he added.

In the interview, Scheltema was critical of Hungary's unwillingness to participate in a European Union plan to relocate asylum-seekers from Greece and Italy. He also criticised the Hungarian government's campaign against billionaire financier and philanthropist George Soros and drew parallels between the government's efforts to "create enemies" and those of the Islamic State group.

Speaking to reporters in the Netherlands, Dutch Foreign Minister Bert Koenders criticised the ambassador's comments.

"It is not right. That comparison should not be made," Koenders said.

Scheltema also expressed concerns about corruption and press freedoms in Hungary.

Government spokesman Zoltan Kovacs said Scheltema's statement equating political campaigns by Hungary's government with those of extremist groups was "totally unacceptable and impermissible."

"There is no need for such unprecedented statements, neither in bilateral relations nor in Europe," Kovacs said. "We decidedly reject (them) and we expect the Netherlands to take steps in this regard."

Hungarian Prime Minister Viktor Orban claims that an old Soros proposal to bring large numbers of migrants to Europe is being carried out at present by the EU.

Orban, who benefited from a Soros-funded scholarship in the late 1980s, sees an ideological foe in the Hungarian-born financier whose Open Society Foundations support many civic groups while promoting democracy, human rights and the protection of minorities.

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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.”

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