Yemeni President Abd-Rabbu Mansour Hadi attends the Arab summit in Mecca, Saudi Arabia, May 31, 2019. Reuters
Yemeni President Abd-Rabbu Mansour Hadi attends the Arab summit in Mecca, Saudi Arabia, May 31, 2019. Reuters
Yemeni President Abd-Rabbu Mansour Hadi attends the Arab summit in Mecca, Saudi Arabia, May 31, 2019. Reuters
Yemeni President Abd-Rabbu Mansour Hadi attends the Arab summit in Mecca, Saudi Arabia, May 31, 2019. Reuters

New Yemeni government to provide impetus for peace, officials say


Mina Aldroubi
  • English
  • Arabic

The formation of Yemen's new government will provide the impetus for a peace process that could end the political deadlock and revive talks, officials told The National.

A new cabinet was announced early this December in a bid to end a power struggle between nominal allies, the government and the Southern Transitional Council, which declared self-rule in Aden.

The main Yemeni forces in a Saudi-led coalition fighting the Iran-backed Houthi rebels, they have been in disagreement in the south for about two years.

The disagreements complicated efforts to enforce a nationwide ceasefire and pave the way for the resumption of negotiations to end the war that has raged for six years.

“The formation of the new government is a positive and pivotal step, not only to unite forces and efforts against the Houthis but also to stabilise the situation in liberated areas and restore basic services to the people of Yemen,” said Marwan Noman, Yemen’s deputy permanent representative to the UN.

Government officials have been wary of the Houthis' commitment to faithfully engage in peace talks.

“Nevertheless, when it comes to peace talks ... we need to be very cautious. There are some preconditions to be honoured,” Mr Noman said.

Measures to build confidence were agreed on during talks in Sweden in December 2018.

They included demilitarising the Yemeni port of Hodeidah to prevent a battle in the Red Sea port city and stave off famine.

The release of hundreds of prisoners and a ceasefire to de-escalate tension were also agreed.

“I think it will be difficult to go to any talks before the parties agree to the joint declaration proposed by the UN special envoy, Martin Griffiths,” Mr Noman said.

The challenges facing this government are “tremendous”, he said.

Mr Noman said he was optimistic and hoped that 2021 was the year of peace in Yemen.

Another government official said the Houthi rebels were the only ones “standing in the way of peace”.

“We want to unite to create peace and every day this urge is intensified when we see the suffering of the Yemeni people,” he said.

“We are ready to build trust with the Houthis. The government is complete and we are ready."

Yemeni officials consider the formation of the government a “crucial step towards ending the war”.

The UN envoy to Yemen, Martin Griffiths, has told the Security Council that he plans to convene face-to-face consultations between the government and Houthis in the coming year.

The UK has offered to host the talks, the official said, but the news was yet to be confirmed.

“Now that the new government is announced, we should expect something before the spring,” he said.

UN-led efforts to stop the war

Mr Griffiths and his team maintain that the formation of the new government is “a pivotal step towards a lasting political resolution to the conflict in Yemen”.

He said his office had been mediating a deal between the sides that would ensure the parties stopped fighting, and adopted measures to reopen the country, ease the suffering and resume the political process.

“It is time for the parties to come together, discuss their differences and agree on a realistic way forward," Mr Griffiths said.

"In 2021, I would like to see the parties demonstrate seriousness about resuming an inclusive political process to end the conflict.”

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Who's who in Yemen conflict

Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

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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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