Protesters with the Shiite Houthi movement flee from tear gas fired by riot police near the cabinet building in Sanaa on September 9. Yemeni troops and Shiite Muslim rebels shot at each other at the western entrance to the capital, residents and security sources said, hours after soldiers killed at least four protesters outside the cabinet building. Mohamed Al Sayaghi / Reuters
Protesters with the Shiite Houthi movement flee from tear gas fired by riot police near the cabinet building in Sanaa on September 9. Yemeni troops and Shiite Muslim rebels shot at each other at the wShow more

Resurgence of Houthi movement in Yemen threatens government



SANAA // A decade after Yemen’s Houthis fought the first of six wars in five years with the central government, the group may finally get its way in Sanaa.

The Houthis, also known as Ansarullah, a group with roots in the Zaidi sect of Shiite Islam, are the driving force behind four weeks of protests by hundreds of thousands people to demand the restoration of fuel subsidies and the fall of the transitional government.

Despite being the only powerful Yemeni faction not represented in government, Houthi leaders met government officials over the weekend to fine-tune a deal to end the standoff. The government had offered on Wednesday to name a new prime minister and cut fuel prices further in exchange for an end to the protests.

The Houthis have become unlikely power brokers in a country where they have spent the past 50 years on the sidelines.

Using widespread public anger over the lifting of subsidies, they have been able to rally tens of thousands of poor Yemenis to join their protests.

The protests had been largely peaceful until early last week, when nine protesters were killed in clashes with security forces. On Saturday, more clashes broke out in a north-western district of Sanaa, near a state TV building, when troops stopped a rebel lorry loaded with weapons, military officials said. There were no reports of casualties.

The price of petrol shot up by 70 per cent after Abdrabu Mansur Hadi, the interim president, removed fuel subsidies in late July as part of a reform package that the government and World Bank say is crucial to saving an ailing economy.

The reforms and fuel price hikes were backed by all parties including Mr Hadi’s General People’s Congress and the Islah Party of the Muslim Brotherhood. The reforms include decreasing government spending and increasing social security coverage.

“Politicians are corrupt in Yemen so they don’t feel the difficulties we faced after subsidies were lifted,” said Ali Shami, a Houthi loyalist from Sanaa who had been protesting for more than two weeks. “We are patient, and will not accept a government that does not work for the people. We have nothing to lose and everything to gain by escalating our protests.”

A few days after the subsidies were lifted, Mr Hadi on September 4 agreed to reduce fuel prices by 15 per cent and offered additional conciliatory measures such as assistance to farmers to compensate for higher fuel costs, limiting spending by top officials, a review of prices of previous oil and gas deals with foreign companies, and ensuring more transparency within government institutions.

“The Houthis are a powerful force and must be involved in decision making if Yemen has a chance to go forward,” said Zaid Al Thari, a political analyst in Sanaa.

The protests have distracted the government from its fight against Al Qaeda insurgents in the south of the country. There have been fewer government attacks and air raids against the militants since the protests in Sanaa began, giving Al Qaeda breathing room and time to regroup.

Mr Hadi has formed committees to end the standoff with the Houthis but progress has been limited.

“There is cooperation from the Houthis and we are trying to build a road map to ensure all factions are involved in the future of Yemen,” a committee member told The National. “We agreed on forming an expert technical committee to evaluate and study the subsidies issue as well as ensuring the implementation of more economic reforms.”

Unlike the 2011 uprising that resulted in the ouster of Mr Saleh, these protests are unified and led by one person, Abdul Malik Al Houthi, whose family has for decades been influential within the Zaidi sect.

Zaidis ruled Yemen for more a 1,000 years until the 1962 revolution by tribal and religious leaders seeking a republican state. Since then, Zaidis claim they have not been fairly represented in national politics.

In 2004, Hussein Al Houthi, along with dozens of Zaidi loyalists, revolted against the government but was killed. His younger brother, Abdul Malik, was immediately chosen as his successor.

Six wars have been fought between the government and the Houtis since 2004 – and with every war, the Houthis have gained more fighters and territory.

By the end of the sixth war in 2009, they controlled vast regions of northern Saada province, where they are based. They are also influential in Amran, Al Jawf, Sanaa, Hajja and Taiz provinces.

When the Arab Spring swept through Yemen in 2011, Houthis joined other political factions in calls for Mr Saleh to go. Tens of thousands of their loyalists took to the streets in their first peaceful protest.

After Mr Saleh agreed to step down in February 2012, Mr Hadi took power to lead the country through the GCC-led transition of power agreement.

At first, the Houthis supported Mr Hadi after he declared the six wars against the Houthis were unjust and oppressive.

But Houthis say they have once again been sidelined since Mr Hadi took power.

Even though they have no political party, the Houthis participated national talks last year to map out Yemen’s future. The talks led to an agreement to make Yemen a federation of six states, despite Houthi objections.

Feeling ignored once again, they continued their insurgency and expansion of territory in northern Yemen.

Last October, they took control of the entire northern Saada province after months of clashes with Salafis in Dammaj and Kitaf districts, considered two of the main Salafi strongholds in Yemen.

Two weeks into October, they expanded into neighbouring Amran province, controlled by the Hashid tribe, a once-powerful pro-Muslim Brotherhood clan left weakened after Saudi Arabia withdrew its support.

Last month, they turned their sights on the strategic Al Jawf province, which also borders Saudi Arabia. Hundreds of troops and Houthi fighters have been killed in ongoing clashes in Al Jawf.

At least 75 fighters were killed last week alone. The air force has struck at dozens of Houthi strongholds in the province fearing the fall of the province.

There are fears the country could return towards sectarian violence.

“We need to learn from the mistakes of Syria and Iraq. Sectarian killing will never solve the problem,” said Mohammed Abulahoum, president of the Justice and Building Party.

“Yemen has a number of social and religious movements. We have to learn how to accept one another and resort to democratic and peaceful solutions to solve our problems instead of using arms.”

foreign.desk@thenational.ae

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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.”