A couple embrace after placing flowers at the beach next to the Imperial Marhaba Hotel in Sousse, Tunisia, where 39 people were killed. Jeff J Mitchell / Getty Images / June 27, 2015
A couple embrace after placing flowers at the beach next to the Imperial Marhaba Hotel in Sousse, Tunisia, where 39 people were killed. Jeff J Mitchell / Getty Images / June 27, 2015

Tunisia clamps down after deadly terrorist rampage



Sousse, Tunisia // The slaughter of 39 tourists in the resort of Sousse “strikes at the heart” of Tunisia, ministers warned on Saturday as hundreds of foreigners fled the country.

In response to the terrorist attack, army and police launched a nationwide crackdown, ordering at least 80 “illegal mosques” closed and pledging to shut them down this week.

Prime minister Habib Essid said reservist forces had been called up to defend sites such as hotels and shopping centres.

The crackdown came as more details emerged about the gunman: Saif Rezgui, a 24-year-old student from a stable family, who was not on any terrorism watch list.

His killing spree on the beach of Sousse’s Imperial Marhaba hotel hit Tunisia’s weak underbelly: an economy hugely reliant on tourism.

“This attack strikes at the heart of the country,” said health minister Said Aidi. “They [the terrorists] know what they want to do, they want to stop visitors coming to Tunisia.”

Tunisia had emerged as the most stable of the 2011 Arab Spring countries, seeing peace and democracy take root after the fall of dictator Zine El Abidine Ben Ali.

But those democratic roots are shallow, and threatened by a weak economy. Unlike its neighbours, Tunisia lacks significant oil production and is reliant on the twin pillars of auto-part exports and tourism to mitigate high unemployment.

Now one of those two pillars may have been kicked away: along with the evacuation of guests at the Imperial Marhaba, thousands of tourists at neighbouring hotels have also demanded to leave, with more than 1,000 flown out early on Saturday morning.

Officials fear a mass exodus may follow, wrecking the summer season that the hospitality industry relies on.

Tourism employs 340,000 people in Tunisia, where many have already made the link between unemployment and terrorism.

Although militant groups have yet to take firm root, the country is nevertheless a leading source of fighters for ISIL, with more than 5,000 Tunisians reported to be fighting with the extremist group in Syria and Iraq.

Mr Essid’s government, appointed after elections late last year, has been struggling to square the circle in which deprivation breeds discontent which in turn fuels extremism. Now his task has become infinitely harder.

It is only three months since the previous massacre of tourists, by two gunmen at the Bardo museum in the capital Tunis, yet hopes that this would be an isolated incident proved premature.

Just as seriously, questions will be raised about the level of security at tourist sites. Survivors of the Sousse massacre said the hotel, despite being one of the biggest and most prestigious in the resort town, had no armed guards or trained security staff, leaving them helpless as the gunman roamed at will.

They described seeing a man in black shorts and shirt running along the beach unloading shots into tourists, before running into the hotel complex.

“Bodies were lying all over the beach,” said Glenn Whitehead, a British tourist. “Some of them were lying on their sun beds, they had not even got off their sun beds when they were shot.”

In the hotel complex, the gunman shot tourists running past the pool, chasing them up marble steps into the foyer.

Inside the hotel, he chased fleeing holiday makers into a stairwell leading to several floors of offices, shooting people as they cowered in corridors.

Mr Whitehead and his wife Anita survived by hiding with about 20 other tourists in the hotel spa, with staff urging them to keep quiet as firing raged outside.

It was more than half an hour before security forces arrived, a response time that is likely to prompt inquiries from the interior ministry – and stoke fears in Tunisia’s resorts.

Most of the gunman’s victims were killed on the beach, a mixture of British, Belgian, French, Irish and German tourists and at least five Tunisian staff. Britain appeared to have suffered the highest toll, confirming on Saturday that at least 15 of its citizens were among the dead.

The Tunisian government said Rezgui, who enjoyed partying and practised break-dancing, was due to receive his master’s degree in engineering in the nearby town of Kairouan.

Similar to other Tunisian extremists, he appeared to have come into contact with hardline preachers about six months ago, a senior security source told Reuters.

“He was a good student and always attending class,” Prime Minister Essid said. “Our investigations show he didn’t reveal any signs of extremism, or ties to terrorists. He wasn’t even on a watch list.”

The government’s immediate response was to declare a crackdown on what Mr Essid called “illegal mosques”.

Blaming the mosques for “spreading rumours and poisons to encourage terrorism,” he said about 80 mosques across the country would be shut in the coming days in a bid to halt extremist propaganda.

The closures highlight the contradictions of a country which is proud of its pluralistic nature, with both churches and synagogues operating freely in the capital, and yet which also breeds a tiny minority of extremists.

The Bardo killings in March saw huge spontaneous protests by Tunisians against extremism of all kinds, in an outpouring of emotion not seen since the revolution. Those protests were confirmation of the popularity of democracy in the country, yet that democratic government is now facing an economic catastrophe that will put it under unprecedented strain.

foreign.desk@thenational.ae

* With additional reporting from Agencies

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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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