An ISIL flag is pictured above a destroyed house near the Clock Square in Raqqa. Reuters
An ISIL flag is pictured above a destroyed house near the Clock Square in Raqqa. Reuters

There are many challenges in the wake of ISIL’s defeat, but there are also opportunities



The fall of Raqqa has, not surprisingly, been greeted with scenes of great jubilation by all those forces, particularly the Kurds and the Syrian Democratic Forces, that have participated in the campaign to drive ISIL from its stronghold.

But while no one would deny the victors their moment of glory after more than three years of bitter fighting, it is also important to remember that ISIL's defeat merely represents the start of a new, equally challenging chapter of bringing political stability to the Middle East.

The destruction visited upon the landscape of the region, both physical and political, by ISIL’s ruinous attempts to establish its so-called caliphate in the war-torn regions of northern Syria and Iraq cannot be underestimated.

The appalling violence meted out by ISIL fanatics against those deemed not to be sufficiently supportive of their perverse Islamist creed, has left entire communities reduced to a state of utter devastation and trauma.

ISIL’s three-year reign of terror, moreover, has had a dramatic and unwelcome impact on the political landscape of the Middle East, with the dismantling of long-established governments and institutions in predominantly Sunni parts of the world. This has provided an opportunity for those hostile to the stability of Sunni states to wreak mayhem.

Qatar's support, for example, for a wide range of Islamist groups has seriously undermined attempts to bring stability to countries as far afield as Libya and Egypt, while Iran's Islamic Revolutionary Guard Corps have taken advantage of any and every opportunity to extend Tehran's malevolent influence in the Arab world.

For example, Brig Gen Issam Zahreddine, the Syrian general killed in an IED explosion this week, was fighting with Revolutionary Guard units trying to capture Deir Ezzor from ISIL militants as part of Iran's efforts to build a Shia superhighway through the Sunni heartlands, stretching from Iran to the eastern Mediterranean.

Rebuilding the Middle East after the widespread destruction visited upon the region by ISIL is, then, not going to be an easy challenge. You only have to look at the recent skirmishing between the Kurds and Iraqi government forces over the disputed northern Iraqi city of Kirkuk to see how easily the tensions created by ISIL's ignominious rule could result in further conflict.

To prevent the region from plummeting into yet another spiral of violence it is, therefore, vital that the major Sunni powers provide the leadership and support necessary to help those countries worst affected by the ISIL era to get back on their feet.

In this context, the assertive role recently assumed by the quartet of Arab states with regard to Qatar's support for Islamist terrorism, as well as its ties to Iran, has a vital role to play.

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The quartet's robust stand against Doha is already starting to pay dividends, as the Qataris come to realise that their policy of support Islamist extremists such as the Muslim Brotherhood will no longer be tolerated by the outside world.

The rapprochement between the rival Palestinian Fatah and Hamas factions has been made possible not least because Qatar no longer finds itself able to provide the level support that enabled Hamas to run an autonomous Islamist entity in Gaza.

Qatar's withdrawal of funding for hard-line Islamist groups in Libya has also had a positive effect on that benighted country, allowing the authorities to get a firmer grip on issues like the migrant crisis.

Moreover, the positive impact the quartet’s stand against Qatar has had on stabilising the region could be extended further afield.

One of the biggest challenges facing moderate Arab governments in the wake of ISIL's defeat is to stabilise Iraq, a country that has now been blighted by virtually uninterrupted conflict for nearly four decades, dating back to the start of the Iran-Iraq war in 1980.

Not surprisingly this has taken a heavy toll on the Iraqi government's ability to govern the country. The recent Kurdish vote in favour of independence has reopened the bitter debate over Kurdish independence, while the continuing alienation of Iraq's once powerful Sunni tribes from the seat of power in Baghdad undermines the spirit of national reconciliation that is needed to rebuild the country after ISIL's defeat.

The recent indication from Riyadh that it is keen to support the Iraqi government’s attempts to bring political stability to the country is therefore a welcome development, one that will help to counter Iran’s continuing efforts to extend its influence in Iraqi affairs.

This was made abundantly clear earlier this week following reports that Qassem Suleimani, the head of the Revolutionary Guards' elite Quds force, played a key role in negotiating the withdrawal of Kurdish Peshmerga fighters from Kirkuk, a graphic illustration of just how much influence the Iranians are able to bring to bear on their Kurdish neighbours.

The Iranians, though, need to tread carefully from now on, following Donald Trump's uncompromising speech last week on the threat Iran poses to the well-being and security of the Middle East.

The Arab world faces many challenges in the wake of ISIL’s defeat, and the task of rebuilding war-torn countries like Iraq is formidable. But with hostile states like Qatar and Iran now forced on the defensive, this is the time for the moderate, Sunni establishment to assert its authority and make sure that, having won the war, it wins the peace.

Con Coughlin is the Telegraph’s Defence and Foreign Affairs Editor

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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