US speeds Iraq withdrawal; 4,000 more headed home



WASHINGTON // The US is speeding up its military withdrawal from Iraq, sending 4,000 more troops home in October, the top American commander there said. The reduced number of troops in Iraq, from 124,000 to 120,000 by the end of October, marks the latest US step in winding down the six-year war. The reduction was to be announced on Wednesday by Gen Ray Odierno. "We have already begun deliberately drawing down our forces - without sacrificing security," Mr Odierno said in a statement he was to deliver to the House of representatives armed services committee.

"As we go forward, we will thin our lines across Iraq in order to reduce the risk and sustain stability through a deliberate transition of responsibilities to the Iraqi security forces," Gen Odierno said. A copy of the testimony was obtained on Tuesday by the Associated Press. A Defence Department official confirmed that Mr Odierno planned to announce that he was reducing the number of brigades in Iraq, as has been widely expected. In his eight-page statement, Mr Odierno voiced cautious optimism about Iraq's future. But his outlook for the nation that he called "an enduring US interest" was far from rosy.

He predicted several looming problems as US troops prepare to end combat missions by September 2010 and leave Iraq at the end of 2011. Those problems include "a clear security lapse," which Mr Odierno said, was evidenced by a pair of lorry bombings in August at Iraq's finance and foreign ministries, which killed about 100 people in Baghdad. In addition a system of government that was accepted across what Mr Odierno described as ethnic, sectarian and regional lines had yet to be agreed on.

He described a power struggle between provincial officials and Baghdad and said long-standing tensions continue to stall progress between Arabs and Kurds. As the January elections approach, military officials have identified Arab-Kurd tensions as one of the top concerns for potential violence, especially in contested territories in the oil-rich north that each side claims as its own. However, Mr Odierno said the darkest days of the Iraq war seem to be long gone, pointing to failed efforts by extremists still seeking to destabilise the nation.

"The overwhelming majority of the Iraqi people have rejected extremism," Mr Odierno said. "We see no indications of a return to the sectarian violence that plagued Iraq in 2006-2007." Although Iraqi leaders had planned to find government jobs for all members of a group known as Sons of Iraq, who helped curb the insurgency, "we do not believe they will meet this timeline," Mr Odierno said. "We continue to monitor the progress of this programme very closely." Iraq's government promised to open thousands of police and military jobs, dominated by Shiites, to the Sons of Iraq, who are mostly Sunni. But the government has been accused by Sunnis of dragging its feet on integrating the jobs.

However, Mr Odierno, said 23,000 former Sons of Iraq have begun working in government jobs since 2008, and 5,000 more will start in October. On the bright side, Odierno quoted data showing that the number of attacks in Iraq had dramatically dropped over the past two years, from more than 4,000 in August 2007 to about 600 in August 2009r. He also said that far fewer al Qa'eda and foreign fighters remain in Iraq, and most of those who are left are criminals and disenfranchised Iraqis who have been recruited by what Mr Odierno described as a "small ideological core" of insurgents.

* AP

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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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