US envoy for the Horn of Africa Jeffrey Feltman called on Friday for Eritrean troops to "immediately withdraw" from Ethiopia's Tigray region, where the seven-month conflict has put over five million civilians at risk.
In a week-long trip to Ethiopia, Eritrea, Sudan and Egypt that concluded on Wednesday, Mr Feltman relayed directly to Eritrean President Isaias Afwerki the need to remove his troops from Tigray.
“In Asmara, Special Envoy Feltman underscored to President Isaias Afwerki the imperative that Eritrean troops withdraw from Ethiopia immediately,” State Department spokesman Ned Price said on Friday.
The conflict that broke out in Ethiopia's Tigray region last November occurred when Eritrean troops joined Ethiopian forces and allied militias in an offensive against the Tigray People's Liberation Front (TPLF).
The conflict has already displaced about one million civilians and has left over five million in need of assistance, according to humanitarian organisations such as Oxfam.
Eritrean troops entered the country upon request from Ethiopia’s Prime Minister Abiy Ahmed. But in March, following reports of extrajudicial killings, massacres, using starvation as a weapon and other grave humanitarian breaches committed in Tigray, Mr Ahmed said these troops would withdraw.
The US government and UN have yet to see evidence of such a withdrawal.
During his trip Mr Feltman, met Mr Ahmed and emphasised the need for an “effort to build national consensus on the country’s future that is based on respect for the human and political rights of all Ethiopians”, with a sovereign and united Ethiopia being integral to this vision.
But Mr Feltman said “the presence of Eritrean forces in Ethiopia is antithetical to these goals".
Besides the withdrawal of Asmara’s troops, the State Department said that securing a ceasefire, providing life-saving assistance and holding “those responsible for human rights abuses and violations accountable” are among US priorities in Tigray.
CNN reported this week that humanitarian access remains restricted in the region and that Eritrean soldiers “were blocking critical humanitarian aid to starving and wounded civilians”.
Ethiopia's government is now estimating 5.2 million out of the 5.7 million people in the region are now dependent on aid.
The dire humanitarian situation and risk of regional war has prompted calls from Congress to impose sanctions on Ethiopia and Eritrea if the troops are not withdrawn.
"We understand that the Biden administration is reviewing all options, but nothing has been announced or finalised, which is why we are pushing them on this," a congressional aide told The National this week.
The bipartisan push for sanctions is being led by the Democratic chairman and top Republican on the House Foreign Affairs Committee – Gregory Meeks of New York and Mike McCaul of Texas. They are urging the White House to use its authorities under the Global Magnitsky Act to levy sanctions on those violating human rights in the conflict.
The UN reported last week that “the scale of food insecurity continues to be large and dire”, estimating that over 63,000 people have fled Tigray and are now refugees in Sudan.
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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