Mehdi Army fighters loyal to the Shiite cleric Moqtada Al Sadr training in the street in Basra, south-east of Baghdad, on June 20, 2014, as Iraqi forces were massing north of Baghdad to strike back at Sunni Islamists. Essam Al-Sudani / Reuters
Mehdi Army fighters loyal to the Shiite cleric Moqtada Al Sadr training in the street in Basra, south-east of Baghdad, on June 20, 2014, as Iraqi forces were massing north of Baghdad to strike back atShow more

Top Shiite cleric calls for new government in Iraq



BAGHDAD // The spiritual leader of Iraq’s Shiite majority has called for a new, “effective” government, increasing pressure on the country’s prime minister as an offensive by Sunni militants rages on.

Grand Ayatollah Ali Al Sistani’s comments at Friday prayers contained thinly veiled criticism that the Shiite prime minister Nouri Al Maliki, in office since 2006, was to blame for the nation’s crisis over the blitz by the Al Qaeda-inspired Islamic State of Iraq and the Levant (ISIL).

While Mr Al Maliki’s State of Law bloc won the most seats in parliament in the Iraq’s April 30 election, he now faces opponents bolstered by criticism on Thursday from the US president Barack Obama.

And with Iraq now asking the US for airstrikes to temper the militants’ advance – especially as they apparently prepared Friday to again assault the country’s biggest oil refinery – Mr Al Maliki appears increasingly vulnerable.

“It is necessary for the winning political blocs to start a dialogue that yields an effective government that enjoys broad national support, avoids past mistakes and opens new horizons toward a better future for all Iraqis,” Ayatollah Al Sistani said in a message delivered by his representative Ahmed Al Safi in the holy city of Karbala.

Iraq’s newly elected parliament must meet by June 30 to elect a speaker and a new president, who in turn will ask the leader of the largest bloc to form a new government.

With Iraq in turmoil, Mr Al Maliki’s rivals have mounted a campaign to force him out of office, with some angling for support from western backers and regional heavyweights. On Thursday, their effort received a massive boost from Mr Obama, who said: “Only leaders that can govern with an inclusive agenda are going to be able to truly bring the Iraqi people together and help them through this crisis.”

Mr Al Maliki has been accused of following sectarian plicies that have fuelled anger among the Sunni minority and turned their sympathies towards Sunni insurgents.

The problem came into sharp focus last week when militants led by ISIL seized the northern town of Mosul and began a sweep south through predominantly Sunni areas. The Shiite-dominated army initially offered liitle or no resistance, allowing the rebels to capture more towns and cities and come to with 60 kilometres of the capital.

The most recent fighting has seen the militants trying to wrest control of the Baiji oil refinery north of Baghdad, Iraq’s largest, and the military attempting to retake the city of Tal Afar in north-west.

Militants on Friday killed 34 Iraqi security forces members in Al Qaim, a town on the Syrian border.

The fighting broke out late Thursday night and continued until around noon on Friday, with militants in control of most of the town.

The identity of the militants was not immediately clear, but one official appealed to the government for arms “stronger than the weapons that ISIL has”.

ISIL has also seized large parts of eastern Syria, where it is waging war against the president Bashar Al Assad as well as rival rebel groups opposed to its extremist ideology.

The Britain-based observatory for human rights, which monitors the civil war in Syria, said ISIL had captured key towns in eastern Syria adjoining territory the group has seized in Iraq.

The Islamists, whose stated aim is to create a strict Islamic state straddling national borders, took over the towns of Muhassan, Albulil and Albuomar in Deir Ezzor province, the Observatory said.

The newly captured towns are in an area running along the Euphrates River that links Syria and Iraq and are significant because they are close to Deir Ezzor ’s military airport and the Syrian city of Al Mayadin, the Observatory’s director, Rami Abdurrahman, said.

“If you control Al Mayadin, this means there are no more important cities except Abu Kamal out of [ISIL] control” in the province, he said, referring to another town close to the Syria-Iraq border. “They are pushing forward.”

Muhassan, which is just over 100km from the border with Iraq, is an important position for any attempt to capture the airport, he added.

Also on Friday, the militants attacked the town of Muqdadiyah north-east of Baghdad, sparking clashes that killed 30 Shiite militiamen, a police colonel and a doctor said.

The fighting began in the morning and eased later in the day with security forces still in control of Muqdadiyah, a key approach to the Diyala provincial capital, Baquba, and militants deployed in adjoining areas.

* Associated Press and Agence France-Presse

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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