Security threats and logistical difficulties pose major challenges to Yemen's plan to establish a financial hub in the southern port city of Aden, but the move is a positive step towards reviving its crippled economy, analysts say.
Yemen's central bank will begin preparations for the Aden Financial Centre (AFC) to strengthen the country's banking system and institutions, state-news agency Saba reported last week, citing central bank governor Mohammed Zammam’s statements after his visit to Saudi Arabia and Jordan. It will house the banking regulator's new headquarters, commercial banks, insurance companies and exchange firms.
"It is undeniable that there are many major security and logistical challenges following the decision to establish a financial centre in Aden in the current circumstances given the ongoing war," Maged Al-Daeri, an Aden-based economic analyst and an employee at The Credit and Agricultural Bank, told The National.
"It will be beneficial for Yemen and the region if the centre is established and gets the region's blessings, international support, as it could be a major boost to the economy and revival of Aden's ports given the city's strategic location from Bab Al Mandab," Mr Al-Daeri said, referring to the strategic Red Sea shipping lane.
The Arab world's poorest country, caught in the grip of a four-year civil war following a coup d’etat by the Houthi movement in Sana’a, is plagued by a humanitarian crisis and a dysfunctional economy. The central bank is split into two rival head offices in Aden and Sana'a, after several state entities fell into disarray following the 2014 Houthi coup. The regulator faces a tall order as it scrambles to revive the Yemeni riyal, which has lost two-thirds of its value since 2015 and exacerbated unemployment, while financing food imports needed to fend off a widespread famine. It is also struggling to pay public sector wages.
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Read more:
UN: Houthi rebels withdraw from Hodeidah port under ceasefire deal
Yemen government to pay civil servants in rebel-held Hodeidah
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Setting up a financial hub in Aden is challenging "if you look at the security situation … and the absence of a stock exchange in Yemen," Saleh Aljefri, an independent Aden-based economist, said.
Analysts also point out the challenges in sourcing the funding and allocating appropriate infrastructure to embark on such a major project, but highlighted its benefits to the economy once its established.
The financial centre in Aden is meant to serve as a base for the Yemeni central bank, a secure location for money deposits and residential quarters for bank employees. It would also house the headquarters of local commercial and government banks and become home to the regulatory authority of a long-planned stock exchange in Yemen, which does not have a bourse.
Setting up a financial hub in Aden will strengthen the role of the Central Bank as the country's banks and financial institutions gather under one roof, helping to empower the central bank and revive the economy, Mr Aljefri said.
The International Monetary Fund has recommended that Yemen "reverse the fragmentation in the central banking system", Kareem Ismail, resident representative for Yemen at the IMF, said to The National. "In our view [reducing fragmentation] would facilitate the pooling of revenues and paying civil servant salaries throughout the country."
But the main priorities to resuscitate Yemen's economy in 2019 will be effective only once peace is restored, Mr Ismail said.
“At this stage, it seems premature to change the legal arrangements for the location and structure of the central bank; this should be part of a post-conflict settlement that ensures that an independent and effective central bank can resume providing price and financial stability for the whole of Yemen.”
The key priorities on Yemen's economic agenda this year will be to unlock the nation's resources by reviving the oil and gas sector and resuming the oil exploration efforts halted by the war, Mr Aljefri said.
Yemen has the smallest oil reserves on the Arabian Peninsula and accounts for 0.2 per cent of the world’s total reserves. The country’s production, which was 341,000 barrels per day in 2007 has steadily declined, falling 19.7 per cent between 2006 and 2017 and averaged 52,000 bpd at the end of 2017, according to BP’s Statistical Review of World Energy.
However, oil exports have picked up since and in August, the country exported a 500,000 barrel cargo from its southern Shabwa province. The shipment, the first since conflict erupted in Yemen in 2015 was offered via open tender and bound for China.
Yemen is awaiting $3 billion in deposits from foreign sources to prop up its economy, which analysts say should come no later than the first quarter of 2019, to avoid another collapse in the currency.
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.”
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
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Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
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Western Clubs Champions League:
- Friday, Sep 8 - Abu Dhabi Harlequins v Bahrain
- Friday, Sep 15 – Kandy v Abu Dhabi Harlequins
- Friday, Sep 22 – Kandy v Bahrain
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Why your domicile status is important
Your UK residence status is assessed using the statutory residence test. While your residence status – ie where you live - is assessed every year, your domicile status is assessed over your lifetime.
Your domicile of origin generally comes from your parents and if your parents were not married, then it is decided by your father. Your domicile is generally the country your father considered his permanent home when you were born.
UK residents who have their permanent home ("domicile") outside the UK may not have to pay UK tax on foreign income. For example, they do not pay tax on foreign income or gains if they are less than £2,000 in the tax year and do not transfer that gain to a UK bank account.
A UK-domiciled person, however, is liable for UK tax on their worldwide income and gains when they are resident in the UK.
Who is Ramon Tribulietx?
Born in Spain, Tribulietx took sole charge of Auckland in 2010 and has gone on to lead the club to 14 trophies, including seven successive Oceania Champions League crowns. Has been tipped for the vacant New Zealand national team job following Anthony Hudson's resignation last month. Had previously been considered for the role.
The biog
Favourite Quote: “Real victories are those that protect human life, not those that result from its destruction emerge from its ashes,” by The late king Hussain of Jordan.
Favourite Hobby: Writing and cooking
Favourite Book: The Prophet by Gibran Khalil Gibran
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
