Europe struggles to solve its 'backyard' crisis in Libya



Two things have become clear about Libya this week. In contrast to the popular uprisings in Tunisia and Egypt where the armed forces stayed on the sidelines, Col Muammar Qaddafi has succeeded in militarising the struggle. It is too soon to call it a civil war, but that is clearly one of the possible outcomes.

The second revelation is that Col Qaddafi seems to be at ease, even revived, by being in a state of near war. In the early days when protests appeared about to overwhelm him, he looked lost and confused. Now he is reborn as the besieged pariah, a position which energises him. He is no less delusional, but his confidence has returned. The chances of him going quietly to exile seem zero. He will stand and fight.

The prospect of prolonged armed conflict, or a messy stand-off involving regular skirmishes, has forced Libya's neighbours in Europe to drop their flowery language about a "rendezvous with history" and focus on a policy response. First off the mark was the British prime minister, David Cameron, who proposed a no-fly zone over Libya, to remove the advantage of Col Qaddafi's air force. He also suggested arming the rebels.

These ideas come from a tainted source. Mr Cameron has begun slashing defence spending so that Britain no longer has any carrier-based fighter-bombers to deploy - a useful platform for enforcing a no-fly zone. Britain is stretched to the limit with its current deployment in Afghanistan. So his comments were seen at home as empty talk to disguise his lack of any real foreign or defence policy.

In Washington, the defence establishment was quick to shoot down the proposal. Robert Gates, defence secretary, questioned whether it was the right time to use US forces in another country of the Middle East. The generals pointed out that imposing a no-fly zone is not just a declaration of intent; it means attacking Libya to destroy its air defences.

The best that can be said for the Cameron initiative is that it has clarified the reasons why imposing a no-fly zone now would be utterly misguided. Given that the US bombed Col Qaddafi's headquarters in 1986, it would fit right into the colonel's propaganda line of him standing up to the oil-hungry neo-colonialists.

It is hard to envisage the US imposing a no-fly zone without a UN Security Council Resolution which, given the opposition of Russia and China, is out of the question at the moment. That could change, of course, if Col Qaddafi used his depleted air force to devastating effect, but that has not been the case so far. The Arab world would have to support the no-fly zone, and the rebels would have to demand it.

No-fly zones have some record of success, but people usually forget that they have to be imposed for many years, and they are lifted only after a real shooting war. They are not quick fixes; they serve as demonstrations of outside support until more resolute measures are taken.

A no-fly zone imposed on northern Iraq in 1992 protected the Kurds from the Iraqi air force for a decade until the 2003 Anglo-American invasion swept away the Iraqi state. The no-fly zone imposed in 1993 to protect the Bosnian Muslims from Bosnian Serb aircraft had some limited success. In the end, it had to be reconfigured as a campaign to bomb Slobodan Milosevic, the Serbian leader, into agreeing to peace talks.

Lord Ashdown, the British politician who was a long-term advocate of foreign intervention in Bosnia and later served as High Representative for that country after the Dayton peace agreement, says that events shaped opinion on Bosnia. The same will happen for Libya.

Decision-making is further hampered by lack of knowledge about Libya. Two generations of the Qaddafi despotism have hollowed out all Libyan institutions. Is the army too weakened by dissent in the ranks to operate, leaving only special units and militias to defend Tripoli? Would Libya's tribal structure, which is still a powerful social force, divide into warring factions and fuel a civil war? Until these and many other questions have answers, caution will be the watchword.

None of this helps the Europeans to make a policy decision. Once again, this is a crisis in Europe's backyard, but ultimately it is the Americans who will have to take the lead.

Col Qaddafi is already trying to spook his northern neighbours with talk of the breakdown of law and order, the arming of the population, and the return of Libya as a jump-off point for mass African emigration to Italy.

Speaking in Tripoli on Wednesday, he said he was prepared to hand out three million weapons to the Libyan people and create a new Vietnam. Comparisons with south-east Asia are clearly exaggerated, but when he says, "it doesn't matter to us. We no longer care about anything", he is not bluffing.

For the moment any foreign help to the rebels must be discreet. The idea that democracy can be imposed, Iraq-style, has had its day.

In the longer term, the goal must be for a new partnership across the Mediterranean. Europe, with its declining birth rate, ought to be a natural fit with the youthful populations of North Africa. But we should beware of high-flown rhetoric. This has never happened in the past despite the efforts of Nicolas Sarkozy, the French president, and others.

The European jobs which migrated to Tunisia and Morocco, for example, have tended to be sewing jeans. Europe's new car factories have not been built there, but in Poland and Slovakia. Despite some grand statements in the past, Europe has required only three things from Libya: to keep sending the oil and gas, send back the African migrants and keep out the jihadists.

In the future, a far deeper and more complex relationship between Europe and the countries of north Africa will have to take shape, but that has not even begun yet.

A MINECRAFT MOVIE

Director: Jared Hess

Starring: Jack Black, Jennifer Coolidge, Jason Momoa

Rating: 3/5

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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UAE v Gibraltar

What: International friendly

When: 7pm kick off

Where: Rugby Park, Dubai Sports City

Admission: Free

Online: The match will be broadcast live on Dubai Exiles’ Facebook page

UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)

Meydan race card

6.30pm: Baniyas (PA) Group 2 Dh125,000 (Dirt) 1,400m
7.05pm: Maiden (TB) Dh165,000 (D) 1,200m​​​​​​​
7.40pm: Maiden (TB) Dh165,000 (D) 1,400m​​​​​​​
8.15pm: Handicap (TB) Dh170,000 (D) 1,900m​​​​​​​
8.50pm: Rated Conditions (TB) Dh240,000 (D) 1,600m​​​​​​​
9.25pm: Handicap (TB) Dh175,000 (D)1,200m
10pm: Handicap (TB) Dh165,000 (D) 1,400m