NAIROBI // Sudan is at a crossroads and perhaps no one knows this better than John Paguir. As the undersecretary for trade in the government of Southern Sudan, Mr Paguir's job is to attract foreign investment in the aspiring nation. But with tensions mounting between north and south Sudan, a shaky start to an independence referendum and continued conflict in the western Darfur region, this may not be the ideal time to invest anywhere in Sudan.
The unsure fate of Southern Sudan - whether it votes for independence or if the referendum even happens in January as scheduled - as well as that of the rest of Sudan makes Mr Paguir's job difficult. "It would be much better for investment if Southern Sudan becomes independent," he said in a recent interview. "We have resources, yes, but we need to bring investors to develop our land. There is fear. Some say they will wait until after 2011."
The next five months will be perhaps the most critical period in the recent history of Sudan, Africa's largest country by land mass and home to 42 million people. The oil-producing south is careening towards a Jan 9 referendum on independence. This is the last step in a 2005 peace deal that ended the country's 20-year civil war between the Muslim north and Christian south. A member of the referendum committee said last week that the vote should be delayed, which sparked a backlash from southern leaders who have staked their political careers on delivering independence for the south.
"The time that is remaining is not enough to hold a referendum," Tarek Osman al Taher said. "We at the commission will begin the necessary measures to try to hold the referendum on time but we must warn the partners that there is not enough time." Several issues need to be resolved before the vote including the demarcation of the border and division of oil revenues between the north and south. There is also the task of organising a free and fair referendum across an underdeveloped region that still sees flare-ups of tribal violence. A presidential election in April was mostly peaceful but was plagued with technical problems in the south. Juba, the southern capital, has little infrastructure and is ill-prepared to be the capital of an independent nation, according to many westerners who live there.
A delay in the referendum would be a violation of the Comprehensive Peace Agreement (CPA) that ended the civil war, southern leaders warned. "Any proposal to postpone the referendum will be considered a violation of the CPA and would be a threat to the entire peace process," Pagan Amum, peace minister in the southern government, told reporters in Juba. He added that Southern Sudan would have "other mechanisms to exercise its right to self-determination in the event of any attempt to put off or create obstacles to this referendum".
Leaders from the north and south began last week to meet to resolve issues of citizenship, currency and international treaties the south would join if it votes for independence. "Action at the political level to resolve these outstanding questions without further delay is clearly now of the utmost importance," said Derek Plumbly, head of the Assessment and Evaluation Commission, a Sudanese commission tasked with implementing the peace agreement.
Even if Southern Sudan votes for separation, as most analysts believe will happen, and the process goes smoothly, Khartoum will still be left with a lingering conflict in the western Darfur region. The war between Arab nomads and African tribes over scarce resources has killed about 300,000 people since 2003, according to the United Nations. The International Criminal Court has indicted Omar al Bashir, the Sudanese president, for genocide.
With most of the villages in the vast arid region razed, many Darfuris live in packed, squalid camps near big cities. Last week, Sudan barred aid groups from some of the largest Darfur camps because of clashes between groups in the camps that are divided over the peace process. Khartoum has been accused using aid as a political tool and withholding the much-needed assistance in order to punish certain groups.
Advocacy groups warned that Southern Sudan's referendum and the north-south issues are taking the international community's attention away from the Darfur conflict, even as violence there surges. "The US and other key countries have largely turned away from serious political engagement in Darfur in favour of the north-south issues," said John Prendergast, co-founder of The Enough Project, an advocacy group. "By not focusing on an all-Sudan solution, they end up with no solution at all, and the crises bleed on."
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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.”
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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Picture of Joumblatt and Hariri breaking bread sets Twitter alight
Mr Joumblatt’s pessimism regarding the Lebanese political situation didn’t stop him from enjoying a cheerful dinner on Tuesday with several politicians including Mr Hariri.
Caretaker Culture Minister Ghattas Khoury tweeted a picture of the group sitting around a table at a discrete fish restaurant in Beirut’s upscale Sodeco area.
Mr Joumblatt told The National that the fish served at Kelly’s Fish lounge had been very good.
“They really enjoyed their time”, remembers the restaurant owner. “Mr Hariri was taking selfies with everybody”.
Mr Hariri and Mr Joumblatt often have dinner together to discuss recent political developments.
Mr Joumblatt was a close ally of Mr Hariri’s assassinated father, former prime minister Rafik Hariri. The pair were leading figures in the political grouping against the 15-year Syrian occupation of Lebanon that ended after mass protests in 2005 in the wake of Rafik Hariri’s murder. After the younger Hariri took over his father’s mantle in 2004, the relationship with Mr Joumblatt endured.
However, the pair have not always been so close. In the run-up to the election last year, Messrs Hariri and Joumblatt went months without speaking over an argument regarding the new proportional electoral law to be used for the first time. Mr Joumblatt worried that a proportional system, which Mr Hariri backed, would see the influence of his small sect diminished.
With so much of Lebanese politics agreed in late-night meetings behind closed doors, the media and pundits put significant weight on how regularly, where and with who senior politicians meet.
In the picture, alongside Messrs Khoury and Hariri were Mr Joumbatt and his wife Nora, PSP politician Wael Abou Faour and Egyptian ambassador to Lebanon Nazih el Nagari.
The picture of the dinner led to a flurry of excitement on Twitter that it signified an imminent government formation. “God willing, white smoke will rise soon and Walid Beik [a nickname for Walid Joumblatt] will accept to give up the minister of industry”, one user replied to the tweet. “Blessings to you…We would like you to form a cabinet”, wrote another.
The next few days will be crucial in determining whether these wishes come true.
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
