Afghan parliamentarians pray during the opening of the new parliament in Kabul.
Afghan parliamentarians pray during the opening of the new parliament in Kabul.

Karzai tells new parliament 'Let us join hands and stand together'



KABUL // Afghanistan's parliament opened in the capital yesterday after days of tense standoff between the country's president, Hamid Karzai, and US-backed Afghan politicians threatened to send the country into a political tailspin.

All 249 members of Afghanistan's new Wolesi Jirga, the National Assembly's lower house, attended the inaugural session amid tight security at the parliament building in central Kabul.

Mr Karzai, who ignited the crisis last week when he said he would delay the inauguration of parliament by one month, also attended the session and called for unity.

Winning members of parliament had promised to defy the president's orders to postpone the opening session, gaining support from US and UN officials in Kabul.

"You are representing the whole Afghanistan and not a particular clan," Mr Karzai said to the MPs. "Let us join hands, stand together and work for the stability and prosperity of Afghanistan."

The session seemed to assuage immediate fears of a political crisis in the capital, but observers say the squabble has left the Afghan political process mired in uncertainty.

While Mr Karzai attended the inauguration, he has yet to acknowledge the final results of last year's elections that brought the new members of parliament to power.

Pashtuns, the country's largest ethnic group and Mr Karzai's traditional power base, are under-represented in the parliament.

Analysts say it is likely to voice stronger opposition to the president.

It also remains unclear whether Mr Karzai's special elections tribunal, appointed in December to investigate allegations of elections fraud, some against current MPs, will continue its work.

Activists and parliamentarians claim it is unconstitutional, and they have accused Mr Karzai of trying to influence its work.

One western official in Kabul said: "Everything is still unclear at this point, but the fact that parliament has opened is a good sign. We know Karzai is trying to get some of his political allies into parliament and he still hasn't ruled that out. I don't think it will end here, but everyone is playing political games."

The country's new parliament was elected in a fraud-ridden poll on September 18.

Because Taliban insurgents, who are mainly Pashtun, threatened to carry out attacks on voters, many Pashtuns were intimidated into staying home on the day of the vote.

Afghanistan's Independent Elections Commission (IEC) eventually discarded 1.3 million ballots, or nearly a quarter of the total,- and disqualified 19 winning candidates before issuing final results on November 24.

More than 2,500 candidates ran for the 249 available seats, although 68 are reserved for women.

While the United States, United Nations and other international backers recognised the IEC's final tally, Mr Karzai refused to publicly acknowledge the results as legitimate.

Analysts say he is under tremendous pressure from Pashtun tribal leaders to ensure they maintain political power, and that creating the special tribunal was a nod to his Pashtun political base.

"Pashtuns are Karzai's biggest liability," one western analyst said. "Many Pashtuns didn't expect much from the election commission in terms of overturning results in areas where they were disenfranchised. They were actually looking to Karzai for guidance."

But when Mr Karzai sanctioned the tribunal and delayed parliament on January 20, politicians, many of them Tajik and Hazara, Afghanistan's other major ethnic groups, cried foul.

Western diplomats worked hard during the weekend to solve the crisis, reportedly pressuring Mr Karzai to cut short a trip to Russia in order to prevent political disaster.

Even Nato's secretary general, Anders Fogh Rasmussen, entered the fray, telling reporters in Brussels on Monday that a stable political environment in Afghanistan is "a prerequisite for a successful transition," according to wire reports. "That is why I have stressed the need for a timely opening of parliament," he said.

Nato, which is training Afghan security forces to assume more power, plans to begin its security handover to the Afghan government as early as March.

In his speech to parliament yesterday, Mr Karzai lashed out at his western backers, saying the elections suffered from "foreign interference".

The western official said: "Nato wants parliament to be working so that we can check it off of our list of requirements for the handover. We can't hand over security if there's no government. It's as simple as that."

Paatal Lok season two

Directors: Avinash Arun, Prosit Roy 

Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong

Rating: 4.5/5

Results
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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.”

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