Iraqi soldiers and volunteers from a Shiite militia take up position in Dhuluiya town, north of Baghdad, Iraq on 30 December 2014 as the town is recaptured by government forces along with Shiites militia supported by airstrikes from an international anti-ISIL coalition. EPA
Iraqi soldiers and volunteers from a Shiite militia take up position in Dhuluiya town, north of Baghdad, Iraq on 30 December 2014 as the town is recaptured by government forces along with Shiites miliShow more

Shiite militias expand influence, redraw map in central Iraq



BAGHDAD // Behind black gates and high walls, Iraqi national security agents watch 200 women and children.

Boys and girls play in the yard and then dart inside their trailers, located in a former US military camp and one-time headquarters for Saddam Hussein’s officials in Babel province’s capital Hilla.

The women and children were rounded up as they fled with their male relatives in October from Jurf Al Sakhr, a bastion of ISIL, during a Shiite militia and military operation to clear the Sunni extremist group’s fighters from the farming community.

Security forces separated out the men, accusing them of being ISIL fighters. They have not been heard from since. The women and children are being investigated, but have not been brought to court.

Their status shows how central Iraq’s mixed Shiite and Sunni regions are being altered.

As Shiite forces push into territories held by ISIL, many Sunnis have fled for fear of both the Shiite-led government and the Sunni extremists.

Shiite leaders insist ISIL must never be allowed to strike them again, nor return to areas now abandoned.

Shiite groups now decide who can stay in a community and who should leave; whose houses should be destroyed and whose can stand.

“Some of these towns and villages, which were neutral or partial to [ISIL], have been retaken. I don’t think the people living there will go back. We are talking about depopulated areas that may be resettled by different groups,” said Ali Allawi a historian and former Iraqi minister.

More than 130,000 people, mostly Sunnis, fled central Iraq in 2014, counting just Baghdad’s agricultural belt and north-eastern Diyala province, according to the International Rescue Committee.

Prime Minister Haider Al Abadi’s government stresses the importance of helping people return home. But in the current chaos it is questionable whether officials can help, or that the displaced will want to return.

Already dramatic changes are happening on the ground. For the 200 women and children from Jurf Al Sakhr, it has meant an undefined period of detention.

“I’m trapped here living on charity without understanding why all this happened to us”, said Umm Mohamed. “All that I wish is to have my husband back and to return to our small farm.”

“These families were joining or harbouring [ISIL],” said Falah Al Rahdi, head of the Babel provincial council’s security committee. “The judicial system will decide their fate.”

As Shiite militia leaders and tribal allies surround Sunni villages in central Iraq, they insist they have strong intelligence from inside the communities.

“Our orders come from the government: whoever is with [ISIL], we will confiscate their land,”said a commander from Asaib Ahl Al Haq.Those who aren’t ISIL “will be allowed back”.

However, those who have lost their homes say the militias make little distinction between militants and civilians when they storm areas.

Akram Shahab, 32, a Shiite in Diyala’s Saadiya district, fled with his family in June when ISIL were about to overrun the town.

When he heard from a Sunni neighbour that a militant family had moved into his home, he was relieved it had not been blown up.

But after Iraqi militias and security forces kicked ISIL out in November, the militias burnt Mr Shahab’s house assuming it was a terrorist’s.

The next day, he went with Shiite militiamen to inspect the ruins. “I blamed the militia members at the scene for burning my house and they defended themselves, saying how could they tell a Sunni house from a Shiite house.”

Mr Shahab, who comes has both Shiite and Sunni relatives, said he managed to save his Sunni aunt’s house by telling the militia she belonged to their sect.

“They spray-painted [Shiite] on the gate to alert the other militia groups,” he said.

“They told me, ‘We need to clean your town from those germs who supported [ISIL]. You might have lost your house but as a Shiite you will live with your head high from now on’.”

* Reuters

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.”