Insight and opinion from The National’s editorial leadership
January 17, 2022
Historians still speak in solemn tones of the 6th-century Plague of Justinian, which killed 25 million people, and the Black Death 800 years later, which killed nearly 200 million. Having thus far claimed more than 5 million lives worldwide, Covid-19 is sure to be recorded as one of the deadliest pandemics in history.
For economic historians, however, it is the death of jobs that provokes great concern. The casualties claimed by Covid-19 in this respect have also been dire. In 2020, the pandemic cost the world nearly 150 million jobs, according to the UN. Altogether, humanity lost nearly 9 per cent of its working hours, as the newly unemployed were joined by many who managed to keep their jobs but were forced to go part-time.
In the wreckage of this economic havoc, it is little wonder that the focus of so many governments right now is on job creation. Public surveys in North America, Europe, the Middle East and China have found a stronger-than-ever thirst for new jobs, not only to compensate for what has been lost, but also to ensure a more resilient economic future.
While job-creation efforts will, indeed, need to be put into overdrive as the pandemic recedes, a fundamental part of resilience in the face of future shocks will also be the ability of governments and employers alike to ensure that workers can keep the jobs they already have and – particularly for young people – turn them into careers. For all of the talk about the rise of the gig economy, the health of the post-pandemic economy will continue to rely on stable, attractive employment – albeit with greater flexibility.
In the UAE, last Friday saw the country's first Cabinet meeting of 2022, and the focus was on the economy and workers' rights. A host of legal reforms, including the expansion of longer-term residency visas to more expatriate residents and allowing 100 per cent foreign of onshore companies, will make the Emirati economy more attractive to new talent, aiding in job creation efforts. But it will also encourage more stability in the private sector.
The health of the post-pandemic economy will continue to rely on stable, attractive employment
Part of the reforms includes more flexibility for some categories of residents to change jobs or work on a freelance basis. While this will encourage temporary work, economists have long found that such elasticity in the labour market can also contribute to more stable long-term employment, as workers will have the scope to branch out and find jobs that are the best fit for them, and employers will have the opportunity to try more employees out before they find the one that will thrive on a permanent contract.
The reforms come soon after a November poll by Mercer found that in 2022, UAE companies are set to go on a hiring spree. Those who take new jobs will find themselves entering one of the most dynamic job markets in the Middle East, as salaries are expected to rise, more companies transition to a Monday-to-Friday working week and more managers accommodate part-time working from home.
No country was left untouched by the ferocity with which the Covid-19 pandemic crippled the global economy. But with a holistic focus on the roles job creation and job security really play in post-pandemic economic resilience, governments may find that they can create a labour market that is stronger than ever. As this week's reforms show, one such market will soon be found in the UAE.
UAE currency: the story behind the money in your pockets
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.”
SCHEDULE
Saturday, April 20: 11am to 7pm - Abu Dhabi World Jiu-Jitsu Festival and Para jiu-jitsu.
Sunday, April 21: 11am to 6pm - Abu Dhabi World Youth (female) Jiu-Jitsu Championship.
Monday, April 22: 11am to 6pm - Abu Dhabi World Youth (male) Jiu-Jitsu Championship.
Tuesday, April 23: 11am-6pm Abu Dhabi World Masters Jiu-Jitsu Championship.
Wednesday, April 24: 11am-6pm Abu Dhabi World Professional Jiu-Jitsu Championship.
Thursday, April 25: 11am-5pm Abu Dhabi World Professional Jiu-Jitsu Championship.
Friday, April 26: 3pm to 6pm Finals of the Abu Dhabi World Professional Jiu-Jitsu Championship.
Saturday, April 27: 4pm and 8pm awards ceremony.
German plea
Ukrainian President Volodymyr Zelenskyy told the German parliament that. Russia had erected a new wall across Europe.
"It's not a Berlin Wall -- it is a Wall in central Europe between freedom and bondage and this Wall is growing bigger with every bomb" dropped on Ukraine, Zelenskyy told MPs.
Mr Zelenskyy was applauded by MPs in the Bundestag as he addressed Chancellor Olaf Scholz directly.
"Dear Mr Scholz, tear down this Wall," he said, evoking US President Ronald Reagan's 1987 appeal to Soviet leader Mikhail Gorbachev at Berlin's Brandenburg Gate.
The protective shell is covered in solar panels to make use of light and produce energy. This will drastically reduce energy loss.
More than 80 per cent of the energy consumed by the French pavilion will be produced by the sun.
The architecture will control light sources to provide a highly insulated and airtight building.
The forecourt is protected from the sun and the plants will refresh the inner spaces.
A micro water treatment plant will recycle used water to supply the irrigation for the plants and to flush the toilets. This will reduce the pavilion’s need for fresh water by 30 per cent.
Energy-saving equipment will be used for all lighting and projections.
Beyond its use for the expo, the pavilion will be easy to dismantle and reuse the material.
Some elements of the metal frame can be prefabricated in a factory.
From architects to sound technicians and construction companies, a group of experts from 10 companies have created the pavilion.
Work will begin in May; the first stone will be laid in Dubai in the second quarter of 2019.
Construction of the pavilion will take 17 months from May 2019 to September 2020.
