Plastic bags of any material or composition will be prohibited in the UAE from 2024. Two years after that, it will be prohibited to import plastic cutlery, drinks cups and styrofoam. AP
Plastic bags of any material or composition will be prohibited in the UAE from 2024. Two years after that, it will be prohibited to import plastic cutlery, drinks cups and styrofoam. AP


The UAE will not miss single-use plastics



January 12, 2023

Just over a year ago, the UAE's pledge to reach net zero by 2050 was a first for the Mena region. In line with that commitment, residents of the Emirates can expect more bold moves ahead.

The most recent of these is an announcement made this week banning, by this time next year, all single-use plastic bags. From 2026, the import of virtually all everyday single-use plastic items – from cutlery to even cigarette butts – will be prohibited.

To be clear, a phase-out of single-use plastics does not mean that other, more durable and useful plastics in the country are disappearing. Plastic bags made out of recycled material, for instance, will still be available. As will countless other items that are a part of our lives – chairs, tables, pens or car parts, for example.

But it cannot be denied that single-use plastics play too large a role in marine pollution and contribute heavily to landfills. Images of sea turtles tangled up in polythene bags have in recent years become a global visual shorthand for the damage plastics can inflict on marine life. Last year, as retailers began introducing a small, government-mandated cost for shopping bags, Dubai officials had said that nine in 10 turtles and five in 10 camels that were found dead had plastic in their stomachs. Limiting such harm ought to be an urgent priority for everyone.

Later this year, the UAE will host the Cop28 UN climate summit. In the build up to it, conversations such as those around the end of single-use plastic are especially relevant and necessary. The new regulation also highlights the important work of environment agencies in the country and the progress that has been made in related areas concerning the environment – be it in the significant reduction of single-use plastics in Abu Dhabi already, or spreading awareness about the importance of waste segregation and recycling, or the focus on renewables, or highlighting the possible replacements for single-use plastics. The uncomfortable and often unpopular truth is also that not all replacements for single-use plastic are sustainable, and plastics are not the only source of environmental damage.

For consumers, there will be time to readjust lifestyles. Several UAE residents may already be in the habit, for example, of carrying cloth or other reusable bags for trips to the supermarket. Across the UAE, many supermarkets and and restaurants are already conscious of the damage that disposable plastics cause to the planet and increasingly offer customers alternatives. Greater adoption of these alternatives will hopefully spur the creation of new businesses responsible for producing them at scale.

Previously, regulations on plastics were largely the domain of individual emirates. The new single-use plastic ban is notable for being a country-wide initiative, helping to encourage a national standard and vision for environmental protection. Most of the changes it will bring to the average resident's daily life will be minor – after all, few people pay attention to what kind of cutlery comes with their take-away order – but the overall impact, on consumer habits, the business landscape and the environment alike, will be hard to overestimate.

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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Sheer grandeur

The Owo building is 14 storeys high, seven of which are below ground, with the 30,000 square feet of amenities located subterranean, including a 16-seat private cinema, seven lounges, a gym, games room, treatment suites and bicycle storage.

A clear distinction between the residences and the Raffles hotel with the amenities operated separately.

The specs
 
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Updated: January 12, 2023, 4:33 AM