The UAE Cabinet, chaired by Sheikh Mohammed bin Rashid. Wam
The UAE Cabinet, chaired by Sheikh Mohammed bin Rashid. Wam

UAE leadership takes nothing for granted



Leaders lead; that might seem like a redundant truism, but it is one lent a new depth of meaning in an open letter from Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, to ministers, officials and the general public, that sets standards of candour, transparency and, indeed, leadership.

Twitter is the new public square and on Saturday, Sheikh Mohammed gathered about him in that place his "brothers and sisters", not only those charged with delivering the policies of the government but also the citizens whose prosperity and happiness is their ultimate objective. This was an address made on the eve of the "new season", when all turn their backs on the well-earned distractions of summer and return to the fray with renewed vigour. But Sheikh Mohammed's words evoked the sense of another kind of season – the opening of a new chapter in the development of the UAE.

To the government’s ministers and officials his message was plain – this must be a government of achievements, not conferences. Their place was in the field, “between students and teachers, with widows and mothers, among the elderly, with the sick”. Sheikh Mohammed also made clear that Emiratisation, a vital component of preparation for the looming realities of national life as a post-oil economy, is not proceeding as quickly as the government believes it should. This programme is linked inextricably with the continued economic growth of the country and it is clear that this coming season will see Emiratisation given a necessary new impetus.

Complaints from the public, said the Prime Minister, were to be met with respect and resolved – any institution afraid to face people was one that had lost its confidence. This point acknowledged an invaluable wisdom. A nation’s success cannot be measured by balance sheets alone; people’s happiness must be weighed in the scales.

Yet with rights come responsibilities. There were words of warning for those who would traduce the image and reputation of the UAE on social media for the sake of gaining a few followers, undermining the work of thousands. But perhaps the most revealing aspect of Sheikh Mohammed’s address is what it tells us about the government of that nation – one still inspired by the legacy of Sheikh Zayed to act always in the best interests of its people.

Within a day, the Cabinet had adopted the six main points in his letter and appointed a committee of ministers to prepare a 100-day plan to address them. It is headed by Sheikh Mansour bin Zayed, Deputy Prime Minister, Minister of Presidential Affairs and, in the words of Sheikh Mohammed, a "graduate of the school of Zayed".

This is a government willing and eager to continually review how it works, unafraid publicly to call out the shortcomings of the engines of state and, above all, determined not to succumb to complacency, the enemy of momentum.

The UAE’s successes to date are as evident as they are legion. Few could doubt Sheikh Mohammed’s confident assertion that the future promises to be even better and brighter. But it is the very fact that the government refuses to take such a future for granted that ensures it will come to pass.

Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia

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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