Mohammed bin Abdulrahman Al Thani, Qatar's foreign minister, hand over a letter from Qatar's emir rejecting demands put to them by the Arab quartet, to the Emir of Kuwait, Sheikh Sabah Al Ahmad Al Sabah, in Kuwait. EPA.
Mohammed bin Abdulrahman Al Thani, Qatar's foreign minister, hand over a letter from Qatar's emir rejecting demands put to them by the Arab quartet, to the Emir of Kuwait, Sheikh Sabah Al Ahmad Al SabShow more

Opinion

Too many false flags flutter over Qatar

Doha tries new distraction tactic by filing legal complaint with the WTO

National Editorial

August 01, 2017

The two-speed nature of the Qatar crisis has been one of the more pronounced characteristics of a dispute that has rumbled on since early June.

On the one side, the quartet of nations – Bahrain, Egypt, Saudi Arabia and the UAE – have consistently demonstrated quick thinking, clear logic and a firm grasp of diplomatic reality.

On Sunday, for instance, the quartet’s statements in Manama reiterated that there was no siege of Doha, despite what those on the peninsula would have some believe, and that there was a way out for Sheikh Tamim and his country. If Qatar stopped supporting terrorism and committed to dialogue, then negotiation would lead to a settlement. At stake, according to one comment from the quartet, is “the future of the Middle East”, which, as statements go, cuts quickly to the heart of this regional dispute.

Compare this to the leaden-footed response from Doha. Too vague in its pronouncements, too inconsistent in its policy making and too prone to prevarication. Late last month, Qatar said it would amend its anti-terror legislation and its emir talked of correcting “our error”, but he has done little since to suggest that this was any more than applying a small sticking plaster to a gaping wound. The quartet waits for some commitment from Doha that it is willing to tread a more constructive path.

Then, on Monday, Adel Al Jubeir, Saudi Arabia’s foreign minister, appeared to anticipate Doha’s next move when he said: “Qatar talks about everything, except for halting terror funding... and interfering in other countries’ internal affairs.”

And, sure enough, Qatar has been talking again.

As The National reported, Qatar has filed a complaint at the World Trade Organisation to challenge the sanctions imposed by members of the quartet. Instead of seeking out its neighbours, Doha has sought to put a regional dispute on the international stage. Instead of addressing the issue of funding terrorism and extremism, Qatar has sought to cloud these matters under the fog of a supposed trade dispute. Instead of starting constructive negotiations, Ali Alwaleed Al Thani, the director of Qatar’s WTO office, has vaguely called for “more information on these measures, the legality of these measures.”

Previously, Mohammed bin Abdulrahman Al Thani, Qatar’s foreign minister, had suggested that the UN was the “right place” to seek a solution and review “possible options”. But the UN of course was the wrong forum to debate the issues and the UN Security Council rejected Doha’s efforts to involve it. The sanctions are not predicated on the virtues of free trade so the WTO is also the wrong forum.

Far too many false flags continue to flutter all over Doha. It is time for them to be stood down. It is also time for Qatar to stop turning away from the region and start talking to the Gulf. All the solutions can be found here.

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.”