ABU DHABI // As they consider the possibility of joining the Gulf Co-operation Council, it seems Jordanians have an eye on their wallets.
Two-thirds (67 per cent) expect development funding or aid to come with GCC membership. But expectations of what membership would bring vary widely between the mooted new members - Morocco and Jordan - and those already in the club, according to the survey compiled for Al Aan TV's Nabd al Arab ("Arabs' Pulse") programme by YouGov Siraj.
Jordanians may be in luck, too. On June 2, shortly after the survey was undertaken, Saudi Arabia granted US$400 million in aid to support Jordan's economy and ease its budget deficit.
Yet Jordanians might be wise not to get their hopes up too soon, warned Dr Kristian Koch, director of international studies at the Gulf Research Centre.
"We are still jumping the gun here," he said. "The details about how Jordan and Morocco would join the GCC have not been discussed or released.
"As the survey results make clear, there are immediate expectations that are raised when talking about a possible expansion."
With an annual gross domestic product of US$29bn, Jordan's economy is dwarfed by those of the existing GCC, which together come to nearly US $1 trillion. With that kind of gap, 70 per cent of Jordanians expect GCC investment following a union, and 71 per cent are hoping for cheaper oil and gas.
Some senior economists, though, saw little benefit for the GCC. "If these two economies join the GCC, they are likely to benefit from political patronage and will emerge as clear winners in the transaction," said Dr Tarek Coury, an economist at the Dubai School of Government.
"On the other hand, the GCC may not see direct economic benefits from these two countries joining the union, as the Gulf relies on a diversified workforce without the benefit of a larger union and has access to a pool of talent from around the world.
"Given the vast differences in their respective economic landscapes, a common monetary policy would be equally hard to justify on economic grounds as Jordan's and Morocco's economies are subject to different external shocks and in general are not in sync with the economies of the Gulf".
Forty-one per cent Gulf nationals think that Jordan will benefit from cheaper GCC oil and gas reserves. Seventy-three per cent of Jordanians believe membership would give their compatriots better job opportunities.
Asked whether or not Jordan would benefit, the results between states appeared to converge. Sixty-six per cent of Gulf nationals believe Jordan would prove beneficial to the GCC if it became a member. Thirteen per cent thought the GCC would benefit a lot, 23 per cent a bit, and 30 per cent not very much.
Saudis were the most positive, perhaps thanks to the closer links between the two kingdoms. Seventy-one per cent of Saudis viewed the move positively.
Jordanians showed overwhelming support for the initiative, with 97 per cent saying the GCC would benefit from Jordanian membership.
And well they might. Of those who believed Jordan has something to offer the Gulf, 34 per cent of GCC nationals believe it could provide better access to skilled professionals - and 65 per cent of Jordanians concurred.
Thirty-nine per cent of Bahrainis, on the other hand, viewed the move negatively, believing that inviting Jordan to the GCC would in no way benefit the union.
Jordanians are sure (99 per cent) they would benefit, and GCC nationals (86 per cent) only slightly less so. One in six (17 per cent) Bahrainis disagreed, however, saying Jordan would not benefit - perhaps scarred by recent experiences with GCC intervention in their nation.
The prospect of Morocco joining the council met with more mixed reactions. Twenty-five per cent of Gulf nationals believe the GCC would in no way benefit from having Moroccan membership - and Bahrainis (37 per cent) were particularly firm in that view.
The perspective is rosier from Morocco. In a clear display of national pride, 93 per cent of Moroccans believe the GCC would benefit from admitting Morocco. And 95 per cent of Moroccans believe their nation's admission would benefit the GCC too, a view shared by 82 per cent of Gulf nationals.
This eastward gaze contrasts with assurances from the Moroccan government that it is committed to its role in the Maghreb Union - an organisation that looks towards Europe, not the Gulf, for assurance.
The Moroccan enthusiasm for GCC membership came as a surprise to Jane Kinninmont, senior research fellow on the Middle East and North Africa programme at Chatham House, a think-tank in London. "It seems very surprising that 95 per cent of Moroccans would favour joining the GCC," she said. "This is likely to reflect positive perceptions of the potential for economic benefits.
"The GCC countries have become increasingly important investors in Morocco in recent years, although most of Morocco's trade is with the EU.
"However, some Moroccan civil society groups are concerned that GCC membership could hinder political reforms."
hhamid@thenational.ae
Dates for the diary
To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:
- September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
- October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
- October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
- November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
- December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
- February 2, 2018 Bodytree will host its 4th annual yoga market.
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.”
Analysis
Maros Sefcovic is juggling multiple international trade agreement files, but his message was clear when he spoke to The National on Wednesday.
The EU-UAE bilateral trade deal will be finalised soon, he said. It is in everyone’s interests to do so. Both sides want to move quickly and are in alignment. He said the UAE is a very important partner for the EU. It’s full speed ahead - and with some lofty ambitions - on the road to a free trade agreement.
We also talked about US-EU tariffs. He answered that both sides need to talk more and more often, but he is prepared to defend Europe's position and said diplomacy should be a guiding principle through the current moment.
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