The Arab Spring has slowed, for all the wrong reasons


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The Arab Spring, as this season of change has come to be known, has had its fair share of detractors. While many considered the Tunisian and Egyptian revolutions moments of hope, Libya, Yemen, Bahrain and Syria have slowed enough to counter the revolutionary fervour.

Some of the detractors may in fact wish these revolutions would grind to a halt, and the status quo be retained. These arguments are seen across the spectrum of Arab people, particularly in the age group above 50.

But this desire is largely based on five misconceptions of where the Arab Spring is heading.

The first of these holds that revolutions bring instability, which will derail the economic growth of Arab countries.

This is perhaps the easiest argument to counter. Economic growth based on unequal distribution of wealth is a mirage, and the figures tell quite a different story than the actual state of the citizenry. Tunisia, like many other Arab economies, grew impressively in the heydays of dictatorship, but that growth was only experienced by a select few.

In fact, what dictators extract from the national economy through corruption, cronyism and outright theft is infinitely more costly in the long term than any improvement in the standard of living for citizens as a result of their economic policies.

The second misconception is that the dictators were protecting us from the Islamists, who are bound to take over now.

Again, there is an easy argument against this. By effectively killing politics and banning political discourse, the region's dictators pushed their people towards the mosque. By savagely persecuting their people, dictators then encouraged Islamists to radicalise and take a harder line. Dictators, therefore, weren't protecting anyone from anything but were rather adding fuel to the fire.

In an open political environment, Islamists will be one political option (of many, we can hope) from which the citizenry can choose its representatives. The only way to hold the Islamists in check is to find a competing political force, and to uphold civil rights and liberties - of expression, of religious belief, of thought. If Islamist parties want to get re-elected, they will be forced to moderate and deliver.

Third, revolutions will lead to sectarian warfare in the Arab world's ethnic and sectarian potpourri.

Again, flatly wrong. This misconception is used strongly in Bahrain and Syria specifically. Surely, one would want to avoid the Iraq scenario, goes the argument. But to the extent that sectarian strife in the Arab world can be attributed to anything, it is failed government polices of the past. Dictators foster sectarian identities at the expense of national ones. It is the oldest trick in the book; divide and conquer.

In a free Arab world, where different sects are respected and citizens are equal, sectarian identities will subside. As long as the law protects all citizens, Arabs have nothing to fear from their diversity.

Fourth, Arab revolutions give foreigners an excuse to meddle with Arab affairs.

Hasn't this been the case for centuries? As if the foreigners were not meddling with Arab affairs before the revolutions. Saddam Hussein practically invited foreign powers to invade Iraq in 1991. Libya's Colonel Muammar Qaddafi bowed to whatever the foreigners wanted after witnessing his Iraqi comrade's demise in 2003.

And in Syria, the Al Assad regime sided with foreigners twice against its Iraqi neighbour (Iran in the Iran-Iraq war, the US in Desert Storm). And we all know who has a naval base in Bahrain. The fact that Iraqis and Libyans would make a pact with foreigners to get rid of their tyrants is quite telling of the circumstance they were living in more recently.

Foreigners will always want to meddle with Arab affairs, but democracies, even those allied with the West, have always been better at saying "no" to their foreign patrons than dictatorships have (Turkey and Israel are prime examples).

And fifth, the misconception that some regimes are part of the "resistance" against the West and Israel is yet another fallacy.

It is no coincidence that Israel was the least enthusiastic country in the world when it came to the Arab Spring. While commentators across the world were singing praises of Arabs for rising up, the Israelis were the only ones saying: "What do we do now?"

Arab democracy robs Israel of its favourite line; that it is the only democracy in the region, sharing the values of the powerful West. In reality, subjugated Arabs were never going to liberate anything or anyone. Resistance that is based on coercion and subjugation will lead to ruin (for two examples, see Hamas and Hizbollah). Freedom of the mind is a necessary precursor for freedom of the land.

The Arab Spring will not lead to a rosy Arab world anytime soon. It will be a long, hard road for us to build our states and societies. But at the very least, the Arab Spring indicates that we have finally begun to recognise the problem.

This ongoing experiment might not always yield wanted results. But at the very least, it will be our own experiment, which we will bear the responsibility of conducting.

Abdul-Wahab Kayyali is a political analyst and editor of the Amman-based Venture business magazine.

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Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.

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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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