The free market is not to blame in Jordan


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In an opinion article carried by the Jordanian newspaper Al Ghad, the economist Jumana Ghunaimat wrote that the government in Jordan was mulling over adopting a welfare state system as a solution to the present economic and social crises.

The economic system adopted throughout the past decade was based on free-market principles, which came at the detriment of people's welfare. A decade after its implementation, many are criticising it because of its sole reliance on the equation of supply and demand.

So any attempt by the government to take extreme measures, such as controlling supply and demand and introducing pricing goods, is likely to be simplistic and unpopular.

It is equally true that the economic programmes introduced failed to ensure a fair distribution of wealth and achieving social justice. As a result, unemployment, poverty and social injustice-related crimes have propagated.

Yet, the free market is not to blame. The problem lies rather in the manner with which successive governments have implemented economic plans, which most of the time lack the far-sighted vision that respond to the population's wants and needs.

Also to blame are the faulty fiscal policies, the indiscriminate distribution of wealth among various regions of the kingdom, a lack of good standards of governance and government performance evaluation.

Libya needs external help to transition

"International intervention is no longer a defect or a source of embarrassment. It has become a popular demand that the masses consider safe and appropriate to oust some corrupt regimes, of which Muammar al Gaddafi is an extreme example," observed Satea Noureddine in a commentary for the Lebanese daily Assafir.

Yet, this does not mean Libyans yearn for a new colonial era. Similarly, the West does not possess the means or the intention to occupy former colonies. The 19th century colonisation campaign was governed by special historical and economic circumstances, which no longer exist.

The Libyan example is more illustrative than the Egyptian or Tunisian one. The latter has got a solid social structure that does not need any foreign intervention to reorganise the state and manage their affairs. Libyans, however, need to be assisted either in killing or arresting Col Gaddafi, and eventually in helping them in the management of the transition period similar to the ongoing one in its eastern and western neighbours.

Libyans are not "a herd of donkeys and rats" or collaborators with al Qa'eda as described by Col Qaddafi. They are simply not ready for self-government, because the regime has destroyed the entire basis that can guarantee a smooth shift of power and immediate functioning of a new system.

Protesters must have an identity in Iraq

The latest protests in Iraq have drawn the political elites' attention to the fact that the Iraqi street no longer accepts corruption and ineffective government, observed Jaber Habib Jaber in an opinion article for the pan-Arab newspaper Asharq al Awsat.

The government has given unexpected concessions, such as abolishing what is called presidency social benefits.

Iraqis have grown aware of the usefulness of protests accompanied by massive media coverage, which attract international public opinion. This helps the process of holding politicians accountable for their acts not only constitutionally but publicly.

Demonstrations in Iraq started when the people realised that the government was involved in fruitless dialogue with political forces about changes to introduce a move that is seen as an attempt to curtail parliament powers and authority. Some provincial officials also acted in irrational ways by focusing on restricting personal freedoms on grounds of protecting national identity instead of performing their assigned duties.

Given the precarious situation of Iraq, protestors should consider protests as a means to achieve demands leading to democratic reforms within the boundaries of the law. They also need to show a clear list of demands and an identity to set themselves apart from saboteurs and profiteers.

A call to abolish sects in Lebanon at last?

Lebanese sectarian leaders perceive Arab protests in a subjective way to suit their political interests, noted the columnist Nabil bou Muncif in an opinion piece for the Emirati newspaper Akhbar al Arab.

It is known that the sectarian makeup of Lebanese society is the shield of most leaders. Yet the latest developments have awakened a glimmer of hope among an almost extinct secular elite for a system that goes beyond rigid sectarian considerations.

"Looking at the present internal circumstances, this is hard to achieve. To abolish sectarianism, this should be done in a decisive manner on two levels: politically and socially. And this is almost impossible in a country like Lebanon.

Similarly, to introduce democratic reforms in Lebanon depends, for the most part, on the willingness of leaders to step down. In Lebanon, they remain in leadership positions for life, taking advantage of a loose system of elections, religious considerations, and some social norms and standards.

It is no wonder then that a personality cult has emerged in Lebanese society. Those "untouchable" political figures are the cause of much democratic crisis that Lebanon endures either within parties proper or in managing the public life as a whole.

* Digest compiled by Achraf El Bahi

Ways to control drones

Countries have been coming up with ways to restrict and monitor the use of non-commercial drones to keep them from trespassing on controlled areas such as airports.

"Drones vary in size and some can be as big as a small city car - so imagine the impact of one hitting an airplane. It's a huge risk, especially when commercial airliners are not designed to make or take sudden evasive manoeuvres like drones can" says Saj Ahmed, chief analyst at London-based StrategicAero Research.

New measures have now been taken to monitor drone activity, Geo-fencing technology is one.

It's a method designed to prevent drones from drifting into banned areas. The technology uses GPS location signals to stop its machines flying close to airports and other restricted zones.

The European commission has recently announced a blueprint to make drone use in low-level airspace safe, secure and environmentally friendly. This process is called “U-Space” – it covers altitudes of up to 150 metres. It is also noteworthy that that UK Civil Aviation Authority recommends drones to be flown at no higher than 400ft. “U-Space” technology will be governed by a system similar to air traffic control management, which will be automated using tools like geo-fencing.

The UAE has drawn serious measures to ensure users register their devices under strict new laws. Authorities have urged that users must obtain approval in advance before flying the drones, non registered drone use in Dubai will result in a fine of up to twenty thousand dirhams under a new resolution approved by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai.

Mr Ahmad suggest that "Hefty fines running into hundreds of thousands of dollars need to compensate for the cost of airport disruption and flight diversions to lengthy jail spells, confiscation of travel rights and use of drones for a lengthy period" must be enforced in order to reduce airport intrusion.

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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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THE BIO

Age: 33

Favourite quote: “If you’re going through hell, keep going” Winston Churchill

Favourite breed of dog: All of them. I can’t possibly pick a favourite.

Favourite place in the UAE: The Stray Dogs Centre in Umm Al Quwain. It sounds predictable, but it honestly is my favourite place to spend time. Surrounded by hundreds of dogs that love you - what could possibly be better than that?

Favourite colour: All the colours that dogs come in