Ambitious economic transformation agendas are driving the diversification and development of economies across the Middle East, creating millions of new jobs and new consumers with new wealth to invest and spend.
The United Arab Emirates is at the forefront of this shift. And it is so by design.
This $350 billion economy is the product of the careful calibration of vision, focus, planning, investment and execution.
The result is the Middle East’s most diversified economy, powered by a “smart” development agenda.
The UAE has a digitally-driven government pushing the private sector to keep the country 10 years ahead of the competition.
We have tech-savvy citizens with the world’s deepest smartphone penetration at more than 90 per cent.
And it’s not just our people who are smart – so is our infrastructure.
The UAE’s project pipeline between now and 2022 is worth $1.3 trillion.
Rethinking the energy value chain and investing to deliver smart growth, maximize value and increase profitability will create in Ruwais the world’s single biggest integrated refining and petrochemicals destination by 2025.
Alongside this, the UAE has established itself as the capital of green energy expertise and home to the International Renewable Energy Association, the world’s driving force for global energy transformation.
The long-term renewables project pipeline in Dubai alone is worth $27bn and the Mohammed bin Rashid Al Maktoum Solar Park is one of the world’s biggest.
That puts the UAE at the centre of a flow of new ideas about the way in which the world will be powered in the future.
And it is flow that is absolutely vital to trade. The flows of goods, of capital, of people.
People are already flocking here in record numbers.
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The 15 million visitors who arrived in Dubai in 2017 made it the 6th most visited city in the world – ahead of New York and Paris.
At least 25 million people are expected to visit in 2020 for the World Expo.
And that’s crucial, because Expo is the global meeting point of people and ideas – a festival of human ingenuity.
That ingenuity is already in action in the work being done to build the world’s biggest aviation hub.
When it’s finished, Dubai will be able to accommodate 240 million passengers every year.
Meanwhile the appeal of the UAE as a destination for long term investors has never been stronger.
The country has attracted an average $10bn of FDI each year so far this decade and was a top 10 destination for global FDI in 2017.
And don’t forget that those investors connect and combine with the wealth that’s already here.
The UAE is home to $1.3tn of sovereign wealth fund assets.
And its population of ultra high net worth Individuals, with investible assets of more than $30 million, is set to expand by 60 per cent in the 10 years to 2026.
This is a financial market and international investment hub that has been built around a geography that connects businesses on three continents.
The UAE is a crucial gateway for two-way trade worth $570bn with Asia, Europe, Africa and the Rest of the World.
It houses the world’s busiest port outside of Asia, handling 15 million containers every year, operated by a company with a ports portfolio extending to 70 terminals on six continents.
The recent HSBC Navigator, a comprehensive report of global trade and business confidence across 25 markets globally, shows that 77 per cent of UAE businesses responding to the survey expect trade volumes to grow over the coming 12 months, with 62 per cent expecting a jump in services trade
But what makes it more promising still is that the UAE is a key connection point for China’s Belt & Road Initiative.
The Trade Navigator report forecasts China to be a top three import and export partner for companies in the UAE between now and 2030.
There are more than 4,000 Chinese businesses here – from large state owned enterprises (SOE)s, to small and medium sized enterprises (SMEs) – and Dubai’s Dragon Mart is the world’s largest hub for trading Chinese products outside of mainland China.
And the investment flows from China through the UAE to the rest of the world are accelerating.
In other words, a new global trade order is emerging, driven by Asia and the Middle East.
As the gateway to growth in the Middle East and beyond, the UAE is immersed in the potential of the flow of capital, people and ideas from around the world.
It’s a rising tide of potential. It is our wave to ride.
Abdulfattah Sharaf is chief executive officer of HSBC UAE
When is VAR used?
• Goals
• Penalty decisions
• Direct red-card incidents
• Mistaken identity
It's up to you to go green
Nils El Accad, chief executive and owner of Organic Foods and Café, says going green is about “lifestyle and attitude” rather than a “money change”; people need to plan ahead to fill water bottles in advance and take their own bags to the supermarket, he says.
“People always want someone else to do the work; it doesn’t work like that,” he adds. “The first step: you have to consciously make that decision and change.”
When he gets a takeaway, says Mr El Accad, he takes his own glass jars instead of accepting disposable aluminium containers, paper napkins and plastic tubs, cutlery and bags from restaurants.
He also plants his own crops and herbs at home and at the Sheikh Zayed store, from basil and rosemary to beans, squashes and papayas. “If you’re going to water anything, better it be tomatoes and cucumbers, something edible, than grass,” he says.
“All this throwaway plastic - cups, bottles, forks - has to go first,” says Mr El Accad, who has banned all disposable straws, whether plastic or even paper, from the café chain.
One of the latest changes he has implemented at his stores is to offer refills of liquid laundry detergent, to save plastic. The two brands Organic Foods stocks, Organic Larder and Sonnett, are both “triple-certified - you could eat the product”.
The Organic Larder detergent will soon be delivered in 200-litre metal oil drums before being decanted into 20-litre containers in-store.
Customers can refill their bottles at least 30 times before they start to degrade, he says. Organic Larder costs Dh35.75 for one litre and Dh62 for 2.75 litres and refills will cost 15 to 20 per cent less, Mr El Accad says.
But while there are savings to be had, going green tends to come with upfront costs and extra work and planning. Are we ready to refill bottles rather than throw them away? “You have to change,” says Mr El Accad. “I can only make it available.”
Tips for entertaining with ease
· Set the table the night before. It’s a small job but it will make you feel more organised once done.
· As the host, your mood sets the tone. If people arrive to find you red-faced and harried, they’re not going to relax until you do. Take a deep breath and try to exude calm energy.
· Guests tend to turn up thirsty. Fill a big jug with iced water and lemon or lime slices and encourage people to help themselves.
· Have some background music on to help create a bit of ambience and fill any initial lulls in conversations.
· The meal certainly doesn’t need to be ready the moment your guests step through the door, but if there’s a nibble or two that can be passed around it will ward off hunger pangs and buy you a bit more time in the kitchen.
· You absolutely don’t have to make every element of the brunch from scratch. Take inspiration from our ideas for ready-made extras and by all means pick up a store-bought dessert.
COMPANY%20PROFILE%20
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
A Long Way Home by Peter Carey
Faber & Faber
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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.”
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
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