Blockchain is a growing chain of blocks linked with each other using cryptography. AFP
Blockchain is a growing chain of blocks linked with each other using cryptography. AFP

Technology

Quicktake: Blockchain set to change the public and private sectors

The technology will help governments and businesses save time, effort and resources

Alkesh Sharma
Alkesh Sharma

December 05, 2018

Blockchain is the latest buzzword being used among public and private sector companies. The technology is growing so fast that Middle East and Africa spending on blockchain will more than double to $80.8 million by the end of 2018 from a year earlier, according to US-based International Data Corporation (IDC).

We take a look at what this technology is all about.

What is blockchain?

Blockchain is a growing digital chain of transactions that are linked with each other using cryptography - a mechanism for secure communications - that creates an open ledger to record transactions in a fast and efficient manner. It is a database technology behind cryptocurrencies such as Bitcoin and can work as a real-time archive for recording the history of financial transactions, contracts, physical assets and supply-chain information.

There is no one person or entity in charge of the entire chain. It is an open network and everyone in the chain can see the details of each record. Every block is encrypted and can only be edited by its owner with a private key. If any change or edit is made the entire chain is updated in real time.

How does it work?

Each transaction is digitally encoded to certify its legitimacy and protect it. It ensures the digital security of transactions while reducing operational cost and speeding the decision-making process. The UAE plans to use blockchain for digital transactions, giving each customer a unique identification number that points to their information on the secure chain.

It is being adopted in a variety of commercial applications and it ensures that information and data on the blockchain cannot be hacked.

How does it help companies and governments?

Besides adding transparency, blockchain technology will help public and private sectors save time, effort and resources. It allows them to process their transactions at their preferred time from any place. Smart Dubai’s blockchain-powered Payment Reconciliation and Settlement System, which went live in October this year, allows transactions to be performed accurately and in real time, vastly increasing efficiency.

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What is the UAE’s strategy on blockchain?

UAE unveiled the Emirates Blockchain Strategy 2021 in April this year. It aims to switch almost 50 per cent of government transactions into the blockchain platform in three years. By adopting blockchain, the UAE is expected to save 77 million work hours annually, Dh11 billion in transaction costs and regular document processing and 398 million printed documents a year.

The UAE plan includes four pillars focusing on citizen and resident happiness, government efficiency, advanced legislation, and global entrepreneurship.

The Dubai Government has its own blockchain strategy that aims to help the emirate become the first city fully powered by blockchain by 2020.

COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
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Investment raised: $4 million 
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Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh132,000 (Countryman)
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The more serious side of specialty coffee

While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.

The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.

Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”

One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.

Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms. 

A State of Passion

Directors: Carol Mansour and Muna Khalidi

Stars: Dr Ghassan Abu-Sittah

Rating: 4/5

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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.”

What is blockchain?

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.

The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.

Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.

However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.

Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.

How to volunteer

The UAE volunteers campaign can be reached at www.volunteers.ae , or by calling 800-VOLAE (80086523), or emailing info@volunteers.ae.

Get inspired

Here are a couple of Valentine’s Day food products that may or may not go the distance (but have got the internet talking anyway).

Sourdough sentiments: Marks & Spencer in the United Kingdom has introduced a slow-baked sourdough loaf dusted with flour to spell out I (heart) you, at £2 (Dh9.5). While it’s not available in the UAE, there’s nothing to stop you taking the idea and creating your own message of love, stencilled on breakfast-inbed toast.  

Crisps playing cupid: Crisp company Tyrells has added a spicy addition to its range for Valentine’s Day. The brand describes the new honey and chilli flavour on Twitter as: “A tenderly bracing duo of the tantalising tingle of chilli with sweet and sticky honey. A helping hand to get your heart racing.” Again, not on sale here, but if you’re tempted you could certainly fashion your own flavour mix (spicy Cheetos and caramel popcorn, anyone?). 

Poland Statement
All people fleeing from Ukraine before the armed conflict are allowed to enter Poland. Our country shelters every person whose life is in danger - regardless of their nationality.

The dominant group of refugees in Poland are citizens of Ukraine, but among the people checked by the Border Guard are also citizens of the USA, Nigeria, India, Georgia and other countries.

All persons admitted to Poland are verified by the Border Guard. In relation to those who are in doubt, e.g. do not have documents, Border Guard officers apply appropriate checking procedures.

No person who has received refuge in Poland will be sent back to a country torn by war.

Married Malala

Malala Yousafzai is enjoying married life, her father said.

The 24-year-old married Pakistan cricket executive Asser Malik last year in a small ceremony in the UK.

Ziauddin Yousafzai told The National his daughter was ‘very happy’ with her husband.

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Rating: 1 out of 4

Running time: 81 minutes

Director: David Blue Garcia

Starring: Sarah Yarkin, Elsie Fisher, Mark Burnham

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
While you're here
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Name: Peter Dicce

Title: Assistant dean of students and director of athletics

Favourite sport: soccer

Favourite team: Bayern Munich

Favourite player: Franz Beckenbauer

Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates 

 

Profile of RentSher

Started: October 2015 in India, November 2016 in UAE

Founders: Harsh Dhand; Vaibhav and Purvashi Doshi

Based: Bangalore, India and Dubai, UAE

Sector: Online rental marketplace

Size: 40 employees

Investment: $2 million

One in nine do not have enough to eat

Created in 1961, the World Food Programme is pledged to fight hunger worldwide as well as providing emergency food assistance in a crisis.

One of the organisation’s goals is the Zero Hunger Pledge, adopted by the international community in 2015 as one of the 17 Sustainable Goals for Sustainable Development, to end world hunger by 2030.

The WFP, a branch of the United Nations, is funded by voluntary donations from governments, businesses and private donations.

Almost two thirds of its operations currently take place in conflict zones, where it is calculated that people are more than three times likely to suffer from malnutrition than in peaceful countries.

It is currently estimated that one in nine people globally do not have enough to eat.

On any one day, the WFP estimates that it has 5,000 lorries, 20 ships and 70 aircraft on the move.

Outside emergencies, the WFP provides school meals to up to 25 million children in 63 countries, while working with communities to improve nutrition. Where possible, it buys supplies from developing countries to cut down transport cost and boost local economies.