Choose your own adventure: will mankind shut itself away, embrace techno-authoritarianism, or build a network of supercities governed by big-data-powered e-mayors?
This is the question posed by the World Economic Forum in a new paper on how technology will change politics.
The WEF extrapolates from trends in internet and tech adoption to produce three versions of the future in its “Smart Toolbox”, released in Dubai yesterday ahead of its meeting of the Global Agenda Council, to be held in the UAE this year.
But they are not uniformly optimistic. As the international relations theorist Joseph Nye warned the WEF: “Today’s trends left unattended could lead to dystopian futures”.
If nationalism rises and governments grow despotic, the WEF foresees an “e1984” scenario, in which big data is harnessed to turn the screws on citizens and dissidents alike. Government agencies leverage future-data analytics to extract a granular, invasive and deeply incriminating picture of your everyday behaviour. This is Thomas Pynchon’s world, where universal paranoia enters daily life.
Or perhaps the libertarians will win the argument. In which case the WEF imagines a world of gated communities. It is a world of radical-right fantasy: where self-governing collectives recruit private companies to provide public services to a gated community, where ties are explicit and voluntary, and where nationhood has disappeared. This is the ringworld of Neill Blomkampf's Elysium – in which the world's wealthiest live in secluded luxury, guarded by mercenaries, while the planet suffers.
It is also the future imagined by Margaret Atwood in her novel Oryx and Crake: "Compound people [who live in gated communities] didn't go to the cities unless they had to, and then never alone … Despite the fingerprint identity cards now carried by everyone, public security in the [cities] was leaky: there were people cruising around in those places who could forge anything and who might be anybody, not to mention the loose change – the addicts, the muggers, the paupers, the crazies…Outside the [compound's] walls and gates and searchlights, things were unpredictable."
Or else, supposes the WEF, should cities continue to grow and grow, perhaps the nation state will wither away. All that will remain will be large cities, governed by charismatic, tech-savvy e-elected mayors – perhaps by some kind of cyborg Boris Johnson. Globalisation, in this vision, concentrates wealth, creativity and skills in cities, which can grow exponentially thanks to the quality-of-life enhancements that result from e-governance and smart city technologies.
This vision draws from “The World is Spiky”, an essay by Richard Florida, a professor at George Mason University in the US, and “Cities Are Good for You” by Leo Hollis – in which cities are seen as complicated devices for reducing transaction costs between individuals and organisations. Technology, in the WEF’s view, hastens this trend, concentrating people, resources and productivity in cities.
But which is it to be?
The WEF offers a classic civil servant’s fudge: “While none of these scenarios is likely to come to pass in full or in isolation from the other scenarios, all the scenarios contain some elements of truth”.
Regardless, it expects that governments around the world in the future will face “a daunting challenge” to deliver the services its people expect in “an environment of diminishing trust … increasing bureaucratic complexity and natural resource constraints”.
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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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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
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The bio
Studied up to grade 12 in Vatanappally, a village in India’s southern Thrissur district
Was a middle distance state athletics champion in school
Enjoys driving to Fujairah and Ras Al Khaimah with family
His dream is to continue working as a social worker and help people
Has seven diaries in which he has jotted down notes about his work and money he earned
Keeps the diaries in his car to remember his journey in the Emirates