America and the UAE are aligned on the "pathway forward" in the region, the US Ambassador to the country has said, as she hailed the strong partnership and opportunities for further co-operation in advanced technology and defence.
"As two countries, two longstanding partners and strategic allies, we're facing a moment of opportunity to strengthen our partnership but also to reach new frontiers and really push the horizons," Martina Strong told The National.
Ms Strong spoke to The National as her term as US envoy to the UAE comes to an end. She assumed the position in 2023 at a time of American disengagement from the Middle East, when the post had been vacant for about two years.
"Whenever I think of our relationship, I like to think back to the very beginnings," she said, recounting the story of American doctors Pat and Marian Kennedy, who founded the emirate’s Oasis Hospital in 1960. That clinic went on to deliver thousands of Emirati babies at a nascent time in the country’s rapid modern development.
Ms Strong described co-operation on health – which began early on – advanced technology, artificial intelligence and space exploration as the key focus areas during her time in the UAE.
She said she was "struck by how forward-looking the UAE has been" on artificial intelligence, having had an AI minister since 2017 – the first such ministerial appointment in the world.
"It's just remarkable that this country has managed to identify early on that this will be a priority." Ms Strong added that artificial intelligence was also one of the "key centrepieces" of US President Donald Trump's visit in May.
President Trump's visit
Mr Trump visited Saudi Arabia, Qatar and the UAE on the first official overseas trip of his second term. The Gulf tour resulted in bilateral deals worth billions of dollars and highlighted the US's growing pivot towards the region.
"It's no accident that the President came here to the Gulf [first] and it's no accident that he visited these three countries," Ms Strong said.
Mr Trump was welcomed to the UAE by President Sheikh Mohamed, who bestowed him with the country's highest civilian honour, the Order of Zayed, a reflection of the importance of the relationship between the countries.
"I've never seen a presidential visit like this," Ms Strong said. "It was so incredibly positive, you could feel it in the atmosphere. The friendship, the partnership. In some moments, I will tell you it was electrifying," she added.
"It was clear that the President was having a great time. He really enjoyed every stop," she said of the visit, adding that it was one of the most memorable events in her diplomatic career.
During the visit, in addition to many deals announced, plans for a UAE-US AI Campus in Abu Dhabi were unveiled. The Commerce Department described it as one of the largest outside the US. The campus is part of an AI Acceleration Partnership between the two countries.
"The area of collaboration is ripe for expansion," Ms Strong said, indicating opportunities beyond AI.
During Mr Trump's visit, a Major Defence Partnership and a partnership programme between the Texas National Guard were announced, increasing defence collaboration. "It's an area of opportunity where we can do much more together," the ambassador said.
"But what I have found striking is that the best work that we're doing here is when we're working together with our Emirati partners."
Ms Strong reflected on her first interview with The National after she arrived in the UAE, when she described the country as an "an anchor" in the region. "I believe that more than ever."
"The President welcomed and really appreciated Sheikh Mohamed's thoughts on where the region is headed," she said.
Mr Trump's visit came during heightened turbulence and conflict in the region, from the Gaza Strip to the Red Sea. He discussed Israel's war on Gaza and growing tension with Iran – at that time still engaged in nuclear negotiations – with leaders of the Gulf states he visited.
"They talked about the region, they talked about regional security but they also talked about the pathway forward," Ms Strong said. She emphasised that Washington was on the same path as the UAE – one focused on "prosperity, peace, coexistence, tolerance".
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Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
Zayed Sustainability Prize
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
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.”
Five films to watch
Castle in the Sky (1986)
Grave of the Fireflies (1988)
Only Yesterday (1991)
Pom Poki (1994)
The Tale of Princess Kaguya (2013)
Mohammed bin Zayed Majlis
