Italy and UAE can be antidote to 'sea of troubles' in world, ambassador says

A mission to build new and durable bridges between Italy and the UAE is what motivates the country’s ambassador to the Emirates.

Lorenzo Fanara said he is committed to building a better tomorrow, describing working with the UAE on cultural diplomacy as an antidote to the “sea of troubles” around the world.

In a wide-ranging interview with The National to mark Italian National Day on Sunday, Mr Fanara reflected on the relaunch of relations between the two countries, and on issues from Gaza to illegal immigration.

Italians sometimes forget that part of our identity is also rooted in Arab culture

Lorenzo Fanara,
Italian ambassador to the UAE

He said relations between Italy and the UAE were “really excellent”, with ties spanning the economy, culture, technology, food security and climate.

“There are many sectors where there has been a clear, concrete partnership,” he said.

Italian companies have been in the UAE for decades, operating in everything from construction to afforestation efforts. Marble that adorns the Sheikh Zayed Grand Mosque was quarried in Italy, while an Italian firm completed mosaics on Qasr Al Watan.

Mr Fanara said the UAE and Italy were natural partners for many years but went through challenging times in 2020 and 2021, leading to efforts to “relaunch” their relationship. This was a priority when he was appointed as ambassador in 2022.

He said there had been an “intense political dialogue” over the past few years to achieve this, with 18 visits to the UAE in the past year-and-a-half alone.

“Relations have been relaunched,” he said. “I think we have achieved this goal.”

He highlighted the pivotal visit of Italian Prime Minister, Giorgia Meloni, in 2023, during which she held talks with President Sheikh Mohamed. Relations were upgraded during the visit to a “strategic partnership”.

Mr Fanara said there was an “incredible, strong” personal rapport between the two leaders and also “common ground on how they see the world”.

President Sheikh Mohamed with Italian Prime Minister Giorgia Meloni in March 2023. UAE Presidential Court

Cementing this, the Italian mission this month was honoured by the Ministry of Foreign Affairs as part of its excellence awards, while current statistics show just how successful this relaunch has been.

Bilateral trade reached €8.7 billion ($9.4 billion) in 2023 – up 8.6 per cent on 2022, with €6.6 billion in Italian exports, statistics from the embassy show. In the first two months of 2024 alone, trade has surged by as much as 34.7 per cent on last year.

Around 20,000 Italians call the UAE home – up from about 7,000 10 years ago – with business opportunities driving the increase. The Italian presence ranges from major energy companies such as Eni to sectors from hospitality to construction.

More than 600 Italian companies operate in the Emirates with exports including industrial machines and jewels. A joint venture to build military ships was recently agreed between UAE defence conglomerate Edge and Italy’s Fincantieri.

Mr Fanara said another “fundamental” goal for him was boosting cultural diplomacy.

An Italian film festival takes place next week, while during his tenure the famed Teatro alla Scala from Milan, a Puccini festival and the ballet of the Roma Opera have come to the UAE, which “had a huge impact”.

Moral duty in Gaza

Mr Fanara said Italy had sent humanitarian and medical aid to Gaza, while Italian medics in the UAE had treated Palestinians brought to the Emirates for care.

“We are trying to alleviate the suffering of the Palestinian population,” he said. “It is not only a political call, but a moral duty.”

The envoy said Italy “strongly and unequivocally” condemned the Hamas attack against the Israeli population on October 7, but Israel also needed to respect international law.

Mr Fanara said humanitarian aid and de-escalation was important and Italy was pursuing this in the context of its G7 presidency with a summit scheduled for June.

Several European countries have recognised the state of Palestine. Mr Fanara said this was their sovereign right but Italy’s position had been consistent for decades.

“There is only one solution for permanent peace – a two-state solution,” he said.

Turning to the EU-led force in the Red Sea that aims to ensure safety of navigation, Mr Fanara said Italy has the tactical command of the operation, which was “not an aggressive” one.

He also highlighted how a Venetian merchant, Gasparo Balbi, was among the first to write about what is now the UAE on his voyages in search of natural pearls in the 16th century. A copy of the book sits in Qasr Al Watan.

“Italians sometimes forget that part of our identity is also rooted in Arab culture,” he said.

Lorenzo Fanara was Italian ambassador to Tunisia before coming to the UAE. Aparna Jayakumar for The National

Tackling illegal immigration

Mr Fanara has held several important roles during his career, including political counsellor at the Italian embassy to the UK during Brexit and, most recently, ambassador to Tunisia.

It is the latter post that means he is attuned to the immigration issue affecting Italy for the past decade and dominating the agenda in many European countries ahead of the June European Parliament elections.

“I come from the southern part of Sicily, where the island of Lampedusa is located,” he said, referring to the point where many migrants from North Africa arrive in Italy.

“One of the most inhuman tragedies I've ever seen in my life … African people who drowned at sea trying to reach Lampedusa,” he said.

“Once people die … this means all of us, the international community, is defeated. The important thing is also to save lives.”

Mr Fanara said people smuggling was an illegal and immoral business but he was not worried about the elections amid concerns the far-right could exploit immigration fears.

He said Europe needs migration but it had to be legal and regulated, and was a humanitarian issue as much as a political one.

He pointed to the International Conference on Development and Migration in Rome last year, attended by Sheikh Mohamed, where he announced $100 million (Dh367 million) to help countries deal with large numbers of illegal migrants reaching their borders.

President Sheikh Mohamed meets Italy's Giorgia Meloni in 2023 – in pictures

What is the FNC?

The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning.
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval.
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.

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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