Edward Hobart, UK ambassador to the UAE. Victor Besa / The National
Edward Hobart, UK ambassador to the UAE. Victor Besa / The National
Edward Hobart, UK ambassador to the UAE. Victor Besa / The National
Edward Hobart, UK ambassador to the UAE. Victor Besa / The National

UK aims to reconnect with the world, says ambassador to UAE


John Dennehy
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The new UK government has a clear ambition to reconnect with the world, the British ambassador to the UAE has said.

Edward Hobart said it was important to move into a new era “beyond the Brexit conversation” that has defined the past few years.

Speaking to The National following the Labour Party’s landslide election victory, Mr Hobart said there was now an opportunity to reinvigorate the bilateral relationship between the UK and UAE.

“It is an important kind of reset for the government and the civil service in supporting the government,” Mr Hobart said on Tuesday.

In a wide-ranging interview, Mr Hobart reflected on the fresh priorities, how the bilateral relationship will strengthen, and the key issues both sides need to work on.

President Sheikh Mohamed has spoken to the new British Prime Minister, Keir Starmer, since Thursday's election, while David Lammy’s first call as Foreign Secretary on Friday was to Sheikh Abdullah bin Zayed, UAE Minister of Foreign Affairs.

“The government was formed at about midday on Friday,” said Mr Hobart. “He was appointed in the afternoon and he picked the phone up and spoke to Sheikh Abdullah. Sheikh Abdullah was available to take the call, which was great.”

Post-Brexit era

The new administration takes power after years of turmoil dominated by Brexit, the fallout from Covid-19 and successive Conservative Party prime ministers who struggled to get a grip on the situation. Rejoining the EU is currently not on the cards, however, the envoy said.

“I think the government's been clear that they're not going back into the European Union,” said Mr Hobart. “That's not part of their agenda but they want to have a better relationship with the European Union.”

Mr Hobart said the phrase the new Foreign Secretary has been using in this regard is “reconnect with the world”.

When asked if the upheaval of the past few years had eroded the UK’s global standing, Mr Hobart said others could judge whether the country had been up or down over the past few years, but his job was to identify strengths.

UK's new priorities

The government has said it will focus on five areas – economic growth, making Britain a clean energy superpower, tackling crime, boosting opportunities, and improving the National Health Service. Mr Hobart said two of those – energy and growth – are particularly relevant for the relationship with the UAE.

He cited the UAE's presidency of Cop28 and how it is a long-term investor in the UK renewable sector. Adnoc and BP work on hydrogen projects, for example, and both countries aim to invest more globally in renewables, “so there's a story there already but I see that as being something that will be enhanced”.

In terms of growth, the UAE is the UK’s largest trading partner in the region and its 19th largest trading partner globally. Bilateral trade last year was more than £24 billion.

Sir Keir Starmer waves with newly elected MPs outside 10 Downing Street on July 9. AFP
Sir Keir Starmer waves with newly elected MPs outside 10 Downing Street on July 9. AFP

The envoy said he hoped the two countries' relationship would strengthen regionally as they needed to work together on many issues, such as “getting more humanitarian aid into Gaza, helping move towards a peace process [and] tackling the humanitarian situation and impending crisis in Sudan”.

Mr Hobart said Gaza is a major foreign policy issue. The human suffering had been “horrific” since October 7 and working out a ceasefire is crucial, he said.

He highlighted Mr Starmer’s call to Israeli Prime Minister Benjamin Netanyahu at the weekend, in which he called for an immediate ceasefire and the entry of more humanitarian aid.

Mr Hobart said he did not see any diminishing of support for Ukraine “in terms of defending them from the Russian attack on their territory”. It was a “huge strain on Europe” but the ambassador said there was a risk that what happens in Ukraine “could take place in other places if we don't support the Ukrainians”.

The shift of power in Downing Street happens in just hours, often seeming abrupt, but preparations had been going on behind the scenes for some time, he said. Future ministers had been preparing, visiting countries and laying the groundwork to ensure a smooth transfer.

“Policies might change,” he said. “But … the civil service doesn't change and in lots of foreign policy areas, there's quite a lot of continuity between governments.”

The decisions are made by the politicians, he said, and diplomats had to listen to them, provide them with honest advice and then respond to what direction they are given, as ultimately they serve them and the British public.

“There is a bit of agility needed there, which can be challenge,” he added.

Warm and historic ties

The relationship between the UK and UAE is deep-rooted. British officials and residents played a vital role in building up the country from the days of the Trucial States to the modern UAE.

Today, around 130,000 British residents call the UAE home, with many of them voting in last week's UK election. Additionally, there are 1.4 million visitors from the UK to the Emirates each year.

Mr Hobart said increasingly these visitors are not only tourists but also people doing business and living part of their lives in the UAE.

The UK has also made it easier for Emiratis to travel to the UK under the Electronic Travel Authorisation, a visa-free process that opened in February. Statistics for February and March show 7,684 successful applicants. This is expected to have risen rise sharply since.

“The first place that we rolled [the scheme] out to was this region,” said Mr Hobart. “It is a good sign.”

Mr Hobart only took up his post last year. Since then he has seen Cop28 and now a change in the UK government in what are supposedly the quieter months of a UAE summer.

The next major event will be the King’s Speech on July 17, which will set out how the Labour government intends to deliver the change it promised in its election campaign.

New appointments expected

The envoy said Mr Lammy is expected to meet Sheikh Abdullah soon, and he also expected to see the appointment of a minister with responsibility for the region.

The early call between Sheikh Mohamed and Mr Starmer demonstrated the countries' close relationship stretching back many years and the “importance of that relationship now”.

“There's a growth element to it,” Mr Hobart said. “There's an energy transition element to it. There's also a regional security element to it and there's a people element to it. This is one of our largest expatriate populations.”

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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.”

Updated: July 11, 2024, 4:48 AM