The controversial former president of the US's Columbia University has been appointed as the UK’s chief economic adviser as Prime Minister Keir Starmer attempts to reboot his troubled government.
With Labour languishing in the polls and the British economy stuttering, Downing Street has decided to put Minouche Shafik in place as an adviser to help remedy the situation.
But the move has already attracted criticism with Ms Shafik’s reputation heavily damaged from her handling of the pro-Palestinian student protests last year at Columbia. The New York campus became the centre of the pro-Palestinian student protests over Gaza and sparked similar demonstrations at universities across the US, some of which turned violent.
After calling in the New York City Police Department (NYPD) to restore order, Ms Shafik resigned in August last year following months of criticism of her handling of the protests, and a much-publicised hearing before Congress during which she took a robust stand on the protests.
The combination of calling in the NYPD to the encampments twice, requesting a police presence for the end of the school year and cancelling the main graduation ceremony were part of the legacy she discussed on departure.
“This period has taken a considerable toll on my family, as it has for others in our community,” Ms Shafik stated in an email to staff and students on her departure. “It has also been a period of turmoil where it has been difficult to overcome divergent views across our community.”
Labour MPs have privately expressed misgivings about the Egypt-born British-American economist's appointment, with suggestions that if things go wrong, the focus will inevitably turn to her mishandling of the Columbia protests.
The Prime Minister’s official spokesman told The National that Ms Shafik brings more than “30 years of experience in public service and academia, the World Bank and the IMF”, and said “obviously she will have findings on a wide range of issues across that time”.
That experience includes stints as the chief civil servant at the former Department for International Development and as deputy governor of the Bank of England
Mr Starmer has also appointed the treasury minister Darren Jones, a rising star in the Labour Party, to the new role of Chief Secretary to the Prime Minister, “to drive forward progress in key policy areas”, Downing Street said.
In another move he has brought back another personality from the Tony Blair era, Tim Allan, who was Mr Blair's director of communications, to give his media strategy a shake-up. With decades of experience in PR, Mr Allan will become Executive Director of Communications, with a plan to deliver more polished messaging.
Last year Jonathan Powell, another important member of Mr Blair’s inner circle, was appointed as Britain’s National Security Adviser. He has had some success in addressing tough foreign policy issues.
But Labour is on 20 per cent in the polls and under severe pressure. The hard-right Reform party has surged to 35 per cent, with its tough anti-immigration message hitting home.
“We need to sharpen things up,” said a Labour official. “We’ve got to get things moving more quickly.”
A senior Labour insider also messaged The National to say that “the whole reshuffle is quite stark in that Starmer is shaking up his team (yet again) and at some point he is going to run out of people to blame”.
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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.”
Innotech Profile
Date started: 2013
Founder/CEO: Othman Al Mandhari
Based: Muscat, Oman
Sector: Additive manufacturing, 3D printing technologies
Size: 15 full-time employees
Stage: Seed stage and seeking Series A round of financing
Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now.
