Labour will increase UK's global engagement, David Miliband says

Former UK foreign secretary David Miliband said the country's new Labour government would increase engagement with long-standing partners including the UAE, as Britain seeks to strengthen its economy.

Speaking at the Aspen Security Forum, the former Labour politician said Prime Minister Keir Starmer and his government were clear-eyed about the challenges facing Britain, after his party was elected to power following 14 years of Conservative rule.

“They have a very realistic view of the challenges facing the UK, notably in the European theatre and Ukraine-related, but also the domestic problems in the UK revolving around the economy,” Mr Miliband told The National.

“But they've also said very clearly that they want the UK to engage globally, including with long-standing partners in places like the UAE. So I think that you're going to see a Britain that's open for business, not just economically but diplomatically as well.”

Mr Miliband served as foreign secretary under Gordon Brown from 2007 to 2010 and now leads the International Rescue Committee in New York. He stepped back from politics in 2010 after losing the Labour leadership contest to his brother, Ed.

Mr Miliband spoke at a panel in Aspen on Wednesday that emphasised the human toll of the many crises facing the world. “You can't talk about security at the Aspen Security Forum if you're not willing to talk about the human consequences of insecurity,” Mr Miliband said, referring to the more than 50 civil conflicts around the world.

“There are record numbers of refugees and internally displaced people, record numbers of coups around the world. And so this is a time when every humanitarian emergency is also a political emergency or reflects a political emergency.”

He added that environmental groups and humanitarian agencies need to do a better job of co-ordinating their responses to crises.

Of the 20 nations on the IRC's emergency watch list for 2024, 14 are among the most climate-vulnerable countries. “There's increasing evidence of the way that resource stress is a multiplier of conflict," Mr Miliband said.

"And that's something that I think we have to do a better job in the humanitarian sector, to try and line up our approach to innovation, to financing, with that of the those working in the climate space."

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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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Start-up hopes to end Japan's love affair with cash

Across most of Asia, people pay for taxi rides, restaurant meals and merchandise with smartphone-readable barcodes — except in Japan, where cash still rules. Now, as the country’s biggest web companies race to dominate the payments market, one Tokyo-based startup says it has a fighting chance to win with its QR app.

Origami had a head start when it introduced a QR-code payment service in late 2015 and has since signed up fast-food chain KFC, Tokyo’s largest cab company Nihon Kotsu and convenience store operator Lawson. The company raised $66 million in September to expand nationwide and plans to more than double its staff of about 100 employees, says founder Yoshiki Yasui.

Origami is betting that stores, which until now relied on direct mail and email newsletters, will pay for the ability to reach customers on their smartphones. For example, a hair salon using Origami’s payment app would be able to send a message to past customers with a coupon for their next haircut.

Quick Response codes, the dotted squares that can be read by smartphone cameras, were invented in the 1990s by a unit of Toyota Motor to track automotive parts. But when the Japanese pioneered digital payments almost two decades ago with contactless cards for train fares, they chose the so-called near-field communications technology. The high cost of rolling out NFC payments, convenient ATMs and a culture where lost wallets are often returned have all been cited as reasons why cash remains king in the archipelago. In China, however, QR codes dominate.

Cashless payments, which includes credit cards, accounted for just 20 per cent of total consumer spending in Japan during 2016, compared with 60 per cent in China and 89 per cent in South Korea, according to a report by the Bank of Japan.

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