Three disparate events in the past few days – the Red Sea internet cable issue, the blocking of some social media platforms in Nepal that sparked protests and, more locally, recent updates regarding the use of smartphones in schools – offer a discursive glimpse at how societies think about the digital world and the broader relationships we all have with technology.
First, the cable cut. It became a big story over the weekend with internet services being reduced to a crawl in parts of the Middle East and South Asia after some Red Sea communication lines were apparently severed. Experts suggest the disruption was most likely the result of a commercial shipping activity, such as a dropped and dragged anchor, rather than the work of a nefarious group. Whatever the cause, repair work is likely to be time-consuming, expensive and complex.
For the average technology dependent person, it may mean some bumps in the road in their day-to-day digital life while relevant authorities devise workarounds to keep communication channels moving. But this is also a short but uncomfortable step into the unknown. We just don’t know whether life will be affected or not from hour to hour.
Anecdotal evidence suggests disruption is now low level, but the incident is a reminder that most of us also find any uncertainty or unknown hard to process. Even small inconveniences become perceived as much larger glitches than they are and can push anxiety levels higher.
The unrest in Nepal over the past few days has provided another perspective on the darker side of disruption and denial of access to digital assets.
While those protests later mutated into severe and deadly violence – more than 20 people have died since unrest began – the roots of the crisis lay in the decision to ban Facebook, X and YouTube over failure to comply with newly introduced registration rules in the country and gave life to a larger protest movement.
Before the ban was imposed, the government in Nepal said regulations had been designed to stop the spread of fake news, hate speech and cybercrime. When protests and violence followed, access to those platforms was reinstated, the prime minister resigned and the government said it would work to address the broader demands of demonstrators.
Recent history provides many adjacent examples. The 2011 uprisings in Egypt were, perhaps, the first example of protesters using social media to organise and communicate with a global audience and achieve their goals. A proposed tax on WhatsApp in Lebanon in October 2019 drew swift popular criticism and was withdrawn within hours, but protests simmered thereafter. Both cases remind us that the digital version of the town square of old remains a crowded and often transformative space.
The third recent example is an evolution of school policy mandates more locally. Public schools in the UAE have adopted a stricter line on mobile-phone use within their grounds this year, matching moves made elsewhere in the world. Changes of policy are evident in private schools, too.
The issue of phone use in schools is divisive and contested, like large tracts of the digital world itself. Those who support bans say they make students more focused during school hours, while others maintain that there are circumstances where students should be permitted to carry their phones and have access to them. We often talk about education needing to prepare students for the working world they will move into, which is one that is, for better or worse, powered by smartphones and digital communication.
The internet, once considered a disruptor, is now a run-of-the-mill utility with associated expectations
One parent told The National that our phones are an addiction: “Our children need traditional ways of writing, reading and interacting to develop … not social media”, while another said: “for many parents, being able to reach our children during the day is essential”. Few of us have neutral opinions on the matter.
A couple of years ago, I wrote in these pages about no-phones policies at entertainment venues, arguing for relaxation of rules at comedy shows and music concerts that required attendees to put their phones in pouches for the duration of the performance. The column was met with some robust disagreement on social media, underscoring the very polarised nature of this issue.
All three stories speak to our attitudes to digital disruption, denial of service in the wider sense of the words and growing global technology dependency. The internet, once considered a disruptor, is now a run-of-the-mill utility with associated expectations. Outage begets outrage.
Having captured large tracts of the attention economy, platforms are regulation resistant institutionally. Their users either coalesce in the same free-for-all area or want the exact opposite to counter their influence. The middle ground may well be more fertile.
More specifically, societies used to think about signal and noise as opposite terms. Recent events tell us that many people want both signal and noise – and they want it all the time.
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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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