Shelina Janmohamed is an author and a culture columnist for The National
July 08, 2022
It’s been quite the week in politics in the UK. After a seemingly unending series of scandals from No 10, Downing Street, a flurry of resignations has been making headlines, not least of all the Prime Minister's.
One of those who stepped down was MP Laura Trott saying, "trust in politics is – and must always be – of the upmost importance, but sadly in recent months this has been lost."
Trust is very much the buzzword. And in recent days, it has been plastered in headlines and punctuated discussions. A loss of trust in government seemed to be the last straw this week in Britain.
The Chinese philosopher Confucius told his disciple Tsze-kung that three things are needed for government: weapons, food and trust. If a ruler can't hold on to all three, he should give up the weapons first and the food next. Trust should be guarded to the end: "without trust we cannot stand.”
But this is about more than just the current scandals in government in Britain or domestic politics. Trust is seemingly nosediving.
Poll after poll makes for depressing and disheartening reading. In the West, people are suffering a crisis of trust in institutions. Think of protests in the US to "‘defund the police", because black people understandably feel their trust has been undermined. The mistrust is potent and appears rampant. Whether it is in the police, big public organisations, leaders, Supreme Court judges – notably in America, to a lesser or greater degree, in more than one country, trust seems to be broken.
Most often people have little choice but to simply get on with life
But is this crisis in trust new? Haven’t we seen it before?
An internet search of "crisis of trust" throws up headlines from varying eras and contexts. Human society, it seems, has on one too many occasions experienced similar crises. But even as we profess broken trust, by and large, the majority of us carry on with daily life. Do we have a choice?
This is the great paradox of asking ordinary people how much we trust institutions of society: there is a notable difference in how much we think we trust versus how much we are required to exercise trust. After all, to conduct daily life we constantly, and by default, trust people – in assuming that others will do as they say, that services we purchase will be delivered, that food we buy will not be poisonous, that employers will pay our wages, that the government will continue to keep the country’s wheels turning, that businesses will continue powering the economy, etc.
But take the example in the west of low trust in the media. The Digital News Report 2022 by the Reuters Institute for the Study of Journalism found that just 34 per cent say they trust UK news. There is an irony of newspapers being trusted to report the lack of trust. So we may say we don’t trust, but we continue with our lives in ways that do. Because otherwise it requires us to make alternative choices. But to even have the choice to trust or not and to exercise that choice, or to find an alternative, is a privilege.
Globally, people assert certain standards and beliefs about the kinds of behaviours that are expected of politicians, businesses and public institutions. People have the right to have those expectations met – of communication, accountability, integrity and transparency.
In the UK, what feels most poignant and heartbreaking in discussions about trust is magnified by the current cost-of-living crisis. If for hours and days your attention and energy are all occupied with putting food on the table and keeping a roof over your head, then it's not easy to prioritise whether or not to trust politicians, businesses and other public institutions. Conversely, the matter of whether on a day-to-day basis, considering everything else that people have to think about, they actively decide to withdraw trust and direct it elsewhere are moot points. Most often people have little choice but to simply get on with one's job and get on with life.
Which is why resignations and declarations on the grounds that trust has been lost, despite a collective feeling that it was lost long ago, seem so dispiriting.
As the 20th century British novelist E M Forster writes in Howards End: “To trust people is a luxury in which only the wealthy can indulge; the poor cannot afford it.”
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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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Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
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Checks continue
A High Court judge issued an interim order on Friday suspending a decision by Agriculture Minister Edwin Poots to direct a stop to Brexit agri-food checks at Northern Ireland ports.
Mr Justice Colton said he was making the temporary direction until a judicial review of the minister's unilateral action this week to order a halt to port checks that are required under the Northern Ireland Protocol.
Civil servants have yet to implement the instruction, pending legal clarity on their obligations, and checks are continuing.