Salama Al Ameemi is director general, Authority of Social Contribution – Ma’an, in Abu Dhabi
September 29, 2022
The unprecedented stresses and strains imposed by the Covid-19 pandemic have highlighted the importance of financial literacy in our everyday lives.
An intensified global focus on this issue means that many countries around the world are now rolling out such strategies for their populations.
According to the 2020 International Survey of Adult Financial Literacy produced by the Organisation for Economic Co-operation and Development (OECD), only 61 per cent of respondents from twenty-six countries – including twelve OECD members – across Asia, Europe and Latin America had the minimum necessary understanding of concepts and prudent principles needed to manage their finances.
The OECD’s report also found that while a little over half of the adults surveyed used a savings, investment or retirement product, as many as 28 per cent of them only had access to sufficient savings to support themselves for just one week if they lost their jobs.
In addition, Standard & Poor’s Global Finlit Survey has also warned of low global levels of financial literacy and the disproportionate effect that this has on women and young people. Furthermore, a lack of knowledge about finance and financial products prevents people from accessing banking and financial services, with resulting negative effects on national economies.
Overall, the existence of significant groups with limited financial knowledge and resilience has caused hardship across many countries over recent years.
More UAE residents are getting the chance to learn about financial literacy. Bloomberg
What is also clear is that the negative impacts of a lack of financial literacy should not only be measured in terms of economic statistics – the evidence suggests that financial insecurity is also strongly linked to high levels of stress and poor health. In this context, the OECD survey noted that 42 per cent of individuals from its countries’ sample groups worried about meeting their everyday living expenses.
As a consequence, the challenge of boosting financial literacy is one that is receiving more and more attention from many countries, including the UAE.
In its Abu Dhabi Family Wellbeing Strategy published in January this year, the Department of Community Development – Abu Dhabi outlined the results of its Quality-of-Life Survey that identified the major issues of concern for the Emirate’s citizens and residents today.
It is clear from the results that financial difficulties and worries loom large among the social challenges that Abu Dhabi faces across all sectors of its population.
These responses indicated concerns about financial planning and failing to save, difficulties in managing and repaying debt and excessive spending on luxury items encouraged by social and peer pressure.
Nevertheless, the survey found that 87 per cent of Abu Dhabi youth agreed that it was important to budget and save. They were also aware of financial problems related to poor planning, social pressure to elevate individual living standards and access to support from families.
Concerning the problems faced by seniors, the survey found that 84 per cent of such people had not started to financially plan for their retirement.
The problems faced by senior citizens indicate a lack of awareness and training to enable better retirement readiness, early retirement ages compared to comparable countries and a perception that existing pensions were inadequate.
The Quality-of-Life Survey’s results demonstrate the scale of financial management challenges for Abu Dhabi’s people.
These findings have informed the Abu Dhabi Family Wellbeing Strategy’s ambitious quest to address these challenges through a range of Strategic Priorities designed to meet six key Strategic Objectives: Improve mental wellbeing; Build financial resilience; Support family growth; Strengthen family bonds and stability; Enable an engaged and resilient community; and Improve care for Senior Citizens.
As the second strategic objective, measures to Build financial resilience will incorporate the two Strategic Priorities of instilling financially responsible behaviours and improving preparedness for retirement.
These priorities will involve building greater personal responsibility in money management through initiatives such as the Ghaya Programme, which gives participants the opportunity to take a bespoke course in financial literacy and the Ma’an Social Incubator, which encourages innovative startups to bring new financial management solutions to the market.
Reflecting the findings of international reports, it is clear that the promotion of better financial literacy is essential to both reduce anxiety for individuals in Abu Dhabi and also contribute at a national level to healthier economic performance and sounder government finances.
Our response to this challenge should be to educate people in basic financial literacy concepts through innovative communications techniques, digital tools and inclusive social programmes that meet the specific needs of our populations.
These programmes should be based on a holistic, community-driven approach through government entities, non-profit organisations, foundations and social enterprises to encourage and build financial literacy and resilience as an essential social benefit for Abu Dhabi’s people.
Small changes can make a big impact on personal finances. Bloomberg
Better financial management and planning will help enhance the overall wellbeing of families and strengthen their cohesion and prosperity within the Abu Dhabi community.
Addressing money concerns will be a key factor in empowering youth to improve their lives for the better and ensure they fulfil their potential to lead productive and rewarding lives.
And easing the transition from working life to retirement will enable Senior Citizens to continue to play positive and engaged roles in their families and communities.
In these ways, we can enhance the health and prosperity of our people and boost our overall national wellbeing over the long term.
Our task now is to drive the engagement needed for our communities to work together to secure a financially healthy future.
Salama Al Ameemi is Director General of the Authority of Social Contribution – Ma’an
Badr Organisation: Seen as the most militarily capable faction in the Hashd. Iraqi Shiite exiles opposed to Saddam Hussein set up the group in Tehran in the early 1980s as the Badr Corps under the supervision of the Iran Revolutionary Guards Corps (IRGC). The militia exalts Iran’s Supreme Leader Ali Khamenei but intermittently cooperated with the US military.
Saraya Al Salam (Peace Brigade): Comprised of former members of the officially defunct Mahdi Army, a militia that was commanded by Iraqi cleric Moqtada Al Sadr and fought US and Iraqi government and other forces between 2004 and 2008. As part of a political overhaul aimed as casting Mr Al Sadr as a more nationalist and less sectarian figure, the cleric formed Saraya Al Salam in 2014. The group’s relations with Iran has been volatile.
Kataeb Hezbollah: The group, which is fighting on behalf of the Bashar Al Assad government in Syria, traces its origins to attacks on US forces in Iraq in 2004 and adopts a tough stance against Washington, calling the United States “the enemy of humanity”.
Asaeb Ahl Al Haq: An offshoot of the Mahdi Army active in Syria. Asaeb Ahl Al Haq’s leader Qais al Khazali was a student of Mr Al Moqtada’s late father Mohammed Sadeq Al Sadr, a prominent Shiite cleric who was killed during Saddam Hussein’s rule.
Harakat Hezbollah Al Nujaba: Formed in 2013 to fight alongside Mr Al Assad’s loyalists in Syria before joining the Hashd. The group is seen as among the most ideological and sectarian-driven Hashd militias in Syria and is the major recruiter of foreign fighters to Syria.
Saraya Al Khorasani: The ICRG formed Saraya Al Khorasani in the mid-1990s and the group is seen as the most ideologically attached to Iran among Tehran’s satellites in Iraq.
(Source: The Wilson Centre, the International Centre for the Study of Radicalisation)
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
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.”
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
An arms embargo
A ban on uranium enrichment and reprocessing
A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
A targeted global asset freeze and travel ban on Iranian individuals and entities
Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
