Raghida Dergham is the founder and executive chairwoman of the Beirut Institute, and a columnist for The National
December 11, 2022
The Arab Gulf region is in the midst of a constructive reboot, with its visionary leaders daring to dream, plan, reform and establish partnerships aimed at the well-being of its peoples.
In the past two weeks, poignant images showing accord have aroused feelings of pride and joy, with Doha hosting a successful football World Cup and welcoming the region’s leaders determined to make the necessary moves forward.
Another impressive development is Saudi Arabia recording a budget surplus for 2023 to the tune of $4.2 billion, and the announcement by Crown Prince Mohammed bin Salman of a historic drop in unemployment in the kingdom. This is the fruit of several reforms, including increasing women’s participation in the economy from 17.7 to 35.5 per cent.
Over the weekend, Riyadh hosted two summits for the first time – a Gulf-Chinese meeting and an Arab-Chinese conference – which reflected the kingdom’s adoption of a doctrine based on partnership as a pathway to successful leadership.
The Riyadh summits, attended by Chinese President Xi Jinping, fired the starting gun for the future.
They secured the export of oil to China and the import of technology from it, established partnerships in mega projects linking China to the Gulf and to the wider Arab region. For its part, China’s leadership seeks sustainable energy supplies. It expects Moscow’s international problems to deepen, and doesn't want to depend entirely on possibly unreliable supplies from it in the future.
Since China’s ruling party conference renewed its commitment to the Belt and Road Initiative, Beijing also seeks to build robust relations with countries in the Middle East. Indeed, a new page in economic relations won't be limited to the energy sphere. It will also include development projects from infrastructure to tourism. In technology, co-operation will extend beyond the civilian to possibly the military sphere, at a time when the West seems unwilling to share certain technologies with the Arab states.
Mombasa Port in Kenya. China's Belt and Road Initiative aims to revive and extend trading routes connecting it with Central Asia, the Middle East, Africa and Europe. Bloomberg
China wants to act as a bridge between Saudi Arabia and Iran
Beijing is certain that current circumstances favour its desire to increase its influence in the Middle East, given Russia’s de facto exit from the region and the US's arguably lost initiative.
There is, of course, no evidence to suggest that China views the Middle East as an arena of competition with the US, but the reverse is true – although it's important to remember that Washington doesn't oppose the development of Gulf-China relations as long as they remain economic in nature. In turn, Beijing isn't seeking to replace the US as the Gulf's pre-eminent security partner. In fact, beyond the stand-off over Taiwan, China doesn't see itself in that kind of conflict with the US.
Therefore, the only issue that has a security dimension in the Gulf region is Iran.
Beijing wants to act as a bridge between Saudi Arabia and Iran and help defuse their tensions, believing it can play a successful role in ending the Yemen conflict. Tehran might resist these efforts, but Beijing’s leverage over it is substantial, thanks to their strategic pact. Beijing, moreover, imports huge quantities of Iranian oil, giving Tehran a lifeline that has helped it to avert economic collapse due to crippling US-led sanctions.
Arab states can benefit from their relations with China to rein in Tehran. This would be a major shift, bearing in mind that Iran had previously sought to build an alliance with Russia and China. This troika’s Iranian and Russian components have unravelled, and so its nature has radically changed due to the leap in Arab-China relations.
Today, Beijing doesn't seek to link its fate to that of Russia, particularly if the latter were to be defeated or further weakened by the Ukraine war. Indeed, the international community has begun preparing for a bipolar world led by the US and China. This requires the two powers to think carefully about the meaning of global security and stability in this new world order. And energy stability in the Gulf is a crucial part of Chinese thinking, underscoring the importance of Mr Xi's Saudi visit.
Riyadh is aware of this. While it’s keen to stabilise the energy markets, bearing in mind that China is the biggest importer of Saudi oil, it also seeks technology imports without restrictions and knowledge transfer and partnerships to jump-start a renaissance in the kingdom. Saudi Arabia is evolving every day, through innovation, projects, investments, and the development of its coastal areas, cities and tourism.
A US Navy photo shows the IRGC ship Shahid Bazair, left, towing a US Navy Saildrone Explorer in the Arabian Gulf in August. AP Photo
The accord emerging among the six GCC countries indicates that they are building a strong base from which to relaunch their joint agenda. The optics of Prince Mohammed standing alongside Qatar’s Emir, Sheikh Tamim Al Thani, during the opening ceremony of the World Cup were positive, reinforced by images of Sheikh Tamim celebrating Saudi Arabia's victory against Argentina by hanging the kingdom’s flag around his neck.
Likewise, President Sheikh Mohamed’s visit to Doha was pivotal, opening a new page and indicating a return to accord. These two countries can be proud of their rapid development, from national infrastructure to space exploration.
The UAE is pursuing a pioneering space mission – the latest achievement being Sunday’s launch of the Rashid Rover to the Moon – as it seeks to fulfil its dreams through its men and women, incessantly probing the features of the future. For its part, Qatar has shown the world its technological and organisational prowess during the World Cup.
The patriotic display by the Arab teams at the tournament has also been a sight to behold, allowing sports diplomacy to enable reconciliation.
Kuwait is playing a global role in support of humanitarian work. Oman, meanwhile, has become a key back channel for international diplomacy, working to reconcile opposite sides, overcome obstacles, and resolve regional crises. For its part, Bahrain has charted out an impressive path towards religious co-existence, recently hosting Pope Francis.
Further, the joint Saudi-Emirati mediation that led to last week’s US-Russia prisoner swap affirms the distinguished international role of the two states and its two leaders.
The mutual strategic trust that Mr Xi spoke about in Riyadh is a positive vision that shouldn't worry Washington, as long as there is seriousness, continuity and coherence in US-Gulf strategic relations. Upholding this trust will be key for the various entities to sustain the important progress made in recent weeks.
Tax authority targets shisha levy evasion
The Federal Tax Authority will track shisha imports with electronic markers to protect customers and ensure levies have been paid.
Khalid Ali Al Bustani, director of the tax authority, on Sunday said the move is to "prevent tax evasion and support the authority’s tax collection efforts".
The scheme’s first phase, which came into effect on 1st January, 2019, covers all types of imported and domestically produced and distributed cigarettes. As of May 1, importing any type of cigarettes without the digital marks will be prohibited.
He said the latest phase will see imported and locally produced shisha tobacco tracked by the final quarter of this year.
"The FTA also maintains ongoing communication with concerned companies, to help them adapt their systems to meet our requirements and coordinate between all parties involved," he said.
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools
- average salary across curriculums and skill levels is about Dh10,000, recruiters say
- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance
- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs
- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills
- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month
- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues
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.”
