Raghida Dergham is the founder and executive chairwoman of the Beirut Institute, and a columnist for The National
September 24, 2023
If one is to read between the lines at the 78th UN General Assembly, there seems to be a quiet acknowledgment of the decline of the organisation and its institutions. This, at a time when groupings outside of the UN – such as Nato and the GCC – have grown in importance on the international stage.
US President Joe Biden failed to fill the void left by the absence of the leaders of China, France and Russia, all of which are permanent members of the UN Security Council. Despite Ukrainian President Volodymyr Zelenskyy addressing the assembly in person for the first time since the full-scale conflict with Russia began, his speech was underwhelming, particularly given the inconclusive equations on the battlefield.
Notably, Arab leaders and officials turned their attention to issues such as climate change and emerging technologies. Instead of using the stage to voice their criticisms, as some leaders sometimes did in the past, most of them presented initiatives and proactive positions.
Of course, traditional issues directly concerning them inevitably found their way into meetings and conferences both inside and outside the UN.
Jordan’s King Abdullah, for example, called on the UN’s members states, and its institutions, to once again focus on the escalating flow of refugees into his country as well as Lebanon due to recent developments in Syria.
At the Middle East Global Summit, held on the sidelines of UNGA, King Abdullah addressed the issue of Syria’s displaced people from the perspective of the Jordan-Lebanon bilateral relationship. This is a useful approach for both countries, especially due to the international community’s tendency to focus on the consequences of the Syrian refugee influx on Europe.
A Syrian refugee who work at a falafel and shawarma shop in the Yasmin-Badr neighbourhood of Amman. All photos: Khaled Yacoub Oweis / The National
A Syrian food take-out shop in Yasmin Badr district of Amman
A manakeesh maker at at an oven shop in Yasmin-Badr neighbourhood in Amman
A building in the Yasmin-Badr district in Amman that housed Abu Kamal, a Syrian restaurant that closed this year
Syrian refugees make paltry wages working in small shops and restaurants in the Yasmin-Badr neighbourhood of Amman
A Syrian sweets shop (right) in the Yasmin-Badr neighbourhood of Amman
The Gulf countries’ approach to relations with other countries is based on self-confidence
King Abdullah’s candour was notable when he said that the Syrian regime had not met the demands of the so-called “step-by-step” approach to resolve the conflict as well as the continued smuggling of drugs and weapons across the border.
What this means for Syria’s gradual rehabilitation into the Arab fold is difficult to say. But amid the regime’s struggles to resolve its outstanding problems, it continues to receive support from Iran and Russia. China and Syria, meanwhile, announced a strategic partnership during Syrian President Bashar Al Assad’s visit to Beijing over the weekend.
Iran and Russia have their own priorities in Syria. Talks during Russian Defence Minister Sergei Shoigu’s trip to Tehran last week covered the conflicts in Syria and Nagorno-Karabakh, with a commonly held view to stabilise the situations in both regions.
Mr Shoigu’s visit highlighted Russia’s intention to strengthen relations with Iran as well as North Korea, both of which have hostile relations with the US. It’s worth recalling that Mr Shoigu played a key role in getting Moscow closer to Pyongyang, with his efforts culminating in a meeting between North Korean leader Kim Jong-un and Russian President Vladimir Putin last week.
The minister aimed to convey to Tehran that Moscow is an ally, and that Washington cannot be trusted. Indeed, Russia seeks to block US attempts to draw Iran away from it through gradual dealmaking. This includes the recent prisoner exchange agreement in return for releasing $6 billion in frozen Iranian assets.
Tehran is not necessarily optimistic about the prospects of US-Iran reconciliation, but it continues to bet on efforts made by key Arab powers to help lift American-led sanctions on its economy.
The Biden administration appears to be investing in the Saudi-Iranian rapprochement process, as it seeks Arab mediation between Washington and Tehran. But there is, of course, a realisation that divisions within Iran’s political system are preventing a qualitative shift in the Iranian regime’s regional doctrine and behaviour.
For its part, Riyadh is bolstering its co-operation with the Biden administration, not only within the framework of the important bilateral relations but also within geopolitical and geoeconomic dimensions.
The India-Middle East-Europe Economic Corridor project has political implications, with the US pursuing improvement in Saudi-Israel relations. As is well known, the UAE established relations with Israel through the Abraham Accords. As Dr Anwar Gargash, diplomatic adviser to the UAE President, said in New York earlier in the week, the Emirates has been at the forefront of a qualitative shift in the Arab approach to relations with Israel.
Meanwhile, at the Middle East Global Summit, Dr Gargash said that the UAE is seeking to reach a “rigorous” defence agreement with the US. This statement comes amid US-Saudi discussions to prepare a “defence pact” and Washington signing a defence and technology agreement with Bahrain earlier this month.
All this reflects a qualitative change in relations between the Gulf countries and the Biden administration, with the latter having recognised its past mistakes in dealing with the GCC member states.
The Gulf countries’ approach to relations with the US, China and Russia, as well as with key European, Asian and African countries, is based on self-confidence and the ability to shape unconventional directions and impose concessions that were not considered in the past.
It’s not just Nato that is reinventing itself. The GCC countries, too, have imposed themselves in new ways on the international stage.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
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.”
