Dr Ebtesam Al Ketbi is the president of the Emirates Policy Centre
January 18, 2024
New beginnings often inspire hope and signify the presence of upcoming milestones. In that spirit, the start of this new year inspires the UAE, even as the country maintains its established trajectory from previous years.
Recent years have witnessed a new approach to shaping Gulf security through economic and diplomacy gateways. This approach is based on the importance of de-escalation in the entire region and diplomatic – not military – tools to enhance regional stability and focus on economic development.
Events such as the ongoing Israel-Gaza war are a fundamental challenge to the approach of de-escalation and expansion of economic co-operation. However, recognising the need for a political solution between Palestinians and Israelis based on the two-state solution is unlikely to disrupt the expansion of economic co-operation. This has become evident in the response to the war in Gaza among regional actors and beyond.
There are, of course, difficulties, challenges and even a certain fragility that sometimes come with this approach, especially when conflicts, wars and divisions erupt. Such developments are always expected, especially in our region. The UAE has a realistic perspective on the enormous difficulties surrounding the Middle East – one that is opposed to regression or any halting of the wheel of development. It continues to prepare for the future while these difficulties are being resolved.
The visit by President Sheikh Mohamed to India on January 9 clearly reflects that approach. The visit came a day after Sheikh Mohamed’s meeting with US Secretary of State Antony Blinken in Abu Dhabi to discuss the fallout of the war in Gaza.
UAE Astronaut Sultan Al Neyadi delivers a presentation during the inauguration of the Gateway Lunar Space Station construction project at Qasr Al Watan, Abu Dhabi. UAE Presidential Court
2024 is poised to be a pivotal milestone in diversifying partnerships and forging global connections
On January 7, the UAE announced its participation in Nasa’s Lunar Gateway Station alongside the US, Japan, Canada and the EU. It is one of the most important international space projects of the 21st century. As part of the project, the UAE will send the first Emirati and Arab astronaut to the Moon after the station’s completion in 2030.
This is undoubtedly a unique step towards accessing valuable and accurate scientific and engineering data that will be appropriately employed to enhance the UAE’s knowledge in this field and boost its status and ability to prepare for the future. The first elements of this project are expected to be launched by 2025, while the Emirates Airlock is scheduled to be launched by 2030.
In the early days of the new year, the UAE announced a limited cabinet reshuffle in the federal government. The objective was to infuse more expertise and youthful energy into decision making, reinforcing the core pillars of prosperity, security and innovation. Recently, during the official visit of Sheikh Mohamed to Baku, the UAE signed several memorandums of co-operation with Azerbaijan. These agreements cover strategic collaboration, investments and financing, marking a significant step in bilateral relations.
Through such engagements, the UAE focuses on two strategic fronts. First, it fosters co-operation to address conflicts, crises, wars and unresolved issues to generate just and sustainable solutions. Second, it demonstrates a clear commitment to enhancing stability through prosperity, economic and participatory diplomacy, expanding opportunities and building bridges.
With the UAE concluding 10 comprehensive economic partnership agreements and negotiating with several other countries, 2024 is poised to be a pivotal milestone in diversifying partnerships and forging global connections. The President’s recent visit to India focused on critical areas, including investment co-operation in developing food parks, renewable energy and innovative health care, and establishing sustainable, green and efficient ports.
Palestinian Muhammad Al Durra with his children in the ruins of a house in Rafah where they sheltered on January 11, 2024. EPA
Family and friends at the funerals of journalists Hamza Al Dahdouh and Mustafa Thuraya on January 7, 2024 in Rafah, Gaza. Getty Images
Palestinians mourn relatives killed by Israeli bombardment of the Gaza Strip outside a mortuary in Khan Younis January 4, 2024. AP Photo
Displaced Palestinians queue to bake bread at a camp in the Muwasi area of Rafah, Gaza Strip, on December 23, 2023. AP Photo
Palestinians queue for food in Rafah, the Gaza Strip, on December 20, 2023. AP Photo
The ruins of Rafah on December 14, 2023. AFP
Palestinians wounded in the Israeli bombardment of the Gaza Strip arrive at a hospital in Khan Younis on December 8, 2023. AP Photo
Palestinians flee Israeli bombing along the Salaheddine Road in the Zeitoun district of Gaza city on November 28, 2023. AFP
A Red Cross vehicle takes Israeli hostages from the Gaza Strip into Egypt in Rafah on November 25, 2023. AP
The ruins of buildings in Gaza city on November 24, 2023, as a temporary truce between Israel and Hamas took effect. AP Photo
A woman and her cat return home to eastern Khan Younis in the southern Gaza Strip during the first hours of a four-day truce between Israel and Hamas forces on November 24, 2023. AFP
Mourning the dead of Israeli bombardment outside the mortuary at Nasser Hospital in Khan Younis on November 14, 2023. AFP
Civilians and rescuers look for survivors in the rubble of a building after Israeli bombing of Khan Younis in the southern Gaza Strip on November 12, 2023. AFP
November 7, 2023, a month to the day after Hamas attacked Israel, a victim of an Israeli bombardment in Rafah is moved from the rubble. AFP
Searching the rubble after Israeli air strikes on the town of Khan Younis, southern Gaza Strip, on October 26, 2023. AP Photo
Mourning the Kotz family at their funeral in Gan Yavne, Israel, on October 17, 2023. AP Photo
An Israeli firefighter composes himself after he and his colleagues extinguished cars set on fire by a rocket fired from the Gaza Strip in Ashkelon, Israel, on October 9, 2023. AP Photo
Palestinians with the wreckage of an Israeli tank at the Gaza Strip fence east of the city of Khan Younis on October 7, 2023, the day Hamas forces swept unopposed into Israel. AP Photo
Israeli police officers evacuate a woman and a child from a site hit by a rocket fired from the Gaza Strip, in Ashkelon, southern Israel, on October 7, 2023. AP Photo
Thani Al Zeyoudi, the Minister of State for Foreign Trade, has said the Comprehensive Economic Partnership Agreement programme is expected to boost the UAE’s exports by 33 per cent and contribute over Dh153 billion ($41.7 billion) to the national gross domestic product by 2031. The programme’s impact is already evident.
These efforts align with the UAE’s persistent call for de-escalation and a ceasefire in Gaza, coupled with pursuing a political horizon leading to a just and comprehensive solution.
The proposed solution is rooted in the two-state paradigm, emphasising the importance of avoiding procrastination and not relying solely on power balance. Simultaneously, there’s a concurrent call for regional and international efforts to mitigate conflicts and promote regional stability, encompassing countries such as Sudan, Syria, Yemen and others.
Explaining this approach, Dr Anwar Gargash, diplomatic adviser to the President, has asserted that the Israeli war on Gaza underscores the need for the UAE and other regional actors to collaborate in ensuring regional stability. “National plans, such as enhancing development and expanding the economy and trade,” he said, “must move forward. I don’t believe national plans should pause, as there will always be major regional issues that will surprise us.”
The year 2024 has undoubtedly already necessitated a UAE policy that weaves caution with perseverance, but the year is off to a promising start all the same.
Kopa Trophy (Best player under 21 – Men’s) Lamine Yamal (Barcelona / Spain)
Best Young Women’s Player Vicky López (Barcelona / Spain)
Yashin Trophy (Best Goalkeeper – Men’s) Gianluigi Donnarumma (Paris Saint-Germain and Manchester City / Italy)
Best Women’s Goalkeeper Hannah Hampton (England / Aston Villa and Chelsea)
Men’s Coach of the Year Luis Enrique (Paris Saint-Germain)
Women’s Coach of the Year Sarina Wiegman (England)
Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Etihad Airways flies from Abu Dhabi to Kuala Lumpur, from about Dh3,600. Air Asia currently flies from Kuala Lumpur to Terengganu, with Berjaya Hotels & Resorts planning to launch direct chartered flights to Redang Island in the near future. Rooms at The Taaras Beach and Spa Resort start from 680RM (Dh597).
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.”
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
What is a robo-adviser?
Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.
These portfolios are made up of exchange traded funds (ETFs) with exposure to indices such as US and global equities, fixed-income products like bonds, though exposure to real estate, commodity ETFs or gold is also possible.
Investing in ETFs allows robo-advisers to offer fees far lower than traditional investments, such as actively managed mutual funds bought through a bank or broker. Investors can buy ETFs directly via a brokerage, but with robo-advisers they benefit from investment portfolios matched to their risk tolerance as well as being user friendly.
Many robo-advisers charge what are called wrap fees, meaning there are no additional fees such as subscription or withdrawal fees, success fees or fees for rebalancing.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
