Why ties with Italy matter so much to the UAE

Last week I visited Rome and Milan on a working visit.

This visit sits within a broader mandate I carry as a Special Envoy for Business and Philanthropy: to open practical avenues of business-to-business co-operation across a wide set of strategic partners in Europe, Asia and the Americas.

Italy was one of these stops, selected for its complementary strengths and the momentum created earlier this year, with President Sheikh Mohamed’s state visit to Italy underscored an intent to translate goodwill into delivery, including a $40 billion investment commitment across key sectors.

Over several days we held a few dozen focused engagements across advanced industry, finance, digital infrastructure and AI, technical training initiatives, and health and life sciences.

We also convened a roundtable of leading Italian foundations and corporate philanthropies to shape a pilot initiative around youth and skills development.

In parallel, cultural and educational links were on the agenda, from joint exhibitions and residencies to university exchanges that build bridges between our creative and academic communities.

The outcomes of such international engagements must translate into opportunities created for our entrepreneurs and SMEs, our students and researchers, our cultural institutions and philanthropies and the communities they serve. They also directly support the UAE’s national agenda of economic diversification, innovation and global partnership.

The UAE economy has diversified decisively: non-oil sectors now account for three-quarters of national output, driven by logistics, finance, technology, tourism, advanced manufacturing, life sciences and the creative industries.

The country has invested at scale in artificial intelligence and advanced digital infrastructure – from research institutions and talent pipelines to the computing capacity that modern enterprise requires.

Italian industrial depth and engineering excellence pair naturally with the UAE’s platforms for rapid adoption and regional scale. When those strengths are combined well, promising ideas move faster from pilot to platform, and value flows in both directions.

Italian industrial depth and engineering excellence pair naturally with the UAE’s platforms for rapid adoption and regional scale

Equally important is the how. We approached the week with a clear standard: useful conversations that lead to appointed focal points, simple workplans, and near-term milestones. Some engagements set the stage for new co-operation; others progressed existing tracks.

In philanthropy, for example, partners agreed to scope measurable programmes that can be designed in 90 days and executed with transparent governance.

In technology and energy, corporates compared roadmaps and identified specific areas where the UAE’s scale and Italy’s capabilities meet – whether that is grid modernisation and storage, clean power integration, AI enabled industry or health innovation.

These outcomes now extend to the UAE’s private sector, civil society and knowledge institutions, inviting local participation in what we co-create abroad.

The UAE’s small and medium enterprises and middle-capital companies can plug into new supply chains and co-innovation opportunities. Universities and research centres in the Emirates can partner on translational projects.

The arts and cultural platforms can deepen people-to-people ties that make commercial partnerships more resilient. And the philanthropic community, with its strong record in humanitarian action and development, can partner in outcomes that uplift the most vulnerable.

With all international partners we engage, the UAE’s role is to be a reliable, constructive counterpart: moving quickly, communicating clearly and staying the course. As an Arab proverb reminds us, “Trust in God, but tie your camel.” Ambition matters; so do discipline and follow through.

Our country’s economic story has been one of diversification, openness and partnership. As we continue to match the UAE’s dynamism and platforms with complementary strengths abroad, we will create new opportunities for our people and deliver broader social value.

That is why countries such as Italy matter to readers at home in the UAE, and why you will see this work continue across a broad slate of partner countries in the months ahead.

Four reasons global stock markets are falling right now

There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:

1. Rising US interest rates

The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.

Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”

At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.

2. Stronger dollar

High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.”

3. Global trade war

Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”

4. Eurozone uncertainty

Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.

Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”

The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”