Iraqi Shiite men beat a bust of ousted president Saddam Hussein in Baghdad in 2003. Ahmad Al Rubaye / AFP
Iraqi Shiite men beat a bust of ousted president Saddam Hussein in Baghdad in 2003. Ahmad Al Rubaye / AFP
Iraqi Shiite men beat a bust of ousted president Saddam Hussein in Baghdad in 2003. Ahmad Al Rubaye / AFP
Iraqi Shiite men beat a bust of ousted president Saddam Hussein in Baghdad in 2003. Ahmad Al Rubaye / AFP

To understand today's conflicts in the Middle East, we have to look to the past


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To understand the Middle East’s current woes, we must look at the region through a historical prism. The Gulf region has been the subject of conflict since its integration into the modern world system in the 16th century. Oil was not the strategic prize then; it was the geopolitics of trade that divided nations. The Gulf was the gateway to riches in Africa and Asia, and the road to highly coveted trade, particularly in spices. The Portuguese laid anchor in the Gulf and did not leave until local resistance fighters chased them away in the 17th century.

The geopolitics of trade was again at play when the British extended their empire in the 19th century and Pax Britannica ruled. The region saw relative peace during that period; however, the British had little to show for it when they left East of the Suez in 1971 as the Trucial States became the UAE, a subject dealt with by Mohammed Al Fahim in his book From Rags to Riches: A Story of Abu Dhabi.

Oil has not always been the strategic prize; it was the geopolitics of trade that historically divided nations

The Gulf states, from Bahrain to Qatar and from the UAE to Oman, were suddenly exposed to the wilderness of the world system, one that is, according to scholars from classic schools of thought on international relations theory, anarchic, with actions primarily motivated by survival. For the first time in decades, Gulf states had to fend for themselves.

They were challenged in earnest by the shah of Iran, who imposed his claim on Bahrain and the three islands – Abu Musa and the Greater and Lesser Tunbs – belonging to the emirates of Sharjah and Ras al Khaimah. The great powers that dominated in the Gulf, the US and the UK, rebuffed the shah over Bahrain but acquiesced to the second claim. The three islands were then seized in an illegal Iranian occupation, which continues to this day, while Bahrain gained independence in 1971.

Not long after the dust had settled, another conflict hung like a miasma over the Gulf. The third Arab-Israeli war erupted in 1973. When the US decided to back Israel, Arab states imposed an oil boycott on countries that rallied to Israel’s defence, including the US.

The international oil crisis of 1973 sent prices skyrocketing. The price of oil quadrupled, leading to enormous capital transfer, which in historical terms was the greatest capital transfer since Spaniards transferred bullion from the new world. More important was the transformation of the geopolitical reality of the Gulf region. Henry Kissinger noted that what had transpired "altered irrevocably the world as it had grown up in the post-war period".

As the region's importance has grown, so have its troubles

Since then, the region’s development has been funded by oil wealth. Oil has become a strategic commodity, in light of the region not having the security guarantee of being part of an empire. As the region’s importance has grown, so have its troubles. Iran’s shah used the windfall from oil for imperial grandeur and development was reduced to little more than a facade. Deprived of oil wealth, Iranians’ political sensibilities and the shah’s hauteur led to his downfall in 1979, and the new regime vowed to export its revolution to other Muslim countries. The seed of instability have flourished ever since.

Saddam Hussein, who assumed power in Iraq a few months after the success of Iran's revolution, either panicked or seized the moment and launched an attack on Iran that plunged the region into chaos. The war lasted eight years and claimed the lives of at least one million people. Both regimes survived but the same could not be said of their countries, devastated beyond recognition.

War-weary Iraqis felt the squeeze most and the regime felt damaged by the ravages of war. Hussein saw Kuwait as his saving grace. In August 1990, he waged his second war in a decade when he invaded Kuwait, then had to face an international coalition led by the US, which evicted Iraqi forces and imposed international embargoes that crippled the country for some time. A decade later, the US-led coalition invaded and overthrew Hussein’s regime. The move restructured the geopolitical landscape of the region.

Iran did not waste time in fishing in the troubled waters of the Gulf. Since the 2003 war, it has become the greatest international player in the political and social scene of Iraq. Its influence has increased in Lebanon and it has directly involved itself in Syria's counter-revolution. Secure in its realm, it has started roaming Africa and Asia under the mantle of religion and a Shiite version of liberation theology, thus committing the sin of simony.

The Obama administration was expected to bring peace and quiet to the region, still reeling from the disastrous invasion of Iraq in 2003. Then US president Barrack Obama hit a home run with his Cairo speech in 2009. Retrospectively, however, it proved to be mere bluster. The agreement that his administration signed with Tehran, the 2015 nuclear deal, did not fly domestically. The Senate would not ratify the treaty, nor could it be sold to the region. Gulf states have long had concerns about Iran’s malign behaviour, beyond the nuclear issue. That and the fact regional actors were kept in the dark led to a frosty reception for the deal.

The perception that the US had abandoned the Middle East to pivot to East Asia and rebalance the rise of China has undermined trust in the US guaranteed the Gulf security structure of the region. It has not been a US retreat from the region so much as a relative decline. Donald Trump's election was a breath of fresh air, promising a decisive leader at last, one who would restore normality to the region and cut troublemakers down to size. Yet that has turned out to be a fantasy. Mr Trump himself is now in a difficult situation, one he cannot tweet his way out of.

These, then, are the historical roots of regional insecurity. A combination of strategic resources, ambitious leaders, historical grievances, great powers jostling, vulnerable states, financial and economic interests and arms races make for a combustible region, where peace is not guaranteed by any measure.

Albadr Alshateri is a former professor at the National Defence College in Abu Dhabi

HIV on the rise in the region

A 2019 United Nations special analysis on Aids reveals 37 per cent of new HIV infections in the Mena region are from people injecting drugs.

New HIV infections have also risen by 29 per cent in western Europe and Asia, and by 7 per cent in Latin America, but declined elsewhere.

Egypt has shown the highest increase in recorded cases of HIV since 2010, up by 196 per cent.

Access to HIV testing, treatment and care in the region is well below the global average.  

Few statistics have been published on the number of cases in the UAE, although a UNAIDS report said 1.5 per cent of the prison population has the virus.

About Seez

Company name/date started: Seez, set up in September 2015 and the app was released in August 2017  

Founder/CEO name(s): Tarek Kabrit, co-founder and chief executive, and Andrew Kabrit, co-founder and chief operating officer

Based in: Dubai, with operations also in Kuwait, Saudi Arabia and Lebanon 

Sector:  Search engine for car buying, selling and leasing

Size: (employees/revenue): 11; undisclosed

Stage of funding: $1.8 million in seed funding; followed by another $1.5m bridge round - in the process of closing Series A 

Investors: Wamda Capital, B&Y and Phoenician Funds 

A Prayer Before Dawn

Director: Jean-Stephane Sauvaire

Starring: Joe Cole, Somluck Kamsing, Panya Yimmumphai

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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 

Rating: 1/5

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Sri Lanka Tharanga (c), Mathews, Dickwella (wk), Gunathilaka, Mendis, Kapugedera, Siriwardana, Pushpakumara, Dananjaya, Sandakan, Perera, Hasaranga, Malinga, Chameera, Fernando.

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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.”