Egyptian president Abdel Fattah El Sisi. Simela Pantzartzi / EPA
Egyptian president Abdel Fattah El Sisi. Simela Pantzartzi / EPA

Downing Street continues to turn its back on Cairo



Why is it that the current British government finds it so difficult to maintain a constructive relationship with Egypt?

The question seems particularly pertinent in the week that Egyptian president Abdel Fattah El Sisi, during a visit to Abu Dhabi, reiterated his personal commitment to maintaining close ties with the United Arab Emirates. In stark contrast, the future of Egypt's relationship with Britain, a country once considered a reliable ally, today appears far more problematic.

There have been many challenging moments during the long, and sometimes undistinguished, history of Britain's centuries-old relationship with the country, not least during the 1956 Suez Crisis, when London participated in the disastrous military operation to seize control of the Suez Canal and remove the then Egyptian president Gamal Abdel Nasser.

No one is comparing the current diplomatic tensions between London and Cairo with those tumultuous events. But the more recent history of Britain’s engagement with Egypt and the surrounding region can hardly be said to have covered Britain’s policy-making establishment in glory.

To my mind, the tensions date back to the time when then British prime minister David Cameron called for the removal of Egyptian president Hosni Mubarak in 2011 who, until anti-government protests began in Tahrir Square as part of the so-called Arab Spring, had been a staunch and loyal ally of Britain for decades.

Mr Mubarak committed Egyptian troops to fight alongside their British counterparts during the US-led military campaign in 1991 to liberate Kuwait from Saddam Hussein and, after the September 11 attacks, played an equally vital role in seeking to tackle Islamist terror groups such as Al Qaeda.

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But that did not stop Mr Cameron and his Conservative colleagues from adding their voices to the clamour led by US president Barack Obama for Mr Mubarak to stand aside, while giving little if any consideration of the likely consequences for Egypt if the president agreed to stand down.

The result was that Egypt soon found itself subjugated to the tyrannical rule of the Muslim Brotherhood, whose government immediately set about harassing its subjects while at the same time reducing the Egyptian economy to a state of abject penury.

As if this were not bad enough, within weeks of securing Mr Mubarak's removal, Mr Cameron then launched a military campaign to remove Libya's Muammar Qaddafi from power, again without having the faintest clue as to what system of governance might replace the Qaddafi clan.

I feel it is important to revisit Britain’s role in these recent turbulent events because they seem to have a direct bearing on the current, rather fractious, state of relations between London and Cairo.

Visiting the Egyptian capital this week, I have been struck by the number of senior officials who, to put it mildly, have expressed exasperation at what they regard as Britain’s lack of concern regarding the difficulties they face.

By far the biggest challenge facing the Egyptian government today is the economic crisis, which has resulted in a 40 per cent rise in the cost of basic foodstuffs, while a staggering 35 per cent of the population are estimated to be on the breadline earning between $2 to $3 per day.

A few years ago such economic challenges would have been sufficient to get the crowds back on the streets demanding radical reform, but it is a testimony to the Muslim Brotherhood’s dire rule that no one in Egypt wants to see a return to the bad old days of public insurrection.

Instead they want the government to embark on a period of economic growth that will generate prosperity, thereby lifting millions out of poverty.

And yet, at a time when economic growth is central to the Sisi government's attempts to stabilise the country after the Brotherhood-inspired tumult of recent years, how does the British government respond? By continuing to maintain its ban on all flights to Sharm El Sheikh - the only European country apart from Russia to do so - on the spurious grounds the popular resort still poses a security threat to British holidaymakers.

Consequently thousands of Egyptian workers have lost their jobs, scores of hotels have been forced to close and the Egyptian economy has lost around $12 billion in badly needed income.

The curiosity concerning the British government's refusal to lift the ban, which was imposed two years ago after a terror attack destroyed a Russian charter jet over Sinai shortly after take-off from Sharm El Sheikh, with the loss of 224 lives, is that the Egyptian authorities have undertaken a complete overhaul of the resort's security arrangements, to the extent that British officials have declared the airport as one of the safest in the region. Despite this, as well as a recommendation from British foreign secretary Boris Johnson that the ban be lifted, Downing Street still refuses to remove the restrictions on the grounds it is still not reassured by the security arrangements.

Nor is this the only area where British policy undermines its relationship with Cairo. London's disinclination to act against the Muslim Brotherhood's operations in the UK is another source of frustration in Cairo, as is Britain's ambivalent attitude towards Qatar, the Brotherhood's main sponsor.

In short, while Britain continues to insist that Egypt is an important regional ally, the government’s policies suggest otherwise, leaving many Egyptians to ponder that Britain is not serious about having a strong and constructive relationship with Cairo.

Con Coughlin is the Telegraph’s defence and foreign affairs editor

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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.”

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