Russian soldiers distributing food in Syria. AP
Russian soldiers distributing food in Syria. AP
Russian soldiers distributing food in Syria. AP
Russian soldiers distributing food in Syria. AP


The Ukraine-Russia conflict could starve the Middle East


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March 02, 2022

Of the many devastating knock-on effects of the war in Ukraine – in addition to the humanitarian crisis – chaos in global food markets is one that should particularly concern the Middle East. Instability in Ukraine can have a severe impact on the food supply chains of neighbouring regions. It is the fifth largest exporter of wheat, often described as the "breadbasket of Europe".

When Russia – the world's biggest exporter of wheat – is also thrown into turmoil, the situation gets even worse. Together, the two countries make up roughly a quarter of global exports. It is little surprise that wheat prices broke records on Thursday, when the invasion began.

With some of the world's largest government-subsidised food programmes, worst environmental crises and most food-stressed populations, many areas of the Middle East enter this uncertain period under-prepared. Having endured one of the hottest summers on record and plagued by water mismanagement, Iraq and Iran's ongoing struggle with desertification is deteriorating; the conflict in Yemen has pushed more than 5 million people to the brink of famine; corruption in Lebanon threatens its ability to export agricultural produce; eighty per cent of Egypt's wheat imports come from Russia and Ukraine.

There is much about the crisis that the region cannot control, particularly climate change, an issue that the whole world has to address. But there is vast potential for the situation to improve. Less than 5 per cent of the GCC's land is arable, but the region is still a centre for making strides in agri-tech. Last year, the UAE launched Food Tech Valley, a project that aims to develop and use modern techniques to both increase the country's food production and make agricultural technology a larger part of its economy. The value of the sector is expected to rise to $22 billion over the next three years.

While there is a concerted plan in most of the Gulf to tackle food security, so should there be for the wider Mena region. Tech can play an important part, as it does in the GCC, but simpler solutions should form the basis. Governments can support farmers by helping them to market their produce to foreign buyers, provide economic protection in tough harvests and work with industry and international organisations to educate farmers where necessary on water management and the transition from subsistence and resource-intensive methods to more sustainable forms.

Simple approaches will work for one key reason: nature has already gifted much of the region with excellent conditions. Farming, perhaps the most consequential invention in human history, began in the Middle East, specifically the area known as the Fertile Crescent, spanning eastern Egypt to southwestern Iran. Roughly 12,000 years later, today's crisis in the region's food supply should serve as a critical warning. From history to modernity, there are plenty of reasons why stressed areas of the Middle East should take longer-term approach to food security.

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Timeline

2012-2015

The company offers payments/bribes to win key contracts in the Middle East

May 2017

The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts

September 2021

Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act

October 2021

Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence 

December 2024

Petrofac enters into comprehensive restructuring to strengthen the financial position of the group

May 2025

The High Court of England and Wales approves the company’s restructuring plan

July 2025

The Court of Appeal issues a judgment challenging parts of the restructuring plan

August 2025

Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision

October 2025

Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange

November 2025

180 Petrofac employees laid off in the UAE

Ms Yang's top tips for parents new to the UAE
  1. Join parent networks
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  3. Keep an open mind
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UAE currency: the story behind the money in your pockets
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What drives subscription retailing?

Once the domain of newspaper home deliveries, subscription model retailing has combined with e-commerce to permeate myriad products and services.

The concept has grown tremendously around the world and is forecast to thrive further, according to UnivDatos Market Insights’ report on recent and predicted trends in the sector.

The global subscription e-commerce market was valued at $13.2 billion (Dh48.5bn) in 2018. It is forecast to touch $478.2bn in 2025, and include the entertainment, fitness, food, cosmetics, baby care and fashion sectors.

The report says subscription-based services currently constitute “a small trend within e-commerce”. The US hosts almost 70 per cent of recurring plan firms, including leaders Dollar Shave Club, Hello Fresh and Netflix. Walmart and Sephora are among longer established retailers entering the space.

UnivDatos cites younger and affluent urbanites as prime subscription targets, with women currently the largest share of end-users.

That’s expected to remain unchanged until 2025, when women will represent a $246.6bn market share, owing to increasing numbers of start-ups targeting women.

Personal care and beauty occupy the largest chunk of the worldwide subscription e-commerce market, with changing lifestyles, work schedules, customisation and convenience among the chief future drivers.

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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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Karwaan

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Director: Akarsh Khurana

Starring: Irrfan Khan, Dulquer Salmaan, Mithila Palkar

Rating: 4/5

Updated: March 02, 2022, 10:01 AM