The challenges that face the Middle East, Europe and the wider world are too complex to be tackled by any one nation alone. Courtesy: European Union
The challenges that face the Middle East, Europe and the wider world are too complex to be tackled by any one nation alone. Courtesy: European Union
The challenges that face the Middle East, Europe and the wider world are too complex to be tackled by any one nation alone. Courtesy: European Union
The challenges that face the Middle East, Europe and the wider world are too complex to be tackled by any one nation alone. Courtesy: European Union


The GCC and EU were born amid conflict. Now they can help end it


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October 17, 2024

Yesterday’s summit between the European Union and the Gulf Co-operation Council in Brussels was a milestone moment during which leaders from the 27 EU and six GCC countries came together for the first time. But this historic meeting took place amid a backdrop of international turmoil that both regional organisations are sadly familiar with.

Established in Riyadh on February 4, 1981, the GCC was born into a volatile Middle East. The Iran-Iraq War started less than six months earlier. Eight months later, Egyptian president Anwar Sadat would be assassinated and in the following year Israeli forces invaded southern Lebanon. It is little surprise then that the 2024 iteration of conflict in the Levant dominated the EU-GCC summit’s agenda.

In the EU, the GCC has a valuable partner that understands the need to pursue regional peace, making such meetings particularly valuable. Like the GCC, the EU also came about in a time of conflict. As the November 1993 Maastricht Treaty replaced the European Economic Community with the new European Union, the disintegration of Yugoslavia had already led to the continent’s worst armed conflict since the end of the Second World War. That devastating war in the Balkans has been replaced by the instability unleashed by the war in Ukraine.

President Sheikh Mohamed meets Charles Michel, President of the European Council in Abu Dhabi on August 30. The GCC and the EU agree that a two-state solution to the Palestine-Israel conflict is essential, and several European states have recognised Palestinian statehood. Ryan Carter / UAE Presidential Court
President Sheikh Mohamed meets Charles Michel, President of the European Council in Abu Dhabi on August 30. The GCC and the EU agree that a two-state solution to the Palestine-Israel conflict is essential, and several European states have recognised Palestinian statehood. Ryan Carter / UAE Presidential Court

Both sides meeting in Brussels therefore understand the pressing need for diplomatic solutions to violent conflict while maintaining security. A draft version of a final communique circulating in Brussels yesterday reflected this, stating that the blocs would “actively explore and seek enhanced co-operation on security through the definition and implementation of joint priorities and co-operation initiatives on security”. Another joint meeting could take place in Riyadh next January.

The organisations’ continued diplomatic partnership is vital, particularly at a time when the US is largely focusing on its coming election. It is a partnership that goes back years – a co-operation agreement signed in 1989 established the EU-GCC Joint Council that provides a forum for dialogue on energy, climate change and economic ties, among other issues. The GCC and the EU are also unequivocal in their agreement that a two-state solution to the Palestine-Israel conflict is essential, and many European states have recognised Palestinian statehood.

The EU is the GCC countries’ second-largest trade partner, generating €170 billion ($185 billion) in trade last year

But solid economic, energy and trade relations buttress this political consensus. The EU is the GCC countries’ second-largest trade partner, generating €170 billion ($185 billion) in trade last year. In 2023, imports of mineral fuels accounted for more than 75 per cent of EU imports from GCC countries. Hundreds of thousands of Europeans live and work in the Gulf, and in May an EU decision to harmonise Schengen visa rules for GCC citizens seems likely to encourage more Gulf students, entrepreneurs and tourists to visit the continent.

The challenges that face the Middle East, Europe and the wider world are too immense and complex to be tackled by any one nation acting alone. Taken together, the GCC and EU represent 33 nations; the collective political, diplomatic and economic influence they can exert by working together is considerable. Yesterday was a good step forward on the road towards a level of co-operation that can not only weather the storm of current events but can calm them too.

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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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The President's Cake

Director: Hasan Hadi

Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem 

Rating: 4/5

What can victims do?

Always use only regulated platforms

Stop all transactions and communication on suspicion

Save all evidence (screenshots, chat logs, transaction IDs)

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Warn others to prevent further harm

Courtesy: Crystal Intelligence

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COMPANY PROFILE

Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed 

War 2

Director: Ayan Mukerji

Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana

Rating: 2/5

The Bio

Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”

Holiday destination: “I like Paris very much, it’s a city very close to my heart.”

Book: “Das Kapital, by Karl Marx. I am not a communist, but there are a lot of lessons for the capitalist system, if you let it get out of control, and humanity.”

Musician: “I like very much Fairuz, the Lebanese singer, and the other is Umm Kulthum. Fairuz is for listening to in the morning, Umm Kulthum for the night.”

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Updated: October 17, 2024, 3:50 AM