The Middle East is critical to global security

I refer to your editorial US engagement in the Middle East is critical to global security (January 13): even though the US remains a vital power in the region, there has been a change in its approach in recent times.

The US government’s decision to withdraw its troops from conflict-hit Syria is a good example of this change in tactic.

However, history reveals that the US has had a serious role in almost every single recent episode in the Middle East. Its close alliance with many countries has increased its involvement.

For the US, it is always a challenge to keep its allies in the region gratified in every aspect. However, Donald Trump’s approach, as president of the US, seems to indicate a lack of adequate knowledge on Middle Eastern affairs.

The enduring US commitment to the region is a strategic benefit to many, especially the GCC countries and this must be a strong emphasis of discussions at every official and unofficial gathering of representatives from the US with its counterparts in the region.

When it comes to global security, no one can overlook the importance of the Middle East.

Ramachandran Nair, Muscat

Your editorial was an interesting read. US Secretary of State Mike Pompeo's visit to the UAE's capital could mark a turning point in the region's security.

The US and UAE have enjoyed a good relationship over the years, thanks to their bilateral trade, and his visit will carry great significance.

K Ragavan, Bengaluru

Don’t be a litterbug – pick up your rubbish

With regards your story Why plogging is the social media fitness craze that needs to catch on in the UAE (January 3), it turns out I was cool without even knowing it.

I even pick up rubbish when I am out at sea paddleboarding. I agree that people need to be taught how to dispose of rubbish properly.

Pam Durant, Dubai

I was doing it without even knowing it was an exercise. I pick up litter for the sake of our public spaces and beaches in Dubai.

Marisa Zanella, Dubai

Littering is an epidemic in this country. There is an assumption from some people that there will be someone who will pick up after you.

Massive fines for littering, enforced by the police, would help. Education and a change of mindset are the only way to change bad habits.

Neil Squibs, Abu Dhabi

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.”

The Middle East is critical to global security

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