The diplomatic crisis between Qatar, on one side, and Saudi Arabia, the UAE, Bahrain and Egypt, on the other, will not sound the death knell for the Gulf Co-operation Council. To think of the GCC as a thing of the past would be an emotional and short-sighted reaction with irremediable consequences for the region.
Instead, the Qatar crisis represents a test of resilience for the organisation, and could, in the long term, give the GCC an opportunity to reinvent itself and better adapt to the challenges of our time.
As the Qatari crisis continues, rumours persist that the GCC union could break apart. Given the magnitude of the crisis, many observers believe the GCC has reached a point of no return. The wounds appear too deep to overcome the level of distrust, and time might not be enough to erase the negativity of the unprecedented media campaigns raging between the two fronts. This could lead GCC countries to reconsider current and future integration projects, such as the regional electricity and gas grid, the intra-GCC railway project, the introduction of a common value-added tax, or even prospects for a unified military command and naval force.
The GCC has been here before. Since its creation in May 1981, every time the GCC faced political crisis, the threat of disintegration emerged. In March 2014, Saudi Arabia, the UAE and Bahrain recalled their ambassadors to Qatar, accusing Doha of threatening the principle of Gulf unity for the benefit of Iran. But the Riyadh agreement, signed the same year, saved the GCC from breakup at the time. Today, the crisis is much deeper and far wider, but similar threats loom large in the horizon. While such a breakup might seem like the only remaining option, it is certainly not the most strategic one.
The dismantling of the GCC would create a bevy of problems. It would spur political and economic uncertainty in an already vulnerable region. Moreover, without an intergovernmental regional organisation to represent them on the international scene, Gulf countries would find themselves unable to contain the influence of Iran, India and even China, which would seek to fill the power vacuum. There is simply too much to lose in letting the GCC disintegrate.
This is why Gulf countries should embrace this crisis as an opportunity for reinvention. More than a crisis, the current impasse could spark a new beginning and demonstrate the group’s resilience. The GCC has been in need of reform for decades, and should jump at the opportunity to rethink its mission. The bloc was created in a different time, when Iran was expected to expand beyond its borders, when the US was militarily engaged in the region against a resurgent former Soviet Union, and when traditional and conventional war was still the norm.
Today, the GCC must rewrite its mission statement and find a new raison d’être, focusing on the main challenges of our times, such as climate change and the need for economic diversification. The GCC should prioritise human capital and implement a regional intergovernmental strategy to invest heavily in education and R&D, while proceeding carefully with institutional reforms to favour innovation. By putting aside political rivalries and focusing on win-win objectives, the GCC has everything to gain from its transformation.
There is a lesson to be learnt from the Association of South-East Asian Nations, or Asean, which was created in 1967 during the Cold War. The organisation underwent a significant shift in its modus operandi after the collapse of communism around the world. In order to remain an influential actor in the global economic arena, Asean filled the resultant political vacuum, realigned its mission to better cope with its new reality, and focused on the economic development of its five founding members (Indonesia, Malaysia, the Philippines, Singapore and Thailand). Asean managed to weather the storm to become a major global hub for manufacturing and trade, and one of the fastest-growing consumer markets in the world.
It is now up to the GCC to walk a similar path and show the international community both its strength and resilience.
Mylene Tisserant is a senior analyst at The Delma Institute, a risk advisory firm located in Abu Dhabi.
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Company%20Profile
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SPECS
Engine: Two-litre four-cylinder turbo
Power: 235hp
Torque: 350Nm
Transmission: Nine-speed automatic
Price: From Dh167,500 ($45,000)
On sale: Now
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.”
Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
Leap of Faith
Michael J Mazarr
Public Affairs
Dh67
AL%20BOOM
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Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
COMPANY%20PROFILE
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
MATCH INFO
Juventus 1 (Dybala 45')
Lazio 3 (Alberto 16', Lulic 73', Cataldi 90 4')
Red card: Rodrigo Bentancur (Juventus)
STAR%20WARS%20JEDI%3A%20SURVIVOR
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The Little Things
Directed by: John Lee Hancock
Starring: Denzel Washington, Rami Malek, Jared Leto
Four stars
Company Profile
Company name: OneOrder
Started: October 2021
Founders: Tamer Amer and Karim Maurice
Based: Cairo, Egypt
Industry: technology, logistics
Investors: A15 and self-funded
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
EA Sports FC 25
Developer: EA Vancouver, EA Romania
Publisher: EA Sports
Consoles: Nintendo Switch, PlayStation 4&5, Xbox One and Xbox Series X/S
Rating: 3.5/5