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Emirates' Dh163bn gift to the world since 1971


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ABU DHABI // The UAE is estimated to have given at least Dh163 billion towards foreign aid since the country was founded in 1971. The provisional figure, covering a period of almost four decades, was announced yesterday by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai.

During the launch of the 2009 UAE Foreign Aid Report, Sheikh Mohammed underscored the UAE's long history as a donor, which has given support to countries including Lebanon, Afghanistan and Somalia. Last May, the Office of the Co-ordination of Foreign Aid (OCFA) announced plans to calculate the total amount of foreign aid provided by the UAE since 1971 and to track where the funds have been directed.

Hazza al Qahtani, the director general of the OCFA, said yesterday that he expected the multibillion-dirham figure announced by Sheikh Mohammed to increase, given that the agency was still waiting for data from various donor groups and organisations. The ultimate aim of the project, he said, was to help "streamline" the local humanitarian sector, particularly for future planning, to ensure efficient use of funds and greater transparency, in addition to highlighting the UAE's role as an international donor.

"The project as a whole will raise the profile of the UAE as an international donor, which has not been recognised properly for years," Mr al Qahtani said. OCFA officials had indicated that the report detailing the UAE's role in international aid efforts since 1971 would be released at the end of last year. Yesterday, Mr al Qahtani said the total was now expected to be released in 2011. In April, the OCFA confirmed that the UAE has poured more than Dh32bn into foreign aid between 2000 and 2008 - the first major piece of data to be released as part of the project to compile the country's historical aid data.

The issue of how much foreign aid is given by the Emirates has generated some controversy in recent years. In 2008, claims that the UAE gave away 3.6 per cent of its gross national product were called into question by Sir John Holmes, the United Nations' undersecretary general for humanitarian affairs. The UN has set donor nations a target of 0.7 per cent of their gross national income (GNI) to contribute to developing countries, but very few countries actually reach that amount.

Based on the figures announced by the OCFA yesterday, in 2009 UAE foreign aid amounted to about one per cent of the UAE's gross national income. One of the bodies that tracks foreign development assistance is the Organisation for Economic Co-operation and Development (OECD). According to the 2009 UAE Foreign Aid Report, the UAE will be submitting separate aid data to the OECD next month, which will be lower than the almost Dh9bn outlined in the report.

Because of what the report describes as the OECD's "stricter definitions" of development assistance, the figures will differ to those in the report launched yesterday, which includes some commitments of aid that have yet to be disbursed. @Email:zconstantine@thenational.ae

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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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