DUBAI // Talks on military collaboration, training and exercises between the UK and the UAE are still under way, Britain’s defence minister said at the opening of the Dubai Airshow.
Philip Hammond confirmed a number of discussions with the UAE were “making good progress”, although no public announcement has yet been made.
“Discussions are under way around many strands of military collaboration, including the Eurofighter Typhoon deal, and those discussions continue very well,” he said.
“These are all long-running ongoing complex issues. They don’t happen overnight, but they are part of building a strong and deep-rooted partnership with the countries in the region.”
The UK said last July that it was drafting a deal to help UAE military-technology companies sell to the European Union.
The UAE’s military products would be marketed in the UK as part of any possible Eurofighter Typhoon deal. Mr Hammond said no military contracts had yet been signed.
“All our discussions with the UAE around military collaboration are about building partnerships,” he said. “It’s certainly not simple equipment deals, it’s a much more complex collaboration than that.
“This is about a much broader collaboration than just any single piece of military equipment.
“It’s about training, security cooperation, technological development, industrial partnership and investment as well as military equipment, so it’s part of a much bigger package of collaboration that serves both countries’ interests.”
Mr Hammond said Britain had received offers from UAE companies for the sale of military equipment.
“We have some areas of equipment where we’ve identified a need to maintain our own sovereign capability, where we will always buy from UK companies,” he said.
“But we have another very broad area of military equipment where we buy in open tender from the best, most value-for-money source that we can. We’re very happy to receive offers from UAE companies and we have received offers from UAE companies.
“In any defence deal that the UAE does, there will always be an offset requirement, which will mean that some part of the product will be manufactured here and supplied back to the main assembly. That’s a very effective way of driving industrial development and technology transfer, making sure that these very large orders are a win for both countries in the deal.”
Mr Hammond said he had met King Hamad bin Isa Al Khalifa of Bahrain at the airshow, and had discussed the country’s need for fighter jets.
“We continue to have very fruitful discussions with Bahrain about the Typhoon, and we very much hope that Bahrain will decide soon to join the Typhoon family,” he said. “I think those discussions are very positive and I look forward to a good outcome.”
Mr Hammond said he hoped British defence sales to the UAE would grow. “The UAE is very important strategically to us as an ally in the Arabian Gulf,” he said.
“It’s important because we have an excellent security relationship, and as an industrial partner because it’s a rapidly industrialising country with a high-technology focus and a huge appetite for both civil and military equipment, which means there are potentially significant deals to be done.
“UK defence sales to the UAE are relatively modest, but we hope in the future that that will change and we’ll see a rapid growth in that relationship over the coming years.”
Mr Hammond also stressed the significance of the airshow to the industry.
“People will pay a lot of attention to a region that’s generating such a large portion of business for the big civil airline manufacturers, and this isn’t just one-way traffic,” he said.
“There’s also a big development going on of the UAE’s industrial base to support the supply of parts and components into the manufacture of those aircraft, so it’s a good deal on both sides.”
The airshow was attended by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, and Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces.
cmalek@thenational.ae
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.
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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