ABU DHABI // A Federal National Council committee has finished reviewing the fast-tracked military service bill, with its public debate set for next week.
The seven-member committee on Sunday met officials from the Armed Forces, including Brig Gen Salim Al Kaabi, to go through the proposed law.
It requires all Emirati men between the ages of 18 and 30 to complete military service and makes it optional for Emirati women.
The main change made on Sunday was the adding of a provision to give those who are unemployed an income while they complete their military service terms.
The meeting was the second the committee has held to review the bill, which was passed to the FNC in February after being drafted in January by the Federal Cabinet on the orders of the President, Sheikh Khalifa.
Because of the importance of the 44-article bill, Saeed Al Khateri (RAK), a member of the Interior and Defence Committee that has been studying and proposing amendments to the law, said it was finished over two meetings within an eight-day period.
While unable to reveal all amendments made to the bill until its public debate, he said one thing that was changed was an addition to the incentives for those who perform their national duty.
The bill – already giving priority in job placements and promotions and for marriage and land loans – will now provide all those without a job with an income while in the military.
“Those in the Government or private sector will continue to get their salaries, but we wanted something for those who were unemployed and serving in the military,” Mr Al Khateri said.
“The country must take responsibility for these people since they are serving the country.”
Mr Al Khateri said while reviewing the law, that the committee looked at similar initiatives in Israel, Turkey, Germany and Jordan.
He said the committee could not copy those since the number of nationals in the UAE was far less and a unique bill was needed.
The bill states that all those who serve must have a record of good conduct and be medically fit.
Participation in political or banned organisations makes them ineligible.
Service terms will be nine months for those who have completed secondary school and two years for those who have not.
For women, service is optional and will last nine months.
Men who have completed their military service will become part of the reserve forces until the age of 58, or 60 for officers.
“The law is very important for the country,” Mr Al Khateri said.
“It is very important for any country, but particularly for those with fewer nationals. We did not change much in the law, we just mentioned things that were left out to make it comprehensive.”
He said officials from the Armed Forces who attended the meeting were extremely cooperative and clarified a number of questions raised by council members.
Rashad Bukhash (Dubai), also a member of the committee who attended the meeting on Sunday, said only about 10 per cent of the bill was changed.
These included changes to language, a few articles and to fines on those who try to dodge military service.
“They were all little amendments, nothing substantial,” he said.
The bill has now been passed to the 40-member council, ready for public debate on Tuesday next week in the presence of officials from the Armed Forces.
After the law is passed on Tuesday, it will be sent to Sheikh Khalifa for final approval.
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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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