The UAE has the chance to play a critical role in efforts by the new leading economies, such as China, to find solutions to some of the world’s most challenging crises, such as refugees and gender inequality.
A delegation from the Emirates is taking part in a global forum in Singapore, which begins on Tuesday.
The New Economy Forum, convened by billionaire Michael Bloomberg, is bringing together the new leaders of those countries that have emerged fastest in the past 20 years, in recognition of their relatively increased global influence in the future.
“A new community for a new economy is what we are calling it,” Justin B Smith, chief executive of Bloomberg Media, said on Monday.
Economic and demographic growth advantages mean that together those markets — China and India, South-East Asia, the Middle East, Africa and Latin America — are “really going to be the centre of the future of the growth of the global economy”, Mr Smith said.
“The UAE is as much a symbol of the new economy as any country in the world and the role the UAE is playing in this emerging new global economy is incredibly important.
“Look at the relationship between the UAE and China from an energy perspective.
“It is very distinctive and very unique.”
The UAE delegation, which includes business leaders from Abu Dhabi and Dubai, is led by Minister of State Dr Sultan Al Jaber, who is also chief executive of the Abu Dhabi National Oil Company.
Adnoc signed several deals with Chinese companies this year, including downstream investment and a landmark seismic onshore and offshore survey, when China's President Xi Jinping visited the UAE in July.
The Singapore forum also aims to bring together the private sector to support efforts to resolve the “increasingly difficult and cross-border challenges and problems” the world is facing in developed and developing countries.
“Social inequality, financial inequality, gender inequality, climate change, trade access to finance and capital markets — all these different issues are in many instances getting more difficult and governments and public sector institutions have had an increasingly difficult time getting their arms around it and realising tangible progress and solutions,” Mr Smith said.
“It is all about action, measurable progress, outputs.”
The forum is smaller than the World Economic Forum’s annual meeting in Davos, to which it is being compared, with 400 chief executives, thought leaders, government officials and former ministers and prime ministers.
Davos typically attracts more than about 3,000 delegates.
The New Economy Forum is expected to be held in China a year from now. This forum was originally going to be there until a change of plans after consultations with the Chinese government.
China’s Vice President Wang Qishan will deliver an address.
But Mr Smith stressed that “it is a truly global forum that is weighted towards these emerging markets but does have a significant participation from the West”.
Former US officials Hank Paulson, Janet Yellen and Henry Kissinger will join Mr Bloomberg during the two-day event. Christine Lagarde, executive director of the International Monetary Fund, will also attend.
Mr Smith said that while globalisation has benefited many in developed and developing countries in recent decades, it has also hurt people in both.
The spirit of the forum is that both need to come together to tackle inequality.
“Economic inequality, financial inequality — they have these problems in China too, not just the West,” Mr Smith said.
Specific solutions will be worked on during and from 30 days after the event, including those aimed at addressing the imbalance of globalisation and trade, such as reskilling workers and moving refugees into the workforce.
Gender and economic inclusion can be solved with a social contract for businesses and establishing global best practice for gender equality, according to the solutions put forward by the forum.
On the latter, HSBC’s chief executive John Flint is expected to be one of the forum’s champions.
Global principles for applying artificial intelligence and new mobility initiatives in urban areas will also be developed.
Creating a market for recycled plastics and making supply chains “green” are also forum targets, the organisers said.
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UAE currency: the story behind the money in your pockets
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6 Max Verstappen (Red Bull)
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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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Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, established Edge in 2019.
It brought together 25 state-owned and independent companies specialising in weapons systems, cyber protection and electronic warfare.
Edge has an annual revenue of $5 billion and employs more than 12,000 people.
Some of the companies include Nimr, a maker of armoured vehicles, Caracal, which manufactures guns and ammunitions company, Lahab
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