• The newly revamped city centre of Sharm El Sheikh, the city which this year is hosting the United Nations climate change conference Cop27.
    The newly revamped city centre of Sharm El Sheikh, the city which this year is hosting the United Nations climate change conference Cop27.
  • An decorative installation in Egypt's Sharm El Sheikh. The government has developed the city extensively ahead of Cop27.
    An decorative installation in Egypt's Sharm El Sheikh. The government has developed the city extensively ahead of Cop27.
  • A pair of decorative statues displayed on the streets of Sharm El Sheikh in Egypt. Kamal Tabikha / The National
    A pair of decorative statues displayed on the streets of Sharm El Sheikh in Egypt. Kamal Tabikha / The National
  • A cartoon depiction of a Bedouin woman, part of a new promotional campaign in the Egyptian city of Sharm El Sheikh ahead of Cop27. Kamal Tabikha / The National
    A cartoon depiction of a Bedouin woman, part of a new promotional campaign in the Egyptian city of Sharm El Sheikh ahead of Cop27. Kamal Tabikha / The National
  • A promotional poster at Sharm El Sheikh airport, part of a wave of beautification the city has undergone recently as it prepares for Cop27. Kamal Tabikha / The National
    A promotional poster at Sharm El Sheikh airport, part of a wave of beautification the city has undergone recently as it prepares for Cop27. Kamal Tabikha / The National
  • An installation depicting two boats in Egypt's Sharm El Sheikh. Kamal Tabikha / The National
    An installation depicting two boats in Egypt's Sharm El Sheikh. Kamal Tabikha / The National
  • An decorative installation in Egypt's Sharm El Sheikh. The government has developed the city extensively ahead of Cop27.
    An decorative installation in Egypt's Sharm El Sheikh. The government has developed the city extensively ahead of Cop27.
  • A statue of a winged seahorse on Sharm El Sheikh's Al Salam Road. Kamal Tabikha / The National
    A statue of a winged seahorse on Sharm El Sheikh's Al Salam Road. Kamal Tabikha / The National
  • An installation of a life-size chess board in the Red Sea city of Sharm El Sheikh. Kamal Tabikha / The National
    An installation of a life-size chess board in the Red Sea city of Sharm El Sheikh. Kamal Tabikha / The National

Expectation builds in Sharm El Sheikh as city awaits Cop27 climate summit


Kamal Tabikha
  • English
  • Arabic

A palpable air of tension hangs over the Egyptian city of Sharm El Sheikh as it prepares for the opening of the United Nations climate change conference (Cop27) next week.

For the Sinai resort city, its residents and the country at large, much is riding on the famed conference, which this year takes place during a trying time for Egypt, set against a backdrop of high energy prices, a global pandemic, the war in Ukraine and major disruptions to the country's food supply.

Visually speaking, the city is in the best shape it has been for a long time after extensive redevelopments as the government prepares for the arrival of world leaders, in whose eyes it wants to bolster its international standing.

As part of the renovations, which cost the government about 15 billion Egyptian pounds ($619 million), several stylish new structures now grace the city centre, bringing an urban, upmarket feel to the previously empty and unassuming pavements.

Some are small retail kiosks that have been taken over by the country’s biggest brands, including Luna, a cosmetics manufacturer, and TBS, a popular bakery chain.

Peppered throughout the city centre are new artworks erected in the past three months.

On Al Salam Road, a central thoroughfare, a pair of statues depicting a king and queen dressed in medieval European regal attire are on display. Behind them on the pavement, the life-sized chess board they are a part of grabs the attention of passersby.

In another spot on the road, an installation depicting two sailing boats each carrying one half of the moon on its deck invokes a quintessential symbol of Sharm El Sheikh, once a modest Bedouin fishing village.

Half a kilometre down the road, a new statue of a giant winged seahorse was met with mixed reviews from the city’s residents.

A statue on Al Salam Road in Sharm El Sheikh, Egypt. Kamal Tabikha / The National
A statue on Al Salam Road in Sharm El Sheikh, Egypt. Kamal Tabikha / The National

While some chose not to give it much thought, one man said: “I understand the seahorse part, that’s characteristic of Sharm El Sheikh, but why does it have wings? I’ve seen them in the water, they don’t have wings.” Another said he likes all the new artwork and that he is happy that the city was given a spruce-up.

Plastered all over the city this week are billboards featuring cartoon depictions of the city’s Bedouins, which on some signs were accompanied by a slogan encouraging visitors to “Experience Sinai’s Bedouin Heritage''.

Bedouins are normally a common sight in Sharm El Sheikh, with the men usually wearing traditional white galabeyas as they drive their pick-up trucks down the city’s streets and the women and children on the beaches selling various handcrafted goods from large cloth bags they carry on their backs.

But this week, all were notably absent from the city, replaced by a marked increase in the number of security officers there to secure Sharm El Sheikh for the arrival of Cop27’s attendees, who are expected to include US President Joe Biden.

A stylised image of a Bedouin woman, part of a new promotional campaign in the Egyptian city of Sharm El Sheikh ahead of Cop27. Kamal Tabikha / The National
A stylised image of a Bedouin woman, part of a new promotional campaign in the Egyptian city of Sharm El Sheikh ahead of Cop27. Kamal Tabikha / The National

The increased security presence in the city has been disruptive to tourists whose numbers have dwindled in recent weeks as preparations for the conference intensified. For residents, most of whom work in the tourist industry, this has been bad for business.

Despite that, the city’s inhabitants expressed surprisingly understanding sentiments towards the conference, because many are aware of how much is riding on it for the Arab world’s most populous nation.

One resident expressed hope that the political capital Egypt stands to gain from hosting a successful Cop27, which it is using to highlight its dual Afro-Arabness by acting as spokesman for the African continent and a bridge between it and the West, will help in the country’s struggle to secure its water resources after the recent third filling of the Grand Ethiopian Renaissance Dam.

A promotional poster at Sharm El Sheikh airport, part of a wave of beautification the city has undergone recently as it prepares for Cop27.
A promotional poster at Sharm El Sheikh airport, part of a wave of beautification the city has undergone recently as it prepares for Cop27.

A hotel manager in the city said he had heard good feedback from tourists on the structural updates. He said he hoped the city's tourism sector would receive a boost on the back of the conference, which is expected to significantly increase Egypt’s political and media visibility.

"We need dollars right now and tourism is one of the quickest ways to do that. Unlike other areas like exports, which still need a lot of work before they can be viable channels of foreign currency, tourism is here, it's ready, people just have to come, which I hope the conference will help with," he said.

Two barren spells, one during Covid-19 and one after the war began between Russia and Ukraine — who together provide more than 30 per cent of Sinai’s incoming tourists — had left the city’s establishments closed and its tourism workers without employment.

Other residents feel that the vast sums of money spent on beautifying the city might have been better used to ease the pressure on some of the country’s essential industries amid a dwindling of foreign reserves to record lows, a severe drop in the value of the Egyptian pound against the dollar and high inflation.

"It's baffling to me that they can secure billions to beautify an entire city for a two-week conference while everywhere else in the country people are suffering high prices and many can't find employment," said a resident who preferred to remain anonymous.

One group viewing the conference with a degree of pessimism are diving instructors, many of whom are involved in the city’s environmental activism.

One instructor said while he understands Cop27 could improve Egypt’s political capital and secure foreign funds if it presents itself as a regional leader on climate change, he does not anticipate it will do much for the city’s ailing ecosystem, which has been severely damaged by years of mass tourism.

Stickers bearing the circulating arrows emblem of sustainability can also be seen plastered on almost every establishment in Sharm El Sheikh in preparation for Cop27 and recycling bins have been placed all over the city centre.

On the surface, the city appears to be in tip-top shape.

But some feel a collective deep breath has been taken — one that could be exhaled when the conference closes and everything returns to normal.

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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.”

Updated: November 04, 2022, 6:54 PM