Indian Prime Minister Narendra Modi will be online to attend the first I2U2 summit that also involves the UAE, the US, and Israel. Bloomberg
Indian Prime Minister Narendra Modi will be online to attend the first I2U2 summit that also involves the UAE, the US, and Israel. Bloomberg
Indian Prime Minister Narendra Modi will be online to attend the first I2U2 summit that also involves the UAE, the US, and Israel. Bloomberg
Indian Prime Minister Narendra Modi will be online to attend the first I2U2 summit that also involves the UAE, the US, and Israel. Bloomberg

India to join UAE, US and Israel in first meeting of new 'I2U2' bloc


Taniya Dutta
  • English
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Indian Prime Minister Narendra Modi will attend the first summit for I2U2 — a newly formed grouping of the US, Israel and the UAE to “re-energise and revitalise alliances” across the world.

US President Joe Biden’s administration will organise the online summit during his four-day visit to West Asia from July 13, where he will make stopovers in Israel, the West Bank and Saudi Arabia.

Mr Modi will join the summit along with President Sheikh Mohammed, Israeli Prime Minister Naftali Bennett, and Mr Biden.

The quadrilateral I2U2 stands for “I” for India and Israel and “U” for the US and UAE.

The leaders of the grouping referred to as the West Asia Quad will discuss the global food crisis and other areas of co-operation, the White House said on Tuesday.

“The president will hold a virtual summit with the I2U2 heads of state for discussions of the food security crisis and other areas of co-operation across hemispheres where the UAE and Israel serve as important innovation hubs,” a White House official said at a press briefing.

“We consider these initiatives central to our strategy of empowering partners and encouraging them to work more closely together, which will lead to a more stable region,” the official said.

I2U2 was formed in October last year following the Abraham Accords between Israel and the UAE, to deal with issues concerning maritime security, infrastructure and transport in the region.

While Israel, UAE and the US were the natural partners in the grouping, India’s inclusion came amid its strained relationship with China and a drive to broaden its global alliances.

New Delhi is also part of the Quad grouping led by the US and includes Australia and Japan.

India shares strong strategic, historic and economic ties with the Gulf states.

Mr Modi has further strengthened the alliance between India and the Gulf since coming to power in 2014.

The summit is significant as it comes at a time when the Russia-Ukraine war has continued for more than 100 days, triggering a global food crisis by disturbing food supply chains and disrupting wheat exports from both countries.

Together Russian and Ukraine provided around 20 per cent of global wheat exports before the war.

High fuel prices and subsequent inflation, emerging as the world recovered from the Covid-19 pandemic but exacerbated by the war, have also shaken the global economy.

The foreign ministers of the four nations had met in Israel in October last year when Indian Foreign Minister Subrahmanyam Jaishankar was visiting the country.

Mr Jaishankar and his Israeli counterpart Yair Lapid attended the summit in-person whereas Sheikh Abdullah bin Zayed, Minister of Foreign Affairs and International Co-operation, and US Secretary of State Antony Blinken, attended the summit online.

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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