Egyptian President Abdel Fattah El Sisi addresses a youth conference in Sharm El Sheikh on November 5, 2018. MENA via AP
Egyptian President Abdel Fattah El Sisi addresses a youth conference in Sharm El Sheikh on November 5, 2018. MENA via AP
Egyptian President Abdel Fattah El Sisi addresses a youth conference in Sharm El Sheikh on November 5, 2018. MENA via AP
Egyptian President Abdel Fattah El Sisi addresses a youth conference in Sharm El Sheikh on November 5, 2018. MENA via AP

Look inward for solutions to Arab problems, former leaders say


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Arab countries must begin the reconstruction of their societies and tap into the growing youth population if they are to overcome challenges facing the region and counter foreign interference in internal affairs, say former Arab ministers.

The speakers at the 5th annual Abu Dhabi Strategic Debate said the willingness of Arab leaders to look westward for solutions continued to contribute to widespread violence and the inability of their countries to address their domestic problems, let alone remedy regional instability.

“If we looked in all honesty, from the Arab perspective not the foreigners' perspective, the problems of Arab should be the Arabs’ responsibility,” said Nabil Fahmy, former Egyptian foreign minister.

Khaled Bahah, the former Yemeni prime minister, said a failure to address not only the problems within Middle Eastern countries but also among Arabs had allowed political and social cracks to develop, creating opportunities for non-Arab countries to interfere in the internal affairs of Arabs.

“Allowing Iran and others to influence us, is found in regional cracks. If we could cement these cracks then it would be impossible for outside forces to interfere," he said. "If we as Arabs could solve our problems we would provide foreign forces with no opportunity.”

Arab countries, despite needing to create the capacity to address their own issues, should continue to develop relationships with the West. Their downfall, said Mr Bahah, is when the gap widens between Arab countries' capacity to overcome their challenges and the ability of foreign actors to willingly provide stability in the face of change.

“As a result we find that there is a security vacuum in the Arab world, and the Turkish, Iranian and Israeli influence in our affairs and their interference in every single issue. It’s gotten to the point where they are the most important players in our own affairs,” said Mr Bahah.

The solution, according to former Libyan prime minister Mahmoud Jibril, is found in empowering Arabs and tapping into what has often been seen as a crippling demographic drawback in the region: the growing youth bulge.

The Arab uprisings in 2011 "was an alarm bell, because it led to more violence and we can’t have that, especially in the light of our knowing that we can do it [ensure stability], especially with the young people,” said Mr Jibril.

He said the youth, who have grown increasingly disenfranchised, need to be given an opportunity to buy in to their respective governments' plans for their future.

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Despite revolutions in the Middle East being an earnest representation of the disenfranchisement of many Arabs, as was the case in several countries in 2011, the fear lies in that doing so in the current unstable environment allows dissident political and religious groups to hijack those movements to pursue their ulterior motives, Mr Jibril said.

That responsibility of change cannot come without the education of the youth and requires the reconstruction of an “Arab intellectualism” matched with a deeper understanding of religion capable of allowing youth to reject extremist, and at times violent, interpretations of religion.

“Building a new Arab mind has become the responsibility of every Arab, not a secondary thought. It is the role of every measure of society to contribute to this development ... It’s about providing agency to Arabs in every segment of society,” he said.

On rebuilding nations that have been divided by civil war, such as Syria and Yemen, Mr Bahah  decried the practice of unifying states as a solution to conflicts without regard to the underlying concerns.

Mr Bahah warned that doing so would be building a state on an uneasy base, which was likely to institutionalise the grievances from both sides without reconciliation.

“The big problem, in transition, is building a nation or sustaining peace to stop a problem, to stop a crisis. We seldom build a country to build a country, we build to stop wars or a crisis, and this applies to all the other countries in difficulty,” Mr Bahah said.

When decision-makers begin the process of nation-building or unification of countries in Middle East, he said, the founding principles of that nation should be geared to sustain long-term peace and not as a remedy to the current conflict.

Many Arab countries development track is no different than that of Singapore’s in the 1980s and that lessons learnt from their development model should be implemented accordingly.

“Today in the region we are in the same situation, but we have a lack of political understanding of this environment, the lack of ability to change is leading to violence, the resistance to change is making us fail to understand these developments and that leads to more violence,” Mr Bahah said.

He said Singapore had implemented a willingness to change and act accordingly to utilise its resources. In recognising their issues and making use of their limited resources, they were able to create a country and build from the ground up a formidable and stable economic force bringing prosperity to its people.

The model has often been used by developing countries and is one that he said could be reinterpreted to help pull several Arab countries out of violence and into normality.

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Lt Gen Erik Petersen, deputy chief of programs, US Army, has argued it took a “three decade holiday” on modernising tanks. 

“There clearly remains a significant armoured heavy ground manoeuvre threat in this world and maintaining a world class armoured force is absolutely vital,” the general said in London last week.

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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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Manchester United v Manchester City, Wednesday, 11pm (UAE)

Match is on BeIN Sports

Friday's schedule at the Etihad Airways Abu Dhabi Grand Prix

GP3 qualifying, 10:15am

Formula 2, practice 11:30am

Formula 1, first practice, 1pm

GP3 qualifying session, 3.10pm

Formula 1 second practice, 5pm

Formula 2 qualifying, 7pm

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Asia Cup Qualifier

Venue: Kuala Lumpur

Result: Winners play at Asia Cup in Dubai and Abu Dhabi in September

Fixtures:

Wed Aug 29: Malaysia v Hong Kong, Nepal v Oman, UAE v Singapore

Thu Aug 30: UAE v Nepal, Hong Kong v Singapore, Malaysia v Oman

Sat Sep 1: UAE v Hong Kong, Oman v Singapore, Malaysia v Nepal

Sun Sep 2: Hong Kong v Oman, Malaysia v UAE, Nepal v Singapore

Tue Sep 4: Malaysia v Singapore, UAE v Oman, Nepal v Hong Kong

Thu Sep 6: Final

 

Asia Cup

Venue: Dubai and Abu Dhabi

Schedule: Sep 15-28

Teams: Afghanistan, Bangladesh, India, Pakistan, Sri Lanka, plus the winner of the Qualifier

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