Egyptian president Abdel Fattah El Sisis (R) sits with Saudi Deputy Crown Prince and minister of defence Mohammed bin Salman during a graduation ceremony of a military academy in Cairo on July 30, 2015. EPA/Office of the Egyptian president/Handout
Egyptian president Abdel Fattah El Sisis (R) sits with Saudi Deputy Crown Prince and minister of defence Mohammed bin Salman during a graduation ceremony of a military academy in Cairo on July 30, 201Show more

New pact brings Saudi Arabia and Egypt closer



NEW YORK // The Arab League on Friday welcomed the signing of a pact that bolsters military and economic ties between Egypt and Saudi Arabia.

The agreement, signed on Thursday, was aimed at underscoring the strategic importance of the countries’ relationship as Riyadh seeks to rally Sunni Arab support to counter Iran and fight extremist groups.

Arab League secretary general Dr Nabil Al Arabi said the agreement reflects progress towards further joint Arab military action and would contribute to discussions at the upcoming Arab defence ministers meeting on August 27.

Saudi Arabia’s defence minister and deputy crown prince, Mohammed bin Salman, had led a delegation to Cairo and met with Egyptian president Abdel Fattah El Sisi.

Thursday’s agreement, which the leaders called the “Cairo Declaration”, pledges increased military cooperation, including the formation of a joint Arab military force for interventions in regional crises, and for increased economic ties through “mutual investment” in energy and transport.

“At this current period which the Arab world is facing, we need to work together, because the threats are many, and we will not overcome them unless we work together,” Mr El Sisi said. “Egypt and Saudi Arabia are the two pillars of Arab national security, and together we can confront these challenges.”

Since the removal of the Muslim Brotherhood-backed Egyptian president, Mohammed Morsi, Saudi Arabia and the UAE have given billions of dollars in aid and investment to Cairo, viewing the country’s stability as key to overall regional stability and their national interests.

But a number of recent public differences over regional issues have led some to perceive growing tension between Riyadh and Cairo. Prince Muhammed’s visit was intended to send a message that the core strategic interests and relationship between the allies remains unshaken, observers said.

“I think the visit was designed to end speculation and open a new public page,” said Mustafa Alani, a security analyst with close ties to Riyadh. “They recognise that Egypt has different views and possibly interests in a number of regional issues but they still believe that on the strategic objective there is no disagreement.”

Under the new leadership of King Salman, Riyadh’s regional policy has taken a different direction than under his predecessor and focused on banding together Sunni forces in the region to counter Iran’s projection of power.

“The adoption of a reappraisal with respect to regional policy has affected [Saudi ties with] Egypt,” said Michael Hanna, an expert on Egyptian and Gulf policy at The Century Foundation think tank in New York.

Saudi Arabia has taken a more pragmatic stance toward Brotherhood-affiliated groups in places like Yemen and Syria, and has recently courted Hamas, possibly to turn its back on Tehran. This has strained relations with Egypt, the analysts said, as did Cairo’s refusal to participate in ground operations against Houthi rebels in Yemen.

Mr El Sisi’s government has also taken a different position on Syria and is primarily concerned with the proliferation of militancy there, with little interest in backing rebels to overthrow the Al Assad regime. The Egyptian foreign ministry this week condemned the Turkish “safe zones” plan as a breach of Syrian sovereignty.

Despite this, both Egypt and Saudi Arabia have an underlying interest in maintaining their close ties that trumps the recent differences over regional policy.

“We haven’t seen any of these differences yet affect the strategic logic of the bilateral relationship,” Mr Hanna said. “Both parties realise they need the other for various things and this trip was a kind of relationship tending exercise.”

tkhan@thenational.ae

THURSDAY FIXTURES

4.15pm: Italy v Spain (Group A)
5.30pm: Egypt v Mexico (Group B)
6.45pm: UAE v Japan (Group A)
8pm: Iran v Russia (Group B)

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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What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.

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The Pope's itinerary

Sunday, February 3, 2019 - Rome to Abu Dhabi
1pm: departure by plane from Rome / Fiumicino to Abu Dhabi
10pm: arrival at Abu Dhabi Presidential Airport


Monday, February 4
12pm: welcome ceremony at the main entrance of the Presidential Palace
12.20pm: visit Abu Dhabi Crown Prince at Presidential Palace
5pm: private meeting with Muslim Council of Elders at Sheikh Zayed Grand Mosque
6.10pm: Inter-religious in the Founder's Memorial


Tuesday, February 5 - Abu Dhabi to Rome
9.15am: private visit to undisclosed cathedral
10.30am: public mass at Zayed Sports City – with a homily by Pope Francis
12.40pm: farewell at Abu Dhabi Presidential Airport
1pm: departure by plane to Rome
5pm: arrival at the Rome / Ciampino International Airport