Mansoor Abulhoul, James Cleverly, Tzipi Hotovely, Dr Anwar Gargash, Liam Fox and Fahad Albinali. Mark Chilvers / The National
Mansoor Abulhoul, James Cleverly, Tzipi Hotovely, Dr Anwar Gargash, Liam Fox and Fahad Albinali. Mark Chilvers / The National
Mansoor Abulhoul, James Cleverly, Tzipi Hotovely, Dr Anwar Gargash, Liam Fox and Fahad Albinali. Mark Chilvers / The National
Mansoor Abulhoul, James Cleverly, Tzipi Hotovely, Dr Anwar Gargash, Liam Fox and Fahad Albinali. Mark Chilvers / The National

Abraham Accords anniversary marked as boost for UK and its Middle East allies


Damien McElroy
  • English
  • Arabic

As a former defence and trade secretary about to celebrate his 60th birthday, Liam Fox is one of the frontline UK politicians with greatest experience of all the countries that joined together to sign the Abraham Accords a year ago in Washington.

The head of the UK Abraham Accords Group, Mr Fox is fleshing out a vision for the agreements as a platform for international engagement at a new level. Before a ceremony to mark the anniversary of UAE, Bahrain and Israel signing the pact, Mr Fox said his work was building on the diplomatic deal sealed with great fanfare in the US capital.

“For the United Kingdom the benefits of this wonderful step forward were really threefold,” he said. “First of all, we are as a country, very strategically engaged in the Gulf. The Gulf is one of our biggest trading partners, after the United States and the EU, and a part of the world where we have a significant military presence.

“We in the UK want to make a very clear point about our commitment to the region but there's also a huge economic opportunity for the region. We see tremendous opportunities to combine the innovation and creativity that we see in the Israeli economy and also the UAE economy, combine that with the availability of capital in the UAE and Bahrain. It could be genuinely synergistic in a way that we have not seen in the past. What has to happen is that these accords have to be real, not just symbolic, not just diplomatic.

“For us as well as those directly involved it can't simply be an accord on paper – it needs to be an accord for business, for people and for security.”

Dr Anwar Gargash, diplomatic adviser to UAE President Sheikh Khalifa, told the gathering on the terrace of the Houses of Parliament that the assembly of the flags of the countries next to each other was a vivid symbol of the steps forward now happening under the Accords.

Dr Anwar Gargash, diplomatic adviser to UAE President Sheikh Khalifa, praised the success of the Accords at an ambassadors' event at the UK Houses of Parliament. Mark Chilvers / The National
Dr Anwar Gargash, diplomatic adviser to UAE President Sheikh Khalifa, praised the success of the Accords at an ambassadors' event at the UK Houses of Parliament. Mark Chilvers / The National

“Normalisation is not an event, it really is a process,” he said. “I see this developing even better as we see more trust being built, as we see more business being done, as we see a bigger network being established. We will see that this process will be in due course even more important than the event itself.

“We have so much more to do with this Accord. We want to see a two-state solution for the Palestinian people and for the Jewish people. We want to see an end to the cycle of violence that has brought so much suffering to both Israelis and Palestinians. The Abraham Accords have helped this goal by averting the proposed annexation. This was really the opportunity of signing the Accords and this was a key, key message when the UAE signed it.

“We want others in the region to see from the success of these Accords – the benefits of peace, the benefits of establishing relationships between Arabs and Israelis – we also want to break down the barriers of misunderstandings and stereotypes. We want to set the agenda of hope in front of our young people, and a largest population of the people in our region is young people, the message should be not forever conflict.”

James Cleverly, the UK's Minister of State for the Middle East, underlined Britain's support for the effort to bring people together to overcome long-standing divisions.

“It is the opening of a new chapter in good relations in the region and I hope that this will continue to expand, that we'll continue to see the normalisation of relationships between Israel and other countries in the Arab World and that we can all, including us here in the UK, reap the benefits from this, whether they be social, economic or diplomatic,” he said. “I'm very pleased that the UK was one of the first countries to publicly celebrate the Abraham Accords.”

“All the signatories to the Abraham accords really set about making this a meaningful relationship, opening new diplomatic missions, economic partnerships, travel, co-operation in technology, energy and climate change.

“It is fantastic to see and the UK is very keen to continue to play a part, supporting our good friends in the region and as they work more closely with each other.”

The UK minister said it was encouraging to see those living in the region breaking bread together, laughing and looking forward to a time of peace. The need for a breakthrough between the Israel and Palestinian leadership remains a vital consideration for all who support the new entente in the region. “It is through the dialogue, it is through joint working that we can avoid the kind of violence that we saw in May this year, which of course none of us would want to see again,” Mr Cleverly said.

Liam Fox in his parliamentary office before hosting ambassadors from Israel, Bahrain and UAE. Mark Chilvers / The National
Liam Fox in his parliamentary office before hosting ambassadors from Israel, Bahrain and UAE. Mark Chilvers / The National

Mr Fox has ambitions to broaden the international engagement, with economic progress underpinning the accords. “I'm acutely aware of the fact that nothing breeds success like success and if you want this accord to be seen to be succeeding then we have to have tangible benefits, larger economic benefits.

“I want to see how we can identify any gaps in economic and investment opportunities, specifically by identifying any non-tariff barriers to trade or regulatory impediments to investment that could be removed. Because if they can, then the market will come in and take that space.

“Greater human interaction always has its own positive knock on consequences,” he said. “You can see how the synergy of economic innovation and opening up of potential markets, plus the availability of capital, can all come together to produce a potentially very positive outcome. So, I'm very positive about that when I look at countries like Morocco and Sudan, who I think would be, you know, potential candidates to join - you can see just how quickly this could become a very influential grouping.”

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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: September 15, 2021, 3:49 PM