Theresa May's government is still promising to quit Europe's customs union when Brexit happens next year.
The prime minister's position is politically understandable, yet entirely indefensible. And it perfectly captures the bind Britain has got itself into.
Staying in the European Union's customs union after Brexit, or joining some specially tailored version of it, would leave the UK with a worse deal than the one it currently enjoys as a full member of the EU. All Remainers think so, and a good many Leavers would probably agree. Proposing such an outcome comes close to admitting that the whole Brexit project has gone wrong. It has gone wrong - but, understandably, that's something Mrs May and her colleagues are unwilling to say.
For all the limitations of a customs-union arrangement, crashing out of the EU with no deal at all - a so-called hard Brexit, and the future to which the country is drifting - would be much worse. It would throw Britain's trade relations into disarray and inflict grave harm on the economy. It would also jeopardise peace in Northern Ireland by requiring a hard border between the North and the Republic of Ireland. Staying in the customs union would lessen all these risks, which is why refusing to countenance it is indefensible.
Members of a customs union apply a common external tariff on goods, and trade with each other tariff-free. This wouldn't maintain the UK's frictionless commerce with the EU - for that, full regulatory compliance and membership in the single market are needed as well. By itself, therefore, a customs union wouldn't solve the border issue. But it would help. Meanwhile, British exporters would be relieved to know that business with the EU would not come to a screeching halt.
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The problem is that a customs union stops the UK from striking new deals of its own, negating one of the main supposed benefits of Brexit. Worse, Britain would be bound by EU trade deals with third parties, despite having no vote on them, and no guarantee of sharing in the reciprocal benefits the deals would confer on EU partners. Membership in the EU is already unpopular with roughly half the country. Such a grossly asymmetrical arrangement would be even more toxic.
Brexit supporters also have reason to suspect that advocates of the customs-union approach have a hidden agenda. This compromise would tacitly acknowledge that the Brexit decision was wrong, and thus looks like the first step in a campaign to reverse it altogether. But those same Brexit supporters have no right to complain. Led by a government lacking faith in its own policy, they've failed to give any remotely plausible account of how their preferred hard Brexit can succeed.
The essential point hasn't changed. The Brexit vote was a mistake, and ought to be reversed now, not later. Britain's members of parliament are mostly opposed to Brexit, yet can't bring themselves to do their jobs and act on that conviction. The country and its legislators are therefore left squabbling over the choice between a bad result and a terrible one.
Exactly how this catastrophic failure of leadership will be resolved is hard to say. No forthright pro-EU candidate for the highest office has emerged in either party. The country seems exhausted, and calls for a second referendum to reverse the Brexit choice are falling on deaf ears. Nothing short of a major political crisis seems capable of breaking the collective paralysis.
It's come to something when such a dire and unpredictable prospect starts to look appealing.
Michael R Bloomberg, the former mayor of New York City, is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News. He is the UN secretary-general’s special envoy for cities and climate change
Result
UAE (S. Tagliabue 90 1') 1-2 Uzbekistan (Shokhruz Norkhonov 48', 86')
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.”
More from UAE Human Development Report:
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Aggro%20Dr1ft
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Roll of honour 2019-2020
Dubai Rugby Sevens
Winners: Dubai Hurricanes
Runners up: Bahrain
West Asia Premiership
Winners: Bahrain
Runners up: UAE Premiership
UAE Premiership
}Winners: Dubai Exiles
Runners up: Dubai Hurricanes
UAE Division One
Winners: Abu Dhabi Saracens
Runners up: Dubai Hurricanes II
UAE Division Two
Winners: Barrelhouse
Runners up: RAK Rugby
