You had to feel just a little sorry for John Bruton, the former prime minister of Ireland, in Dubai on Monday.
Here is a politician who has done just about everything in a long and distinguished career: the head of government of an EU country; early involvement in the testy Northern Irish peace process; the first European government head to address the US Congress since 1945; an architect of the EU stability and growth pact, which paved the way for the euro; and an EU ambassador to the US.
Yet here he was in Dubai - part of a multi-centre trip to the region - with an almost thankless job: trying to sell Irish financial services to the Gulf.
The trip must have been organised months ago, so whoever planned it couldn't have known that on the very day Mr Bruton was talking about the attractions of Ireland as a financial services hub, his country would be in the latest spasm of its ongoing crisis, or that the EU would be locked in an increasingly desperate bid to avoid the collapse of the currency Mr Bruton did much to establish.
The timing was awful. Instead of waxing lyrical about the attractions of the International Financial Services Centre in Dublin, the organisation of which he is now chairman, Mr Bruton found himself fielding questions about the unfolding crises in Ireland and the EU.
Irish officials in the UAE have had plenty of time to prepare the arguments for continued investment in the country, despite the crisis.
Its "enterprise economy" , as opposed to its financial sector, is still strong, with foreign companies still heading for Ireland attracted by its low corporate tax rate. Irish exports, the highest in the EU as a proportion of GDP, continue to rise. "We have problems with the banking sector, but 80 per cent of the economy is in rude good health," said Mr Bruton.
Maybe, but the 20 per cent now threatens the rest of the euro zone, and the whole European system, with implosion.
The Dubai audience, which included Ahmed Humaid al Tayer, the governor of the Dubai International Financial Centre and member of the Supreme Fiscal Committee overseeing the emirate's recovery, was familiar with Mr Bruton's explanation of his country's ills.
Over-reliance on property and construction, the financial problems caused when this property bubble burst, and the need of help from a wealthy neighbour, are all themes common to both Dubai and Dublin.
Gulf investors listened appreciatively as Mr Bruton put Ireland's case: the country is changing its laws to make Sharia-compliant products more financially efficient, and a range of new products are being offered to Ireland's Muslim population, the fastest-growing ethnic group in the country. Some 20 per cent of the Islamic funds outside the Middle East are already based in Dublin and the Irish hope that will increase.
But there is a paradox at the heart of Mr Bruton's appeal that is difficult to reconcile: on the one hand, the country is "open for business as usual", as he proclaimed; on the other, the representative from the Irish central bank promised an "obtrusive and challenging" approach to the financial industry.
Which is Ireland going to be, post-crisis? A business-friendly, lightly regulated market welcoming all from around the world? Or a suspicious, snooping regime of regulators and watchdogs guaranteed to deter potential investors?
That paradox is also reflected in the wider EU at the moment, with the prevailing force being the anti-business tendency, at least insofar as it concerns the Anglo-Saxon business model that the Celtic tiger has come to represent in French and German minds.
Given his background, you would expect Mr Bruton to be a Europhile, even if bruised by the current relationship between his country and the EU. He would not want to see the kind of outcome now being openly contemplated by policymakers in Berlin, Frankfurt and Brussels: the end of the euro as the continent's single currency; and the severe weakening, even to the point of collapse, of the EU itself.
This was an unthinkable prospect just a few months ago but the Greek and Irish crises, as well as the Portuguese and maybe Spanish crises that look set to follow, have made such an outcome a matter for serious contingency planning.
Put simply, Europe is running out of money with which to bail out the weaker members of the euro zone. The €750 billion (Dh3.68 trillion) rescue fund set up to handle the Greek crisis looked enormous at the time but the idea of these funds is that they are never used; their existence alone is supposed to solve the problem.
Once they start getting eaten into - €110bn for Greece, €85bn for Ireland and what would be an awful lot more for Portugal and Spain - the fund becomes just an ATM for the global financial markets, paying out on the one-way bet of collapsing sovereign debts.
Mr Bruton could not have envisaged all this when he signed the growth and stability pact in 1996. But back then neither could he have imagined asking Gulf states for help with Ireland's economic problems.
fkane@thenational.ae
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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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OPINIONS ON PALESTINE & ISRAEL