DAVOS, SWITZERLAND // Government and business titans from the UAE join record numbers of their global counterparts in the exclusive Alpine retreat of Davos this morning to address the world's worst economic crisis in decades.
Delegates from the Emirates such as Mohammed Abdullah al Gargawi, Minister of Cabinet Affairs and the chairman of Dubai Holding, feature on a VIP participant list that includes the Russian prime minister, Vladimir Putin, and the Chinese premier, Wen Jiabao.
The first annual World Economic Forum (WEF) meeting since global markets plunged into financial meltdown will see more than 40 heads of state and government brush shoulders with banking and business chiefs in the charming Swiss ski resort.
More than 2,500 participants from 96 countries are congregating under the gloomy banner of "Shaping the Post-Crisis World" in a forum that was characterised in previous years by laissez-faire capitalists sipping champagne at fancy receptions.
This year's event will see the marked absence of bankers from Lehman Brothers and other victims of what some analysts describe as the worst economic crisis since the Great Depression of the 1930s.
They have been replaced, by and large, with politicians such as the British prime minister, Gordon Brown, and Sheikha Lubna Al Qasimi, Minister of Foreign Trade, echoing a power shift away from the free market as governments struggle to bail out sinking economies.
Sessions bearing titles such as "What Went Wrong?", "Hard Lessons about Global Imbalances" and "No Way Back" set a sombre tone for a forum that Klaus Schwab, its founder and chairman, hopes will challenge the "self indulgence" of recent years.
"The pendulum has swung and power has moved back to governments," said Mr Schwab, the German-born economics professor who founded the forum in 1971 and has been its impresario ever since. "This is the biggest economic crisis since Davos began."
The WEF, set up as a business and academic think-tank with the motto "entrepreneurship in the global public interest", has snowballed into a huge event for its coterie of A-list invitees, while drawing ire from anti-capitalist activists.
This year, however, ethically aware celebrities who captured the limelight in previous years such as the actress, Angelina Jolie, and the U2 front-man, Bono, have not made their annual pilgrimage.
The spotlight now shines on government and business chiefs as they debate reforming the world's financial architecture and relaunching the global economy in advance of a Group of 20 summit of leading and emerging economies in April, and a meeting in July of the Group of 8 leading industrialised nations plus Russia.
More than a dozen trade ministers will meet on the sidelines of the five-day Davos forum to discuss the long-running Doha-round talks to open up commerce, bolster international co-operation and ward off protectionism.
Delegates from the UAE - expected to include the chairman of Dubai World, Sultan Ahmed bin Sulayem, and Mohamed Ali Alabbar, his counterpart at the property developer, Emaar - will advance the nation's business interests in response to financial uncertainties back home.
Economic boom in the Emirates, the world's fifth-largest oil exporter, came to an end late last year as crude prices collapsed by more than US$100 a barrel, regional credit markets froze and Dubai's previously spectacular building boom started to unravel.
The recent announcements of layoffs by Istithmar World, the investment arm of Dubai World, and the property developer, Nakheel, ended all doubt that the Emirates could remain immune to a wide-reaching global economic slump.
For Eckart Woertz, the economic programme manager at the Dubai-based Gulf Research Center, Davos provides UAE executives with an opportunity to strike deals and showcase themselves as "role-model Arab" businesspeople to a global audience.
"It's a place to be seen and a place to network - a very typical UAE thing to do," said Mr Woertz, the author of a report on the impact of the financial crisis on Gulf economies. "In the UAE, they are dependent on attracting business from the people showing up there, particularly businesses from Dubai."
A session on Friday will see Abdulaziz al Ghurair, the Federal National Council speaker, join regional finance chiefs in debating "The Gulf's New Economic Agenda" and examine how petrodollar reserves can bolster floundering economies.
For Vladimir Kvint, the economist and author of The Global Emerging Market: Strategic Management and Economics, this year's forum represents a "new global economic paradigm" in which emerging markets in places such as the Gulf and China will challenge the West's financial hegemony.
"If businesspeople from the UAE want to interact with decision makers, develop contacts and get an understanding of where the world is going, Davos is a good place to go," Mr Kvint told The National.
The forum will also see the Arab League secretary general, Amr Moussa, and others tackle an economic slump across the wider Middle East, only weeks after delegates to Kuwait's finance summit estimated Arab losses already amounted to $2.5 trillion (Dh9.18tn).
The value of Arab overseas investments, estimated at close to $2.5tn, have dropped by about 40 per cent in the current financial crisis, while Arab stock markets haemorrhaged $600 billion of their capitalisation last year, according to the league.
The wealth gap between rich and poor is also growing, experts say, with Qatar's per capita income of $72,300 being 80 times higher than the $900 in Yemen, respectively the richest and poorest Arab nations.
jreinl@thenational.ae
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
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The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
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.”
Terminator: Dark Fate
Director: Tim Miller
Starring: Arnold Schwarzenegger, Linda Hamilton, Mackenzie Davis
Rating: 3/5
The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Under 19 World Cup
Group A: India, Japan, New Zealand, Sri Lanka
Group B: Australia, England, Nigeria, West Indies
Group C: Bangladesh, Pakistan, Scotland, Zimbabwe
Group D: Afghanistan, Canada, South Africa, UAE
UAE fixtures
Saturday, January 18, v Canada
Wednesday, January 22, v Afghanistan
Saturday, January 25, v South Africa
more from Janine di Giovanni
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
The winners
Fiction
- ‘Amreekiya’ by Lena Mahmoud
- ‘As Good As True’ by Cheryl Reid
The Evelyn Shakir Non-Fiction Award
- ‘Syrian and Lebanese Patricios in Sao Paulo’ by Oswaldo Truzzi; translated by Ramon J Stern
- ‘The Sound of Listening’ by Philip Metres
The George Ellenbogen Poetry Award
- ‘Footnotes in the Order of Disappearance’ by Fady Joudah
Children/Young Adult
- ‘I’ve Loved You Since Forever’ by Hoda Kotb
RESULTS
6pm: Al Maktoum Challenge Round-2 – Group 1 (PA) $55,000 (Dirt) 1,900m
Winner: Rajeh, Antonio Fresu (jockey), Musabah Al Muhairi (trainer)
6.35pm: Oud Metha Stakes – Rated Conditions (TB) $60,000 (D) 1,200m
Winner: Get Back Goldie, William Buick, Doug O’Neill
7.10pm: Jumeirah Classic – Listed (TB) $150,000 (Turf) 1,600m
Winner: Sovereign Prince, James Doyle, Charlie Appleby
7.45pm: Firebreak Stakes – Group 3 (TB) $150,000 (D) 1,600m
Winner: Hypothetical, Mickael Barzalona, Salem bin Ghadayer
8.20pm: Al Maktoum Challenge Round-2 – Group 2 (TB) $350,000 (D) 1,900m
Winner: Hot Rod Charlie, William Buick, Doug O’Neill
8.55pm: Al Bastakiya Trial – Conditions (TB) $60,000 (D) 1,900m
Winner: Withering, Adrie de Vries, Fawzi Nass
9.30pm: Balanchine – Group 2 (TB) $180,000 (T) 1,800m
Winner: Creative Flair, William Buick, Charlie Appleby
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
Super Rugby play-offs
Quarter-finals
- Hurricanes 35, ACT 16
- Crusaders 17, Highlanders 0
- Lions 23, Sharks 21
- Chiefs 17, Stormers 11
Semi-finals
Saturday, July 29
- Crusaders v Chiefs, 12.35pm (UAE)
- Lions v Hurricanes, 4.30pm
The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
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SPECS
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Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Results:
Men's wheelchair 800m T34: 1. Walid Ktila (TUN) 1.44.79; 2. Mohammed Al Hammadi (UAE) 1.45.88; 3. Isaac Towers (GBR) 1.46.46.
