LONDON // The UAE and Britain have set a new target for bilateral trade that would more than double its current value to £25 billion (Dh140.60bn) by 2020.
With economic links between the two countries growing each year, the objective was described by Sultan Al Mansouri, the Economy Minister, as “taking our relations to a new dimension”.
Mr Al Mansoori was speaking to The National during a two-day trade visit to the UK, which took delegates to London and Manchester.
He said the UAE was keen to achieve the new target, which has been agreed by the UAE-UK Business Council. Although he and British officials accepted the goal as “ambitious”, Mr Al Mansouri insisted it was achievable following the success of the two countries in reaching their previous target of £12bn in 2103, two years ahead of schedule. About two thirds of the total benefits UK exporters.
The minister contrasted the rapid growth of trade between the UAE and the UK with a decline from the 1990s until “we seemed to rediscover each other” from the turn of the century.
The trading relationship had a key part to play in the UAE’s drive to innovate and diversify its activities as the Arab world’s biggest economy after Saudi Arabia, he said. Oil and gas still account for 30 per cent of the UAE’s economy but the minister said it had already fallen from 90 per cent in 1971 with a projected reduction to 20 per cent within 20 years.
Sajid Javid, Britain’s secretary of state for business, innovation and skills, told the London section of the ministerial visit: “There has never been a better time for trade between the countries. It is fair to say it is stronger than ever.”
Mr Javid, who is of Pakistani descent, also cited Masdar’s new 35 per cent stake worth £525 million in the UK’s Dudgeon offshore wind power project, a £1bn investment in urban regeneration in Manchester and the Dubai-based Toy Store’s new shop in the heart of London which created 120 jobs.
UAE imports from Britain amounted to Dh24.6bn last year, 3.5 per cent of the total, making the UK the sixth-largest customer behind China, the United States, India, Germany and Japan.
But Doing Business in the UAE, a guide book produced jointly by the Ministry of Economy and Britain's Institute of Export and launched during the UK visit, points out that a significant proportion of imports are re-exported to Saudi Arabia and Iran.
Philip Parham, UK ambassador to the UAE, comments in the book that Emirati exports to the UK have also substantially increased.
Bilateral UAE-UK trade stood at just £7.5bn when the first target was set in 2009. Sir Alan Parker, chairman of the corporate communications company Brunswick Group, likened the two-way business to a flywheel with “the wheel turning ever faster and more powerfully”.
He said: “We have shown over the years that it can be done and there is huge natural affinity between us. The fresh target is really ambitious, stretched even, but it is realistic.”
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Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
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- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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Creators: Matt Sazama, Burk Sharpless, Irwin Allen
Stars: Molly Parker, Toby Stephens, Maxwell Jenkins
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In numbers: PKK’s money network in Europe
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Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
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About Proto21
Date started: May 2018
Founder: Pir Arkam
Based: Dubai
Sector: Additive manufacturing (aka, 3D printing)
Staff: 18
Funding: Invested, supported and partnered by Joseph Group
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Develop an innovative business concept
Have the ability to differentiate yourself from competitors
Put in place a business continuity plan after Covid-19
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* Tips from Jassim Al Marzooqi and Walid Hanna
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Total funding: Self funded
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Company Profile
Company name: Yeepeey
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Founders: Sagar Chandiramani, Jatin Sharma and Monish Chandiramani
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Industry: E-grocery
Initial investment: $150,000
Future plan: Raise $1.5m and enter Saudi Arabia next year
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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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UAE currency: the story behind the money in your pockets
