Much of the modern-day Middle East as we know it was drawn up in the Sykes-Picot Agreement of 1916, seen in this map of "Eastern Turkey in Asia, Syria and Western Persia" / Unispal
Much of the modern-day Middle East as we know it was drawn up in the Sykes-Picot Agreement of 1916, seen in this map of "Eastern Turkey in Asia, Syria and Western Persia" / Unispal

Why do we still use the term Middle East when West Asia is more relevant to Arab nations?



Neuroscientists and linguists have demonstrated that the language we speak and the words we use shape how we think. Terminology certainly matters in geopolitics as well, conditioning how we view entire regions of the world. Crucially, our geographic vocabulary evolves to suit the times. The Cold War, for example, was often referred to as the "East-West conflict" but today nobody thinks of Russia as representative of the "East" – when it is China that is clearly the eastern superpower. Unfortunately, when it comes to the Arab, Turkic and Persian realms, the catch-all term "Middle East" continues to hold sway among English speakers. Subsuming any of the geographic distinctions and nuance contained in the Arabic terms Maghreb, Khaleej and Mashriq, the vague "Middle East" continues to represent so much –even as it increasingly means nothing at all. Isn't it time for our vocabulary to adapt to reality?

At its most obtuse, Middle East connotes everything from Morocco to Afghanistan, spanning a melange of sub-regions stretching from North Africa to Central Asia. But North African countries from Egypt westwards have little relevance to Asia, even though they are mostly Arab-populated. It makes far more sense to refer to West Asia and Southwest Asia to capture Turkey, Iran, the Gulf states, and the nations lying between them. Neutral geographic labels are ultimately much more revealing than colonial artefacts. Of course we can blame colonialism and the Cold War for fragmenting what was once a far more fluid and integrated picture of relations across Asia’s Silk Roads. But it has been nearly three decades since the collapse of the Soviet Union, more than enough time for Arab leaders to come to terms with the new global circumstances.

Since that time, East and South Asia’s rise has compelled West Asia to rediscover its Asian geography. The energy “supercycle” that kicked off in the 1990s rapidly tied the Gulf’s fortunes to Asians – especially China, Japan and South Korea, and now also energy-thirsty India – rather than to the West. The Gulf states’ trade with all other sub-regions of Asia is intensifying. The GCC exports petroleum and gold to India and imports jewellery and textiles amounting to nearly $200 billion per year. China also has nearly $170 billion in trade with GCC countries and its growing use of the renminbi is rekindling plans for a free-trade agreement. In the past decade, Japan and South Korea have also increased their trade with the Gulf states and Japan is pursuing a free-trade agreement with the GCC. Meanwhile, Asean exports of meat, fruit, tea and other agricultural goods to the Gulf states have doubled in less than a decade, contributing to their $130 billion in annual trade. Asean energy consumption is expected to double between 2015 and 2030, with much of the additional supply coming from the Gulf.

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Fresh investments spanning the breadth of this new maritime Silk Road from the Strait of Hormuz to the Strait of Malacca – the world’s most significant energy passageways – are further evidence of the Asianisation pulling all corners of the region together. In early 2017, Saudi Arabia’s King Salman spent one month travelling to Malaysia, Indonesia, Japan, and China, inaugurating new petrochemical refineries for their oil imports from the kingdom. Many of his generation studied in India, and now thousands of young Saudis are returning to Indian universities as King Abdullah Scholarship recipients. All Gulf states have launched eastward-facing campaigns. Kuwait and Qatar have invested in large new refineries in Indonesia, while Mubadala Petroleum is underwriting gas exploration in Thailand and elsewhere in Southeast Asia.

In the reverse direction, China has bought into the UAE’s oil fields by acquiring a stake in Adnoc’s onshore drilling operations, while both the Jiangsu Province Overseas Cooperation and Investment Company and Cosco have signed 35-year and 50-year leases, respectively, on facilities at Abu Dhabi’s Khalifa Port. Across the Arab world, China invested $26 billion in 2016 alone. Arabic is the fastest-growing language at Beijing’s Foreign Studies University. Cross-Asian investment growth is inspiring plans for a great decoupling between oil and the dollar, with many experts predicting the imminent establishment of petro-RMB oil pricing.

Gulf economies cannot achieve their goal of economic diversification without support from East Asia. In 2015, Saudi Arabia's Public Investment Fund (PIF) purchased a 38 per cent stake in South Korea's Posco Engineering and Construction, after which Saudi Aramco turned to Korea's Hyundai to construct the Gulf's largest shipyard. Bahrain and Oman are turning ever more to East Asian banks for trade financing and joint investments. Both Japan and South Korea have been crucial in providing the high-end industrial machinery and electronics necessary for the Gulf states' ambitions for economic transformation.

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Asia’s SWFs and financial conglomerates are also working with high-growth Asian countries on crucial infrastructure projects. Mubadala Investment Company together with its partners in China has committed $1 billion towards opportunities there, while Dubai Ports World has a $3 billion fund that is targeting investments across India’s rapidly growing logistics sector. Asian tech companies are also leading the drive to capture the Arab world’s 400 million customers, half of whom are regular internet users. Alibaba has begun a $600 million investment into a “tech town” near Jebel Ali that will house robotics and mobile app companies. Tencent is launching WeChat services across the region, facilitating payments and remittances for the millions of migrant labourers from South Asia, while Xiaomi has begun selling an $88 smartphone targeting low-wage workers.

For the past quarter of a century, the most fragile part of the Arab world has been the West’s purview, with Asians free riding on western military involvement and financial contributions. But now that most of the significant long-term energy contracts, infrastructure projects and diplomatic initiatives are tied to Asian powers, the Asian-Arab nexus will determine West Asia’s future more than any diktats from Washington or London. China and India are already the largest purchasers of Iraqi oil. The Iraqi army used Chinese-made killer drones in its successful 2017 assault on ISIS, and China’s Huawei outbid European bidders to win the contract to build Iraq’s telecom infrastructure, which it rolled out in just 12 months.

Other Arab countries that have failed to build meaningful postcolonial identities are also seizing the chance to deepen strategic ties with the world’s largest and fastest-growing economies. Jordan is trying to stop relying on Arab and western aid by inviting in Asian investors to help build its economic base. Jordan also became a founding member of the Asian Infrastructure Investment Bank (AIIB), rewarded with immediate approval of financing to construct new shale-oil and renewable-energy power plants, a special economic zone for manufacturing and logistics near the strategic port of Aqaba, and a $3 billion deal for China to build a national railway network. Within a decade, the old Ottoman-era Hejaz Railway will become part of the new Asian Silk Road network. Syrians used to proudly call themselves “eastern Mediterranean”. Now they know their future is Arab-Asian.

Dr Parag Khanna is managing partner of FutureMap, a strategic advisory firm, and author of The Future is Asian: Commerce, Conflict, and Culture in the 21st Century published by Hachette, from which this essay is adapted. The book is available from today in the UAE and across the Gulf region

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
Ziina users can donate to relief efforts in Beirut

Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”

If you go…

Emirates launched a new daily service to Mexico City this week, flying via Barcelona from Dh3,995.

Emirati citizens are among 67 nationalities who do not require a visa to Mexico. Entry is granted on arrival for stays of up to 180 days. 

From Europe to the Middle East, economic success brings wealth - and lifestyle diseases

A rise in obesity figures and the need for more public spending is a familiar trend in the developing world as western lifestyles are adopted.

One in five deaths around the world is now caused by bad diet, with obesity the fastest growing global risk. A high body mass index is also the top cause of metabolic diseases relating to death and disability in Kuwait,  Qatar and Oman – and second on the list in Bahrain.

In Britain, heart disease, lung cancer and Alzheimer’s remain among the leading causes of death, and people there are spending more time suffering from health problems.

The UK is expected to spend $421.4 billion on healthcare by 2040, up from $239.3 billion in 2014.

And development assistance for health is talking about the financial aid given to governments to support social, environmental development of developing countries.

 

A MINECRAFT MOVIE

Director: Jared Hess

Starring: Jack Black, Jennifer Coolidge, Jason Momoa

Rating: 3/5

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.”

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"