The US-Saudi “relationship is probably the strongest it’s ever been”, in the words of US president Donald Trump. Jonathan Ernst / Reuters
The US-Saudi “relationship is probably the strongest it’s ever been”, in the words of US president Donald Trump. Jonathan Ernst / Reuters

Editorial

Mohammed bin Salman's visit to the United States reaffirms an old friendship

Much has already been accomplished in the areas of security, energy and trade

National Editorial

March 21, 2018

"We are the oldest ally of America in the Middle East", Saudi Arabia's Crown Prince Mohammed bin Salman told US president Donald Trump in the Oval Office on Tuesday. The relationship between Washington and Riyadh, founded on mutual respect and shared interests, has served their two nations – and the Middle East and the world at large – well. Yet, despite its depth, the friendship has known its moments of stress and strain, most recently and acutely during the presidency of Barack Obama. The first objective of the visit by Prince Mohammed to the US – the first in his official capacity – was to reaffirm the bond between the two countries. His reception in Washington, the first leg of his 20-day tour of the US, suggests this aim has been achieved. In the words of Mr Trump, the US-Saudi "relationship is probably the strongest it's ever been".

The two countries are bound by common interests in the areas of energy security and jobs: deepening cooperation on the former boosts the latter. On terrorism and the conflict in Yemen, they have a common position. A resolution in the US Senate to end Washington's support for the Saudi-led campaign to restore Yemen's legitimate government was defeated as Mr Trump held talks with Prince Mohammed. The two countries are united too on the need to contain Iran, which has sowed discord and spread terror in this region. As Mr Trump said in the presence of Prince Mohammed, "Iran has not been treating that part of the world well". It appears Mr Trump may choose not to recertify the flawed Iran nuclear deal in May, a position Prince Mohammed will undoubtedly support. With the quartet of Saudi Arabia, the UAE, Egypt and Bahrain determined to maintain their boycott of Qatar, Mr Trump has branded Doha "a funder of terrorism at a very high level".

The lunch hosted by the US president in honour of his guest was attended by officials responsible for energy, security and trade: the three major priorities for both countries. Prince Mohammed's push to modernise his nation's economy and liberalise its society ever since he was elevated to his role last summer has earned him a reputation as a serious-minded reformer. His efforts have put Saudi Arabia's full potential on display, and the world is eager to partner and do business with it. His Vision 2030 programme, a comprehensive plan to diversify the kingdom's economy and transform the country, has sparked interest among international observers. During his visit, Prince Mohammed will meet with leaders of business as well as politics. The US-Saudi relationship is a historic one, built today on the three pillars of energy, security and trade. Under Mr Trump, it is likely to strengthen further.

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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.”

When Umm Kulthum performed in Abu Dhabi

  

 

 

 

Known as The Lady of Arabic Song, Umm Kulthum performed in Abu Dhabi on November 28, 1971, as part of celebrations for the fifth anniversary of the accession of Sheikh Zayed bin Sultan Al Nahyan as Ruler of Abu Dhabi. A concert hall was constructed for the event on land that is now Al Nahyan Stadium, behind Al Wahda Mall. The audience were treated to many of Kulthum's most well-known songs as part of the sold-out show, including Aghadan Alqak and Enta Omri.

 
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Ultra processed foods

- Carbonated drinks, sweet or savoury packaged snacks, confectionery, mass-produced packaged breads and buns 

- margarines and spreads; cookies, biscuits, pastries, cakes, and cake mixes, breakfast cereals, cereal and energy bars;

- energy drinks, milk drinks, fruit yoghurts and fruit drinks, cocoa drinks, meat and chicken extracts and instant sauces

- infant formulas and follow-on milks, health and slimming products such as powdered or fortified meal and dish substitutes,

- many ready-to-heat products including pre-prepared pies and pasta and pizza dishes, poultry and fish nuggets and sticks, sausages, burgers, hot dogs, and other reconstituted meat products, powdered and packaged instant soups, noodles and desserts.