If money makes the world go around, then the ear-splitting screech you heard in the waning months of 2008 was the sound of the wheels of the global economy braking as it lurched from one crisis to another, uncertain about the road ahead.
In any other year, the rise of a member of a historically marginalised racial minority to leader of the most powerful country in the world might easily rank as the top news story. So, too, might the Olympian entry onto the international stage of the world's most populous nation, China.
Even escalating worries over Iran's nuclear programme and President Mahmoud Ahmadinejad's denial that Tehran was building nuclear bombs ("Nuclear weapons are so 20th century") might warrant top billing.
But for the sheer impact it had on people's wallets, company coffers and national treasuries - and more importantly, its probable impact in the uncertain months and years ahead - nothing mattered more in 2008 than money: money vanished, money squandered, money stolen.
In retrospect, the worst economic crisis since the Great Depression should have come as little surprise. The global banking system had been living dangerously high on debt for years. High-risk investments and loose lending kept the music playing and the profits rolling in.
But in mid-September, the tune changed to a dirge, as venerable pillars of the international financial system started to tumble. As the reckless bets of months and years, especially on mortgage securities, were called in across the system, there was precious little actual money to cover them.
Lehman Brothers went belly up. Morgan Stanley and Goldman Sachs were forced out of investment banking. The sixth-largest bank in America, Washington Mutual, went under, marking the biggest bank failure in US history. The British government nationalised two banks and Germany drew up a bank bailout plan worth up to $645 billion (Dh2.36 trillion).
Not everyone, however, got the message the party was over and that a grimmer, more volatile, era had begun.
The Republican Party's presidential candidate, John McCain, declared that the "fundamentals" of the US economy were "strong" - a gaffe that probably helped cost him the election. And a week after the insurance giant AIG received an $85bn government bailout, 70 of its top employees enjoyed a week-long retreat in California, replete with banquets, golf and spa treatments. The cost: $440,000.
Those in the US and Europe who took malicious delight in the misfortunes of the very rich quickly lost their smirks when they realised the values of their homes and retirement accounts, as well as the money they had set aside for the education of their children, had plummeted or evaporated.
Their chagrin was compounded when it soon became clear who would foot the bill to save banks, companies and industries from ruin: the taxpayer. By the end of 2008, taxpayers in the West were set to cough up more than $2trillion in various rescue and stimulus packages.
In the twilight of an administration that ran up an estimated $10.35trillion in debts while in power, making the world's money troubles even worse, the best public explanation George W Bush could muster was, "Wall Street got drunk, and we got a hangover."
No one was immune from blame for the meltdown - not the agencies who rated credit-worthiness, not government regulators, not credulous borrowers and investors, not the banks or investment houses themselves.
Even Alan Greenspan, the powerful former chairman of the US Federal Reserve and the reputed "God of Money", was forced to admit he had made a mistake in opposing attempts to regulate the easy money policies that helped funds flow into high-risk investments. "I found a flaw," he said.
Thanks for letting us know.
Those beyond the shores of America and Europe who thought their distance from Wall Street and the epicentre of the crisis would spare them pain were soon disabused of that notion. Here is something we learned in 2008, in case it had not quite sunk in before: there is no longer an "epicentre".
Banks and investment funds had been intertwined for a long time and were often underwriting each other's heedless risks. With much of the global economy depending on US consumer spending, the news that Americans spent $102.8billion less than they did the month before had predictably calamitous results.
Thus, by year's end few had been spared economic woes.
Across the globe, some $25trillion in the value of stocks went up in smoke. Mongolia saw runs on its banks. Argentina nationalised pension funds. Iceland went bankrupt. Japan fell into recession. Honda dropped out of Formula One auto racing. The economies of India and China, once thought immune to the crisis, began to slow.
As the storm clouds gathered, oil and money-rich Gulf countries such as the UAE boasted with their trademark confidence that they were the calm eye of the hurricane. Their self-confidence was understandable. For the first half of 2008, they enjoyed extraordinarily high oil prices, with the cost of a barrel hitting a whopping $147.25 on July 11.
Yet the insistence there was a "calm eye" was just as anachronistic as an "epicentre". As the global economy slowed, so did the demand for oil. By Dec 19, the price of crude had plummeted 77 per cent to $33.87 a barrel - a four-and-a-half year low.
The cash flows of Russia, Venezuela and Iran, as well as Gulf countries, suffered. Real estate was quick to follow. In the UAE, the bank loans and foreign buyers that property developers depend upon started to dry up, even as Nakheel announced plans to build a 1-km high skyscraper, hundreds of metres higher than Emaar's Burj Dubai, the world's tallest.
By late 2008, the nation's leading developers had suspended work on pending projects, laid off workers and scaled back plans for high-profile ventures. The plunge also wiped billions off the value of the Abu Dhabi Investment Authority, the world's flushest sovereign wealth fund.
After assuring that the real estate sector was "witnessing a healthy correction", Mohamed Ali Alabbar, chairman of the Dubai property giant Emaar and head of the hastily formed Financial Advisory Council, declared: "Yes, we recognise the new reality. Make no mistake."
To be sure, 2008 was not just a year when money disappeared, "new reality" or not.
An investment group led by Sheikh Mansour bin Zayed, the brother of Abu Dhabi's Ruler, bought the English Premier League's Manchester City for $123 million. The Abu Dhabi Investment Council purchased a 90 per cent stake in the Chrysler Building, New York City's art deco jewel for an estimated $800m.
Meanwhile, a 25-year-old from Abu Dhabi named Saeed Khouri bought a licence tag for $14m at a charity auction, and Nakheel and Kerzner International threw a $20m party to celebrate the opening of Dubai's Atlantis resort.
About $7,450 at the Skyview Bar in Dubai's Burj al Arab hotel also bought what is reputed to be the world's most expensive cocktail. And for an unspecified amount, the Tamweer Group and Nibras Media purchased the rights to stage a Middle Eastern version of the Eurovision Song Contest.
Elsewhere, an average of $2m liberated a vessel captured by Somali pirates in the busy shipping lanes of the Gulf of Aden and $2.4bn financed the US presidential campaign.
US Republicans spent $124,487 to outfit their vice-presidential candidate, Sarah Palin, and her family, and a right-wing Israeli candidate for parliament said Israel should pay each Palestinian family $250,000 to move out of the West Bank.
Amid the hurly-burly of money lost or spent, some events with profound consequences passed virtually unnoticed. For the first time in human history, there were more people living in cities than in rural areas. Also, the polar bear was listed as an "endangered" species - the first animal to be added due to global warming.
As we turn the corner on a new year, perhaps the majestic creature's fate is an apt metaphor. In 2008, due to the global financial meltdown, the ground under everyone's feet shifted. Assets by the trillions have been replaced by mistrust in spades. Vagaries have replaced verities, not only in the marketplace but in politics as well.
Ironic, then, that buzzword of 2008 was "change". We are getting far more than we expected and bargained for. On the cusp of a new year, it is therefore tempting to follow the example of the Iraqi journalist Muntazer al Zaidi and hurl a shoe at the old one and shout: "Enough already!"
The hitch is that 2009 could be worse, as money problems sweep the globe. No one - not even "change agent" Barack Obama and his celebrated Obi-Wan Kenobi calm - can be sanguine about that.
cnelson@thenational.ae
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
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.”
'Ashkal'
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Attacks on Egypt’s long rooted Copts
Egypt’s Copts belong to one of the world’s oldest Christian communities, with Mark the Evangelist credited with founding their church around 300 AD. Orthodox Christians account for the overwhelming majority of Christians in Egypt, with the rest mainly made up of Greek Orthodox, Catholics and Anglicans.
The community accounts for some 10 per cent of Egypt’s 100 million people, with the largest concentrations of Christians found in Cairo, Alexandria and the provinces of Minya and Assiut south of Cairo.
Egypt’s Christians have had a somewhat turbulent history in the Muslim majority Arab nation, with the community occasionally suffering outright persecution but generally living in peace with their Muslim compatriots. But radical Muslims who have first emerged in the 1970s have whipped up anti-Christian sentiments, something that has, in turn, led to an upsurge in attacks against their places of worship, church-linked facilities as well as their businesses and homes.
More recently, ISIS has vowed to go after the Christians, claiming responsibility for a series of attacks against churches packed with worshippers starting December 2016.
The discrimination many Christians complain about and the shift towards religious conservatism by many Egyptian Muslims over the last 50 years have forced hundreds of thousands of Christians to migrate, starting new lives in growing communities in places as far afield as Australia, Canada and the United States.
Here is a look at major attacks against Egypt's Coptic Christians in recent years:
November 2: Masked gunmen riding pickup trucks opened fire on three buses carrying pilgrims to the remote desert monastery of St. Samuel the Confessor south of Cairo, killing 7 and wounding about 20. IS claimed responsibility for the attack.
May 26, 2017: Masked militants riding in three all-terrain cars open fire on a bus carrying pilgrims on their way to the Monastery of St. Samuel the Confessor, killing 29 and wounding 22. ISIS claimed responsibility for the attack.
April 2017: Twin attacks by suicide bombers hit churches in the coastal city of Alexandria and the Nile Delta city of Tanta. At least 43 people are killed and scores of worshippers injured in the Palm Sunday attack, which narrowly missed a ceremony presided over by Pope Tawadros II, spiritual leader of Egypt Orthodox Copts, in Alexandria's St. Mark's Cathedral. ISIS claimed responsibility for the attacks.
February 2017: Hundreds of Egyptian Christians flee their homes in the northern part of the Sinai Peninsula, fearing attacks by ISIS. The group's North Sinai affiliate had killed at least seven Coptic Christians in the restive peninsula in less than a month.
December 2016: A bombing at a chapel adjacent to Egypt's main Coptic Christian cathedral in Cairo kills 30 people and wounds dozens during Sunday Mass in one of the deadliest attacks carried out against the religious minority in recent memory. ISIS claimed responsibility.
July 2016: Pope Tawadros II says that since 2013 there were 37 sectarian attacks on Christians in Egypt, nearly one incident a month. A Muslim mob stabs to death a 27-year-old Coptic Christian man, Fam Khalaf, in the central city of Minya over a personal feud.
May 2016: A Muslim mob ransacks and torches seven Christian homes in Minya after rumours spread that a Christian man had an affair with a Muslim woman. The elderly mother of the Christian man was stripped naked and dragged through a street by the mob.
New Year's Eve 2011: A bomb explodes in a Coptic Christian church in Alexandria as worshippers leave after a midnight mass, killing more than 20 people.
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
The Lowdown
Us
Director: Jordan Peele
Starring: Lupita Nyong'o, Winston Duke, Shahadi Wright Joseqph, Evan Alex and Elisabeth Moss
Rating: 4/5
Oppenheimer
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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
THE SPECS
Engine: 1.5-litre, four-cylinder turbo
Transmission: seven-speed dual clutch automatic
Power: 169bhp
Torque: 250Nm
Price: Dh54,500
On sale: now
The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
A little about CVRL
Founded in 1985 by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, the Central Veterinary Research Laboratory (CVRL) is a government diagnostic centre that provides testing and research facilities to the UAE and neighbouring countries.
One of its main goals is to provide permanent treatment solutions for veterinary related diseases.
The taxidermy centre was established 12 years ago and is headed by Dr Ulrich Wernery.
How to join and use Abu Dhabi’s public libraries
• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.
• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.
• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.
• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.
• For more information visit the library network's website.
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
J%20Street%20Polling%20Results
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The specs
Price, base / as tested Dh1,470,000 (est)
Engine 6.9-litre twin-turbo W12
Gearbox eight-speed automatic
Power 626bhp @ 6,000rpm
Torque: 900Nm @ 1,350rpm
Fuel economy, combined 14.0L / 100km
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
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- 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
more from Janine di Giovanni
Leaderboard
63 - Mike Lorenzo-Vera (FRA)
64 - Rory McIlroy (NIR)
66 - Jon Rahm (ESP)
67 - Tom Lewis (ENG), Tommy Fleetwood (ENG)
68 - Rafael Cabrera-Bello (ESP), Marcus Kinhult (SWE)
69 - Justin Rose (ENG), Thomas Detry (BEL), Francesco Molinari (ITA), Danny Willett (ENG), Li Haotong (CHN), Matthias Schwab (AUT)
The five pillars of Islam
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
The biog
Favourite book: Animal Farm by George Orwell
Favourite music: Classical
Hobbies: Reading and writing
SPECS
Nissan 370z Nismo
Engine: 3.7-litre V6
Transmission: seven-speed automatic
Power: 363hp
Torque: 560Nm
Price: Dh184,500
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Mohammed bin Zayed Majlis
