Creative new ways of expanding the UAE's message abroad was the focus of a new diplomatic body's first meeting involving a number of the country’s top diplomatic officials.
Chaired by Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister of the UAE and Minister of Presidential Affairs, the UAE Soft Power Council convened on Monday as part of the two-day UAE government annual meetings to come up with a UAE Soft Power Strategy to increase the country’s global reputation abroad by highlighting its identity, heritage, culture and contributions to the world.
“The UAE’s Soft Power Strategy is a comprehensive framework for all sectors in the country,” said.
Sheikh Mansour. “The responsibility of the UAE’s reputation is also the responsibility of any person and group in the UAE. Our goal is to build a strong reputation for the nation, through which we can achieve our developmental, economic and cultural goals and ambitions.”
Sheikh Mansour noted the UAE’s ambitious political leadership, strong economy, significant cultural initiatives, along with its infrastructure, which he said is the best in the world, “support us in leapfrogging our soft power.”
“The UAE is an urban metropolis and an important hub in the region,” said Sheikh Mansour. “We have developed in a remarkable way, and can offer a model for development for many other countries around the world.”
He added, “The UAE is a regional and global platform that embraces Arab culture and global best practices; we are a global meeting point, an essential gateway to the Arab world, and offer a platform for a renaissance in the Arab world.”
“The people of the UAE are a valuable part of our Soft Power Strategy, and open communication with them is as much a priority as communicating with government entities; we will develop an institutional framework for communication, so we may deliver our message to many parts of the world,” he concluded.
The strategy is based on four main objectives, which are to develop a unified direction for various sectors including the economy, humanities, tourism, media and science, and to promote the UAE’s position as a gateway to the region. In addition, to establish the UAE as a regional capital for culture, art, and tourism, and to establish its reputation as a modern and tolerant country that welcomes all people from across the world.
The strategy also includes six main pillars that together form the framework for the UAE’s public diplomacy: humanitarian diplomacy, scientific and academic diplomacy, national representatives diplomacy, people diplomacy, cultural and media diplomacy, and economic diplomacy.
Sheikh Mohammed bin Rashid Al Maktoum launched the UAE Soft Power Council in May, enlisting it to develop the country’s soft power strategy to include the culture, technology, humanitarian, science and economic sectors, in order to establish relationships at the grassroots level with partners both in the Middle East region and globally.
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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.”
