Obama to give address in Cairo



Cairo // Answering to his longstanding campaign promise, Barack Obama, the president of the United States, has chosen Egypt as the location from which he will address the Muslim world early next month in a speech that will appeal for greater understanding between the global Muslim community and the West.

Despite Egypt being one of America's closest allies in the Middle East and the largest recipient of American aid after Israel, the decision is not without controversy. The Egyptian president, Hosni Mubarak, governs with an autocratic authority that Mr Obama will need to carefully avoid endorsing, according to political analysts. But in choosing the Arab world's most populous and, arguably, one of its most politically vital nations, Mr Obama will be better equipped to target his speech directly at adherents of humanity's second-largest religious faith.

"The reason it's an interesting decision is that there were probably politically safer places - places that didn't have the same kinds of dilemmas," said Nathan Brown, an expert on Egyptian politics and a professor of political science and international affairs at George Washington University. "The American relationship with Egypt has been focused over the last couple of years on really purely regional and security issues," he said. "Introducing a broad cultural element is an interesting step because again, there were places that the people would have expected were more likely, like Turkey and Indonesia, that wouldn't have gotten the speech tied up implicitly or explicitly with those other issues" of good governance and human rights.

The announcement on Friday follows several American policy decisions on Egypt that cast doubt on whether Mr Obama is truly committed to democratic reform in Egypt. During a visit to Egypt last week, Robert Gates, the US secretary of defence, said America's nearly US$2 billion (Dh7.3bn) in mostly military aid to Egypt will remain unhindered by political conditions. According to The Washington Post, the Obama administration will no longer fund Egyptian pro-democracy organisations without Egyptian government approval - a move that will effectively cut US funding for reform-minded civil society groups by approximately 70 per cent, the newspaper said in an editorial.

The decisions reflect new foreign policy thinking in Washington that prioritises political stability over democratic reform, said Issandr El Amrani, a Cairo-based political analyst for the International Crisis Group. It also represents a different approach from the Bush administration, which at times seemed to view democratisation in the Middle East as part and parcel with its fight against Islamist terrorism.

"On the one hand they recognise that this idea of democratisation is important, that the spirit of democratic values are important. That's still there," said Mr Amrani. "But it's being countered by the regional situation and a desire to stabilise Egypt ... I don't think that we are going to see toward Egypt a policy that will destabilise the regime because the regime is seen externally as weak." Part of the problem for US policymakers is the dearth of political alternatives in Egypt, he said.

The largest political entity outside Mr Mubarak's National Democratic Party is the Muslim Brotherhood - an Islamist political organisation that is outlawed by the Egyptian government. While the Brotherhood has long agitated for democratic reform, their Islamist political platform is far more unsavoury to American policymakers than Mr Mubarak's. For their part, one of the Brotherhood's leaders said the organisation feels no particular affinity toward Mr Obama. Instead, the Egyptian people are looking for material policy changes, not empty words, said Muhammed Habib, the organisation's second-in-command.

"It's not about feelings and passion and all that, it's about what could happen to change the American policy in the Muslim world," said Mr Habib. "Will they still be seeking hegemony in the Arab world to support the Zionist state? Will the American bases remain in Iraq? This all needs clarification and a stance." Even the youthful, secular-minded April 6th Movement, which seeks to consolidate Egypt's divided political and labour opposition movements under a single banner, remains sceptical of the upcoming speech, which is scheduled for June 4, and US intentions in the Middle East.

"American support for the Egyptian regime does not concern me at all because democracy in Egypt, if it happens, will be in contradiction to American policies," said Mohammed Abdel Aziz, a spokesman for the April 6th Movement. But on the streets of Egypt's capital, the news of Obama's speech was greeted with pride and cautious optimism. "He will speak from Egypt because Egypt is the heart of the Arab world and the lighthouse of Islam," said Haitham Osama, a database administrator for an information technology company. Mr Osama added it was too early to decide whether Mr Obama's Middle East policies would have a positive influence on Egyptian affairs.

To others who were smoking at a shisha cafe in the middle-class Cairo neighbourhood of Agouza, Mr Obama's speech represents the kind of opportunity for intercultural dialogue that his predecessor shirked. As for whether Mr Obama's choice signals unconditional US support for Mr Mubarak and his autocratic policies, Mohammed Shaaban, who owns the cafe, said such governance can be found throughout the world. Stability and prosperity, he said, are what most people value.

"These problems shouldn't be overlooked, but everyone is equal when it comes to problems. The whole world shares when it comes to these problems," said Mr Shaaban. @Email:mbradley@thenational.ae

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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.”