Venezuela’s currency is in free fall. Cryptocurrencies such as bitcoin are going precisely the other direction. And there, President Nicolas Maduro sees a way out of his country’s economic ills.
On his Sunday television show, Mr Maduro announced the nation would create its own “petrocurrency,” backed by reserves in oil, gas, gold and diamonds. It will enable Venezuela “to advance in monetary sovereignty, carry out its financial transactions to overcome the financial blockade,” Maduro said.
“This will allow us to advance toward new forms of international financing for the country’s social and economic development,” he said.
The black market rate for one dollar weakened to 103,000 bolivars on Friday compared with 10,000 at the end of July, according to dolartoday.com, a website that tracks the data. The International Monetary Fund sees Venezuela’s economy shrinking 12 percent this year and annual inflation rising beyond 2,300 percent in 2018.
Bitcoin rose on Friday after CME Group Inc. and Cboe Global Markets Inc. said they will offer futures contracts as soon as this month, capping a record-breaking week. The world’s largest digital currency surged about 30 percent last week, reaching a record high of $11,434 on Nov. 29.
Maduro’s government persists in laying the blame for the country’s economic woes at the feet of an opposition conspiracy to overthrow him and, more recently, U.S. sanctions that have limited its ability to restructure its debts. As the country finishes its fourth straight year of recession, some voices in the ruling socialist party are calling for a more market-friendly approach.
Jesus Faria, a self-proclaimed Marxist economist and a former trade minister who’s now a member of the constituent assembly, recently said about the current foreign-exchange policy that a “truly free exchange market has to be established, where supply and demand meet to fix the price.”
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
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Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
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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
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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.”
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
On Women's Day
Dr Nawal Al-Hosany: Why more women should be on the frontlines of climate action
Samar Elmnhrawy: How companies in the Middle East can catch up on gender equality
The National Editorial: Is there much to celebrate on International Women's Day 2021?
Justin Thomas: Challenge the notion that 'men are from Mars, women are from Venus'
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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Pathaan
Arabian Gulf League fixtures:
Friday:
- Emirates v Hatta, 5.15pm
- Al Wahda v Al Dhafra, 5.25pm
- Al Ain v Shabab Al Ahli Dubai, 8.15pm
Saturday:
- Dibba v Ajman, 5.15pm
- Sharjah v Al Wasl, 5.20pm
- Al Jazira v Al Nasr, 8.15pm
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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Banned items
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Drones
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Animals
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Fireworks/ flares
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Radios or power banks
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Laser pointers
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Glass
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Selfie sticks/ umbrellas
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Sharp objects
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Political flags or banners
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Bikes, skateboards or scooters