For Saudi Arabia and the UAE, this year appears to be wrapping up in favour of their regional perspective. Any gains are particularly significant considering that they come amid deep changes in the way these two key regional countries seek to shape their neighbourhood.
The policy direction in question has been clear for months. It involves a new drive in Riyadh and Abu Dhabi to shape the future through unprecedented levels of coordination, combined with new and long-term strategies.
In Yemen, for example, the latest developments present a notable breakthrough for the Saudi-led coalition and its allies on the ground. Specifically, the formal breakdown of the partnership between the Houthis and allies of the former president, Ali Abdullah Saleh, who was killed days after he had turned against his erstwhile allies over the weekend. The implications of this move, despite his killing, are far-reaching.
First, the breakup serves key objectives of the Riyadh-led coalition. It vindicates the narrative that the war in Yemen was focused on the Iranian-backed Houthis. Since the campaign began more than two years ago, a counter-argument has been raised that the war targeted a broader spectrum of Yemenis, who include supporters of the former president, rather than just the Houthi rebels. The involvement of other Yemenis played into the hands of the Houthis, not just in military terms, with some observers even distancing themselves from talk of the group being Iranian proxies, since it was presumably a broader popular resistance.
This "demarbling" effect offers another benefit to the coalition — an objective that the United States often seeks in conflicts in which it is engaged. This objective involves an effort to peel off the reconcilable segments within opponents, to both weaken and delegitimise the enemy. Coalition officials often indicated the war had specific and limited goals, mostly to restore the political process and reverse the Houthi takeover; and stated that the war was not designed to eradicate the group, whom they asserted were part of the Yemeni society. The same applied to supporters of Saleh.
So, the split between the two factions offers the coalition fighting to restore the internationally recognised Yemeni government clarity to outsiders. The coalition could more easily pin its government-backed campaign as directed at the Houthis. Yemeni officials have already sent goodwill gestures to supporters of the former president to mend ties and reach an agreement. The Yemeni president, Abdrabu Mansur Hadi, even called Saleh a "martyr" and offered condolences to his family and base.
The Houthis, meanwhile, seem to have fortified the split with the killing of Saleh and have thus ensured a point of no return. As Majid al-Madhaji, from the Sanaa Center for Strategic Studies, told the Associated Press, the Houthis are now ”stripped of any cover and shown purely as a religious sectarian movement ruling with force and repression”.
It will be up to the coalition to seize the moment, but this is already a major breakthrough that is barely highlighted as such. It will also likely take time for the Saleh supporters to recover from the shock of his death and organise themselves, and for the two anti-Houthi blocs in Yemen to potentially agree and team up efforts against a common and clear enemy.
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Elsewhere in the region, Abu Dhabi and Riyadh are seeing openings in countries like Libya and Iraq. The political situation in Libya is poised to develop in favour of anti-Islamist forces they support. New developments behind the scene, as well as the recent military breakthrough against Islamists in Benghazi in the summer, suggest that the winds are blowing in favour of the policies that the UAE and Saudi Arabia have envisioned over the past few years. The nascent rapprochement with leaders in Iraq has also been a milestone in the way Saudi Arabia conducts its regional policies.
Critically, these breakthroughs come amid an understanding that big changes cannot happen quickly.
These changes are further bolstered by the actions of the quartet of nations - Bahrain, Egypt, Saudi Arabia and the UAE - against Qatar six months ago. As Doha faces continuing isolation from its neighbouring countries, it is less capable of challenging their policies. This dynamic is at the heart of the Qatar crisis, enabling Saudi Arabia and the UAE to make progress on both the home and regional fronts, mainly by slowly undoing or eroding policies advanced by Doha, despite the persistence of a stalemate.
New dynamics in the relationship between Saudi Arabia and the UAE could make hoped for changes in the Middle East more possible and consequential than before. Such dynamics include near uniformity in the way they pursue change, contrary to before when Saudi Arabia, for example, tended to be more cautious and less agile.
The Gulf countries still have some way to go before they could begin to turn over nefarious policies by their rivals, and any gains remain reversible without a consistent effort. But any progress made in recent weeks should be viewed in the context of a new partnership, codified on Tuesday in a new bilateral agreement beyond the existing the umbrella of the Gulf Cooperation Council, that will involve new rules of engagement in the Middle East.
Hassan Hassan is a senior fellow at the Tahrir Institute for Middle East Policy
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The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Teams in the EHL
White Bears, Al Ain Theebs, Dubai Mighty Camels, Abu Dhabi Storms, Abu Dhabi Scorpions and Vipers
The specs: Fenyr SuperSport
Price, base: Dh5.1 million
Engine: 3.8-litre twin-turbo flat-six
Transmission: Seven-speed automatic
Power: 800hp @ 7,100pm
Torque: 980Nm @ 4,000rpm
Fuel economy, combined: 13.5L / 100km
COMPANY PROFILE
Name: Lamsa
Founder: Badr Ward
Launched: 2014
Employees: 60
Based: Abu Dhabi
Sector: EdTech
Funding to date: $15 million
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.”
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
COMPANY%20PROFILE
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