Cucumbers grown in a greenhouse in Dubai are one way the UAE ensures it has food security. Photo: Jeffrey Biteng / The National
Cucumbers grown in a greenhouse in Dubai are one way the UAE ensures it has food security. Photo: Jeffrey Biteng / The National

Food security and the UAE’s Midas touch



The legend of King Midas is used to show the folly of valuing one form of riches to the exclusion of others. When Dionysus granted Midas his wish that everything he touched turned to gold, the king soon discovered that everything he tried to eat turned into the metal. Whether or not the policymakers of the UAE are familiar with Greek mythology, their attitude towards food security shows they are keenly aware of the fable’s cautionary principle.

The UAE is, of course, blessed with vast oil reserves but that commodity cannot in itself sustain the country except by providing the means to buy food from less arid regions or to artificially foster agriculture here using desalinated water. The population now is 7.9 million peoplebut before oil was discovered and exported, the Trucial States sustained fewer than one million people.

The issue was quantified recently when the UAE was included for the first time in the The Economist Intelligence Unit's Global Food Security Index, which put it in 30th place of 109 countries assessed. The score was based on three factors: food affordability (in which the UAE was rated 15th), food availability (51st) and quality and safety (32nd).

However, that kind of standardised assessment does not sit comfortably with the unique situation here. The UAE received the lowest possible score for its investment in agriculture research and development, but the challenge is not improving local agricultural practices but in ensuring the security of the supply chain, both from farms owned by the UAE in Africa, Europe and Asia and from external suppliers.

Although experiments have been held in Abu Dhabi in the last two years for the most suitable variety of wheat for local conditions, one need only look at a similar programme in Saudi Arabia that depleted its groundwater to produce wheat at several times the price it would have cost to import on the open market.

There is also a bigger issue that is not reflected in the food security score. By operating farms in places like East and North Africa, the UAE not only gains food security based on a much more favourable conditions for agriculture but is also able to introduce highly-efficient practices to countries thanks to its understanding of the culture of the region that in many places are struggling to develop beyond subsistence agriculture.

It can do this in a more ethical and sustainable way than many other global agribusinesses. This would be a truly virtuous circle in which each side benefits.

If you go...

Fly from Dubai or Abu Dhabi to Chiang Mai in Thailand, via Bangkok, before taking a five-hour bus ride across the Laos border to Huay Xai. The land border crossing at Huay Xai is a well-trodden route, meaning entry is swift, though travellers should be aware of visa requirements for both countries.

Flights from Dubai start at Dh4,000 return with Emirates, while Etihad flights from Abu Dhabi start at Dh2,000. Local buses can be booked in Chiang Mai from around Dh50

From Zero

Artist: Linkin Park

Label: Warner Records

Number of tracks: 11

Rating: 4/5

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If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.

How to get there: Emirates currently flies from Dubai to Orlando five times a week.

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.”

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Power: 480kW

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Electoral College Victory

Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate. 

 

Popular Vote Tally

The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.

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Disclaimer

Director: Alfonso Cuaron 

Stars: Cate Blanchett, Kevin Kline, Lesley Manville 

Rating: 4/5

How to register as a donor

1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention

2) There are about 11,000 patients in the country in need of organ transplants

3) People must be over 21. Emiratis and residents can register. 

4) The campaign uses the hashtag  #donate_hope