A New Era of Capital Flows in a Polycentric World

[Music] uh it's me again so you would have seen me a minute ago um I'm a a last minute uh redeployment into the moderating slot but thanks everyone for coming along um and joining us at Abid Abby Finance week I'm Chris Hughes the chief editor here at Finance week and on behalf of adgm we just want to say thank you to everyone for all of your support and encouragement and getting involved in this little gathering that we're putting together that's over time becoming a a bigger Gathering we have a very short um interview today it's a preview of this so it's a a paper that we've um created with adq for Abu Dhabi Finance week it's called a new era of capital Flows In A polycentric world and one of the the very bright Minds that have uh helped us to put this paper together um is Dr Yap cman group Chief investment officer at adq and we're going to preview this piece over the next few minutes so Dr kman welcome first of all thanks for coming um a new era of capital Flows In A polycentric World polycentric what does that mean it means many cent well let let me explain that a little a little bit um so our view is that uh in in the let's say the past couple of decades the world was relatively simple and uh but it's changing so it was relatively simple in the sense that there were a few centers of uh developed nations in North America the US Japan and Asia Europe in uh by itself and they generated uh a lot of capital and they use that Capital to deploy it in the development World Whenever there was money Surplus in the developing World they would invest in us treasuries and the like to bring that money back and so the the capital flows relatively simple that has changed so instead of three centers there are around 25 sizable centers including Abu Dhabi where money is flowing in and money is Flowing out so that's basically the essence of the paper three three centers to 25 did you say yeah 25 I mean you can of course depending on how high you set the bar but over over the space of how long has that has that shift happened is it is has it been I would say this has happened over the last 1520 years okay and is it you know is it speeding up over time it's it's currently speeding up uh and um actually the question is where it's going to go right because and that I think that question is open uh and that's what we're here to try and figure out exactly um so adq um headline partner of ABAB Finance week and thanks to adq for for doing that adq are a very good example so adq are investing in a domestic economy in order to to to grow the that economy we call it the Falcon economy are we seeing generally you know we're seeing that in Abu D daab but are we seeing an increased reinvestment in domestic economies you know how how does that all look in a more Global context yeah I think uh I mean I I mentioned very simply we have three centers now we have 25 uh there's of course much more to it one of the aspects is that um a lot of countries started investing in themselves right rather than putting your money in treasuries uh actually you invest in infrastructure uh new hospitals power plants new airports ports um and Abu Dhabi is an ex excellent example of that right they have P literally hundreds of billions in new infrastructure uh here in Abu Dhabi and one way of seeing adq is we were established or we were born because they needed someone to manage that infrastructure yeah right critical infrastructure and and so we were uh appointed to manage this infrastructure uh we're supposed to develop it to grow it and to internationalize it yeah yeah yeah yeah well you can see the the results of your work every day from EAD to the you know great companies that are uh that are growing here in um in Abu Dhabi you can see that that it's really working um the next question I have is around um importing and exporting capital okay so the UAE so many people today um have come here with the idea of uh fundraising um from Abu Dhabi um for various initiatives across the world but we are not just an exporter of capital um we're an importer and exporter um what are the key benefits and challenges of being both an importer and an exporter of of capital yeah well the the benefits are I I think relatively clear first of all you create a whole new industry right so you could you could see adgm as uh the regulator of most of that Capital flow right so you create an industry uh it helps diversify the economy of uh of of the UAE so that's a benefit it's beneficial that you have yourself access to Capital uh in an easier way you can develop your Capital Market so those are all the benefits of course there are risks as well right and the big the big risk is uh is a change in those Capital flaws right Capital as uh his Excellency B suedi mentioned uh Capital likes to be loved right and how do you love Capital you give it stability you give it predictability and all of these things so Abu daab and the uee will need to continue to work to keep that trust that we have received from the International Community to make sure that Capital keeps on flowing so that we can re redeploy that Capital outside the UAE as well y adq follow-up question on that adq are you an importer or exporter of capital A little bit of both what does that all look like we're actually both both yeah we we we attract Capital uh we attract FDI we attract uh um uh financing for our projects here but we are also committed to grow our companies and to help other countries develop through that right in a of course in a financially responsible way yeah uh but we're investing a lot uh of that Capital that we receive also internationally well um we as I as I mentioned at the beginning we have a a very short interview today um but I have a couple of follow-up questions and then I'm just going to do a little summary of the report um so ultimately we're at the Abu Dhabi economic Forum it's an Abu Dhabi Finance week um Finance week is divided into four thematic days and day one is all about Abu dhabi's economy so we're here to talk about the Falcon economy how do we make Capital stick in Abu Dhabi I think it's important um uh you know to build on the theme of capital needs to be loved it's it's important for Abu Dhabi and for the uee to continue to grow the economy the bigger the more stable to continue to diversify the economy so it's very important that we continue to build new sectors and and build out the existing sectors other than oil and gas yeah um it's also very important to make sure that regulation is as clear as you can have it right predictability is very important and to have institutions like adgm for example uh and to have a rule of law here that people can trust people know what they're putting their money with uh those kind of things are are really the most important to make the capital stick the the theme of Abid Finance week this year is welcome to the capital of capital and as you heard from our chairman speech earlier what we're trying to do is Define what capital means and you've got the monetary Capital yes it's great but legal Capital environmental Capital cultural capital technological Capital all these other aspects of of uh of um of you know how you could Define the word capital or what makes an economy grow and again the capital of capital being um the growth driver of the uh of the Falcon economy so um folks over the the next four days you're going to be able to find uh a new era of capital Flows In A polycentric world uh this is a um just a very short briefing on the paper in about 90 minutes from now there's going to be a a large um round table set up um with a whole bunch of experts that are going to debate the findings in this paper um but again hopefully you can pick up the paper hopefully you can learn from it uh hopefully you can contribute to the conversation going forward it's very very important to us that members of our community have a say in these things and um I'll finish up by saying thank you to Dr calman uh for joining us and thank you to adq for being such a fabulous partner of Abu Dhabi Finance week thank you Dr thank you Chris [Music]