January 12, 2017

Atlantic Council
Global Energy Forum

What’s the Clock? – Economic Diversification Strategies and Post-Oil Era Investment Dilemmas

 

Moderated By:
Becky Anderson,
Managing Editor,
CNN Abu Dhabi & Anchor

A Conversation With:
H.E. Khaldoon Khalifa Al Mubarak,
Group Chief Executive Officer and Managing Director,
Mubadala Development Company

 

Location:  Al Maryah Ballroom, Four Seasons, Al Maryah Island, Abu Dhabi, United Arab Emirates

Time:  3:00 p.m. Local
Date:  Thursday, January 12, 2017

 

 

Transcript By
Superior Transcriptions LLC www.superiortranscriptions.com


(Applause.)

BECKY ANDERSON:  All right.  Well, let me get the room going, then.  (Music.)  Welcome back, everybody, to our afternoon session.  It’s an absolute pleasure to be here with you.  I’m just going to do a little bit of housekeeping before we move on.  This session is on the record.  Do remember to turn your phones off because that will otherwise disturb us.  We’re running a little bit late and I know that our esteemed guest this afternoon has conceded spending a little bit more time with us, which is absolutely fantastic.  But the phones will hold us up if they ring.

Tweeting, you can do so, hashtag #ACEnergyForum.  I should have brought my glasses but I didn’t – #ACEnergyForum, and please no fake news.  That will wind me up.  And no pointing fingers and winding me up from our next esteemed guest.

Excellencies, ladies and gentlemen, it is an absolute pleasure to be here.  Before I introduce my esteemed guest, from me, I just want to extend our condolences from the CNN family to those of you here in the UAE family for the loss of a number of members of the family here.  So that is from us here. 

Most of you in this room will know that our guest needs no introduction but let me make a short one today.  Khaldoon Khalifa Al Mubarak is the group CEO and managing director of Mubadala Development Company, the Abu Dhabi Sovereign Wealth Fund, which is currently merging with IPIC.  As such, he oversees the delivery of what is an aggressive investment strategy, responsible for helping drive sustainable growth in this UAE economy.  Khaldoon, come and join me.  (Applause.)

You have weathered a period of lower commodity prices and weaker financial investment income.  I know that there are many people in this region who are quite happy to see the back end of 2016.  Are you?

KHALDOON KHALIFA AL MUBARAK:  Not really, actually, Becky.  It wasn’t as bad as we thought it would be.  I think if you have asked – if you had asked me this question in December of 2015 as we were, you know, about to enter 2016, a lot of uncertainty, a lot of volatility, a lot of unpredictability. 

I think we had – I’ll tell you from my perspective and as Mubadala – big concerns on commodity prices, particularly the commodities that we have exposure to – oil, gas, metals ranging from aluminum, iron ore, copper, zinc, et cetera.  So we were very concerned in terms of the commodities, very concerned in terms of our financial position with the prospective authority that we anticipated in markets from North America to Europe, also in Asia. 

Also, had you had asked me in December of ’15, I would have told you unlikely would have been my prediction in terms of Brexit.  So even with that, you know, I would have anticipated less volatility even, you know, as challenging as that was.  Looking at the elections that were coming in – the U.S. election – I would dare to say I didn’t predict that Donald Trump would win the Republican ticket, let alone win the election.  So a lot has changed.  Even back then – again, this is all – we’re talking a span of 12 months, less than 12 months – I wouldn’t have anticipated the Italian referendum going the way it was and then the markets reacting the way they did react.  So, again, a lot of things that we wouldn’t have predicted and then the way they have transpired.  Also, the reactions to them also I don’t think we’d have predicted.  The year ended up on a relatively better note and I would say ’16 was actually a good year.

MS. ANDERSON:  Yeah, a relatively strong performance, given everything that you’ve said in 2016.  So what is the outlook as far as you are concerned for 2017?

MR. AL MUBARAK:  You know, we live in now such uncertainty where predictability is becoming less and less possible.  I think this is the new norm that we live in today.  Very hard to predict.  I think the politics around the world have a big impact on the global economy and today we, specifically, this case as Mubadala, but, frankly, most of the global companies around the world have such an exposure that is – that is diverse in terms of sectors but also in terms of geographies. 

So any changes around the world we get impacted and the world is changing in a way that is very difficult to predict.  You have a lot of elections coming in this year, a lot of geopolitical uncertainty all over the world, not specifically in one area.  So, again, it makes 2017 another, like ’16, a year difficult at the beginning of it to really predict, project in a – in a – in an effective way.  You have to ultimately make assumptions and then be able to pivot if these assumptions don’t go the way you anticipate.

MS. ANDERSON:  All right.  Let’s do some crystal ball-gazing then, shall we?  Let’s make some predictions and let’s start off with the oil price.  If there were ever an unpredictable price it is that of oil.  In October, the IMF said the UAE will need a price of $60 on the barrel to balance its budget in 2017.  How concerned are you that forecasts from most banks are below that level?

MR. AL MUBARAK:  Well, let me caveat my answer by saying you’re asking me an impossible question.  When I look at the crowd, I see several ministers of energy.  I think they are far more knowledgeable in that area than I am and I will only give maybe an opinion, probably an uneducated opinion compared to many of them here today.

I think today – if I look at ’17, given what we see today, my anticipation would be to project an oil price between 50(dollars) to $60 for 2017.  That’s a short answer.  I can spend a long time giving you a philosophical rationale why I go behind it.  At the end of the day, it’s an opinion.

MS. ANDERSON:  All right.  Well, perhaps we can talk about how that sort of window might affect your investment strategy and decision making going forward.  But let’s talk specifics here.  Mubadala and IPC – when the merger was announced last year – and I hope everybody in this room – I’m pretty confident everybody in this room is aware of that merger – it was touted as an opportunity to enhance global competitiveness and to open new markets.  So I’ve got two very specific questions before we move on on that.  What’s the timeline for the completion of that merger, Khaldoon, and can you be a bit more explicit or specific about the structure of the company going forward?

MR. AL MUBARAK:  OK.  First, in terms of timeline, we are in the final stages.  I anticipate this as a Q1 event for this year so it’s a matter of weeks before we are able to conclude the merger and really start moving into the new combined entity.  As you might imagine, in a merger this size – and bear in mind, this is probably the largest merger ever done in the UAE in terms of its size, in terms of the – essentially, the size of the company we are creating – I cannot today, prior to it finalizing, go into details in terms of structure and more details.  So all I can say today is that we are in the final stages and it’s a matter of weeks and it’s a Q1 event.

MS. ANDERSON:  Excellent.  All right.  Well, the company has and will have, increasingly, a diverse energy portfolio.  You got the Masdar’s renewables portfolio and renewables, obviously, enormously important to the audience that we have here today – power utilities, oil and gas and petrochemical investments.  Back in September, you said that for someone who takes a long-term view it is an attractive time to invest in the energy industry.  Where do you see the opportunities?

MR. AL MUBARAK:  I think – and that just doesn’t simply apply to upstream oil and gas or the energy-focused sector, but it applies, really, to many commodities.  I think if you stay in that tier one space – tier one space by definition, for me, is bottom quartile in terms of cost, top quartile in terms of quality and scale – that’s the place where we always feel very confident because at the end of the day if you are in that, you know, bottom 20 percent and top 20 percent, no matter where the – you know, the market prices go you’ll be in a very competitive position and I think that’s really our area of focus. 

That’s what we are targeting.  That’s where we are spending a lot of energy in and that’s where we see opportunity, and we think in many assets in that space there are attractive valuations and, frankly, at the right valuation and in these assets I think, you know, you really manage your risk very, very well.

MS. ANDERSON:  Anything more specific than that?

MR. AL MUBARAK:  No, because, frankly, we are – we are approaching with an open mind.  We consistently look at, on the upstream side, producing assets.  I think you’ll see us more interested on the production side rather than on the exploration side.  So we have a – you know, we have made that shift a while ago where we are more allocating resources towards upstream production rather than exploration.  Doesn’t mean that we wouldn’t do exploration.  But it’s less of a focus than on – than on production.

Same thing applies with gas, although we are more keen on the – on the oil side than in gas at this stage.  But, again, we remain open for and looking at good opportunities.  Now, with this merger, we will have a considerable – the combined entity will have a considerable exposure towards the downstream – midstream and downstream – and I think there there is an area where I certainly, I think – as the year moves forward, I think there will be a lot of opportunities for us to grow those businesses in the midstream and the downstream areas where we have already, I think, a considerable exposure with strong assets.

MS. ANDERSON:  Geographically, where is your appetite?

MR. AL MUBARAK:  In the energy space or in general?

MS. ANDERSON:  In the energy space.

MR. AL MUBARAK:  In the energy space, we remain, I would say, committed to the areas we know well and I think there’s a big circle you can – you can go around the UA, going to Southeast Asia all the way to North Africa.  I think that’s the circle that we operate in.  That’s a circle we are confident and comfortable in, and I think you will see that as our priority areas in terms of – in terms of the energy upstream space.

MS. ANDERSON:  And we might just give ourselves time to talk about the wider remit than just energy in a moment, so perhaps the appetite for deals elsewhere is also important in other industries.  The investment fund will, of course, work in tandem with ADNOC itself undergoing consolidation with a view to strengthening its key role in the prosperity of this place, going forward.  Can you be a little bit more explicit about what sort of targeted investments you expect to see being made there as part of its new strategy and its new five-year plan?

MR. AL MUBARAK:  ADNOC?  Forgive me, Becky.  I think you spoke to Sultan earlier today.  He’s the CEO of ADNOC.  ADNOC has a very ambitious plan with regards to their investments and developments in country.  I think he’s probably addressed these answers, so I won’t, you know –

MS. ANDERSON:  All right.  That’s fair enough.

MR. AL MUBARAK:  – talk about them.  I’ll leave it to him, yeah.

MS. ANDERSON:  Mergers and acquisitions then – we’re looking at the FGB and NBAD shareholders.  You’ve approved the merger of the two Abu Dhabi banks.  That will create one of the Middle East’s largest banks by assets and you said again back in September you wouldn’t rule out more M&A activity.  Specifics?  (Laughter.) 

MR. MUBARAK:  You know – you know –

MS. ANDERSON:  I’m digging here, Khaldoon.

MR. AL MUBARAK:  No, no.  I mean, listen, I want to just address the track record here.  I mean, there’s a – there’s a logic to it and then there’s a commercial sense behind every one of these mergers that have happened over the last couple of years and, frankly, there’s a success – a successful record that now we see.  You look at, I would say – maybe I’ll quickly run over – run through five mergers that have happened over the last couple years that now we can really see the value that has been created through them, and I’ve been fortunate to be involved in most of them.

I would say, first, the merger between DUBAL – Dubai Aluminum – and EMAL, the Emirates Aluminum, creating this global player in the Emirates Global Aluminum – big play, very successful merger.  It’s been operational now for a couple years.  The results are clear.  The results of this company, its efficiency and that, particularly, in the – in the smelting side is very clear in terms of both OPEX and, you know, going back to my earlier point – by combining the two, maintaining a very competitive position in terms of cost but also in terms of quality of output – and that’s been a very successful merger. 

The merger between Aldar and Sorouh before that – the two real estate developers in Abu Dhabi – provided scale and, again, more efficiency in terms of operations.  Now, a couple of years on, we can see today the combined entity, Aldar, is doing extremely well.  We remain shareholders in that entity also.  So we’re 50 percent shareholders in Emirates Global Aluminum and we are shareholders in the public company Aldar and we are very satisfied with how that merger played out and the value it’s created for the shareholders.

In addition, I would say the merger between NBAD and FGB – big merger – big banking merger.  Early days, but I have high confidence that this is a highly successful merger that will show value to the shareholders.  Very quickly, I think in the next two or three years, this is going to be one of the most important banks not just in the region but I think on a – on a, you know, a continent level and, potentially, globally.  This is a very, very successful merger and I’m – and I’ve been very proud to be a part of that merger.  So, again, you know, that brings me to this IPIC-Mubadala merger.  It’s not new news but it’s news and it’s a big merger – very, very big and very significant – and I can tell you from now you will start – again, within a – within a year to start seeing the results – positive results of this merger and how it will create value to, in this case, one shareholder, which is the government of Abu Dhabi, by having the scale and the diversity that this company will create.

What does – what does that do?  By having a track record like that and by having actually many of these mergers happen and then show value to the shareholders in a tangible way I think that it encourages the market to follow suit.  I’m not saying that you’re going to see a wave of mergers but I think there is a confidence now that is growing within the market that, for the right reasons and with the right value that these can create for the – for the shareholders, there’s an appetite to do more. 

I expect more mergers.  Can I – can I – can I point you to finger – I don't know today of any mergers that I’m aware of or that I can actually disclose today.  So you're asking me the wrong question.  (Laughter.)  But I know from a sense perspective that that’s the direction, and I expect you’ll see mergers continue in a – in a positive way.

MS. ANDERSON:  All right.  I just want to get a little bit more meat on another story that’s out there, and I know that you’ll work with me on this one.

MR. AL MUBARAK:  Well, I’ve managed to dodge everything so far.  Let’s see if you can get me to – (laughter) –

MS. ANDERSON:  While we’re on the subject of investments, there has been much speculation that Mubadala is in talks with SoftBank about a potential multibillion-dollar investment in its technology fund.  I know you’re not going to probably give me anything more on that so let me put it this way.  How – do you see a future where a Mubadala will work through an investment vehicle like that to diversify its portfolio away from its legacy projects into, for example, technology and beyond?

MR. AL MUBARAK:  Directionally, Becky, for sure.  We have been doing that for the – you know, since inception and that’s been a journey and you can see where we started in terms of maybe 14 years ago how energy was 100 percent of our portfolio to now energy being less than 20 percent of our portfolio. 

So we’ve been going down that diversification route now for 14 years and it serves – it serves us very well.  I mean, this is why we do what it’s for – for times when commodity prices are down that you are able to show more diversified returns by having such a portfolio.  So that strategy I think was the correct one.  I feel very strongly that we were on the right route and it’s paying off in these years when energy prices are down.

I think the spectrum of, you know, the world has changed over the last 20 years and conventional investments, conventional sectors that we are used to in the past and conventional companies – if you look at the top 20 companies in size 20 years ago compared to the top 20 companies globally in size today you’ll see a completely different picture.

So, accordingly, we have to also pivot and we have to go into these new areas and we have to invest in these areas and we have to take different types of risks as we approach these areas, and in the spirit of everything we’ve done.  Everything we’ve done in the last 14 years as Mubadala and, by the way, as IPIC has been in partnership. 

We always tried to partner with the best companies in these sectors that we are embarking on and, believe me, as we pivot into new countries, new regions and new sectors, we will seek the best partners in that – in that sphere.  You know, you referred to SoftBank. SoftBank is led by, I think, an individual that we have – I have high respect for, Masa Son.  Masa Son, over the years, I think – also, I think, his record speaks for itself.  Since 1984, Masa has been investing in telecoms and technology.  And I think, you know, the world knows – I don’t need to talk about it – in terms of how he has performed and his funds have performed over the last 30 years.

So it’s an example.  You know, either we invest – we invest with SoftBank or we don’t.  I think directionally we are going to go and continue to diversify into such areas.  That’s for sure.

MS. ANDERSON:  So an investment in SoftBank would make sense?  (Laughter.)

MR. AL MUBARAK:  You know, if I talk about every investment that we are potentially talking to I think we can go –

MS. ANDERSON:  All right.  OK.

MR. AL MUBARAK:  But I think it’s been reported that we are in discussions with SoftBank.  I can confirm that we are in discussions with SoftBank.  I cannot confirm whether we’re going to do a deal or not.

MS. ANDERSON:  You speak very highly of the gentleman who runs that organization, as does Donald Trump.  What does a Donald Trump administration mean for the UAE?

MR. AL MUBARAK:  I think it’s really too early to judge.  Once this new administration goes into office and once we get out of the election rhetoric and we start going actually into real, let’s say – maybe real is not the right word but into, let’s say, positions that are administration positions, I think that’s when we’ll start getting a better sense for where the president is going – president-elect is going. 

I think the early signs are good.  The early signs are positive.  I don’t see, from my perspective, any major alarm bells.  I think on the – on the business side, on the economic side, I think the market in itself and the way it has reacted, if you look at December and January, you know, that’s a – that’s a feeler for you in terms of how, you know, the economy is reacting.

MS. ANDERSON:  If you had any concerns, what would they be?

MR. AL MUBARAK:  OK.  As you see, Becky is just going to keep – (laughter) – so I can keep fighting her or I can actually start playing with her.  (Laughter.) 

MS. ANDERSON:  You’re play with me, come on.  (Laughter.)

MR. AL MUBARAK:  I think – listen, I mean, everybody wants stability.  Stability is good for growth.  Stability is good for business.  The region we live in has been very unstable, to say the least, and I think any policies that will help stabilize the region I would say would be very good.  Any policies that will not help stabilize the region I would be very concerned about. 

So I think how the administration approaches many of the issues that we are dealing with in the region I think will either be extremely positive or will be of high concern.  Uncertainty on that point, obviously, concerns me when you – when you don’t have clarity in terms of really how this administration will act on many of these issues.  Today, you have feelers but you don’t have facts.  Time will tell.  But I think, from what I’ve seen and what I’ve heard, I would say we’re more on the comfortable side than the concerned side.

MS. ANDERSON:  Secretary of state, of course, will be – will play a significant role in how you will feel about the – and how the UAE will feel about the administration, going forward, and our esteemed colleague here, his excellency, the minister of oil, I think has already suggested that Tillerson – Rex Tillerson, the ExxonMobil CEO – ought to be a relatively good friend of the UAE.  Is that – do you share that – yeah, do you share his thoughts?

MR. AL MUBARAK:  We know Rex very well.  I mean, I’ve known Rex from his days, obviously, in his previous career.  He’s a man we know very well.  He’s a man that’s been here many, many times and we have a relationship with and he understands, I think, the region extremely well.  And looking at his hearing comments yesterday, I think, from my perspective, I see him as very sensible and has an approach that the UAE will be positive with.  So, no, that’s a positive sign.  I think, you know, you look at many of the appointments – you know, Tillerson is one example.  Secretary of Defense Mattis is another example of someone that knows the UAE extremely well and has a very, you know, long history with dealing with many of the – many individuals here in the United Arab Emirates and I think will have a very positive view on the UAE.  But, to be honest, I think, you know, the – for the right reason, the UAE has been a great partner to the United States, and I don’t see why we would be viewed anything but positively.

MS. ANDERSON:  Back to investment strategy, then, and the announcement just over the last 48 hours of the very ambitious energy strategy here, which has a significant focus on clean energy.  We’re looking at the investment of, what, $163 billion over the next three decades.  What’s your plan in the position you’re in at the moment to help execute on that strategy?

MR. AL MUBARAK:  You know, about 10 years ago, Becky, when we started really looking at renewables seriously and when that vision for what then transpired to be, which is Masdar, was first developed, we, you know, had several objectives.  You know, we knew we needed to be in that space, we didn’t understand that space very well and we wanted to create a capability here in Abu Dhabi, in the UAE, to better understand that sector, to start investing intelligently in that sector, to have a homegrown capability in that sector and, ultimately, to get to a position where we can be global, competitive and with a technological edge. 

I look back now to where we are today.  Let’s just start from the starting point.  Masdar is a well-recognized company all over the world, particularly in the – in the – in the renewable field.  We have invested all over the world and have assets – very good assets in many places.  We are players in the – in the wind field and the solar field and many other aspects of renewables.  We have great investments.  And then here, in country – and I’ll go specifically to one example, which is a recent example – winning that bid in Dubai for the Rashid – Mohammed bin Rashid Solar Park was a significant achievement for Masdar from very aspects – various aspects.

Number one, it set a global benchmark in terms of cost per kilowatt for solar power.  That is exactly what we planned for and hoped to get to 10 years ago – to get to the point where, by 2016, we’re going to get to a price of approximately, you know, 2.9 cents per kilowatt of solar power generated here in which we can underwrite it ourselves.  I think that – that’s something I am extremely proud of and I think was a remarkable achievement because we’ve done it and it’s been homegrown and we were able to do it on a competitive basis.  Not on a give me here, on a competitive basis against world leaders from all over the world to – (inaudible) – in order to achieve a lowest cost per kilowatt by any standard at the point of award, scale, which was also achieved, and a healthy rate of return.

So I think our strategy when it comes to renewables has been a success. We will continue down this route, and as we have seen over the years, the cost will continue to get more and more efficient.  I mean, it’s amazing.  You look at five years ago where the cost of solar power was to where it is today and where directionally it’s going.  You know, solar power is becoming extremely competitive – extremely competitive – and we will continue to invest in that space.

MS. ANDERSON:  Beyond oil, in a diversified world, running a diversified economy going forward, if you had three priorities for this year, then, what would they be?

MR. AL MUBARAK:  Which sectors?

MS. ANDERSON:  Mmm hmm.  (Affirmative.)

MR. AL MUBARAK:  OK.  I think we would like – we’re focusing a lot on IOT – internet of things.  We’re focusing a lot on artificial intelligence.  These are really new areas that I think are extremely interesting – technology companies that have technologies that could be, you know, game changers and with potential scale and application, both in terms of software and hardware.  So that space you can see the logic.  That’s an area that no doubt we are – we are looking at and we are focusing on and I hope that we will be able to achieve good progress in that area with potentially good investments.

MS. ANDERSON:  I’m going to leave just a couple of minutes for questions.  I’ve got a couple more.  But if anybody out there – and I know you will have lots of questions – so if anybody out there can just raise their hands at the moment so that our microphones can be travelled in the right direction then we’ll take your questions shortly.  I’ve just got one more from me before we take some from the floor.

You are also the chairman of CFC, which is City Football Club.  So I can’t let you go today without getting a comment on Gabriel Jesus, who is the newly-acquired Brazilian sensation – your thoughts and expectations.  Let’s get back to energy in a moment.

MR. AL MUBARAK:  Talk about going to left field.  (Laughter.)  Yes, obviously, I’m the chairman of the City Football group, and incredible talent – a really incredible talent.  When we – you know, the funny thing about Gabriel Jesus, when we first started looking at him, which was about a year ago, he was an unknown.  Not many people knew about him.  Obviously, a lot of the scouts in South America had knowledge of him but he wasn’t a global name by any – by any means. 

And then we were successful in acquiring Gabriel to Manchester City in the summer and that was before the Olympics and before the Copa América.  So even then, he was still an unknown, relatively speaking.  He then went ahead afterwards and was an – you know, an incredible success in both tournaments.  Now, I have to be careful.  He’s 19.  He’s very young and he’s Brazilian and he’s going into Europe and he’s going into the United Kingdom and into the Premier League and into Manchester, and we are very conscientious that we have to take care of Gabriel, give him time and not really put too much pressure on him.

We have, I think, the best manager in the world in Pep Guardiola and I think he will be – I think he’s in extremely good hands.  So I have a lot of – we have a lot of, obviously, aspirations for Gabriel but we have to be patient and we don’t want to be putting too much pressure on the – on the young kid.  He’s still 19 and he needs time to adjust.

MS. ANDERSON:  We often talk football.  The team I support is third in the division at the moment.  Yours is fourth.  I know you’ll beat us in the end.  But it’s been an interesting – an interesting season.  Right.  Questions from the floor – any questions for Khaldoon?  Can I see any hands here?  If there aren’t – yes, there are.  I knew there would be.  Yes, sir.  Your affiliation, if you will.  Keep it short.

Q:  Hi.  My name is Tanzeed Alam.  I’m the director of climate and energy with the Emirates Wildlife Society.

Your Excellency, really interesting to hear you speak.  My question is how much does Mubadala consider environmental aspects in its – in its investment decisions, like carbon emissions, damage to conservation areas, et cetera?

MR. AL MUBARAK:  You know, it’s – you know, the short answer is high consideration, obviously.  But it comes – and maybe just let me give it a bit more context – it really starts with our shareholder, the government of Abu Dhabi. 

The government of Abu Dhabi, you know, pays a lot of attention to preserving and protecting the environment and puts some very stringent rules and regulations for anybody operating in the – in the emirate of Abu Dhabi.  And, you know, I know it from the leadership.  It started from His Highness, Sheikh Zayed – God bless his soul – Sheikh Khalifa bin Zayed Al Nahyan, His Highness the president of the United Arab Emirates, had very strong feelings towards the environment and preserving the environment and that, you know, trickles down throughout the government and throughout the people of the UAE. 

And, you know, coming down now at the Mubadala level, we know, from every aspect, not just because we feel strongly about it but because every stakeholder around us has a strong view on that and you see it in all of our operations.  I think one thing I’m exceptionally – you know, so particularly proud of is in everything we do in Mubadala in this sphere that has an impact on the environment we go above and beyond the call of duty to ensure that we are compliant and that we are not just compliant but we are setting benchmarks.  We have done that through our strategy in Masdar.  We have done that on the industrial side in every industry we have invested in and how we have really gone beyond the call of duty.  I invite you to come, for instance, to our industrial project in Taweelah, which is the Emirates’ aluminum smelter, and just go see the great work we are doing over there in terms of how we are able to balance between creating and investing in industry but at the same time doing everything we can on the environmental side to make sure we are not just compliant but setting global benchmarks, and we have done that over there and I think it’s a great idea also for you to come visit.  That’s my answer.

MS. ANDERSON:  Thank you.  Any other questions from the floor?  Yes, sir.  Just here.  Yes, please.  You might just want to stand up and call it out.

Q:  Hi.  My name is Jed (sp) – (off mic).  I am with the Albright Stonebridge Group.  (Comes on mic.)  Just let me repeat again.  My name is Jed (sp) – (inaudible).  I’m with the Albright Stonebridge Group.  Thank you both for your time.

My question is regarding the assets that you now hold in Latin America.  You now have a(n) office in Brazil.  It’s the first office that Mubadala has internationally.  What’s the plan for that?  Is it something that you might replicate later on in other jurisdictions?  Just wanted to get your thoughts on that.  Thank you.

MR. AL MUBARAK:  I think on a – on a need – on a need basis.  Today, because of connectivity, you know, the days where you have to have offices everywhere in the world, I think, is just not necessary.  Be it through, you know, your phones, your computers, live feeds, you know, airplane connections, I think you have a lot more ability to work all over the world while being headquartered in Abu Dhabi.

So the principle of being headquartered in Abu Dhabi and having that centralized presence in Abu Dhabi I think will remain because I think that’s the most efficient way for us to operate.  But there are occasions, like you just mentioned in Brazil, where there’s actually – the market requires a 24-hour-a-day presence.  We have some assets in Brazil and I think because of the nature of that market and the assets we have in that market that required us actually to mobilize a team into Brazil, which are operational there, and I think that makes a lot of sense.  There are other markets that have that same requirement which we will do the same – which we’ll continue to do the same in, and it really depends in terms of how we are deploying our capital and where.  So I wouldn’t discount, for instance, an office in Asia or in China if there’s a need in the – in the months and years ahead.

MS. ANDERSON:  Yes, the last two questions.  Are you OK to take a couple more questions?

MR. AL MUBARAK:  Yeah.

MS. ANDERSON:  Perfect.  Brilliant.  Thank you.  Two questions here.  Yes, sir.

Q:  Hello.  Hi.  Nasr al-Taibi (ph) from Al Arabiya. 

Mr. Khaldoon, you’ve spoken about investing in IOT and AI.  Do you think that the technological revolution has been overhyped and that we’re really going into secular stagnation and it won’t be able to help us out of it?  How sure are you of these investments?  Thank you.

MR. AL MUBARAK:  No, I don’t think it was – it’s been overhyped and, obviously, nobody’s sure of anything but you have to make a calculated educated, you know, view on any investment you make and then do everything you can to support that investment to achieve the objectives you’ve targeted.  So, you know, what more can I tell you?

MS. ANDERSON:  There’s your answer.  Good.  Yes, please.

Q:  (In Arabic.)

(Continues in English.)  Your Excellency, thanks for your time.  Bringing the conversation back to energy – His Honor Sheikh Mohamed bin Zayed will be the chief guest at the Indian Republic Day.  We’re talking about Mubadala and the merger.  We talked about China being a major consumer for this region.  Tell us about India and what’s the perspective that you might have on the opportunity in India for the GCC but, specifically, for Mubadala and IPIC.  Thank you.

MR. AL MUBARAK:  Good question.  I’m a big fan of India, and I didn’t understand India in the past.  I think India was one of those countries which is actually, you know, perplexing, how up until three, four years ago, while India has a very deep historical relationship with the UAE from a trade relationship, from a people relationship, you know, the business wasn’t where I think it could have been or should have been.

Over the last two years, you know, we spent a lot of time educating ourself about India, understanding India.  I’ve traveled a lot to India.  You know, I’m going to shock you but maybe – up until three years ago I had never been to India.  Really.  I’ve been to India, I can assure you, many times since then over the last three years, and I have – I think I have a lot of confidence in Prime Minister Modi. 

Prime Minister Modi has shown a lot of character, a lot of courage in many of the decisions he has taken from an economic perspective that gives international investors more and more confidence.  India, in itself, is a massive market – massive market – big population, huge growth potential in terms of infrastructure in many of the areas that are – that are under serviced today in India. 

So yes, I think India is very interesting and we are looking at it quite seriously and I think we will be doing a lot in India in the years to come.

MS. ANDERSON:  And with that, we’ve kept you a good 15 minutes longer than you promised that you could spend with us.  So I will just say from me you’re a pleasure and a delight as ever, and thank you on behalf of the audience and the Atlantic Council for joining us today.  Thank you. 

MR. AL MUBARAK:  Thank you for coming.  (Applause.)

MS. ANDERSON:  Great.  Thank you.  And just before you go or as you’re getting up, everybody – no, you can – I’ll allow you to go – I’m just doing the next sessions.  Please don’t – if you are going to get up don’t go too far.  I’ve been asked by the organizers to let you know that the next sessions will be almost immediately:  “The Global Future of the Peaceful Use of Nuclear Energy, and that is in the Maryah Ballroom; and “Regional Impacts of the U.S. Elections: The Middle East.”  Thank you. 

(END)

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