North Korea claimed to have tested its first intercontinental ballistic missile, earlier in July. AP Photo
North Korea claimed to have tested its first intercontinental ballistic missile, earlier in July. AP Photo

Latest North Korea missile test puts major US cities in range, say experts



North Korea's second test of an intercontinental ballistic missile has put a wide swath of the United States, including Los Angeles and Chicago, within range of North Korean weapons, analysts say.

North Korea's state news agency said the Hwasong-14 missile launched early late on Friday had reached a maximum height of 3,725 kilometres and travelled 998km before accurately landing in waters off Japan.

The test was aimed at confirming the maximum range and other technical aspects of a missile capable of delivering a "large-sized, heavy nuclear warhead", the Korean Central News Agency said.

The flight data released by North Korea was similar to assessments by the United States, South Korea and Japan.

Analysts had estimated that the first ICBM tested by North Korea on July 4 could have reached Alaska, and said the latest missile appeared to extend that range significantly.

David Wright, a physicist and co-director of the global security programme at the Union of Concerned Scientists, said that if reports of the missile's maximum altitude and flight time were correct, it would have a theoretical range of at least 10,400km. That means it could have reached Los Angeles, Denver or Chicago, depending on variables such as the size and weight of the warhead the missile was carrying.

The KCNA quoted North Korean leader Kim Jong-un as saying that the launch reaffirmed the reliability of the country's ICBM system and an ability to fire at "random regions and locations at random times" with the "entire" US mainland now within range.

Mr Kim said the launch sent a "serious warning" to the United States, which has been "meaninglessly blowing its trumpet" with threats of war and stronger sanctions, the agency said.

It said the test confirmed important features of the missile system, such as the proper separation of the warhead and controlling its movement and detonation after atmospheric re-entry.

Immediately after the launch, US and South Korean forces conducted live-fire exercises. South Korean defence minister Song Young-moo called for the deployment of strategic US military assets — which usually means stealth bombers and aircraft carriers — as well as additional launchers of an advanced US anti-missile system.

Japanese government spokesman Yoshihide Suga said the missile launched on Friday flew for about 45 minutes — about five minutes longer than the first. The missile was launched on very high trajectory, which limited the distance it travelled, and landed west of Japan's island of Hokkaido.

The Hwasong 14 ICBM test-fired earlier this month was also launched at a very steep angle, a technique called lofting, and reached a height of more than 2,500km before splashing down in the ocean 930km away.

South Korea's military said the missile was launched from North Korea's northern Jagang province near the border with China. President Moon Jae-in presided over an emergency meeting of the national security council, which called for an emergency meeting of the UN Security Council and stronger sanctions on North Korea.

President Donald Trump condemned the missile test as a threat to the world, and rejected North Korea's claim that nuclear weapons ensure its security. "In reality, they have the opposite effect," he said.

Mr Trump said the weapons and tests "further isolate North Korea, weaken its economy, and deprive its people". He vowed to "take all necessary steps" to ensure the security of the US and its allies.

Japanese foreign minister Fumio Kishida said he had told US secretary of state Rex Tillerson that the second missile test greatly increased the threat from Pyongyang. He said two sides agreed to consider all means necessary to exert the utmost pressure on North Korea. They reiterated calls for new sanctions and to work closely together with South Korea along with efforts by China and Russia.

China, meanwhile, urged its ally North Korea to abide by UN Security Council resolutions and halt any moves that could escalate tensions on the Korean Peninsula.

Washington and its allies have watched with growing concern as Pyongyang has made significant progress toward its goal of having all of the US within range of its missiles to counter what it labels as US aggression. There are other hurdles, including building nuclear warheads to fit on those missiles and ensuring reliability. But many analysts have been surprised by how quickly Mr  Kim has developed North Korea's nuclear and missile programmes despite several rounds of UN sanctions that have squeezed the impoverished country's economy.

Mr Trump has said he will not allow North Korea to obtain an ICBM that can deliver a nuclear warhead. But this week, the Defence Intelligence Agency reportedly concluded that the North will have a reliable ICBM capable of carrying a nuclear weapon as early as next year, two years sooner than the agency's earlier estimate.

On the streets of Pyongyang, North Koreans welcomed the news of their country's latest missile test while state media broadcast images of a projectile launched into the night sky. Mr Kim was shown with military commanders near a mobile missile launcher.

"I feel really confident. From now on, we will develop and have the strongest weapons, strategic weapons, so we can safeguard our sovereignty and independence, so that we can end up winning against the imperialists and against America," said Pak Gi-nam, a student.

North Korea celebrates July 27 as Victory in the Fatherland Liberation War Day, marking the signing of the armistice that ende the 1950-53 Korean War. That armistice is yet to be replaced with a peace treaty, leaving the Korean Peninsula technically in a state of war.

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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.”