Britain has announced billions more pounds in spending on defence to show its rivals that it is serious about preparing for full-scale war with new missiles, nuclear platforms and increased troop numbers.
Prime Minister Keir Starmer launched the UK's Strategic Defence Review on Monday, which calls for an expansion of its nuclear deterrent.
A world shaken by population growth, climate change, nuclear proliferation and the digital age, and dominated by state-level confrontation
SDR authors
Ahead of the launch, he said it was time to flood the zone with new initiatives and new investments as war-fighting readiness was an overriding priority.
He described the review as a blueprint to make Britain a "battle-ready, armour-clad nation with the strongest alliances, and the most advanced capabilities, equipped for the decades to come". He also said it would provide a "defence dividend" as jobs are created.
Speaking at a shipyard in Glasgow, Mr Starmer said it was a “moment of danger and threat for our country” and all citizens of the UK had a role to play in the defence of the nation.
He said “three fundamental changes” would be made. “First, we are moving to war-fighting readiness as the central purpose of our armed forces," he said.
“When we are being directly threatened by states with advanced military forces, the most effective way to deter them is to be ready, and frankly, to show them that we’re ready to deliver peace through strength.”
The second change is that the government will adopt a “Nato-first” stance towards defence so that everything it does adds to the strength of the alliance.
He added: “Third, we will innovate and accelerate innovation at a wartime pace, so we can meet the threats of today and of tomorrow, as the fastest innovator in Nato.”
But Mr Starmer could not say when his aim of raising defence spending to 3 per cent of the UK’s economic output would be realised, amid questions about whether the Treasury had guaranteed to fund it. The review was based on the 2.5 per cent target to be met from April 2027.
Defence Secretary John Healey said on Sunday that he had no doubt that defence spending would rise to 3 per cent of GDP in the foreseeable future, implying an extra £17 billion ($21.7 billion) in the annual budget. The review was led by former Nato secretary general George Robertson, a former Labour statesman, and makes 62 recommendations in its 150 pages.
Central to the plans are the construction of up to 12 new nuclear-powered attack submarines - delivering one every 18 months - to complement the investment of £15 billion in advanced missile warheads.
While the review has been revised several times in recent months, its main themes are rearmament and "getting the armed forces to a stage where it would be ready to fight a war".
Other immediate drives by the government include £6 billion for new weapons, including £1.5 billion for new production lines.
When the government asserts that Russia is mounting digital attacks on the UK every day and other states, such as Iran, pose incessant dangers, there is a new offensive strategy. This means setting up a cyber command and investing £1 billion in digital capabilities.
The authors of the report used a newspaper article on Monday to say there may be an existential risk to the UK driven by a combination of factors. "The UK must protect its security, prosperity and values in a world shaken by population growth, climate change, nuclear proliferation and the digital age, and dominated by state-level confrontation," the authors wrote.
Other announcements:
- Boosting weapons and equipment stockpiles and making sure there is capacity to scale-up production if needed in a crisis or war
- Building at least six new munitions factories, generating 1,000 jobs
- Buying up to 7,000 UK-built long-range weapons in a move to support 800 defence jobs
- Transforming the Royal Navy into a 'hybrid' organisation blending drones with submarines and aircraft
- More than £1.5 billion of additional funding to repair and renew armed forces housing
Putting new submarines to sea at the rate of one every 18 months is designed to make sense of the £15 billion investment into the warhead programme. The British government remains committed to maintain a continuous-at-sea nuclear deterrent as it builds the new fleet of Dreadnought submarines and upgrades of the existing fleet.
“With new state-of-the-art submarines patrolling international waters and our own nuclear warhead programme on British shores, we are making Britain secure at home and strong abroad,” Mr Healey said.
From the late 2030s, the fleet of up to 12 SSN-Aukus conventionally armed nuclear-powered submarines will replace seven Astute class attack submarines the UK is due to start operating. The build-up is part of a partnership with Australia and the US that has promised an "arc of security" between the three allies.
Mr Robertson said that Britain is entering "a new era of threat" as drones and artificial intelligence transform warfare. The document also describes the "immediate and pressing" danger posed by Russia, as well as urging the government to focus on China, Iran and North Korea.
Lord Robertson has described the four countries as a "deadly quartet" that were "increasingly working together".
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
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Favourite holiday destination: Thailand. I go every year and I’m obsessed with the fitness camps there.
Favourite book: Born to Run by Christopher McDougall. It’s an amazing story about barefoot running.
Favourite film: A League of their Own. I used to love watching it in my granny’s house when I was seven.
Personal motto: Believe it and you can achieve it.
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Multitasking pays off for money goals
Tackling money goals one at a time cost financial literacy expert Barbara O'Neill at least $1 million.
That's how much Ms O'Neill, a distinguished professor at Rutgers University in the US, figures she lost by starting saving for retirement only after she had created an emergency fund, bought a car with cash and purchased a home.
"I tell students that eventually, 30 years later, I hit the million-dollar mark, but I could've had $2 million," Ms O'Neill says.
Too often, financial experts say, people want to attack their money goals one at a time: "As soon as I pay off my credit card debt, then I'll start saving for a home," or, "As soon as I pay off my student loan debt, then I'll start saving for retirement"."
People do not realise how costly the words "as soon as" can be. Paying off debt is a worthy goal, but it should not come at the expense of other goals, particularly saving for retirement. The sooner money is contributed, the longer it can benefit from compounded returns. Compounded returns are when your investment gains earn their own gains, which can dramatically increase your balances over time.
"By putting off saving for the future, you are really inhibiting yourself from benefiting from that wonderful magic," says Kimberly Zimmerman Rand , an accredited financial counsellor and principal at Dragonfly Financial Solutions in Boston. "If you can start saving today ... you are going to have a lot more five years from now than if you decide to pay off debt for three years and start saving in year four."
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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.”
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Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5