Michael Goldfarb is the host of the First Rough Draft of History podcast
April 27, 2022
Last weekend was a good one for supporters of liberalism. After much media-induced fear about the hard-right candidate Marine Le Pen winning, centrist Emmanuel Macron was re-elected President of France. Even though Ms Le Pen garnered more votes than she did in the previous election, it wasn’t really a close contest.
After five turbulent years of gilets jaunes’ riots and contested lockdowns and vaccine mandates because of Covid-19, Mr Macron won by 17 percentage points. By the standards of modern politics in the old democracies of Europe and North America, that is a landslide.
At the same time in Slovenia, one of the countries that emerged out of the violent disintegration of former Yugoslavia, three-term Prime Minister Janez Jansa, an admirer of former US president Donald Trump and Hungarian Prime Minister Viktor Orban, was easily defeated by Robert Golob. Described as being of the “liberal left”, Mr Golob had formed his Freedom Party only a year ago.
Trend spotters detected something new: authoritarianism and xenophobia were in retreat.
Maybe. It all depends on how one defines those terms.
The reasons why people vote are often unique to a given country
We live in a world of identity by brand names. In theory, the labels you wear tell people everything they need to know about you. Political journalists and analysts also use labels: populist, nationalist, authoritarian. They are about as accurate a way of judging a country’s politics as judging a person by the fact that they wear Lacoste or Nike or Chanel. People are really more complicated than that.
Societies are even more complex than individuals and the reasons why people vote are often unique to a given country.
Mr Orban, for example, started out as a power-seeking opportunist, an astute reader of Hungary’s political mood. He was a liberal in the years after the Soviet Union collapsed before increasingly becoming a nationalist as resentment against the EU grew because the post-Cold War “peace” dividend did not reach much of Hungary. Outflanked by a nakedly racist and xenophobic party called Jobbik a decade ago, Mr Orban too became an authoritarian xenophobe and gobbled up Jobbik’s voters.
What is true is that the seismic changes that have troubled the politics of the old democracies during the past 15 years can be traced to a series of three shocks.
The financial crash of 2008-2009 led to the worst economic downturn since the Great Depression. But the bankers whose reckless, sometimes criminal, behaviour caused the crash were bailed out by governments. Ordinary citizens paid the bill through their taxes and reduced government services: the policies of austerity.
The 2008 Great Recession and events of the years since left people in the West with uncertainty to deal with. AP Photo
This bred real popular anger in Europe and America against the international institutions, such as the EU, which had become very powerful after the collapse of the Soviet Union. As recession took hold, it also bred traditional resentments against immigrants. Xenophobia always surges when work becomes scarce.
Racist and Islamophobic political parties, such as Germany’s AfD, began to gain traction.
In Europe this reached an extreme in 2015, when Turkish President Recep Tayyip Erdogan opened his borders with Greece and allowed hundreds of thousands of refugees from Syria and Iraq to flood into the EU. Ethno-nationalism was resurgent and xenophobic politicians feasted on the anger.
This led to the second shock: the 2016 earthquake. Britain voted to leave the EU and Mr Trump was elected US president. Both sets of votes were marked by the victorious campaigns’ rule-breaking change of tone and language. That’s a fancy way of saying outright lies, particularly about immigration. The language and messaging of politicians was dragged down to the level of angry bar room debate. Bar room arguments are known to end up in fist fights. The social fabric of both the UK and the US became dangerously frayed.
The entire liberal order seemed to be on the verge of being overthrown. Mr Trump didn’t hide his fondness for Russian President Vladimir Putin nor did Britain’s Brexiteer government. Mr Trump’s consigliere, Steve Bannon, engaged in his own personal shuttle diplomacy, visiting Mr Orban and other xenophobic authoritarians.
And it was not just in Europe and America that authoritarians with questionable belief in democracy were, such as Mr Orban, attacking the democratic processes that brought them to power. In Brazil and India, authoritarianism was on the rise.
Brazilian President Jair Bolsonaro addresses the opening of the National Mayor's Meeting in Brasilia on Tuesday. AP Photo
But then came the third shock: Russia's invasion of Ukraine. The endless videos of epic destruction of city after city, the evidence of civilian massacres, the bravery of Ukrainians pushing back what the whole world assumed was one of its most powerful armies, reminded many people in the old democracies of what authoritarianism could lead to.
In the first round of the French presidential campaigns, the polls were close. One reason was that Mr Macron was busy dealing with the Ukraine crisis. In the second round, he was laser-focused on his campaign. When he and Ms Le Pen finally debated – for nearly three hours – on French television, Mr Macron’s killer moment came when he attacked her for her well-documented closeness to Mr Putin. Politically and financially. In the days after the debate, the polls dramatically began to run in the incumbent’s favour culminating in his victory.
So is this a new trend? Has the “authoritarian” moment passed?
Don’t ask me. I’m not a trend-spotter. But there are two elections this autumn that might give us a clue. The midterm Congressional election in the US and the presidential election in Brazil.
Will the Democrats and the left-leaning former Brazilian president Lula de Silva do as Mr Macron did and remind voters of their opponents’ love of Mr Putin? And if they do, will it prove to be a successful strategy? We must watch those campaigns closely.
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
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.”
The flights Emirates, Etihad and Malaysia Airlines all fly direct from the UAE to Kuala Lumpur and on to Penang from about Dh2,300 return, including taxes.
Where to stay
In Kuala Lumpur,Element is a recently opened, futuristic hotel high up in a Norman Foster-designed skyscraper. Rooms cost from Dh400 per night, including taxes. Hotel Stripes, also in KL, is a great value design hotel, with an infinity rooftop pool. Rooms cost from Dh310, including taxes.
In Penang,Ren i Tang is a boutique b&b in what was once an ancient Chinese Medicine Hall in the centre of Little India. Rooms cost from Dh220, including taxes. 23 Love Lane in Penang is a luxury boutique heritage hotel in a converted mansion, with private tropical gardens. Rooms cost from Dh400, including taxes.
In Langkawi,Temple Tree is a unique architectural villa hotel consisting of antique houses from all across Malaysia. Rooms cost from Dh350, including taxes.
