Richard Javad Heydarian is a Manila-based academic, columnist and author
December 23, 2022
The best way to describe Asian geopolitics in the past year is encapsulated by the term "strategic maturity", namely the ability of nations to see the bigger picture beyond the fog of short-term tensions and uncertainty. What began as a tumultuous year, which took an even more troubling turn over the coming months, ended on a relatively more encouraging geopolitical note, largely thanks to the proactive role of "middle powers" in encouraging the better angels of superpowers’ nature.
Already divided by the war in Ukraine, and locked into a disruptive trade and technological warfare, the US and China almost sleepwalked towards direct confrontation following a controversial visit to Taiwan by Nancy Pelosi, the departing Speaker of the US House of Representatives, in August.
In particular, South-East Asian nations such Indonesia – this year’s G20 president, and the incoming chairman of Association of South-East Asian Nations – was instrumental to brokering a desperately needed detente between the two superpowers. The upshot is a more manageable competition rather than a mutually destructive conflict.
Sino-American ties constitute the most consequential bilateral relationship in the world. But the past year also demonstrated the growing significance of middle powers in shaping the 21st-century global order – in ways that preserve the interests of smaller nations and ensure maximum possible stability and prosperity for all. Thus, both the reigning superpowers as well as key regional players such as Indonesia have demonstrated commendable degree of strategic maturity, which bodes well for the future of the Indo-Pacific.
Lest we forget, 2022 began with a shocking geopolitical development. Just days after the Munich Security Conference in Germany, where Russia’s threat of military action against Ukraine dominated the proceedings, Europe witnessed the first major conventional war of the 21st century.
I vividly recall late-night conversations with European counterparts on the sidelines of the conference. Few believed that a major armed conflict was truly on the short-term horizon. Having spent years in conflict-ridden regions of the world, especially the Middle East, I remained deeply sceptical of the strategic complacency pervading the European strategic community.
Closely following analyses by a few perspicacious Russian experts, I publicly argued that an actual war was more probable than not. I also maintained that Asia could not insulate itself from a potential war in Europe, especially given the centrality of both Russia and Ukraine to global commodity markets. Just weeks after the actual war broke out, a number of Asian nations grappled with a huge energy and food crisis.
US President Joe Biden, right, and Chinese President Xi Jinping shake hands at the G20 summit in November. AP Photo
Smaller nations don’t want to be at the mercy of the whims of superpowers
The war in Europe, meanwhile, only accentuated Sino-American rivalry. While the US mobilised its European and Asian allies against Russia, the Chinese leadership blamed the West for provoking the conflict. Aside from laying blame on Nato expansion into post-Soviet space, Beijing also stepped up its energy imports from Russia in a bid to shield its Eurasian ally from western sanctions.
By and large, Chinese President Xi Jinping and Russian President Vladimir Putin projected a united front, pledging to jointly pursue a "new world order" beyond the West’s dictates. In response, the Pentagon spoke of the need to confront a Sino-Russian alliance in a new era of "great power competition".
Accordingly, the Biden administration moved on three fronts. To begin with, it released two major policy documents in quick succession, namely the National Security Strategy document and the National Defence Strategy to signal its commitment to confront its superpower rivals with gusto.
In particular, the NDS described the Asian powerhouse as the “most consequential strategic competitor for the coming decades", while the NSS openly accused Beijing of harbouring the “intent to reshape the international order [with] … increasingly, the economic, diplomatic, military, and technological power to do it".
Second, the Biden administration mobilised a new set of sanctions to weaken the foundations of its rivals' economies. While Russia was met with comprehensive financial and energy sanctions, China confronted unprecedented sanctions targeting its cutting-edge industries. In particular, Washington threatened to punish any western or multinational companies providing semiconductor technology to China.
While tightening the noose around China’s economy, the Biden administration proposed an Indo-Pacific Economic Framework, which aims to deepen strategic economic co-operation among a dozen US allies and partners, particularly in the realm of cutting-edge industries, public infrastructure development, and green technology.
Finally, the Biden administration also stepped up its military footprint on both ends of the Eurasian landmass. While mobilising European military allies against Russia, Washington forged ahead with solidifying a new alliance of “maritime democracies” in the Indo-Pacific.
In a surprising move, the Biden administration signed a nuclear submarine deal under the Aukus alliance, with the clear objective of countering China’s growing maritime capabilities in the Western Pacific. This went hand-in-hand with expanded naval patrols across China’s immediate neighbourhood.
Crucially, the US also began negotiating new basing access across vital locations in the Philippines in order to expand its forward-deployment presence in East Asia. The ultimate aim is to build an integrated network of allies and partners to keep China’s ambitions in check.
Against the backdrop of rising tensions across a whole range of issues, Ms Pelosi’s visit to Taiwan, which Beijing considers as a "renegade province", almost provoked a full-scale conflict between the two superpowers.
Singapore's Prime Minister Lee Hsien Loong and Indonesian President Joko Widodo meet in Riau, Indonesia, in January. Reuters
Perturbed by the perilous direction of Sino-American relations, South-East Asian leaders openly warned that the two superpowers could end up "sleepwalking" into conflict. It was precisely at this point that regional states, namely Indonesia and Singapore, stepped up their efforts to mediate between the rival powers.
Neither Asean member state has the same economic and military resources as the reigning superpowers. But what they bring to the table as "middle powers" include credibility as responsible regional powers, and a proven capacity to foster co-operative relations and corral geopolitical coalitions. They are also capable of exercising a significant degree of strategic autonomy and, accordingly, projecting power beyond their immediate borders.
While Singaporean leaders publicly warned of the disruptive impact of Sino-American relations, Indonesia mediated among them. Crucially, both countries were backed by other "middle powers" such as Japan, India, South Korea and Australia, which had also fretted over this concern.
Following a historic trip to Europe to mediate the Russia-Ukraine conflict, Indonesian President Joko Widodo convinced his Chinese and American counterparts to find a common ground on the sidelines of the G20 summit in Bali before the end of the year.
As non-aligned nations with robust ties with all major powers, and key leaders within Asean, Indonesia and Singapore were also in a unique position to nudge the US and China towards a new modus vivendi. The upshot was the "Bali detente", which saw both Mr Biden and Mr Xi hold a cordial meeting and recognising their shared interests in creating a broadly stable and prosperous order in the Indo-Pacific.
The highly encouraging episode not only underscored the strategic maturity of the two global statesmen, but also the proactive contribution of middle powers such as Indonesia and Singapore. The past year showed that smaller nations don’t want to be at the mercy of superpowers and, accordingly, are willing and capable of becoming captains of their own strategic destiny.
Squid Game season two
Director: Hwang Dong-hyuk
Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
Rating: 4.5/5
EA Sports FC 25
Developer: EA Vancouver, EA Romania Publisher: EA Sports Consoles: Nintendo Switch, PlayStation 4&5, Xbox One and Xbox Series X/S Rating: 3.5/5
MATCH INFO
Uefa Champions League, Group C
Liverpool v Red Star Belgrade
Anfield, Liverpool
Wednesday, 11pm (UAE)
Reading List
Practitioners of mindful eating recommend the following books to get you started:
Savor: Mindful Eating, Mindful Life by Thich Nhat Hanh and Dr Lilian Cheung
How to Eat by Thich Nhat Hanh
The Mindful Diet by Dr Ruth Wolever
Mindful Eating by Dr Jan Bays
How to Raise a Mindful Eaterby Maryann Jacobsen
Results
5pm: Maiden (PA) Dh80,000 (Turf) 1,000mm, Winners: Mumayaza, Fabrice Veron (jockey), Eric Lemartinel (trainer)
5.30pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 2,200m, Winners: Sharkh, Pat Cosgrave, Helal Al Alawi
6pm: The President’s Cup Prep - Conditions (PA) Dh100,000 (T) 2,200m, Winner: Somoud, Richard Mullen, Jean de Roualle
6.30pm: Handicap (PA) Dh90,000 (T) 1,600m, Winner: Harrab, Ryan Curatolo, Jean de Roualle
7pm: Abu Dhabi Equestrian Gold Cup - Prestige (PA) Dh125,000 (T) 1,600m, Winner: Hameem, Adrie de Vries, Abdallah Al Hammadi
7.30pm: Al Ruwais – Group 3 (PA) Dh300,000 (T) 1,200m, Winner: AF Alwajel, Tadhg O’Shea, Ernst Oertel
8pm: Maiden (TB) Dh80,000 (T) 1,400m, Winner: Nibras Passion, Bernardo Pinheiro, Ismail Mohammed
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
UAE’s revised Cricket World Cup League Two schedule
August, 2021: Host - United States; Teams - UAE, United States and Scotland
Between September and November, 2021 (dates TBC): Host - Namibia; Teams - Namibia, Oman, UAE
December, 2021: Host - UAE; Teams - UAE, Namibia, Oman
February, 2022: Hosts - Nepal; Teams - UAE, Nepal, PNG
June, 2022: Hosts - Scotland; Teams - UAE, United States, Scotland
September, 2022: Hosts - PNG; Teams - UAE, PNG, Nepal
February, 2023: Hosts - UAE; Teams - UAE, PNG, Nepal
TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
FlyDubai flies direct from Dubai to Skopje in five hours from Dh1,314 return including taxes. Hourly buses from Skopje to Ohrid take three hours.
The tours
English-speaking guided tours of Ohrid town and the surrounding area are organised by Cultura 365; these cost €90 (Dh386) for a one-day trip including driver and guide and €100 a day (Dh429) for two people.
The hotels
Villa St Sofija in the old town of Ohrid, twin room from $54 (Dh198) a night.
St Naum Monastery, on the lake 30km south of Ohrid town, has updated its pilgrims' quarters into a modern 3-star hotel, with rooms overlooking the monastery courtyard and lake. Double room from $60 (Dh 220) a night.
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Scorecard
Scotland 220
K Coetzer 95, J Siddique 3-49, R Mustafa 3-35
UAE 224-3 in 43,5 overs
C Suri 67, B Hameed 63 not out
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Mark Chahwan, co-founder and chief executive of robo-advisory firm Sarwa, forecasts that Generation Alpha (born between 2010 and 2024) will start investing in their teenage years and therefore benefit from compound interest.
“Technology and education should be the main drivers to make this happen, whether it’s investing in a few clicks or their schools/parents stepping up their personal finance education skills,” he adds.
Mr Chahwan says younger generations have a higher capacity to take on risk, but for some their appetite can be more cautious because they are investing for the first time. “Schools still do not teach personal finance and stock market investing, so a lot of the learning journey can feel daunting and intimidating,” he says.
He advises millennials to not always start with an aggressive portfolio even if they can afford to take risks. “We always advise to work your way up to your risk capacity, that way you experience volatility and get used to it. Given the higher risk capacity for the younger generations, stocks are a favourite,” says Mr Chahwan.
Highlighting the role technology has played in encouraging millennials and Gen Z to invest, he says: “They were often excluded, but with lower account minimums ... a customer with $1,000 [Dh3,672] in their account has their money working for them just as hard as the portfolio of a high get-worth individual.”
Goalkeepers: Ali Khaseif, Fahad Al Dhanhani, Mohammed Al Shamsi, Adel Al Hosani
Defenders: Bandar Al Ahbabi, Shaheen Abdulrahman, Walid Abbas, Mahmoud Khamis, Mohammed Barghash, Khalifa Al Hammadi, Hassan Al Mahrami, Yousef Jaber, Mohammed Al Attas
Midfielders: Ali Salmeen, Abdullah Ramadan, Abdullah Al Naqbi, Majed Hassan, Abdullah Hamad, Khalfan Mubarak, Khalil Al Hammadi, Tahnoun Al Zaabi, Harib Abdallah, Mohammed Jumah
Forwards: Fabio De Lima, Caio Canedo, Ali Saleh, Ali Mabkhout, Sebastian Tagliabue
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
Earth under attack: Cosmic impacts throughout history
- 4.5 billion years ago: Mars-sized object smashes into the newly-formed Earth, creating debris that coalesces to form the Moon
- 66 million years ago: 10km-wide asteroid crashes into the Gulf of Mexico, wiping out over 70 per cent of living species – including the dinosaurs.
- 50,000 years ago: 50m-wide iron meteor crashes in Arizona with the violence of 10 megatonne hydrogen bomb, creating the famous 1.2km-wide Barringer Crater
- 1490: Meteor storm over Shansi Province, north-east China when large stones “fell like rain”, reportedly leading to thousands of deaths.
- 1908: 100-metre meteor from the Taurid Complex explodes near the Tunguska river in Siberia with the force of 1,000 Hiroshima-type bombs, devastating 2,000 square kilometres of forest.
- 1998: Comet Shoemaker-Levy 9 breaks apart and crashes into Jupiter in series of impacts that would have annihilated life on Earth.
-2013: 10,000-tonne meteor burns up over the southern Urals region of Russia, releasing a pressure blast and flash that left over 1600 people injured.
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.”
Favourite piece of music: Verdi’s Requiem. It’s awe-inspiring.
Biggest inspiration: My father, as I grew up in a house where music was constantly played on a wind-up gramophone. I had amazing music teachers in primary and secondary school who inspired me to take my music further. They encouraged me to take up music as a profession and I follow in their footsteps, encouraging others to do the same.
Favourite book: Ian McEwan’s Atonement – the ending alone knocked me for six.
Favourite holiday destination: Italy - music and opera is so much part of the life there. I love it.