Soldiers of the P18 Gotland Regiment of the Swedish army camouflage their armoured vehicles. Sweden already enjoys active participation in Nato's military and technological initiatives. AFP
Soldiers of the P18 Gotland Regiment of the Swedish army camouflage their armoured vehicles. Sweden already enjoys active participation in Nato's military and technological initiatives. AFP
Soldiers of the P18 Gotland Regiment of the Swedish army camouflage their armoured vehicles. Sweden already enjoys active participation in Nato's military and technological initiatives. AFP
Raghida Dergham is the founder and executive chairwoman of the Beirut Institute, and a columnist for The National
July 09, 2023
Ahead of this week’s Nato summit in Lithuania, the alliance’s Secretary-General, Jens Stoltenberg, delivered a pragmatic message. He said Sweden would not be able to accede to the alliance during the summit due to Turkey's continued opposition, but added: "Hopefully we can find common ground to make a positive decision on the completion of Swedish accession into Nato” and stressed that more needs to be done to realise this outcome.
Turkey opposes Swedish membership because it claims Stockholm harbours around 120 alleged members and supporters of the PKK, a terrorist group spread across southern Turkey and northern Iraq. Ankara is demanding Sweden extradite them back to Turkey. It also accuses Stockholm of harbouring figures allegedly involved in an attempted coup against Turkish President Recep Tayyip Erdogan in 2016.
Mr Stoltenberg cautioned that any delay in Sweden's accession to Nato would be welcomed by both the PKK and Russian President Vladimir Putin. Yet negotiations between Ankara and Stockholm are ongoing. Moreover, Nato’s leadership, the US administration, and European leaders appear to have prioritised giving the negotiations a chance instead of adopting a confrontational approach with Turkey and threatening consequences if Sweden's accession is further obstructed.
Nato does not want to completely shut the door on the role that Turkish President Recep Tayyip Erdogan wishes to play as a mediator between President Vladimir Putin's Russia and Ukraine AFP
Nato countries are closely monitoring the relationship between Mr Putin and Mr Erdogan, who was re-elected this year. Some Nato leaders perceive Mr Erdogan as unpredictable and harbouring a resentful attitude towards the EU, given the obstacles to Turkey's accession bid. But the statements made by Mr Stoltenberg indicate that Nato leaders believe confrontation and estrangement with Turkey to be unwise for two significant reasons.
First, Sweden has, in a sense, become a de facto and unofficial Nato member anyway. Indeed, Sweden's affiliation with the Nato military umbrella is as much a European and American desire as it is a Swedish one. It already enjoys active participation in Nato's military and technological initiatives, and the Swedish military-industrial complex plays a crucial role in bolstering Nato's military capabilities. Wars are lucrative for military-industrial complexes and technological industries, and the Ukrainian war has led to 2 per cent of Nato member countries' GDP being allocated to defence, not to mention new opportunities for testing new weapons and for countries to develop their militaries.
The fundamental question is not only about confronting Russia but also about what the changing identity, trajectory and fate of the Nato alliance mean
Consequently, Sweden's de jure membership serves as more of a litmus test for Turkey rather than a practical necessity for the alliance. Nato leaders have made the decision to provide Turkey with a timeline to address its reservations with Sweden's membership, opting to avoid exacerbating European estrangement with Turkey and the potential consequences and repercussions that all parties can, at this particular moment, do without.
Second, Nato leaders worry about the relationship between Mr Putin and Mr Erdogan, which has helped Russia to bypass American and European sanctions. But at the same time, Nato does not want to completely shut the door on the role that Mr Erdogan wants to play as a mediator between Russia and Ukraine. That role is useful not only for a potential political settlement, but also in the context of the now-expired agreement to export Ukrainian grains via the Black Sea.
Another complication is what Swedish association with Nato signals. Mr Putin will closely monitor the outcomes of this week’s Nato summit, particularly regarding any steps that could officially cement Ukraine's position within the alliance. This would be final proof of the failure for the ultimatum he issued on December 17, 2021, cautioning Nato against considering Ukrainian membership or expanding its membership. The first blow, in Russia’s eyes, came when Finland, a country located on the border with Russia, officially joined Nato. And Sweden’s unofficial, but still very real, relationship with Nato may imply that although Ukraine will not officially become a member soon, it, too, is, in practical terms, already part of the alliance.
Ukrainian President Volodymyr Zelenskyy visited Istanbul on Friday for the first time since the start of the Ukrainian war, focusing on the grain export agreement as well as Ukraine's aspirations for the Nato summit in Vilnius, the Lithuanian capital. Mr Zelenskyy launched a charm offensive targeting the capitals of Nato member states, emphasising the need for tangible steps by Nato leaders towards committing to Kyiv’s accession to the alliance during the upcoming Nato summit. He said that Ukraine needed a clear signal that it will eventually be allowed into the alliance, not just being told that the door is open for it.
Russia will inevitably be the focus of this Nato summit. But the fundamental question is not only about confronting Russia but also about what the changing identity, trajectory, and fate of the Nato alliance mean. It is lost on no one that the relationship between the US and European countries under President Joe Biden has become stronger and deeper, evolving into a new era of military and strategic co-operation for Nato that goes beyond what may show on the surface.
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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