The second summit between the Association of South-East Asian Nations and the Gulf Co-operation Council wound up in Kuala Lumpur around lunchtime on Tuesday. In the afternoon, the regional groupings were joined by China, for the first ever Asean-GCC-China trilateral.
Did the gatherings constitute one of the “most substantive” milestones in 10-nation Asean’s history, as this year’s chair, Malaysian Prime Minister Anwar Ibrahim, put it? Was the trilateral “historic”, as the Malaysian academic Phar Kim Beng argued last week, because “it institutionalises symmetry among three civilisational spheres – maritime South-East Asia, the Islamic Gulf, and Confucian China”?
Or was the Asean-GCC meeting a small and incremental step forward for two very different regional blocs, with the addition of an extra meeting with China that may turn out to have been a one-off?
There may be elements of truth in all three statements. Mr Anwar made a confident case, saying he thought “the Asean-GCC partnership has never been more vital than it is today”. He pointed to both region’s centuries of history as trading hubs, mentioning that Oman and the Malaysian city of Malacca had both served as “strategic crossroads that linked East and West, demonstrating the power of openness, exchange and strategic connectivity”.
Kuwait’s Crown Prince, Sheikh Sabah Al Khaled Al Sabah, also called the partnership “vital”. He said: “Together our 16 nations represent immense economic and human potential, with a combined GDP nearing $6 trillion and a population of about 740 million.” The total trade volume between the two blocs stood at $131 billion in 2023, he added – a figure he expected to rise to $180 billion by 2026. “The growth in GCC-Asean trade, along with rising Gulf investments in Asian markets, reflects mutual confidence and deepening economic integration.”
Chinese Premier Li Qiang said that Beijing was “willing to join hands with Asean and the GCC to fully harness the synergy of one plus one plus one being greater than three, and inject powerful momentum into the common development and prosperity of our three sides” and that “differences are not obstacles to co-operation – rather, they present opportunities for complementarity”.
Prof Phar Kim Beng’s at-times rather poetic essay also pointed out that “when senior officials discuss port interoperability, halal certification frameworks, or AI governance standards, they are doing more than negotiating terms – they are creating a shared civilisational grammar … China’s Digital Silk Road, the GCC’s green hydrogen corridors, and Asean’s biodiversity-based value chains are not competing blueprints. They are complementary avenues for creating value – and values – across regions that refuse to be passive recipients of a waning Bretton Woods system”.
There should be a kind of magic, even a touch of romantic idealism, about trying to bring these two regions (and China) closer
There’s no doubting that the sentiment between the leaders, ministers and officials in the meeting halls was warm and genuine. Timor-Leste Prime Minister Xanana Gusmao – present because his country is expecting to join Asean later this year – spread the joy when he unexpectedly handed out chocolates to reporters waiting outside the ballroom at the Kuala Lumpur Convention Centre after the first of Tuesday’s summits. “Take it, you’ve waited so long,” he told them with a smile. The summits also concluded with a joint statement that underlined the commitments of Asean, the GCC and China to peace, stability, dialogue, development, mutual respect and co-operation, non-interference into the internal affairs of others, and to strengthening collaboration between the regions.
But that doesn’t mean that getting there was easy or that concrete results will automatically follow without much further work.
Negotiations in the run-up to the summits were “hard”, I’m told by a senior official involved. There were substantial differences in style and process between the GCC and Asean – which is not surprising, considering how different their make-ups are. The GCC countries are all Arab Muslim and the amount they have in common may aid faster decision-making. Asean, on the other hand, is made up of states with so many different faiths and ethnicities that the region was once known as “the Balkans of Asia”. The association is used to a very measured – critics would say laboured – way of reaching conclusions.
I’m told that some on the GCC side were pushing for a mutual free trade agreement fast, whereas some Asean members were suggesting that the GCC should consider joining the Regional Comprehensive Economic Partnership – a free trade agreement that includes all Asean countries, plus China, Japan, South Korea, Australia and New Zealand. “And in any case,” one other official said to me, “the Asean way is that we can’t take a formal decision without doing a study first.”
Differences in approach may have led to some misunderstandings. Some on the Asean side felt their GCC counterparts didn’t always appreciate the advances some of their countries had made. On the other hand, perhaps because of its long and deep institutional relations with Beijing, there is a danger that Asean overestimates the extent to which it is needed as a “bridge” between the Gulf and China – two parties that now know each other extremely well.
This doesn’t appear to be a problem at the top level. It is among the ranks of diplomats and sherpas on both sides that these issues must be worked through – for it is they who will need to put in the hard yards to turn warm words into economic mechanisms that benefit the peoples of both the Gulf and South-East Asia.
It’s not just a matter of material progress, and shared and equitable prosperity, important though both are. There should be a kind of magic, even a touch of romantic idealism, about trying to bring these two regions (and China) closer. And so, I will leave the last words to Prof Phar.
The senior officials who were working to make the Kuala Lumpur summits a success were doing more than laying the groundwork for trade, he wrote. “They are rewriting the rules of recognition. They are showing that in a fragmented world, civilisation can still speak to civilisation – not through weapons or treaties, but through standards, ports, and trust.”
Match info:
Portugal 1
Ronaldo (4')
Morocco 0
Grand slam winners since July 2003
Who has won major titles since Wimbledon 2003 when Roger Federer won his first grand slam
Roger Federer 19 (8 Wimbledon, 5 Australian Open, 5 US Open, 1 French Open)
Rafael Nadal 16 (10 French Open, 3 US Open, 2 Wimbledon, 1 Australian Open)
Novak Djokovic 12 (6 Australian Open, 3 Wimbledon, 2 US Open, 1 French Open)
Andy Murray 3 (2 Wimbledon, 1 US Open)
Stan Wawrinka 3 (1 Australian Open, 1 French Open, 1 US Open)
Andy Roddick 1 (1 US Open)
Gaston Gaudio 1 (1 French Open)
Marat Safin 1 (1 Australian Open)
Juan Martin del Potro 1 (1 US Open)
Marin Cilic 1 (1 US Open)
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
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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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Match info
What: Fifa Club World Cup play-off
Who: Al Ain v Team Wellington
Where: Hazza bin Zayed Stadium, Al Ain
When: Wednesday, kick off 7.30pm