The Syrian war, in which more than half a million Syrians are thought to have died, is entering its 11th year. AFP
The Syrian war, in which more than half a million Syrians are thought to have died, is entering its 11th year. AFP
The Syrian war, in which more than half a million Syrians are thought to have died, is entering its 11th year. AFP
The Syrian war, in which more than half a million Syrians are thought to have died, is entering its 11th year. AFP

Can Russia persuade the world to rehabilitate Bashar Al Assad?


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Russia is seeking to pre-empt the US in the Arab world by developing policies that capitalise on President Joe Biden's new administration still trying to find its footing and an eagerness among Washington's Arab allies to maintain a balance in their relationships with the West, Moscow and Beijing.

So far, Mr Biden has hinted at his desire for a reset with Gulf states, Egypt and others in the context of reconfiguring US-Iranian relations. Moscow sees the current moment, in which US policy remains unclear, as an opportunity to mobilise support for an eastern pivot in the Middle East. Impatience in the region for the Biden administration’s apparent disregard for US-Gulf relations is growing, especially given that it seems to be given less attention than relations with Iran. To be clear, US relations with the Gulf are far from ruptured, but confidence is being shaken. Russia's veteran foreign minister, Sergei Lavrov, must have sensed that when he undertook a visit last week to various Gulf capitals.

Beyond a Russian campaign to bolster bilateral relations – particularly political ties and economic co-operation, including in energy markets – Mr Lavrov’s talks with Gulf officials also addressed Iran and the prospect of renewed nuclear negotiations with it. Moscow, an ally of Iran, favours an unconditional return to the nuclear deal negotiated between Tehran and various world powers, led by then US president Barack Obama, in 2015. "Unconditional" includes separating the issue of Iran’s nuclear programme from other grievances against Tehran, such as its ballistic missile programme and aggressive behaviour throughout the Middle East.

Russia has largely ignored proposals for Arab states' interests to be represented directly in any nuclear negotiations with Iran, suggesting instead on addressing those concerns during a wider regional security conference it proposes holding at an as-yet unknown, future date.

In Saudi Arabia, Mr Lavrov spoke about the need for some kind of accord between the kingdom and Iran, and offered to play a role in facilitating it. However, one flaw in Russia’s diplomatic approach is that, by its own admission, it sees Iran as an ally it must go through greater lengths to accommodate, whereas it considers its Arab partners to be "more flexible", as a former Russian diplomat put it to me. This is why Mr Lavrov's efforts in the Arab world are focused on winning concessions and seeking compromise.

Russian President Vladimir Putin (R) has been a strong ally of his Syrian counterpart Bashar Al Assad (L). AFP
Russian President Vladimir Putin (R) has been a strong ally of his Syrian counterpart Bashar Al Assad (L). AFP
Moscow sees no option but to search for a breakthrough in the Syrian crisis

Mr Lavrov's trip was also focused heavily on Syria, where it has helped the Syrian government wage a complicated, bloody and costly war for several years. At this point, Moscow must see no option but to search for a breakthrough in the Syrian crisis.

Russia is resolved not to abandon Syrian President Bashar Al Assad, who has afforded Moscow a major base from which to operate in the Middle East. With that in mind, Mr Lavrov has sought to secure a breakthrough by trying to persuade Arab states to find ways to reintegrate Syria into the Arab League and rehabilitate Al Assad as a recognised ruler in the region.

Russia has also made a case to Arab states that the Caesar Act, a US law that imposes sanctions on the Syrian regime, is ultimately counterproductive. According to Moscow's logic, the fact that it hinders international companies from returning to Syria helps to keep the country's public and private sectors in a state of paralysis. It also obstructs Russian and regional efforts to mobilise financial support for rebuilding Syria. To that end, Russia is also seeking concrete commitments from Arab states and others to help finance the reconstruction of the country without conditions. Russia fears that without this breakthrough in the regional logic on Syria, the country will only continue to be a quagmire.

During Mr Lavrov's visit to Abu Dhabi, UAE Foreign Minister Sheikh Abdullah bin Zayed indicated that there were merits to the argument. He spoke of the "necessity" of Syria returning to its role in the Arab League, and that the Caesar Act posed obstacles that should be "addressed clearly" in dialogue "with our friends in the United States”.

At a virtual panel discussion held by the Beirut Institute in Abu Dhabi, UAE ambassador to Washington Yusuf Al Otaiba stressed: “We’re trying to re-engage Syria [but] how we re-engage, how we do not cross wires on the Caesar Act, is something we are talking to the Americans about now.”

In Saudi Arabia, there has been no public statement made against the Caesar Act, and the government in Riyadh is said to be highly sceptical of any prospects of Iran's presence in Syria diminishing. Nonetheless, in the Saudi leg of his tour, Mr Lavrov encountered a recognition that more work could be done by the US in terms of diplomacy. At the same time, he was also told that any rehabilitation of Al Assad would be contingent upon progress being made in the Syrian political process, especially in the ongoing talks of the Syrian Constitutional Committee. Those talks, held in Geneva between the war's various factions, have taken place for more than a year without much progress. Mr Lavrov acknowledged that the Syrian government’s stubbornness will continue to preclude any such progress.

But there is a sense that more pragmatic approaches must be considered, and that sense may even extend to Europe. During the Beirut Institute panel, Sir Mark Lyall Grant, a former British envoy to the UN, said: “We are realists in Europe, and recognise that Bashar Al Assad is there and he's going to stay.”

Even so, Mr Biden's administration will be in no rush to repeal the Caesar Act, not only because it is a law issued with bipartisan support in Congress that directly pursues accountability for crimes against humanity and the protection of Syrian civilians, but also because, in the US view, repealing the law would primarily benefit Russia. It is also unlikely that the Biden administration would advocate for any Russian-sponsored reconstruction process for Syria.

Mr Al Otaiba addressed that perspective head on: “We're 100 per cent committed to this alliance [with the US] but at the same time, we're having this very schizophrenic debate.” The UAE-US security and defence relationship is "unparalleled with any other country," he said, also noting that the strengthening of Gulf relations with Russia and China did not mark a pivot, but rather reflected a new regional dynamic. But the US, he continued, is "basically telling the entire world for years now that the region is less important to you. Fine, that's a healthy debate. It's a healthy but polarising debate. You can't also expect everyone to wait for you as you are telling them they are less important to you."

Raghida Dergham is the founder and executive chairwoman of the Beirut Institute and a columnist for The National

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.”