Michael Pompeo, US Secretary of State, left, speaks to Toshimitsu Motegi, Japan's Foreign Minister, right, during a meeting of the 'Quad' in Tokyo in October. Bloomberg
Michael Pompeo, US Secretary of State, left, speaks to Toshimitsu Motegi, Japan's Foreign Minister, right, during a meeting of the 'Quad' in Tokyo in October. Bloomberg
Michael Pompeo, US Secretary of State, left, speaks to Toshimitsu Motegi, Japan's Foreign Minister, right, during a meeting of the 'Quad' in Tokyo in October. Bloomberg
Michael Pompeo, US Secretary of State, left, speaks to Toshimitsu Motegi, Japan's Foreign Minister, right, during a meeting of the 'Quad' in Tokyo in October. Bloomberg

Is the 'Quad' Asia's new Nato?


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The stand-off between India and China along the Line of Actual Control, as their contested border is known, remains tense. The latest round of talks last week failed to lead to a significant breakthrough, and both sides have amassed thousands of troops with considerable military inventory – including artillery and tanks – along the LAC. October 20, 1962 is the day when a short, but intense war broke out between the Asian giants across the same border. Today, exactly 58 years later, the issue continues to fester.

Concurrently, other developments point to a discordant Indo-Pacific, with a grouping that includes Australia, India, Japan and the US – known as the "Quad" – coming to the fore. The countries' foreign ministers met in Tokyo a fortnight ago. The event will have a bearing on the emerging post-Covid-19 Asian and world orders.

At a time when virtual meetings have become the norm, the ministers opted to meet in person. Further, the fact that US Secretary of State Mike Pompeo chose to travel to Japan, even though President Donald Trump had tested positive for Covid-19 a few days earlier, was indicative of the importance Washington attached to the meeting.

Exactly 58 years on from the 1962 border war between China and India, tensions have not eased much. AFP
Exactly 58 years on from the 1962 border war between China and India, tensions have not eased much. AFP

The meeting was also remarkable because, despite the perception that the Quad has a single-point anti-China agenda, the ways in which the different participants chose to characterise Beijing varied widely. The US was explicit in referring to the challenge it faces from a rising China. But the other three members made elliptical references to regional affairs: the need to adhere to rules and norms at sea, the urgency for co-operation in re-wiring supply chains and the need to deal with the pandemic and its consequences and cyber security.

Most observers were puzzled by the fact that, India's Foreign Minister Subrahmanyam Jaishankar refrained from raising the issue of the LAC. Perhaps, quiet, high-level talks between Delhi and Beijing are on the cards.

The Tokyo meeting did not result in a joint statement. The four ministers did, however, highlight the areas that they understood to be shared priorities, where collective action or more discussion might be needed. It is a wide spectrum, encompassing the security and strategic domain, economic and trade matters and the public health challenge posed by Covid-19. Australia, meanwhile, will rejoin the trilateral Malabar maritime exercise that includes India, Japan and the US, scheduled to be held next month.

Beijing's response to the Quad meeting was along expected lines. Previously, China had been dismissive about the viability of the Quad, with Foreign Minister Wang Yi referring to it in March 2018 as "the foam on the sea that gets attention but will soon dissipate". It found this most recent Tokyo meeting, however, to be more irksome.

In an interview to the Xinhua news agency on Friday, Mr Wang was sharply critical, describing the Quad as an "Indo-Pacific Nato" and added that “the aim [of the Quad] is to trumpet the old-fashioned Cold War mentality to stir up confrontation among different groups and blocs and to stoke geopolitical competition, in a bid to maintain the dominance and hegemonic system of the US".

The 'Quad' is a regional grouping of India, Japan, Australia and the US. Reuters
The 'Quad' is a regional grouping of India, Japan, Australia and the US. Reuters
China found the recent Tokyo meeting of the 'Quad' to be irksome

Mr Wang also sounded a note of caution for the 10-member Association of South-East Asian Nations (Asean) – five of whose member states he had visited a week ago in order to allay their anxiety about Beijing’s assertiveness. He said the US-led Quad “will undoubtedly damage Asean's centrality and undermine regional peace and stability, contravening the common, long-term interests of regional countries".

While the Quad is yet to evolve into the maritime Nato that makes Beijing uncomfortable, there have been other developments related to the Quad nations that point to a certain pattern of military and maritime co-operation that could lead to a cluster of nations banding together to deal with the China challenge. In a little-noted development late last month, a US maritime reconnaissance P-8 aircraft landed in India’s Andaman and Nicobar Islands for refuelling, as part of an India-US logistics agreement. Separately, the US and its military allies have engaged in multilateral naval exercises in the Indo-Pacific that included Japan and Australia. In other initiatives, intelligence gathering among the nations comprising the Five Eyes – Australia, Canada, New Zealand, UK and US – is acquiring an Indo-Pacific focus.

The Quad remains a work in progress, and the degree to which it acquires muscle and resolve that will pose a tangible challenge to China is opaque. Among the Indo-Pacific nations, many look to the US to assuage their security concerns about Beijing. But they are in a dilemma about the degree to which they can count on American consistency and reliability in the long term, especially given how turbulent Mr Trump's term has been. The outcome of the US presidential election on November 3 will not result in a dramatic change in US-China ties, but they will impact the manner in which Washington deals with both Beijing and its many partners and allies in Asia.

Michael Pompeo, US Secretary of State, left, greets with Yoshihide Suga, Japan's prime minister, exchange greetings on October 6, 2020. Bloomberg
Michael Pompeo, US Secretary of State, left, greets with Yoshihide Suga, Japan's prime minister, exchange greetings on October 6, 2020. Bloomberg

The policy conundrum for the post-pandemic world is stark. Globalisation and the intricate web of trade dependency, supply chains, technological advances and the myriad challenges of an increasingly digitised society have rendered past structures and arrangements redundant. China is set to recover faster than most major nations from the pandemic, and its rise under President Xi Jinping remains relentless. While security considerations may impel a collective anxiety about China, trade and economic compulsions cannot be easily jettisoned. India, Japan and South Korea are among Beijing's top five trading partners. De-linking with China totally is not a viable option.

The 19th Communist Party Congress, which will begin next Monday, October 26, in Beijing, will provide some cues about Mr Xi's policy orientation for the next five years.

When the tragic fallout of Covid-19 is accurately assessed and the pandemic ends, and a bruised world seeks a new strategic framework, Asian geopolitics will be discordant and volatile. Prickly nationalism, alas, is likely to be in the ascendant.

C Uday Bhaskar is director of the New Delhi-based think tank Society for Policy Studies

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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.”

Real estate tokenisation project

Dubai launched the pilot phase of its real estate tokenisation project last month.

The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.

Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.

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1. Stefan Bissegger (SUI) EF Education-EasyPost, in 9-43

2. Filippo Ganna (ITA) Ineos Grenadiers, at 7s

3. Tom Dumoulin (NED) Jumbo-Visma, at 14s

4. Tadej Pogacar (SLO) UAE-Team Emirates, at 18s

5. Joao Almeida (POR) UAE-Team Emirates, at 22s

6. Mikkel Bjerg (DEN) UAE-Team Emirates, at 24s

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1. Stefan Bissegger (SUI) EF Education-EasyPost, in 9-13-02

2. Filippo Ganna (ITA) Ineos Grenadiers, at 7s

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4. Tom Dumoulin (NED) Jumbo-Visma, at 14s

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6. Joao Almeida (POR) UAE-Team Emirates, at 22s

Who's who in Yemen conflict

Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

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India Test squad

Virat Kohli (c), Mayank Agarwal, Rohit Sharma, Cheteshwar Pujara, Ajinkya Rahane, Hanuma Vihari, Rishabh Pant (wk), Wriddhiman Saha (wk), Ravichandran Ashwin, Ravindra Jadeja, Kuldeep Yadav, Mohammed Shami, Umesh Yadav, Ishant Sharma, Shubman Gill

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'I Want You Back'

Director:Jason Orley

Stars:Jenny Slate, Charlie Day

Rating:4/5

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COMPANY PROFILE
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