Russian president Vladimir Putin tells reporters in Paris that Russian hackers might “wake up, read about something going on in interstate relations and, if they have patriotic leanings, they may try to add their contribution to the fight against those who speak badly about Russia" / Sputnik, Kremlin pool photo via AP)
Russian president Vladimir Putin tells reporters in Paris that Russian hackers might “wake up, read about something going on in interstate relations and, if they have patriotic leanings, they may try Show more

Rumours of Russian meddling give a murky picture on both sides



On Monday the British prime minister Theresa May launched an attack on Vladimir Putin for trying to influence elections by planting fake news stories and provocative social media posts. "We know what you're doing and it won't succeed," she said.

The harshness of her attack came as a surprise. It prompted fevered speculation that she was about to declare that last year’s referendum on leaving the European Union should be annulled on the grounds of Russian interference. There is no chance of that happening, however. A more likely explanation is that Russia-bashing is a good fallback position for a prime minister whose grip on her cabinet seems to be weakening by the day.

What is clear is that "information war" is a hot topic these days. The Spanish government says that state and private sector Russian groups used Twitter and Facebook to promote the cause of Catalan separatism ahead of last month's referendum, with the aim of weakening Spain.

In Washington, Congress, the media and law enforcement are hunting for proof of collusion between Donald Trump’s election campaign and the Russian state. There is plenty of evidence of a desire to co-operate with Russia to keep the Democratic candidate, Hillary Clinton, out of the White House, but Robert Mueller, the special counsel of the Justice Department, has yet to come up with proof.

As part of the many investigations in Washington into Russian influence, and after much prodding from the media and law enforcement, Facebook has announced it took $100,000 in paid advertising to support the posts of a network of Russian fake accounts over two years up to May this year.

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But it is far from clear whether this sum – paltry by Facebook standards – swung the election. Much of this spending was after the election and apparently one quarter of the fake posts were not seen by anyone at all.

What do we know from the Russia side? We know that Russia has a “troll farm” in St Petersburg, thanks to a Russian whistle-blower, who revealed that staff were paid to attack critics of president Vladimir Putin at home and spread pro-Kremlin views around the world.

We also know that Mr Putin believes Russia is the target of a western “information campaign”, in which non-governmental organisations, funded by foreign states or wealthy individuals, lend support to his opponents in the name of democracy promotion. Given America’s huge advantages – military, economic and cultural in terms of Hollywood and the English language – he believes Russia has the right to respond to what he sees as outside interference.

It now appears that he feels misled by advisors who told him that hacking of foreign governments or election campaigns could not be traced back to Russia. After US intelligence concluded that there were clear links to Russian hacking, the cyber branch of the Russian Federal Security Service was placed under tighter Kremlin control.

In July this year Mr Putin made a careful concession, admitting that “patriotic” Russians might have been responsible for incidents of hacking foreign elections. But he said they were “free-spirited people” not working for the state.

This year the campaign of Emmanuel Macron, who became the surprise winner of the French presidential election in May, was hacked and emails stolen. But that did not stop the outsider winning.

In Washington, the view was that Russians were behind the hack. In Paris, the head of French cyber security said there was no evidence of a Russian hand. The hack “was so generic and simple that it could have been practically anyone”, Guillaume Poupard told the Associated Press.

When it comes to the effect of social media posts from Russian accounts, the picture gets even murkier. In Britain, research at the University of Edinburgh has identified 3,468 tweets from these sources about Brexit – but most of them after the referendum. The content of the tweets was described as “quite chaotic”.

Another researcher, Yin Yin Lu of the Oxford Internet Institute, has found only 416 tweets about Brexit from these Russian accounts during the referendum period, which she says is too small to be described as interference in the electoral process.

Not surprisingly, Damian Collins, the MP who is leading a parliamentary investigation into fake news, has said that the Russian accounts appear to be more aimed at dividing society and destabilising politics than having a clear impact on voting.

True, perhaps, but more relevant is the fact that the argument over leaving the European Union has been tearing the Conservative Party apart since the early 1990s, while anti-immigrant tweets were of little significance given that one of the planks of the successful campaign was ramping up fears of migrants and Islamophobia. And all this happened without any push from Moscow.

As for the situation in the United States, it is just as murky. Judging by the Russian-linked Facebook posts which have been reported by the US media, they seem quite random. In addition to attacking Mrs Clinton, they also attack her rival for the Democratic ticket, the socialist Bernie Sanders.

One post after the election invites people to join a “Not My President!” protest march against the victorious Mr Trump. And most baffling is a collection of cute puppy pictures – apparently a test of how many "likes" it could acquire.

All this should be put in the context of where Americans get their news from. According to Pew Research released in January, Fox News – Mr Trump’s favourite channel – was the main source of news for 40 per cent of people who voted for the president. Most respondents said they relied on TV news, not social media, for their election news.

There is no doubt that Mr Putin is seeking to boost Russian influence around the world, including through the state-funded RT network (formerly Russia Today). This effort includes false-flag social media posts. But it is mistaken to blame Mr Putin for what really happened at the polls – the implosion of traditional parties in the US and Britain due to their losing touch with the public mood.

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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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