The Trump administration's vague desire to keep old adversaries close is one that is counteracted by historic hype but reinforced by their common fight against ISIL.
The Trump administration's vague desire to keep old adversaries close is one that is counteracted by historic hype but reinforced by their common fight against ISIL.

The paradoxes in US-Russian relations are only intensifying



Everybody knows by now that politicians in Washington cannot agree on anything. It is not just that politics is polarised to the point of gridlock between Republicans and Democrats. Even the Republicans, who control both houses of Congress, are too divided among themselves to enact a replacement to Barack Obama's healthcare plan. And this is a project they have been banging the drum about for seven years.
But there is one thing that almost all can agree on: that Russia is a threat to American lives and liberty. On Tuesday, the House of Representatives voted by 419-3 to take control of sanctions on Russia in order to stop president Donald Trump lifting them as part of his plan to improve relations with Vladimir Putin.
The sanctions were imposed as a result of Russia's seizure of Crimea, a territory that was part of Ukraine, and more recently to punish the Kremlin over its alleged attempts to hack the US presidential election.
The vote aims to codify the sanctions so that the president cannot waive them. In the past, it has been accepted that the president must have the flexibility to lift sanctions since they are a diplomatic tool. This is not a minor detail. Once Congress has control, they tend to stay for decades – as in the sanctions against Cuba – because it is never in a senator's interest to cast a vote that would make him or her look "soft" on Putin or Castro.
The rhetoric has a distinctly Cold War tone. Paul Ryan, the Republican speaker of the house of representatives, said the vote "tightens the screws on our most dangerous adversaries to keep Americans safe". It sounds like we are back in the era when schoolchildren were taught to hide under the kitchen table in the event of a Russian missile strike.
Clearly, the alleged attempt to manipulate the elections has touched a raw nerve in Washington, as if the foundations of democracy were shaken. What we know is that data on voters was stolen from several states to no discernible effect on the election. Emails hacked from the Democratic National Committee showed that this body – which was supposed to be even-handed among the Democratic contenders for the presidency – was biased towards Hillary Clinton, a titbit that the US media jumped on.
But what kind of a threat is Russia? Russian analyst Fyodor Lukyanov, editor-in-chief of the journal Russia in Global Affairs, has highlighted the contradictory assessments of Mr Putin's Russia, which western experts can hold in their heads at the same time. Russian foreign policy is both a failure and rather successful. Russia is an economically backward and demographically declining power with no prospects. Yet the "Russian factor" is almost as important as the Soviet threat was in the past.
Russia has no vision for the future, but its influence on people's minds is assuming dangerous proportions.
Such contradictions are perhaps no surprise. Russia has always been either stronger or weaker than it appears to western eyes. What is different today is the angst felt in Washington by the security establishment at its declining power in the world, even as its military strength and technological lead in weapons systems remain unchallenged.
Power is shifting – though more towards China than Russia – but when viewed through a distorting Washington lens, Russia seems to be the culprit. 
From Washington's perspective, the whole world since 1991 has been America's sandpit. And particularly the Middle East, where it has wielded unbridled power. Yet it is forgotten that Syria has always been a Russian asset and that Moscow has not abandoned its diplomatic connections with the region, but rather reinforced them. Talk of Mr Putin spinning a "Eurasian spider's web" over the region is disingenuous: Russia is closer geographically and historically more vulnerable to events in the area than America.
All this is perfectly clear to the US military, which is cooperating closely with Moscow in the endgame to destroy ISIL's headquarters in the Syrian city of Raqqa. It could hardly be otherwise when there are so many distinct conflicts being waged in Syria. But working hand-in-glove with the Russian military sits uneasily with the idea that Moscow is America's "most dangerous adversary".
This highlights another aspect of the complex relationship between Washington and Moscow. President Trump has never hidden his desire for better relations with the Kremlin, arguing that they share a goal in combatting terrorism. He believes he has a good personal relationship with Mr Putin, but the political and intelligence establishment is making sure that personal chemistry does not sway policy.
So there are three Washington policies towards the Kremlin – a military one in Syria based on tactical necessity, a Trump one based on his intuition that the world would be a better place if the US was not at odds with Russia and a "deep state" one that holds to the view that Russia is, at least in intelligence terms, a dangerous adversary.
Mr Trump's intuition is unlikely to win. The view of US intelligence that Russia tried to manipulate the election in his favour means his hands are tied, perhaps for four years. Any concession to Mr Putin will be seen proof of collusion with the Kremlin.
The open question is why Russian hackers tried to manipulate the presidential election. The most likely explanation is that Russia, which feels itself to be much more vulnerable than it looks, could not resist giving the Americans a taste of their own medicine. 
In the Russian view, the US has spent a decade and a half engaged in regime change around the region in the name of spreading democracy. It was time Uncle Sam got a glimpse of how it feels when a foreign state starts meddling. Of course, in the Russian view, it was the work of "patriotic hackers", not the Kremlin. The final irony is that this small act of retaliation may have ruined the chance of a new start with the Trump administration.


Alan Philps is a commentator on global affairs. 
On Twitter: @aphilps

Russia's Muslim Heartlands

Dominic Rubin, Oxford

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.”

Shubh Mangal Saavdhan
Directed by: RS Prasanna
Starring: Ayushmann Khurrana, Bhumi Pednekar