Suddenly the space for action for President Recep Tayyip Erdogan has shrunk dramatically.
Just a month ago the leading think tank, European Council on Foreign Relations, was bemoaning the lack of cards in the bloc's hand to play against the Turkish leader. The Europeans stand frustrated and apparently impotent in front of his expansionist power projects both at sea in the Mediterranean and conflict zones from Libya to Nagorno-Karabakh.
Why then is Mr Erdogan appearing to give ground?
His shake-up of his economic team this week was an uncharacteristic concession. Mr Erdogan engineered the exit of his son-in-law Berat Albayrak as finance and treasury minister. The Turkish President has also promised to shake up his country's institutions and enact judicial reforms.
It all suggests a reopening after a grim tailspin went into overdrive following the failed coup attempt in 2016.
Migrants walk towards the Greek border in Pazarkule, in the Edirne district. Thousands of migrants stuck on the Turkey-Greece border clashed with Greek police. AFP
Children sit on a beach near Skala Sykamineas on the Greek Lesbos island after crossing the Aegean sea between Turkey and Greece. AFP
Migrants help each other after an attempt to enter Greece from a location near Edirne, Turkey, by crossing the Maritsa river. AFP
Migrants walk towards the Greek border in Pazarkule, in the Edirne district. AFP
Migrants on a dinghy cross the Evros river to reach Greece, pictured from the Turkish border city of Edirne, Turkey. Reuters
Migrants carry a dinghy to cross the Evros river to reach Greece, pictured near the Turkish border city of Edirne, Turkey. Reuters
Migrants gather around a fire as they wait to cross the Evros river to reach Greece, near Doyran Village, near the Turkish border city of Edirne, Turkey. Reuters
A group of migrants are detained after being caught by police on the side of the highway near the Greek-Turkish border. Getty Images
Migrants on a dinghy cross the Evros river and reach Greece, pictured from the Turkish border city of Edirne, Turkey. Reuters
Migrants walk along the Evros river to reach Greece, near the Turkish border city of Edirne, Turkey. Reuters
Migrants sit waiting near the buffer zone at Turkey-Greece border, at Pazarkule, in Edirne district. AFP
A migrant passes to the buffer zone during clashes with Greek police at the Turkey-Greece border, at Pazarkule, in Edirne distric. Thousands of migrants stuck on the Turkey-Greece border clashed with Greek police. AFP
A migrant walk towards the Greek border in Pazarkule, in the Edirne district. AFP
There have been signs of a welcome for his moves. The lira has rallied on the removal of an economy tsar who dogmatically insisted that reduced interest rates were the path to low inflation. Tongues are wagging in Ankara and Istanbul that Mr Erdogan is shifting to accommodate the new pressures that the incoming US administration of Joe Biden will bring. The fragility of the economy robs Mr Erdogan of a narrative to present to a Democratic administration at a time when internal record of his leadership will be far more closely scrutinised.
It would be folly for Mr Biden’s team to fall for this window-dressing as a real platform for partnership. The Erdogan that Mr Biden is now dealing with has shed much of his political skin since the Democrats were last in power almost four years ago.
The assumption that the new administration can go back to the relationship – and the actors it worked with – before is not really on the cards. The Erdogan agenda is here to stay, makeover or not.
Even this week Mr Erdogan was pursuing his efforts to weaken the Europeans. This is a key policy that grants him the scope to meddle beyond Turkish borders in traditional stomping grounds of the Middle East, North Africa and the Caucuses.
He visited Northern Cyprus to push his "two-state, one-island" plan for the island. This is a direct confrontation with European interests and has firmed up the continent's pressure to promulgate sanctions on Ankara.
The Turkish exploration activity around Cyprus and in Greek waters is steadily weakening Nato. A clash earlier this year between a Turkish vessel and a French Corvette led to a complaint to the alliance. But the inquiry was never satisfactorily resolved.
A soldier hangs from a helicopter during a military exercise in the self-proclaimed Turkish Republic of Northern Cyprus. AFP
Turkey's research vessel, Oruc Reis, center, is surrounded by Turkish navy vessels as it was heading in the west of Antalya on the Mediterranean, Turkey. AP
Turkish seismic research vessel 'Oruc Reis' heads in the west of Antalya on the Mediterranean Sea.AFP
A Turkish Navy warship patroling next to Turkey's drilling ship "Fatih" dispatched towards the eastern Mediterranean near Cyprus. AFP
Turkish President Recep Tayyip Erdogan shakes hands with Fayez al-Sarraj, the head of the Tripoli-based Government of National Accord , during their meeting in Istanbul. Turkey signed a military deal late on November 27, 2019, with Libya's UN-recognised government following a meeting with Turkish President in Istanbul, his office said. AFP
In a note last week the Washington think tank, Centre for Strategic and International Studies, identified the Eastern Mediterranean as potential flash point for the Biden administration. To maintain Nato’s effectiveness and readiness in its “southern flank” will be a top priority for Washington as it seeks to shore up US global leadership.
Mr Erdogan's positioning is therefore a complicating factor for the US. Turkey has an opportunistic and symbiotic relationship with Russia that CSIS points out undermines policies based on reducing or eliminating threats in the Nato allies' sphere of influence.
The Turkish leader not so long ago declared that French President Emmanuel Macron "needed mental treatment". As European countries including France increasingly appreciate the threat to their social and political systems posed by Islamist extremism, Mr Erdogan has found himself on the wrong side of the dividing line.
In Germany, the Netherlands and Austria, the Diyanet – Turkey's directorate of religious affairs, which is directly controlled by the presidency – is increasingly seen as a hostile presence among the local community. Its role in controlling religious institutions is the primary reason that there are proposals for training or licensing imams across Europe to ensure a common standard and as a bulwark against extremism.
From a European vantage point, it remains essential to get Turkish relations right. The great wave of migration westwards in 2015 was a demonstration of how bad things can get when that relationship is overwhelmed.
The Europeans are also keen to find a role in the power balance that plays out between the US and China – and the White House and the Kremlin for that matter – once President-elect Biden formally assumes office.
With his instinct of these equations honed over 18 years at the helm of the Turkish state, Mr Erdogan no doubt wants to establish a first mover advantage.
The Obama administration, in which Mr Biden was vice president, was favourable to him in many ways. It reduced sanctions on Iran that allowed Ankara to enjoy a lucrative trading and financial relationship with Tehran. Officials had a benign attitude to the Muslim Brotherhood as Mr Erdogan came to the fore under that umbrella.
The troubles that follow from Mr Erdogan’s policies, as these play out in the Middle East and Europe, cannot be as easily ignored this time round. Not only will the administration acknowledge the Abrahamic Accords but it will seek stability and rebuilding in Libya, and perhaps even Syria, in a way that will not be compatible with Turkish interests.
As Mr Biden rebuilds America's relations with Europe and necessarily shores up Nato’s southern flank, he will find Turkey's place in that alliance an increasingly uncomfortable problem.
Damien McElroy is the London bureau chief of 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.”
UAE Division One
Winners: Abu Dhabi Saracens
Runners up: Dubai Hurricanes II
UAE Division Two
Winners: Barrelhouse
Runners up: RAK Rugby
PROFILE OF STARZPLAY
Date started: 2014
Founders: Maaz Sheikh, Danny Bates
Based: Dubai, UAE
Sector: Entertainment/Streaming Video On Demand
Number of employees: 125
Investors/Investment amount: $125 million. Major investors include Starz/Lionsgate, State Street, SEQ and Delta Partners
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
