Predictions, as the American baseball player Yogi Berra once said, are hard, especially about the future. And forecasts are especially perilous in the midst of a global pandemic.
But the coronavirus crisis is indisputably changing our view of what is important. Could it take a pandemic to redefine the idea of what constitutes national security?
There are at least three good reasons to think along these lines. First, Germany has been arguing for overseas development aid to be included as part of traditional defence spending on the grounds that helping poorer countries offers a measure of national security.
The rationale, according to German development minister Gerd Muller, is as follows: if the Middle East and North Africa region becomes destabilised by the coronavirus, it could cause "famine, outbreaks of violence, and civil wars", which would force refugees to head towards Europe in the hundreds of thousands.
Mr Muller has consequently been urging members of the European Union to commit to a one billion euro Covid-19 programme for low-income countries. Six other European development ministers – the UK, Sweden, Denmark, Finland, Iceland and Norway – recently joined Mr Muller to publicly call for action to help "poor and fragile countries… if we want to protect our own populations and economies".
Second, European Commission president Ursula von der Leyen has said the bloc’s seven-year spending plan will now tack heavily towards an emergency fund for vital medical equipment and virus testing. “Just as the world looks very different from the way it did just a few weeks ago – so must our budget,” she declared.
It was an admission that the EU’s military and security aspirations are on hold. Even in mid-February, before the full force of the coronavirus was felt in Europe, discussions in Brussels on the financial package were veering away from the original proposals for flashy spending on space, military and peacekeeping activities.
There seems little appetite for Ms von der Leyen’s promised “geopolitical Commission”, one that would turn Europe’s soft influence into hard power.
Instead, says Daniel Hamilton, a professor who specialises in transatlantic relations at the Johns Hopkins School of Advanced International Studies, Ms von der Leyen will preside over the "coronavirus commission for its tenure".
Third, the most obvious reason, post-pandemic, countries may simply be too poor to spend lavishly on the instruments of war.
READ 2019 saw biggest defence spending rise in a decade
It would be Panglossian to think we are even starting to move towards George Washington’s fervent wish to “see this plague of mankind, war, banished from the earth”.
But can anyone seriously see even rich western countries scaling up defence spending while their people plead for relief from crippling poverty because of the collapse of economic activity?
National Editorial: To beat coronavirus we must also fight poverty
It seems unlikely that European countries or even the US, the dominant military power on the world stage, will be able or willing to slash social spending to protect defence expenditure.
Unemployment benefits, healthcare and the provision of medical supplies will take priority as the pandemic strains national budgets.
The effects on defence spending will be felt in real terms. Germany, the largest economy in Europe, is expected to shrink by 4.2 per cent this year.
READ G20 agrees to suspend debt payments of world's poorest nations
It is reasonable to assume that efforts to rebuild the German military’s eroded force structure and capabilities will similarly slow, perhaps to a halt.
In the past couple of years, Germany’s military shortcomings have become the subject of much international hilarity, with reports that one tank unit was forced to use a broomstick instead of a gun on a Nato exercise.
US President Donald Trump has constantly demanded that Germany and other Nato allies pull their share of the weight in the alliance by raising defence spending to two per cent of gross domestic product. That was not likely even before the coronavirus outbreak. Now, it seems impossible.
Since 2010, the US has spent roughly $180 billion a year on counterterrorism efforts, compared with less than $2bn on pandemic and emerging infectious-disease programs
In the straitened circumstances wrought by the pandemic, Mr Trump himself may find it harder to push his usual view of a richly endowed traditional national security apparatus.
He has always hailed as a sign of America’s overweening strength, the size of the Pentagon budget, the nuclear arsenal, the number of naval carriers and the recently established Space Force, the first new military branch since 1947.
Indeed, the US military machine inspires awe. Since 2010, the US has spent roughly $180 billion a year on counterterrorism efforts, compared with less than $2bn on pandemic and emerging infectious-disease programmes.
But the new reality is very different. Americans, just as everyone else anywhere, are acutely aware of a deadly transnational threat, one that will not be defeated by guns and tanks.
Kori Schake, director of foreign and defence policy at the American Enterprise Institute think tank, says Americans will now want to protect themselves from “threats that did not come from an enemy directing a weapon at the United States”.
With pandemic spending pushing America’s deficit to record levels – nearly $4 trillion, by one reliable estimate – the US Congress may be forced to adopt austerity measures that inevitably lead to a cut in defence spending.
Samantha Power, former US ambassador to the UN, recently wrote that “the shared enemy of a future pandemic must bring about a redefinition of national security”, prompting an intense effort to build “national and international mechanisms to protect people not merely from the last threat, but from the coming ones”.
The medium to long-range implications of the coronavirus crisis are immense for war and peace.
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
Results
5pm: Maiden (PA) Dh80,000 (Turf) 2,200m; Winner: Gurm, Antonio Fresu (jockey), Eric Lemartinel (trainer)
5.30pm: Handicap (PA) Dh80,000 (T) 1,600m; Winner: Al Nafece, Al Muatasm Al Balushi, Mohammed Ramadan
6pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 1,200m; Winner: Ashton Tourettes, Adrie de Vries, Ibrahim Aseel
6.30pm: Arabian Triple Crown – Group 3 (PA) Dh300,000 (T) 2,200m; Winner: Ottoman, Adrie de Vries, Abdallah Al Hammadi
7pm: Liwa Oasis – Group 2 (PA) 300,000 (T) 1,400m; Winner: Hakeemat Muscat, Szczepan Mazur, Ibrahim Al Hadhrami
7.30pm: Handicap (TB) Dh80,000 (T) 1,600m; Winner: Ganbaru, Antonio Fresu, Musabah Al Muhairi
Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
The Case For Trump
By Victor Davis Hanson
UAE currency: the story behind the money in your pockets
Avatar%20(2009)
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EJames%20Cameron%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3ESam%20Worthington%2C%20Zoe%20Saldana%2C%20Sigourney%20Weaver%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E3%2F5%3C%2Fp%3E%0A
The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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.”
First Person
Richard Flanagan
Chatto & Windus
Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster who has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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