Since Barack Obama came to office in 2009, a signature policy of his administration has been the “pivot to Asia”. Much time has been spent in the region where the young “Barry” spent formative years (in Indonesia). US ships have conducted increasingly assertive “freedom of navigation operations” in the disputed South China Sea to defend the claims of American allies. And to cap it all, there was to be the Trans Pacific Partnership (TPP), a deal that Mr Obama’s then secretary of state, Hillary Clinton, said set “the gold standard” for trade agreements, binding 12 Pacific Rim countries but notably excluding China.
As the US president counts the days until he departs, there has already been much speculation over whether the pivot has a future under either of his successors. Donald Trump’s isolationism and badmouthing of trade deals offer little hope, while Mrs Clinton’s about-turn on the TPP – she later decided “it didn’t meet my standards” and said she was against it – leaves what Japan’s prime minister Shinzo Abe described as a “pillar” of the policy with no support.
Recent events, however, suggest that the rebalance is unravelling even before Mr Obama leaves office. Late last month the Philippines’ president, Rodrigo Duterte, announced his country’s “separation” from Washington and that it was “time to say goodbye to America” during a visit to Beijing. His soft-pedalling of an international arbitration that ruled against China and for the Philippines in the South China Sea appears to have had results – deals and agreements to the tune of $24 billion, and Filipino fishermen being allowed to return to the Scarborough Shoal, one of the maritime areas both countries claim.
Vietnam also has a maritime dispute with China and, given their history, has plenty of reasons to be suspicious of its northern neighbour’s intentions. Relations were thought to have significantly warmed with the US. But last month, Chinese warships were welcomed in the Vietnamese strategic deep water port of Cam Ranh Bay for the first time, with Vietnam’s defence ministry saying the visit was aimed at bolstering ties.
This week, Malaysia’s prime minister, Najib Razak, is also in Beijing. Trade relations are already strong, but many new agreements and the first ever military deal between the two countries are also expected to be signed. Malaysia is another party to the South China Sea dispute, and under Mr Najib ties with America had seemed closer than ever.
But in an interview ahead of his visit, he said China was “a true friend and a strategic partner” and that he wanted the relationship “to reach new heights”. The defence deal, meanwhile, provoked alarm among pro-US commentators. A Reuters report declared it a “blow to the US”, while CNBC pondered whether “Beijing could gain a strategic ally in the thorny South China Sea problem”.
The timing may be coincidence, but all three countries appear to be sending clear signals that their friendships with America should not be taken for granted and that in the long run, their relationships with Asia’s rising giant may be given priority.
And why not? As Singapore’s prime minister, Lee Hsien Loong, put it in an interview with Time recently: “The Chinese go around with lollipops in their pockets. They have aid, they have friendship deals … for them trade is an extension of their foreign policy.” Americans, he said “do not do these retail items”.
Moreover, he accused them of being about to walk away from TPP, which he referred to as the “one big thing which you have done … It shows that you are serious, that you are putting a stake here which you will have an interest in upholding”. After this, said Mr Lee, addressing an American audience: “How can anybody believe in you anymore?”
The pivot, according to the veteran South East Asia researcher Bridget Welsh, is “dead in the water”. She told the Guardian: “This is the new regional norm. Now China is implementing the power and the US is in retreat.”
This may be a cause for consternation among those who see only good in American dominance, and it would be both a grave disappointment for Mr Obama, and another example of the aspirations of his foreign policy failing to overcome reality. Whether it is bad for the region, however, is another matter entirely.
Chinese officials talk repeatedly of “win-win cooperation”. Sceptics joke that they know what that means: China wins twice. But the many billions of dollars that the Chinese government and large companies are prepared to invest in South East Asia, particularly in infrastructure, are not to be sneezed at. And why should it matter that it is the China Railway Group that is planning to build the world’s largest underground city at an old military airport near my home in the Malaysian capital, Kuala Lumpur, rather than a European or American conglomerate?
The disputes in the South China Sea naturally worry smaller claimant nations. Yet China does not want military conflict. It is entirely possible that its leadership will settle for what my colleague Shahriman Lockman has described as “non-compliant compliance” with international rulings that go against it, maintaining its claims to sovereignty while effectively observing the status quo.
China does not subscribe to the “universal values” of the West, it will be said. But then neither does much of developing world.
And let us look again at the declining dominance, and question assumptions about its benevolence. Jimmy Carter once told me he thought that the US, since the Second World War, “has been the most warlike nation on Earth. We’ve been involved probably 30 times in military action in foreign countries, which has been almost invariably a mistake”.
If that is what US dominance meant, maybe we shouldn’t mourn the failure of the pivot too much.
Sholto Byrnes is a senior fellow at the Institute of Strategic and International Studies, Malaysia
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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.”
2018 ICC World Twenty20 Asian Western Regional Qualifier
The top three teams progress to the Asia Qualifier
Final: UAE beat Qatar by nine wickets
Third-place play-off: Kuwait beat Saudi Arabia by five runs
Table
1 UAE 5 5 0 10
2 Qatar 5 4 1 8
3 Saudi 5 3 2 6
4 Kuwait 5 2 3 4
5 Bahrain 5 1 4 2
6 Maldives 5 0 5 0
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Favourite Quote: Prophet Mohammad's quotes There is reward for kindness to every living thing and A good man treats women with honour
Favourite Hobby: Serving poor people
Favourite Book: The Alchemist by Paulo Coelho
Favourite food: Fish and vegetables
Favourite place to visit: London
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Tips for taking the metro
- set out well ahead of time
- make sure you have at least Dh15 on you Nol card, as there could be big queues for top-up machines
- enter the right cabin. The train may be too busy to move between carriages once you're on
- don't carry too much luggage and tuck it under a seat to make room for fellow passengers
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World record transfers
1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
3. Gareth Bale - to Real Madrid in 2013/14 - €101m
4. Cristiano Ronaldo - to Real Madrid in 2009/10 - €94m
5. Gonzalo Higuain - to Juventus in 2016/17 - €90m
6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
8. Luis Suarez - to Barcelona in 2014/15 - €81.72m
9. Angel di Maria - to Manchester United in 2014/15 - €75m
10. James Rodriguez - to Real Madrid in 2014/15 - €75m
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In Full Flight: A Story of Africa and Atonement
John Heminway, Knopff
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