Germany's Andre Schuerrle celebrates after scoring his team's sixth goal in its 7-1 World Cup semi-final demolition of Brazil. Fabrice Coffrini / AFP
Germany's Andre Schuerrle celebrates after scoring his team's sixth goal in its 7-1 World Cup semi-final demolition of Brazil. Fabrice Coffrini / AFP
Germany's Andre Schuerrle celebrates after scoring his team's sixth goal in its 7-1 World Cup semi-final demolition of Brazil. Fabrice Coffrini / AFP
Germany's Andre Schuerrle celebrates after scoring his team's sixth goal in its 7-1 World Cup semi-final demolition of Brazil. Fabrice Coffrini / AFP

On and off the football pitch, Germany is at ease with itself


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When Brazil won the right to host this year’s football World Cup and the 2016 Olympic Games, the then President, Luis Inacio Lula da Silva, claimed with tears in his eyes that Brazil was at last being recognised as a “first class country”. The 21st Century would belong to Brazil, he said.

He had some cause to be triumphant. The economy was booming, his charisma had turned Brazil into a diplomatic powerhouse and he was dealing with the country’s shocking rates of inequality. Thanks to a policy of cash handouts to mothers and aggressive raising of the minimum wage, some 40 million Brazilians have been lifted out of poverty into a new middle class.

The fortunes of football teams rise and fall, so the significance Brazil’s crashing out of the tournament on Tuesday at the hands of Germany should not be exaggerated. But still, it is a good opportunity to take a snapshot of the changing fortunes and faces of these two countries.

Superficially they have little in common. Brazil is the ultimate ethnic melting pot, made up of Europeans, Africans, Amerindians, Japanese and peoples of the Middle East. Germany, by contrast, for decades insisted it was not a country of immigration, while the numbers of what were called “guest workers” from Turkey, Yugoslavia and southern Europe rose inexorably. The German chancellor, Angela Merkel, declared as recently as 2010 that multiculturalism had failed utterly, and that all immigrants should integrate into German culture.

For different reasons both countries have elevated football as a defining element of their character. For Brazil, lacking any glorious revolution or war of liberation, football is the nation’s glue. Thanks to natural talent, Brazil is credited with turning the brutal contest invented by the English into the beautiful game.

As for the Germans, the Second World War has made nationalism a taboo subject except on the football pitch. The German Football Association, the DFB, oversees 25,000 clubs. With 6.8 million members, the DFB claims to be the largest sports federation in the world.

Hosting a major sporting event is a harsh test for any country. Reporters look for trouble until the opening ceremony, and they found protesters angry at the $10 billion cost of staging the tournament while roads and schools remained underfunded.

An indication of the limits to the unfinished business of lifting the majority out of poverty came from the city of Belo Horizonte, where Brazil played Germany. According to a 2010 census, no fewer than 97 million Brazilians, or 50.7 per cent of the population, define themselves as having African ancestry. These people were notable by their absence in the sea of white, middle class spectators. Being a member of Lula’s “new middle class” – which could mean earning no more than $400 a month – does not stretch to buying a semi-final ticket.

If Brazil had seemed over confident in recent years, Germany has a long history of angst – about its history, about race and immigration, about whether it should adopt the leadership role in Europe that its economy dictates.

But the country has changed out of all recognition in one important respect. Germany now recognises itself as a country of immigration. Germany is second only to the United States, rising above Australia and Canada, as a destination for immigrants, according to the 34-nation Organisation for Economic Cooperation and Development (OECD). Migrants rose by a third in 2011-12, yet unlike other European countries, this has not been accompanied by any noticeable rise in anti-immigrant feeling.

Superficially, at least, Germany’s national squad tends to prove that the country is at ease with immigration, with five prominent players who are foreign-born or eligible to play for a foreign country.

Everyone loves a winner, so long as they are winning, therefore, some caveats are in order. When the French squad – known as the “Black, White, Arab” team for its racial diversity – won the World Cup in 1998, it was hailed as proof that France was coming to terms with its colonial heritage of racism. It was not long before the anti-immigrant National Front was riding high in the polls, the national team was portrayed in the media as somehow un-French, and football chiefs were caught discussing how to limit the number of non-white players in the academies.

All is not completely rosy in Germany, of course. The Polish-born stars – Lukas Podolski and Miroslav Klose – do not have to prove their German-ness thanks to being white and Christian. Mesut Özil, a third generation Turkish immigrant who reads a few verses of the Quran before each game, has to choose his words carefully when talking about his identities, saying he combines a Turkish feeling for the ball with German “discipline and attitude”.

As Mrs Merkel has made clear, those of immigrant stock, even if they and their parents were born in Germany, will be judged by their level of integration.

Germany has moved a long way from its old position that nationality was acquired by blood, not birthplace. It is a rare example – perhaps the only one – in Europe of a country that is confident and at ease with itself. This has a lot do with its bubbling economy, which is still providing jobs and sucking in workers. The success of the German team is a separate issue, stemming from decisions taken to rebuild the national squad after its failure to win the World Cup at home in 2006. Brazil will have to follow the same course, recognising that natural talent will only take you so far.

As for becoming Lula’s “first class country”, Brazil will need to take tough decisions on its economy and its social problems, particularly corruption and the legacy of crime in the favelas. But those will have to wait until after the October elections, where Lula’s successor, Dilma Rousseff, is running for a second term. She had hoped for a World Cup boost but instead will be dealing with a hangover.

Alan Philps is a commentator on global affairs

On Twitter: @aphilps

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“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
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• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.

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2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.

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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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Men:

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2. Constantin Popovici (ROU) 424.65
3. Oleksiy Prygorov (UKR) 392.30

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