Kuo Kai-wen, director of Taiwan's Seismology Center, explains the locations from a monitor showing North Korea's first hydrogen bomb test site (AFP PHOTO / Sam Yeh)
Kuo Kai-wen, director of Taiwan's Seismology Center, explains the locations from a monitor showing North Korea's first hydrogen bomb test site (AFP PHOTO / Sam Yeh)

Pyongyang tests Obama’s weaknesses



For a country with so many of its citizens on the edge of survival, North Korea expends a great deal of economic and political effort on developing new versions of nuclear weapons. The latest detonation – if true, its fourth – brings it a step closer to developing nuclear warheads capable of hitting its chief enemy, the United States.

But why now? Last month, the secretive state carried out a submarine-launched ballistic missile test, further demonstrating its growing military capability. Historically, however, nuclear tests and sabre-rattling appear designed to gain the attention of the international community, in particular the US. As Barack Obama enters his last year as president, and with few foreign policy successes to show for his time in office, North Korea may feel emboldened to demonstrate its relevance – and its main way of doing that is provoking the outside world.

But there is another reason, too, and that is that the country believes it can get away with it. The perception in parts of Asia, as indeed in parts of the Middle East, is that Mr Obama is weak, too willing to see diplomacy as both the first and last resort. Just this week, China, the main source of provocations in the region, landed a civilian aircraft on disputed islands in the South China Sea, further inflaming tensions with its neighbours.

China is steadily building up its presence in parts of the South China and East China Seas, large parts of which it claims as its own territory. America’s response, as the traditional guarantor of security in the region, has been muted. The last time the US sent a warship through the disputed regions – the usual way of enforcing “freedom of navigation” – was back in October. Since China has been able to get away with it, the reasoning in Pyongyang may run, we can too.

All of this is worrying, for the Middle East as much as for East Asia. Just in the past week, we have seen in our own region the consequences of rewarding Iran’s bad behaviour with a nuclear deal. Even now, Iran, like the Assad regime in Syria, like Russia in Ukraine, believes it can do what it likes and America will not oppose it. By demonstrating that neither the use of chemical weapons in Syria nor the seizing of parts of another country in Ukraine would be met with an appropriate response, Mr Obama has practically invited his enemies to test his red lines. North Korea has now done so, with explosive results.

Guide to intelligent investing
Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
  • Stay invested: Time in the market, not timing the market, is critical to long-term gains.
  • Rational thinking: Breathe and avoid emotional decision-making; let logic and planning guide your actions.
  • Strategic patience: Understand why you’re investing and allow time for your strategies to unfold.
 
 
Emergency

Director: Kangana Ranaut

Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry 

Rating: 2/5

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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The Africa Institute 101

Housed on the same site as the original Africa Hall, which first hosted an Arab-African Symposium in 1976, the newly renovated building will be home to a think tank and postgraduate studies hub (it will offer master’s and PhD programmes). The centre will focus on both the historical and contemporary links between Africa and the Gulf, and will serve as a meeting place for conferences, symposia, lectures, film screenings, plays, musical performances and more. In fact, today it is hosting a symposium – 5-plus-1: Rethinking Abstraction that will look at the six decades of Frank Bowling’s career, as well as those of his contemporaries that invested social, cultural and personal meaning into abstraction. 

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Cryopreservation: A timeline
  1. Keyhole surgery under general anaesthetic
  2. Ovarian tissue surgically removed
  3. Tissue processed in a high-tech facility
  4. Tissue re-implanted at a time of the patient’s choosing
  5. Full hormone production regained within 4-6 months