President Barack Obama is using the presidential retreat at Camp David to discuss defence arrangements with the Gulf states. Carolyn Kaster / AP
President Barack Obama is using the presidential retreat at Camp David to discuss defence arrangements with the Gulf states. Carolyn Kaster / AP
President Barack Obama is using the presidential retreat at Camp David to discuss defence arrangements with the Gulf states. Carolyn Kaster / AP
President Barack Obama is using the presidential retreat at Camp David to discuss defence arrangements with the Gulf states. Carolyn Kaster / AP

Taiwan could provide a powerful example for US-GCC relations


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The Camp David summit with Gulf Cooperation Council leaders has the Obama administration casting about for ways to enhance security assurances. Fearful that a probable nuclear accord with Iran would mark a strategic shift towards Tehran as regional guarantor, the GCC is speculating on a worst-case scenario.

America abandoning its security ties to the GCC, however, is highly unlikely. Even if negotiators reach agreement with Iran, there is no linkage to any wider US-Middle East policy. In fact, the divorce of the Iran deal from any larger US strategy was one of the criticisms that former secretaries of state Henry Kissinger and George Shultz made of the administration in The Wall Street Journal.

Nonetheless, such fears cannot be wished away. Occasional White House hints suggest it hopes that a nuclear accord would lead to a thaw in US-Iranian relations. Such a fading enmity makes the Gulf’s fears almost inevitable.

It is worth noting that it has not been a case of either/or. Until the 1979 Iran revolution, US security policy in the Gulf was based on supporting the “twin pillars” of Iran and Saudi Arabia. The strategic importance of the Gulf states would not disappear with an Iran deal. But any renewed version of America’s “twin pillar” diplomacy would require a detente if not reconciliation between Saudi Arabia and Iran.

A formal alliance, as the United States has with Nato or Japan, would require Congressional ratification and is off the table. But instability in the region and the Gulf’s importance argues for an enhanced security relationship.

There may be some possibilities to be gleaned from the long-standing US security relationship to Taiwan. While short of an alliance, the 1979 Taiwan Relations Act (TRA) is instructive. It requires the US to consider any non-peaceful means to determine Taiwan’s future “a threat” of “grave concern”. It stipulates that in such circumstances, the US would “provide Taiwan with arms of a defensive nature” and “to maintain the capacity of the US to resist any resort to force or other forms of coercion” that jeopardise Taiwan’s security.

In addition to the TRA, when the US normalised relations with China, it gave an informal pledge, known as the “six assurances” to Taiwan. These included a commitment to keep arms sales open-ended, to not alter its position on sovereignty over Taiwan, and to not pressure Taipei to enter into negotiations with the People’s Republic of China.

Unlike the Nato Article 5 commitment – that an attack on one member is an attack on all – or the firm commitment to defend Japan if attacked, the TRA did not commit the US to defend Taiwan if attacked. But it did lock the US into efforts to help Taipei defend itself, and the “grave concern” language implied the US might take military action.

Most Asia analysts assume that if China took unprovoked military action, the US would intervene. Though Beijing-Taipei relations are relatively smooth, forthcoming elections in Taiwan could well see tensions rise. However, if Taiwan provoked Beijing by formally declaring independence, there is a good chance that the US would not respond. Since the TRA was passed, the ambiguity in the security relationship has been a factor reinforcing stability.

Even Saudi’s hints that it may go nuclear if Iran does has a Taiwan precedent. On two previous occasions in the 1970s and 1980s, the US detected secret Taiwanese efforts to build nuclear capabilities. The US in effect, forced a choice: security ties or strategic independence. Any enhanced US-GCC relationship should have understandings about the effect of nuclear proliferation on US security obligations

Of course, the situation concerning the GCC is very different. But the Taiwan example may be helpful in crafting stronger assurances to the GCC than are currently the case. Perhaps some Congressional mandate to help the GCC defend itself and a US commitment to view with “grave concern” any outside aggression could help better reassure America’s strategic partners.

After Mr Obama’s “red line” fiasco over Syria and Gulf concern about the US-Iran reconciliation, the administration desperately needs a creative approach to enhance its security relationship with GCC nations. Drawing lessons from the Taiwan experience is not a bad place to start.

Robert A Manning is a senior fellow at the Brent Scowcroft Center for International Security at the Atlantic Council and its Strategic Foresight Initiative

On Twitter: @RManning4

COMPANY PROFILE

Founders: Sebastian Stefan, Sebastian Morar and Claudia Pacurar

Based: Dubai, UAE

Founded: 2014

Number of employees: 36

Sector: Logistics

Raised: $2.5 million

Investors: DP World, Prime Venture Partners and family offices in Saudi Arabia and the UAE

Islamophobia definition

A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.

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.”

THE SPECS

Engine: six-litre W12 twin-turbo

Transmission: eight-speed dual clutch auto

Power: 626bhp

Torque: 900Nm

Price: Dh940,160 (plus VAT)

On sale: Q1 2020

TRAINING FOR TOKYO

A typical week's training for Sebastian, who is competing at the ITU Abu Dhabi World Triathlon on March 8-9:

  • Four swim sessions (14km)
  • Three bike sessions (200km)
  • Four run sessions (45km)
  • Two strength and conditioning session (two hours)
  • One session therapy session at DISC Dubai
  • Two-three hours of stretching and self-maintenance of the body

ITU Abu Dhabi World Triathlon

For more information go to www.abudhabi.triathlon.org.

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Sheer grandeur

The Owo building is 14 storeys high, seven of which are below ground, with the 30,000 square feet of amenities located subterranean, including a 16-seat private cinema, seven lounges, a gym, games room, treatment suites and bicycle storage.

A clear distinction between the residences and the Raffles hotel with the amenities operated separately.

Cricket World Cup League 2

UAE squad

Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind

Fixtures

Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE

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The specs

Engine: 2.0-litre 4cyl turbo

Power: 261hp at 5,500rpm

Torque: 405Nm at 1,750-3,500rpm

Transmission: 9-speed auto

Fuel consumption: 6.9L/100km

On sale: Now

Price: From Dh117,059