Vladimir Putin has much experience dealing with insurgencies in Russia. But he has only a limited range of techniques (EPA / Turkish Presidential Press Office)
Vladimir Putin has much experience dealing with insurgencies in Russia. But he has only a limited range of techniques (EPA / Turkish Presidential Press Office)
Vladimir Putin has much experience dealing with insurgencies in Russia. But he has only a limited range of techniques (EPA / Turkish Presidential Press Office)
Vladimir Putin has much experience dealing with insurgencies in Russia. But he has only a limited range of techniques (EPA / Turkish Presidential Press Office)

Why Putin’s iron-fist policy will not work in Turkey


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Another terror attack has devastated Turkey. Although it is not yet clear who carried out the attack, ISIL has claimed responsibility and the footage of the gunman entering the nightclub certainly suggests he had some military training.

Turkey has paid a significant and continuing price for its involvement in and geographical proximity to the Syrian civil war. No country can accept regular attacks as a “new normal”, but Turkey, with its history of attacks by Kurdish separatists, is particularly unwilling to contemplate such a fate.

In the coming weeks, the Turkish president will look for ways to end this ISIL menace – and he will find, in Vladimir Putin, a willing mentor.

Russia and Turkish relations are getting warmer. Together, they have brokered a ceasefire for Syria that accepts Bashar Al Assad’s position as head of state. But their growing closeness is also hinged on something else.

Often overlooked, there is one region that is pulling Turkey, Russia and Iran together. Not Syria, but the northern Caucasus. The southern regional states of Armenia, Azerbaijan and Georgia border all three countries, but the north is part of Russian territory – and home to restive provinces that have violently resisted Moscow’s rule.

This volatile region is wedged between the three countries and it is what happens in that region that has focused the mind of Moscow on the Syrian civil war.

Too often western politicians and media have assumed that Russia is conducting its politics with an eye on rivalling Nato. In fact, in this case, Syria’s civil war and the rise of ISIL is practically a domestic matter.

There are thousands of Chechens fighting with ISIL – perhaps as many as 4,000 – and by all accounts they are formidable fighters. Abu Omar Al Shishani, who served as “minister for war” and was one of ISIL’s highest-ranking fighters until his death last summer, was, as his nom de guerre suggests, a Chechen. Indeed, he once explicitly threatened to return to Russia and exact “revenge”.

Mr Putin knows, therefore, that the stability of Russia is intimately tied to the stability of Syria. ISIL fighters have their eyes on the Caucasus. From a political perspective, having one of your enemies fighting a war against another enemy is a policy challenge. Interfere, and you risk provoking the fighters against you. Leave them to fight it out and they may emerge victorious and come after you. Mr Putin appears to have chosen the former option, for very personal reasons.

Russia’s battles with separatist states throughout the Caucasus region has been long. But for Mr Putin, these insurgencies have defined his career. As prime minister and then as president, Mr Putin oversaw the second Chechen war, a series of brutal, scorched-earth battles that eventually pacified the region. More than any other policy of his first term in office, these battles endeared him to large parts of the electorate as a man who could maintain law and order.

When Turkey searches for an answer to the increased attacks against it, it will find Mr Putin has long experience in putting down an insurgency in a complicated region. But his techniques are more limited: confined mainly to an iron fist. How well that will work in such an interconnected region is yet to be seen.

Because Turkey too has fought a long-running insurgency, this time against the Kurds. But unlike Mr Putin, Turkish president Recep Tayyip Erdogan’s approach to it was more carrot-and-stick – a technique that appeared to finally bear fruit in 2013, when the Kurdistan Workers Party (PKK) announced the end of its armed struggle. Talks broke down and it has since resumed its attacks against the Turkish state but there is little doubt it was the combination of incentives and military action that finally brought the PKK to the table.

Mr Putin offered no such carrot in Chechnya. And herein lies the problem. It is not that Turkey can offer ISIL any version of a deal – anyone who has tracked the militant group knows there can be no negotiation with them.

Rather it is that if a scorched-earth policy against ISIL works, Mr Erdogan may be tempted to employ the same approach to the Kurdish insurgency – and to other political challenges. But the two scenarios, though both parties have used terrorism, need to be dealt with in different ways. There is still something to talk to the Kurdish rebels about.

More broadly, the challenges Turkey faces cannot all be solved by scorched-earth politics. Mr Al Assad used this approach in Syria and, while it did result in him recapturing Aleppo, it has created many opponents to his rule, some very formidable. Mr Erdogan, already authoritarian minded, clearly finds the certainty of the iron fist compelling. But while a military-first approach to ISIL is the right response, in other political challenges it cannot be the only approach. At times of enormous political stress, Turkey must choose carefully whose advice it heeds.

falyafai@thenational.ae

On Twitter: @FaisalAlYafai

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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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