Smelling the coffee amid the stirrings of discontent in Ukraine



The thing you have to remember about revolutions,” Georgia’s ambassador to Britain once told me, “is that they’re like Turkish coffee.”

Any time the social order is upturned, he elaborated, society is shaken up and it takes time for elements that would normally dwell at the bottom to return, like coffee grains, to their rightful place.

This conversation took place nearly 20 years ago but it remains just as prescient today – and not just for Georgia but for any post-revolutionary country, be it Ukraine now or the Arab Spring countries, where protesters have learnt the hard way that ousting an unpopular leader is just the start of the process of achieving real change.

A few of Georgia’s “coffee grains” underscored the ambassador’s epithet a few weeks after our discussion, firing anti-tank rockets at Eduard Shevardnadze’s motorcade in Tblisi in a determined but unsuccessful bid to assassinate the country’s then leader.

In Kiev last week, it didn’t take long for the coffee analogy to come to mind as I wandered through the dozens of encampments in Maidan Nezalezhnosti (Independence Square) and along Khreshchatyk Street, where a core of protesters have stayed on, nearly two months after people power caused president Viktor Yanukovich to flee.

Ten years earlier, this had been the site of the Orange Revolution, in which people power prevailed against attempts to rig the presidential election.

“After the Orange Revolution, they told us to go home,” one of the veterans of that protest explained. “But nothing changed. This time we’re staying here until the goals of the revolution are secured.”

Five months after people power returned to Maidan Nezalezhnosti and two months after the government fell, central Kiev remained caught between two worlds: an unsettling mix of militancy and normality.

The barricades – made up of old car tyres, paving stones ripped from the ground, Christmas decorations and anything else that came to hand – remain, but with gaps in them where smartly-dressed commuters walk through on their way to work.

Nearby, Molotov cocktails were stored ready for hostilities to resume and the streets featured groups selling revolution memorabilia alongside the traditional Ukrainian embroidery that in less turbulent times was the main item sold to tourists.

The bulk of the protesters came from the centre of Ukrainian life: those who cared little for ideology or politics but wanted the chance to get ahead and make a life for their families. Just as the protests of Tahrir Square didn’t magically turn Cairo into Dubai, leaning towards Europe was not going to change Kiev into a new Frankfurt. But there remained a hunger for western mores like the rule of law and the concept of meritocracy, where reward is linked to ingenuity and hard work.

But those kind of protesters are also not the kind who can spend five months camped in the Maidan. While they still made up most of the encampments, each group’s members split their time between going home to make money and maintaining a presence in the camps.

The ones who could be there full time were often the fringe groups with abhorrent ultranationalist or far-right views, most of whom organised themselves under the umbrella group, Pravyi Sektor (Right Sector).

It was easy for Russia to point to Right Sector and claim it had hijacked the revolution. The assertion gained traction even though any neutral observer would accept that the caretaker government reflected the breadth of the political spectrum.

Wandering through Maidan Nezalezhnosti also bolstered that view that the far right and ultranationalist groups remained the minority – the coffee grains of Ukraine’s popular uprising. The protest movement’s centre of gravity remained with ordinary Ukrainians who simply wanted a better life for themselves and their families.

The ambassador’s Turkish coffee analogy was not the only bit of prescient observation about Georgia in the mid-1990s that was true in much wider contexts than just this troubled former Soviet state.

A second observation came from a BBC journalist, reporting on the attempt to assassinate Shevardnadze and summed up the machinations of Georgian politics this way: “The choice for Georgians isn’t between good and bad. It’s between bad, worse and unthinkable.”

Ukrainian voters will face a similar choice of options this month, when the post-revolution election is scheduled.

That is when the truth about the will of the people will emerge, regardless of the encampments of the maidan or the coffee grains stirred up in the revolution.

jhenzell@thenational.ae

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.”