Cars in traffic in downtown Moscow.
Cars in traffic in downtown Moscow.

Road deaths elicit fury over Russian elite's scorn



MOSCOW // Rush-hour gridlock in the Russian capital is largely predictable. In the morning, inbound commuter traffic chokes the city's main arteries, while outbound traffic is sparse on the other side. In the evening vice versa. To avoid the snarling congestion, the more brazen Moscow drivers - many of them bureaucrats in expensive cars equipped with whining blue sirens - will buzz down the central reserved lane flouting the law while idling drivers look on and seethe.

Olga Alexandrina, a Moscow obstetrician-gynecologist, was a cautious driver, her friends and family say. And traffic was light on the morning of February 25 as she was driving to work in an outbound lane on the expansive Leninsky Prospekt in southern Moscow: there would have been little reason for her to take to the median strip. It remains uncertain exactly how the Citroën C3 hatchback driven by Alexandrina, 35, collided head-on with an oncoming Mercedes carrying a senior oil executive, killing her and her mother-in-law. But the tragedy has elicited fury nationwide over the impunity with which Russia's rich and powerful rule the roads.

Alexandrina's car was demolished in the collision with the Mercedes S-500 sedan carrying Anatoly Barkov, the vice president of Lukoil, Russia's largest oil company. She died at the scene, while her mother-in-law, Vera Sidelnikova, 72, died of her injuries in the hospital. Mr Barkov, 62, and his driver both survived with minor injuries, and a traffic police officer said in televised comments from the scene of the accident that Alexandrina had been driving too fast and swerved into the median strip after losing control of her vehicle.

Almost immediately, however, witnesses and the Russian blogosphere began challenging this version of events. A driver who said he saw the accident told a morning call-in radio show said the Mercedes had been speeding down the median and slammed into the red Citroën. Bloggers and car owner lobbies said traffic patterns and the driving habits of Russia's elite suggest Mr Barkov may have been driving on the median to circumvent inbound gridlock.

Fuelling speculation about a possible cover-up were contradictory reports about surveillance cameras that may have captured footage of the crash. Igor Trunov, a prominent lawyer representing the victims' family, complained that police were refusing him access to possible video footage of the accident. Then the state-run RIA-Novosti news agency cited a law enforcement source as saying a potential suspect in the disappearance of the footage had been identified and that authorities were investigating.

Finally, on Friday, Moscow traffic police released footage that proved inconclusive because of a billboard blocking the camera's view of the accident site. Mr Barkov's car can be seen hugging the centre line in the far left lane, but it disappears behind the billboard. There did not appear to be a traffic jam on either side of the freeway, according to the footage. "We can only see what happened 200 metres before the accident," the Moscow traffic police chief, Sergei Kazantsev, said during a news conference, RIA-Novosti reported.

Police have not yet established who was at fault, Alexei Kuznetsov, a senior Moscow police investigator, told reporters. Mr Barkov released a statement to the Russian media last week expressing his condolences to the victims' families and saying he wants a thorough investigation of the accident. The tragedy would have probably gone unnoticed in Russia, where between 25,000 and 30,000 people die annually in road accidents, had it not involved a senior executive. Numerous deadly car accidents involving well-connected Russians have sparked grassroots outrage in recent years, and the ubiquitous sight of the powerful using their status to wantonly violate traffic rules has become a notorious symbol of social stratification.

In 2005, the son of Sergei Ivanov, then the Russian defence minister, slammed his car into an elderly female pedestrian in southern Moscow, killing her almost instantly. Prosecutors eventually ruled that the minister's son, Alexander Ivanov, was not at fault, prompting accusations from government critics that the minister had pulled strings to clear his son. Mr Ivanov, who is now a deputy prime minister, denied those allegations.

In 2006, Russian drivers held rallies nationwide in defence of a driver convicted in a car crash that killed Mikhail Yevdokimov, the governor of Russia's Altai region. The driver, Oleg Shcherbinsky, later had the conviction overturned in what was seen as the authorities' acquiescence to the country's enraged car owner lobbies, whose fanatical devotion to their vehicles has made it one of the few of Russia's grassroots organisations capable of influencing government policy.

Sergei Kanayev, the head of the Moscow branch of the Federation of Russian Car Owners, said his group has located several witnesses whose independent accounts suggest that Mr Barkov's car was driving illegally down the median strip when it collided with Alexandrina's Citroën. He said his group would provide the results of its independent inquiry in which it did not have access to the cars just the photographs to prosecutors and hope for a fair investigation. Alexandrina may indeed have been at fault in the crash, Mr Kanayev said, but the outpouring of anger among Russians shows the depth of their antipathy towards the elite's well-known disregard for road rules.

"It's characteristic of the attitude of the powerful towards regular citizens," Mr Kanayev said. "Everyone was already dismayed with the situation. This was just the last straw." cschreck@thenational.ae

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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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