The Munich Security Conference, held this past weekend in the Bavarian capital, is to the security community what Davos's World Economic Forum is to the business community.
But it is missing a few things. For one, it lacks the buzz and glamour provided by stars like Angelina Jolie and Bono, who roam the corridors of Davos's conference centre armed with feel-good slogans and well-meaning projects that appeal to the rich and powerful.
The stars in Munich are current and former heads of state, defence and foreign ministers and national security advisers; not exactly a fun, easy-going bunch, especially with their retinues of aides and bodyguards. The audience is overwhelmingly grey-haired, plainly dressed white men whose hearts jump at the mention of arms control treaties, security initiatives and conflict management, but who sometimes seem detached from today's fragmented world and certainly don't reflect its complexities.
Just like Davos, however, Munich is not about solving crises. It is about setting agendas, enhancing reputations, bombast and showmanship. A handshake with Henry Kissinger, perhaps the world's best-known unemployed diplomat, is a must.
The agenda-setters were a group of elder statesmen backing "Global Zero", an initiative to convince the world's atomic powers to relinquish their nuclear arsenals. They truly are a powerful collection of global figures, from the arch-realist Mr Kissinger to more internationalist types like the former Australian foreign minister Gareth Evans, who led a high-level brainstorming group in Munich. They have the sympathy of the US president Barack Obama, although the leaders of Russia, China, India and other nuclear nations seem utterly uninterested in any initiative that would deprive them of their standing.
Dissenters in Munich were few, but their arguments compelling. It is relatively easy to reduce stockpiles from 50,000 to 10,000 warheads, but much harder to go beyond that because the fewer nuclear warheads there are, the more valuable they become. For a third-rate country like North Korea, nuclear weapons allow it to play in the major league; for middle-tier powers like France and the UK, they are key to their global relevance; and for Israel, they constitute an existential guarantee.
And it is impossible to unlearn nuclear knowledge, making every country with a nuclear past a potential proliferator.
An opportunity for the Global Zero vision will be the Nuclear Non-proliferation Treaty review conference in the spring. Significant successes would be the establishment of multilateral nuclear fuel banks, the imposition of more stringent safeguards and higher costs for violators, and a commitment by nuclear states to declare that nuclear weapons should only deter other nuclear weapons states, not be an instrument used against weaker and non-nuclear nations.
One who came to Germany to enhance his reputation was the Afghan president Hamid Karzai. He is travelling the world hoping to redress his sullied standing after a controversial re-election, mobilise resources and sympathy for his political reconstruction agenda, and rally support for his plan to reach out to the Taliban. Mr Karzai may have been the most fashionable dignitary, but he failed to impress this time around. Promoting the Afghan mission was better done by others, from Nato's secretary general to European defence ministers and US officials. The audience was generally supportive, while the constituencies they represent are anything but so.
Bombast was definitely the forte of the Iranian foreign minister Manouhcher Mottaki. Not originally scheduled to attend, he flew into Munich on the opening night to guaranteed headlines. Days before, his boss, Mahmoud Ahmadinejad, had made a vague allusion that Iran had no problem with a uranium exchange programme, so officials and journalists hoped that Mr Mottaki would say something that would revive nuclear talks. In reality, he had nothing to offer. He came to gain time and meet the Chinese and Russian foreign ministers as talks of sanctions intensify.
He then timed a press appearance to steal the limelight from the Global Zero discussion. In his talks with the director of the International Atomic Energy Agency, he made no commitment on key aspects of an exchange: the quantity of uranium to be enriched abroad, the timing of uranium delivery and the location of enrichment. Sure enough, Mr Ahmadinejad announced soon after that Iran would enrich uranium to 20 per cent domestically.
Hoping to counter Mr Mottaki's media blitz, the US congressional delegation led by senators John Kerry and John McCain gave a press conference denouncing Iran's delays and calling for more sanctions, although fewer journalists attended because the senators are not considered decision-makers. The smooth Mr Kerry appeared to roll his eyes when his colleague Joe Lieberman spoke of the "fanatical" regime.
The image that will be remembered, however, is the handshake between Danni Ayalon, the Israeli deputy foreign minister, and Prince Turki al Faisal, a senior Saudi royal. Mr Ayalon appeared to have bullied Prince Turki who, in line with the traditional Arab position of boycotting Israeli officials, had refused to sit on the same panel. The gesture will probably amount to little tangible. Prince Turki is a strident critic of Israeli policy and of weak US resolve, and Mr Ayalon is possibly the most inflexible and tactless Israeli diplomat.
If the Munich theatrics have done little to make the world a safer place, they told us a lot about how diplomacy is conducted and global power distributed. An undisputed star was the Chinese foreign minister, who delivered a blunt warning to the US over frayed relations. His Russian colleague was as blunt as he was bullish. The Turkish foreign minister radiated confidence. And only a few truly seemed to care about European security.
ehokayem@thenational.ae
KEY HIGHLIGHTS
Healthcare spending to double to $2.2 trillion rupees
Launched a 641billion-rupee federal health scheme
Allotted 200 billion rupees for the recapitalisation of state-run banks
Around 1.75 trillion rupees allotted for privatisation and stake sales in state-owned assets
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MATCH INFO
Manchester United v Brighton, Sunday, 6pm UAE
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
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Abu Dhabi racecard
5pm: Maiden (Purebred Arabians); Dh80,000; 1,400m.
5.30pm: Maiden (PA); Dh80,00; 1,400m.
6pm: Sheikh Zayed bin Sultan Al Nahyan National Day Cup (PA); Group 3; Dh500,000; 1,600m.
6.30pm: Sheikh Zayed bin Sultan Al Nahyan National Day Cup (Thoroughbred); Listed; Dh380,000; 1,600m
7pm: Wathba Stallions Cup for Private Owners Handicap (PA); Dh70,000; 1,400m.
7.30pm: Handicap (PA); Dh80,000; 1,600m
Schedule:
Pakistan v Sri Lanka:
28 Sep-2 Oct, 1st Test, Abu Dhabi
6-10 Oct, 2nd Test (day-night), Dubai
13 Oct, 1st ODI, Dubai
16 Oct, 2nd ODI, Abu Dhabi
18 Oct, 3rd ODI, Abu Dhabi
20 Oct, 4th ODI, Sharjah
23 Oct, 5th ODI, Sharjah
26 Oct, 1st T20I, Abu Dhabi
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29 Oct, 3rd T20I, Lahore
The biog
Name: Samar Frost
Born: Abu Dhabi
Hobbies: Singing, music and socialising with friends
Favourite singer: Adele
THE BIO
Favourite car: Koenigsegg Agera RS or Renault Trezor concept car.
Favourite book: I Am Pilgrim by Terry Hayes or Red Notice by Bill Browder.
Biggest inspiration: My husband Nik. He really got me through a lot with his positivity.
Favourite holiday destination: Being at home in Australia, as I travel all over the world for work. It’s great to just hang out with my husband and family.
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 biog
Hometown: Birchgrove, Sydney Australia
Age: 59
Favourite TV series: Outlander Netflix series
Favourite place in the UAE: Sheikh Zayed Grand Mosque / desert / Louvre Abu Dhabi
Favourite book: Father of our Nation: Collected Quotes of Sheikh Zayed bin Sultan Al Nahyan
Thing you will miss most about the UAE: My friends and family, Formula 1, having Friday's off, desert adventures, and Arabic culture and people
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
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