To give or not to give: Korean conundrum on Japan aid



SEOUL // South Koreans are caught between a rock and a hard place - literally as well as figuratively - when it comes to giving cash donations to their neighbours in Japan after last month's massive earthquake and tsunami.

Renewed anger over a group of rocky islets claimed by both nations - known as the Dokdos in South Korea and Takeshima in Japan - has caused a sharp cooling in South Korean impulses to help.

At first, the Korean pop singer Kim Jang-hoon, dubbed "the angel of donation" for his habit of donating many of his concert proceeds to the poor and campaigns to promote his country, asked his fans to put aside their decades-old animosity towards Japan over the Dokdos after the 9.0 March 11 disaster that has left nearly 28,000 dead or missing.

Many ordinary South Koreans responded generously, and a dozen K-pop stars donated more than $5 million (Dh18.35m).

But the mood soon darkened after a Japanese education panel authorised the publication of school textbooks that assert Japan's claims to the islets, which act as a stark reminder of Japan's brutal colonial rule over Korea from 1910-1945.

For many, this meant all donations were off.

"It is heart-wrenching that Koreans with a big heart wanted to donate money for Japan, which keeps insisting on its sovereignty of the islands that are undeniably ours," said Yeo Mi-ok, 51, an art teacher staging a display of children's drawings of the islets at a busy Seoul subway station.

A Seoul district office that raised about $10,000 for Japanese disaster relief changed its mind and sent most of the funds to a civic group promoting Korea's claims to the islets, which are also a symbol of South Korea standing up to its neighbour.

"I asked myself, why did Japan do this at this tragic moment. We had to discuss what to do next with this fund," said Ra Tae-sung, an official at the office.

Prior to the quake, relations between the neighbours had been improving.

Tokyo has backed Seoul's tough stance towards North Korea following the sinking in March 2010 of a naval ship, blamed by the South on Pyongyang, as well as the North's bombardment of a South Korean island in November. They had even agreed to upgrade their military co-operation.

But for years, South Korea has rebuffed calls from Japan to discuss the Dokdo dispute at the International Court of Justice and announced plans to beef up governance of the islets through measures including research institutes in the area.

"Japan is not wise, making a lot of Koreans with sympathy feel more hostile than before," said Choi Ji-yong, 27, an office worker.

* Reuters

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Started: 2016

Founders: Hussein Nasser Eddin, Laila Akel, Tayeb Akel 

Based: Ramallah, Palestine

Sector: Technology, Security

# of staff: 13

Investment: $745,000

Investors: Palestine’s Ibtikar Fund, Abu Dhabi’s Gothams and angel investors

UK's plans to cut net migration

Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.

Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.

But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.

Language requirements will be increased for all immigration routes to ensure a higher level of English.

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Key figures in the life of the fort

Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.

Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.

Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.

Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.

Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.

Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.

Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.

Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.

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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.”