People wave banners and shout slogans as they attend a rally in support of North Korea's stance against the US, on Kim Il-Sung square in Pyongyang on August 9, 2017. 
US President Donald Trump said the United States' nuclear arsenal was "more powerful than ever" in a fresh warning to North Korea over its repeated missile tests. / AFP PHOTO / KIM Won-Jin
A rally in support of North Korea's stance against the US, on Kim Il-Sung square in Pyongyang on August 9, 2017 after US President Donald Trump threatened to hit North Korea with "fire and fury" if itShow more

America first: the US will put its own safety before protecting the region



There is an inconvenient truth behind the North Korea crisis: No one wants a war with Pyongyang because its threats are ultimately viewed as bluster from a cornered regime.

Yet the brinkmanship between the main protagonists is close to taking on a life of its own.

Donald Trump has consistently used confrontational messages - and even choreographed body language - to set out a hard line with Pyongyang. His opposite number Kim Jong-un has raised the stakes week after week, with missile tests and a rush to defy sanctions by completing a missile-ready nuclear device.

Senator Lyndsey Graham, a Republican but no friend of the president, has provided the best insight into why Washington has run out patience with Kim.

“For 20 years this kind of thinking has allowed North Korea to develop dozens of nuclear weapons, not just one. They’ll have dozens one day if somebody doesn’t stop them. They’ll have a hydrogen weapon one day if somebody doesn’t stop them," he said. “It’s time for a new approach. We need to let China know that we will pick our homeland defence over regional stability. If we have to chose between an ICBM [inter-continental ballistic missile] in the hands of the North Koreans and a conflict in the region, we’re going to choose the conflict to protect the American homeland. Quite frankly President Trump has no other choice because everybody before him has failed.”

By reaching this conclusion, Senator Graham ripped up a playbook on how to handle North Korea that has been in place since the 1990s.

There is a long list of envoys that have shuttled to Pyongyang to talk the regime back from confrontation - former president Jimmy Carter, Bill Richardson, a Clinton-era cabinet member and Christopher Hill, who endured years of temporary pacts fleshed out in what was known as the six-party talks between the two Koreas, the US, China, Japan and Russia.

As Mr Graham said, the approach has manifestly failed. Phone screens across America alert more than once a week with new messages of a missile test. At 33 years old Mr Kim is a leader who appears to be testing himself as much as he is making demands on world leaders.

Mark Fitzpatrick, a security expert with the International institute for Strategic Studies, worked in US government during the six-party talks and has followed the issue closely as a threat to global peace. Mr Fitzpatrick points out that the confrontation remains several steps away from conflagration.

The US military does not appear to have changed its military posture around the Korean peninsula or further afield in Guam or any other likely Korean target. The danger comes only if Pyongyang really sees Mr Trump's "fire and fury" announcement as a clear and imminent notice of a US attack.

Even then Mr Fitzpatrick points out the very public signal sent by Pyongyang about its interest in hitting Guam could be interpreted as a bluff.

North Korea could unleash missiles, even nuclear weapons, on South Korea and Japan. Given the succession of tests it has carried out in recent months, its arsenal is far more likely to score a successful hit closer to its shore than on the far-off Pacific atoll.

Rex Tillerson, the US secretary of state, qualified Mr Trump’s comments yesterday, telling Americans to “sleep well at night”. In doing so, he alluded to how both sides were knowingly upping the pressure on the other side. Since North Korea does not understand diplomatic pressure, Mr Trump was sending a strong message in language Kim would understand, Mr Tillerson added.

It should not be forgotten that the clear test of Mr Trump’s approach remains not much different from the measure of success faced by President Barack Obama or any of his predecessors.

Can Washington persuade Beijing to put Pyongyang under pressure to make real concessions?

After numerous failed deals in the past it is hard to see how a deal with North Korea would succeed without Chinese guarantees that the arsenal, which could now be as many as 60 nuclear bombs, has been properly safeguarded.

Only that would ensure that Americans can sleep soundly without waking up to more news alerts about North Korean launching missiles.

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THE BIO

Family: I have three siblings, one older brother (age 25) and two younger sisters, 20 and 13 

Favourite book: Asking for my favourite book has to be one of the hardest questions. However a current favourite would be Sidewalk by Mitchell Duneier

Favourite place to travel to: Any walkable city. I also love nature and wildlife 

What do you love eating or cooking: I’m constantly in the kitchen. Ever since I changed the way I eat I enjoy choosing and creating what goes into my body. However, nothing can top home cooked food from my parents. 

Favorite place to go in the UAE: A quiet beach.

Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

Specs: 2024 McLaren Artura Spider

Engine: 3.0-litre twin-turbo V6 and electric motor
Max power: 700hp at 7,500rpm
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Transmission: Eight-speed dual-clutch auto
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Karwaan

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Director: Akarsh Khurana

Starring: Irrfan Khan, Dulquer Salmaan, Mithila Palkar

Rating: 4/5

COMPANY PROFILE

Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded

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.”

Company Profile

Company name: Hoopla
Date started: March 2023
Founder: Jacqueline Perrottet
Based: Dubai
Number of staff: 10
Investment stage: Pre-seed
Investment required: $500,000

COMPANY PROFILE

Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)