A protester holds an anti-US banner with a picture of the president-elect Barack Obama, during a rally in Seoul.
A protester holds an anti-US banner with a picture of the president-elect Barack Obama, during a rally in Seoul.
A protester holds an anti-US banner with a picture of the president-elect Barack Obama, during a rally in Seoul.
A protester holds an anti-US banner with a picture of the president-elect Barack Obama, during a rally in Seoul.

Koreas locked in brinkmanship


  • English
  • Arabic

BEIJING // In what some call Pyongyang's first major act of defiance since Barack Obama won the US presidential election, North Korea has threatened to sever virtually all ties with South Korea from Dec 1. The notification came as part of a barrage of threats Pyongyang made last week. It refused nuclear sampling by international inspectors, threatened to restrict and shutter the border it shares with South Korea, said it would seal off the Red Cross liaison office and unplug all the direct phone lines between the two Koreas.

The dizzying list had been somewhat expected. Pyongyang, it was believed, would try to "snub" South Korea, its enemy for the past 60 years, when Mr Obama was elected. The Pyongyang strategy then would sidestep Seoul to directly reach Washington, being led by a more flexible Democratic president, who during the campaign trail repeatedly said he would be willing to have a direct dialogue with the Stalinist regime to resolve the stalled nuclear talks.

The world, despite being used to Pyongyang's quirky brinkmanship and diplomatic blackmail, responded by putting on the table exactly the two cards Pyongyang expected: alarm and disarray. Initially, analysts speculated that the North's move had a two-fold message. One was to raise its strategic profile in its dealings with the post-election United States. The other was to tame Seoul, which had been mounting - in the words of North Korea's state media - a "confrontational" stance against Pyongyang. Now, it is increasingly clear that it is the latter.

The news hit South Korea particularly hard. Political parties in the South have become bitterly divided over how to respond to North Korea's new gamble. Supporters of engaging North Korea criticised the president, Lee Myung-bak, for the tough stance he has taken on North Korea since his election in February, reversing the decade-long "sunshine policy" of his liberal predecessors, Kim Dae-jung and Roh Moo-hyun.

Severing the cross-border relations is an especially emotional issue for many South Koreans. As many as one quarter of the country's population have family members living in North Korea, separated since the Korean War. Hope for reunion is rapidly decreasing because many are believed to have died as the North-South divide prolongs. Any South Korean president seen as bringing about the end to cross-border relations endangers his political career.

North Korea has watched the internal strife in South Korea with a smirk. "Pyongyang appears to be passing the ball into Seoul's court to pressure the Lee Myung-bak administration," said Lee Hee-ok, of Sungkyunkwan University in Seoul. "The deadlock may last long unless Seoul makes the moves that Pyongyang wants it to make." Those "moves" would be a conciliatory gesture. But they are not guaranteed. Even though a delegation of South Korean opposition members is visiting Pyongyang with a message from the Seoul government to placate North Korea, one of the bedrock platforms Mr Lee promoted as a presidential candidate was to stand firm against North Korea.

Mr Lee has repeatedly said his government would not expand inter-Korean co-operation projects unless Pyongyang abandons all of its nuclear ambitions first. This time, faced with North Korea's threat of cutting off relations, Mr Lee could not have been more blunt: "Sometimes, to wait it out can be a strategy." Han Suk-hee, of Yonsei University in Seoul, gave his vote of confidence to Mr Lee. "North Korea is turning to stubbornness again. We just have to wait. There is no need for us to open a door for it first."

Conservative media outlets that helped Mr Lee get elected are also encouraging him not to budge. Their prediction: it will be North Korea that is pressed harder economically. That attitude worries Prof Lee. "Time may not be on President Lee's side. If Seoul does not take actions to mend its ties with the North, or just keeps silent in a move to ignore North Korea, North Korea will gradually raise the bar."

Prof Han disagrees: "North Korea doesn't have an alternative. Its economic situation is not good. We shouldn't give in to its demands." A spokesman for South Korea's unification ministry, Kim Ho-nyoun, downplayed the North's threat, saying he did not believe the North intends a complete border closing. Mr Kim may be wrong. A proud country, North Korea might be compelled to prove its stance by knowingly making the self-defeating choice - even at the expense of the considerable economic benefits generated by the Kaesong Industrial Complex, an industrial manufacturing site run by South Koreans within North Korea. Severing inter-Korean relations would also mean discontinuation of southern investment in the North.

Worse, while Seoul prolongs its "wait and see" strategy, Pyongyang's patience may run out. On the current impasse, a North Korea diplomatic source predicted a bad ending. "The Lee Myung-bak government seems to indulge itself in the erroneous belief that it's high time to teach a lesson to North Korea. It had better let it go now. If not now, it will be too late." A Chinese scholar said it is actually South Korea that does not have an alternative. "I believe South Korea will definitely give in and compromise its stance," said Shen Dingli, a nuclear security analyst at Fudan University in Shanghai. "South Korea doesn't have an alternative."

What options does South Korea have? he asked. "Will it go to a war with North Korea?" Prof Shen then offered a fresh perspective on North Korea's recent move. He said the outward threat was, in fact, a disguised cry for help. "North Korea's purpose is not to sever its relations with South Korea. The real motivation behind is to let South Korea compromise and act in a way beneficial to North Korea," he said. "Eventually, it wants to recover and improve its relationship with South Korea."

Perhaps decoding the North Korean psychology in this manner is one way to see the silver lining in the crisis. Pyongyang did not completely break off communication with Seoul, but "seriously restrict" it, leaving room for further dialogue. Also, the deadline is Dec 1, not today. * The National

Sheer grandeur

The Owo building is 14 storeys high, seven of which are below ground, with the 30,000 square feet of amenities located subterranean, including a 16-seat private cinema, seven lounges, a gym, games room, treatment suites and bicycle storage.

A clear distinction between the residences and the Raffles hotel with the amenities operated separately.

Specs

Engine: 51.5kW electric motor

Range: 400km

Power: 134bhp

Torque: 175Nm

Price: From Dh98,800

Available: Now

The%20Caine%20Mutiny%20Court-Martial%20
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EWilliam%20Friedkin%3Cbr%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3EKiefer%20Sutherland%2C%20Jason%20Clarke%2C%20Jake%20Lacy%3Cbr%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E3%2F5%3C%2Fp%3E%0A
Match info:

Real Betis v Sevilla, 10.45pm (UAE)

MATCH INFO

Syria v Australia
2018 World Cup qualifying: Asia fourth round play-off first leg
Venue: Hang Jebat Stadium, Malayisa
Kick-off: Thursday, 4.30pm (UAE)
Watch: beIN Sports HD

* Second leg in Australia on October 10

Dengue%20fever%20symptoms
%3Cul%3E%0A%3Cli%3EHigh%20fever%3C%2Fli%3E%0A%3Cli%3EIntense%20pain%20behind%20your%20eyes%3C%2Fli%3E%0A%3Cli%3ESevere%20headache%3C%2Fli%3E%0A%3Cli%3EMuscle%20and%20joint%20pains%3C%2Fli%3E%0A%3Cli%3ENausea%3C%2Fli%3E%0A%3Cli%3EVomiting%3C%2Fli%3E%0A%3Cli%3ESwollen%20glands%3C%2Fli%3E%0A%3Cli%3ERash%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3EIf%20symptoms%20occur%2C%20they%20usually%20last%20for%20two-seven%20days%3C%2Fp%3E%0A

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.”

'Texas Chainsaw Massacre'

Rating: 1 out of 4

Running time: 81 minutes

Director: David Blue Garcia

Starring: Sarah Yarkin, Elsie Fisher, Mark Burnham

Women%E2%80%99s%20Asia%20Cup
%3Cp%3E%3Cstrong%3EUAE%20fixtures%3C%2Fstrong%3E%3Cbr%3ESun%20Oct%202%2C%20v%20Sri%20Lanka%3Cbr%3ETue%20Oct%204%2C%20v%20India%3Cbr%3EWed%20Oct%205%2C%20v%20Malaysia%3Cbr%3EFri%20Oct%207%2C%20v%20Thailand%3Cbr%3ESun%20Oct%209%2C%20v%20Pakistan%3Cbr%3ETue%20Oct%2011%2C%20v%20Bangladesh%3Cbr%3E%3Cbr%3E%3Cstrong%3EUAE%20squad%3C%2Fstrong%3E%3Cbr%3EChaya%20Mughal%20(captain)%2C%20Esha%20Oza%2C%20Kavisha%20Kumari%2C%20Khushi%20Sharma%2C%20Theertha%20Satish%2C%20Lavanya%20Keny%2C%20Priyanjali%20Jain%2C%20Suraksha%20Kotte%2C%20Natasha%20Cherriath%2C%20Indhuja%20Nandakumar%2C%20Rishitha%20Rajith%2C%20Vaishnave%20Mahesh%2C%20Siya%20Gokhale%2C%20Samaira%20Dharnidharka%2C%20Mahika%20Gaur%3C%2Fp%3E%0A