Ukrainian armed forces drive a self-propelled rocket launcher along a pontoon bridge while crossing the Aidar River during military drills near Novoaidar in the Luhansk region. Reuters
Ukrainian armed forces drive a self-propelled rocket launcher along a pontoon bridge while crossing the Aidar River during military drills near Novoaidar in the Luhansk region. Reuters
Ukrainian armed forces drive a self-propelled rocket launcher along a pontoon bridge while crossing the Aidar River during military drills near Novoaidar in the Luhansk region. Reuters
Ukrainian armed forces drive a self-propelled rocket launcher along a pontoon bridge while crossing the Aidar River during military drills near Novoaidar in the Luhansk region. Reuters

Russia demands end to Nato military presence in Ukraine in return for security guarantees


Jamie Prentis
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Russia has demanded Nato end its military activities in Ukraine and not allow new members into the alliance as part of security guarantees to lower tension in Eastern Europe.

The proposal calls for a ban on the deployment of intermediate and shorter-range missiles, a general pullback of weapons and ending drills near the borders between Russia and Nato member states.

The publication of the two draft texts — one sent to Nato, the other to the US — come at a time of particularly heightened tension in the region.

Russia has massed as many as 100,000 troops on its border with Ukraine, leading to concerns in some western capitals that an invasion is imminent. Moscow denies these claims and says it is responding to perceived threats to its security.

Nato members have thrown their support behind Ukraine, which is not a member of the alliance, and threatened Russia with sanctions if it violates Ukrainian territorial integrity.

While Nato promised membership to Ukraine and former Soviet state Georgia in 2008, the prospect of their ascension is seen as unlikely in the short term. Despite that, Nato is likely to push back against the demands as it has rejected any say from Moscow in the expansion of the alliance.

In announcing the proposals, Russia’s deputy foreign minister, Sergey Ryabkov, said “western capitals” were acutely aware of Moscow’s opposition to Ukraine and Georgia ever joining Nato.

He said Moscow’s relations with Washington and its Nato allies have approached a “dangerous point”, noting that alliance deployments and drills near Russia have raised “unacceptable” threats to its security.

“The line pursued by the United States and Nato over recent years to aggressively escalate the security situation is absolutely unacceptable and extremely dangerous,” he said.

“Washington and its Nato allies should immediately stop regular hostile actions against our country, including unscheduled exercises, dangerous rapprochements and manoeuvres of military ships and planes, and stop the military development of Ukrainian territory,” Mr Ryabkov added.

Moscow handed over its proposals to the US this week, days after a call between President Joe Biden and his Russian counterpart Vladimir Putin.

Mr Ryabkov said Russian officials were “ready to immediately travel” to a neutral country for negotiations with the US and added that Geneva had been proposed by Moscow.

“We propose writing down that the US and Russia don't view each other as opponents and will use bilateral and multilateral consultations to resolve conflicting situations. It's also important to ascertain the principle of non-interference in each others' internal affairs,” he added.

In response, the White House said they had seen the proposals and would consult with US allies in Europe.

“There will be no talks on European security without our European allies and partners,” said White House Press Secretary Jen Psaki.

“We will not compromise the key principles on which European security is built, including that all countries have the right to decide their own future and foreign policy, free from outside interference,” she added.

A senior US official later reiterated the position and warned Moscow of "massive, massive consequences" if it invades Ukraine.

In a call with Ukrainian President Volodymyr Zelenskyy, Britain's Prime Minister Boris Johnson said his country would use all of its diplomatic and economic powers to stop any Russian aggression towards Ukraine.

“He reiterated the message relayed to President Putin about the UK’s support for Ukraine’s territorial integrity," a Downing Street spokesperson said.

“The Prime Minister and President Zelenskyy discussed the importance of Ukraine and other European states reducing their dependence on Russian gas and the need to cultivate green and diverse energy sources," the spokesperson said.

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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Updated: December 17, 2021, 5:37 PM