Jens Stoltenberg said 'Russia doesn't have a veto' on which country can join Nato. EPA
Jens Stoltenberg said 'Russia doesn't have a veto' on which country can join Nato. EPA
Jens Stoltenberg said 'Russia doesn't have a veto' on which country can join Nato. EPA
Jens Stoltenberg said 'Russia doesn't have a veto' on which country can join Nato. EPA

Nato leaves door open for further Russia talks despite 'significant differences'


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A tense Russia-Nato summit ended on Wednesday with diplomats saying further talks were needed to reconcile “significant differences” over Ukraine and the future of European security.

Alliance chief Jens Stoltenberg said the opposing views were “not easy to bridge”, with Moscow demanding a say in the membership of Nato and the US insisting that any progress must include a withdrawal of Russian troops near Ukraine.

Russia's representative, deputy foreign minister Alexander Grushko, described the talks as “a heart-to-heart”.

“The conversation was quite frank, direct, deep, intense, but at the same time it revealed a large number of differences on fundamental issues.”

The talks in Brussels, described by Mr Stoltenberg as a “defining moment for European security,” were the second part of this week’s peace efforts after Russia and the US met on Monday.

They took place as Russian troop movements led to fear of an invasion of Ukraine.

Mr Stoltenberg said Nato and Russia had “expressed the need to resume dialogue and explore a schedule of further meetings” as diplomats try to reduce tensions.

But he said Nato was “united on the core principle that each and every nation has the right to choose its own path”, and that “Russia doesn't have a veto” on who can join the military alliance.

Mr Grushko said that any further deterioration in relations could lead to the “most unpredictable and most dire consequences for European security".

He later said Moscow would use military means to neutralise security threats if diplomacy proved insufficient.

Moscow’s key objective is to stop any eastward expansion of Nato, a condition rejected by the US, the alliance and potential candidate countries such as Ukraine.

It wants Nato forces withdrawn from central and eastern European nations that joined the US-led bloc after the Cold War ended.

Wendy Sherman, the US deputy secretary of state who led the American delegation, said Russia brought nothing new to Wednesday's talks and had not been clear about whether it took diplomacy seriously.

“It's very hard to have dialogue, to have diplomacy that is conducive to success when in fact you have 100,000 troops live-fire exercises, propaganda, disinformation, other efforts to subvert that environment,” she said.

She repeated US vows to “exact a severe ongoing price for Russia’s economy and financial system” should it escalate its military activity in Ukraine.

To that end, Ms Sherman also met with European External Action Service secretary-general Stefano Sannino in Brussels to discuss potential financial penalties on Russia.

Those measures could include Germany terminating its agreement to put the Nord Stream 2 oil pipeline from Russia into operation.

The US and Nato have also vowed to shore up the alliance’s eastern flank if Russia does not back down. Alternatively, Nato has offered a series of areas to enhance co-operation with Russia in order to lower the temperature.

“The Nato allies offered their views on areas where Nato and Russia could make progress together in a way that strengthens security for all of us, and indeed for the world,” Ms Sherman said.

“These include reciprocal actions around risk reduction and transparency, improved communication and arms control.”

Following the meeting, UK Foreign Secretary Liz Truss reiterated support for Ukraine’s sovereignty and territorial integrity, and said Russia’s military build-up on the border of Ukraine and in illegally annexed Crimea was unacceptable.

She condemned Russia’s “aggression and destabilising activity”, saying Nato was pushing back against the Kremlin’s threatening behaviour.

She said that a further military incursion into Ukraine would come with a severe cost on Russia’s economy, including co-ordinated sanctions.

“The quagmire of a long-running conflict would cost lives and damage communities on both sides. This is the reality of armed conflict, as we have seen before.”

“What happens next will be absolutely critical to peace and security in Europe. The only way forward is for Russia to de-escalate and engage in meaningful discussions,” Ms Truss said.

Kremlin spokesman Dmitry Peskov, spokesman at the talks, repeated Russia's denials on Wednesday that it intends to invade Ukraine.

“We are not negotiating from a position of strength; there is not, and nor can there be, any place for ultimatums here,” he said.

Josep Borrell, European Union foreign affairs chief, said Russia's proposals to end the stand-off “contravene the principles of the European security architecture".

He claimed Russia sought “to challenge the political and security order born after the Cold War”, which included the right of each state “to freely choose to belong, or not to belong, to an international organisation and to be a party to treaties or alliances".

Russian Deputy Foreign Minister Alexander Grushko, right and Mr Stoltenberg attend the summit in Brussels. EPA
Russian Deputy Foreign Minister Alexander Grushko, right and Mr Stoltenberg attend the summit in Brussels. EPA

Julianne Smith, the US ambassador to Nato, said Washington would push back on proposals from Russia “that are simply non-starters”.

“We will not allow anyone to slam Nato’s open-door policy shut,” Ms Smith said, speaking before the meeting.

The allies prepared for the meeting by consulting with Ms Sherman on the outcome of her talks with Russia on Monday. Those talks in Geneva ended with no breakthrough.

Denmark’s delegation to Nato said it hoped for a “meaningful dialogue” with Russia but said the Kremlin must “choose co-operation over confrontation”.

The Nato-Russia Council was established in 2002, and has kept going after most ties were severed following Moscow’s annexation of Crimea in 2014.

The talks will continue with a meeting of the Organisation for Security and Co-operation in Europe on Thursday. Russia said on Tuesday that it would not let the security talks drag on indefinitely.

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: January 12, 2022, 7:18 PM