A billboard reads "with Russia for ever" ahead of a referendum in Luhansk, eastern Ukraine. AP
A billboard reads "with Russia for ever" ahead of a referendum in Luhansk, eastern Ukraine. AP
A billboard reads "with Russia for ever" ahead of a referendum in Luhansk, eastern Ukraine. AP
A billboard reads "with Russia for ever" ahead of a referendum in Luhansk, eastern Ukraine. AP

Voting begins in 'sham' Russian-backed referendums in occupied areas of Ukraine


Gillian Duncan
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Voting has opened in four occupied areas of Ukraine in referendums on joining Russia, officials backed by Moscow have said.

The polls, which have been denounced as a sham by the West, are expected to lead to the Russian annexation of Luhansk, Donetsk, Kherson and Zaporizhzhia.

“We cannot — we will not — allow President Putin to get away with it,” US Secretary of State Antony Blinken said in a UN Security Council session on Thursday.

“The very international order we've gathered here to uphold is being shredded before our eyes … [Defending Ukraine] is about protecting an international order where no nation can redraw the borders of another by force.”

The polls are reminiscent of one in 2014 that led to Ukraine's Crimean Peninsula being annexed by Russia and was denounced as fraudulent in the West.

Balloting in the four areas will continue for the next five days, through to Tuesday.

Russian-installed officials said during the first four days ballots will be brought to people’s homes. People can also vote at makeshift polling stations near residential areas, they said. On the fifth day, Tuesday, voters will be invited to regular polls.

In the eastern Donetsk and Luhansk regions, which were already recognised as independent by Mr Putin before he launched the invasion in February, residents are answering if they support their “republic's entry into Russia”, according to Russian news agency Tass.

Ballots in the Kherson and Zaporizhzhia regions have the question: “Are you in favour of secession from Ukraine, formation of an independent state by the region and its joining the Russian Federation as a subject of the Russian Federation?”

Russian news agencies reported that the voting process, which is using traditional paper ballots, began on Friday morning.

Denis Pushilin, separatist leader of Moscow-backed authorities in the Donetsk region, called the referendum on Friday “a historical milestone”.

But Ukrainian President Volodymyr Zelensky denounced the polls as a “farce”, and praised Western allies' condemnation of moves by Russia.

“I am grateful to everyone in the world who supported us, who clearly condemned another Russian lie,” he said during his daily address on Thursday.

US Secretary of State Antony Blinken speaks during a meeting of the UN Security Council on Ukraine. Reuters
US Secretary of State Antony Blinken speaks during a meeting of the UN Security Council on Ukraine. Reuters

The votes are all but certain to go Russia’s way, giving it the pretext to claim Ukrainian attempts to take back the areas are an attack on Russia itself.

They follow Mr Putin’s announcement of the partial mobilisation of 300,000 reservists to fight in Ukraine.

Western leaders unanimously denounced the referendums and call-up during meetings at the UN headquarters in New York this week.

French President Macron told the UN General Assembly that the referendums were a “travesty”.

Videos shared on social media purported to show hundreds of Russian citizens across the country responding to the military summons, while the Russian military claimed at least 10,000 people had volunteered to fight in 24 hours since the order.

But men were also leaving Russia in droves before they were made to join. Across Russia on Wednesday, more than 1,300 people were arrested during protests, a monitoring group reported.

Flights to neighbouring countries, mainly former Soviet republics that allow Russians visa-free entry, are nearly entirely booked and prices have shot up, pointing to an exodus of Russians wanting to avoid going to war.

Mr Putin has said Moscow will use “all means” to protect its territory. Former Russian leader Dmitry Medvedev said on social media that this statement meant “strategic nuclear weapons” would be included.

Mr Medvedev also predicted the voting regions “will integrate into Russia”.

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.”

Updated: September 23, 2022, 7:11 AM