Did Kremlin tricks help Vladimir Putin win election?



MOSCOW // Victory for Vladimir Putin in today's presidential election is a foregone conclusion, but opposition figures and analysts say a Kremlin campaign of tricks may have helped rebuild his popularity.

When opposition protests erupted in early December, Putin's re-election looked less certain. His ratings plummeted, and, in mid-December, state-run pollster VTsIOM gave him just 42 per cent of the vote.

Now his victory seems assured despite weeks of opposition rallies that brought hundreds of thousands onto the streets.

Mr Putin, now the prime minister, could sweep the election with up to 66 per cent of the vote, according to a recent poll by the independent Levada Center.

The poll also shows that only about one-third of Russians generally support the protest movement. Most of supporters of the opposition are in urban areas with large numbers of educated middle-class Russians.

The recent months of campaigning have seen Mr Putin's camp countering the growing opposition movement with rival demonstrations and a messy media war.

Experts say the Kremlin has been desperate to score a propaganda coup after a drop in public trust for both Mr Putin and the ruling United Russia party, which barely secured a majority in December's parliamentary elections. That election was marred by allegations of vote rigging.

A key part of the Kremlin's plan has been organising pro-Putin rallies. The most recent demonstration, on February 23, attracted upwards of 100,000 people - many of whom were bussed in from the regions.

The rallies have been one part of a Kremlin plan to downplay the opposition protests, said Masha Lipman, an expert at Moscow's Carnegie Center.

"I would actually see it as part of a broader response to a new phenomenon, such as tens of thousands of people in Moscow chanting 'Putin out!'" she said. "I think there is a whole range of different, mostly manipulative, propaganda steps aimed at reducing the importance and countering the effect of these rallies."

The Kremlin has taken its fight to the internet. In mid December, the pro-Kremlin website Life News published a series of leaked phone conversations, in which opposition leader Boris Nemtsov viciously debased his fellow activists. Mr Nemtsov and others alleged Russia's security service was ordered by the Kremlin to tap his phone and leak the conversations.

The murky cyber sparring continued when the Russian wing of Anonymous, the internet whistle-blowing group, hacked the email accounts of key figures in Russia's pro-Kremlin youth movement, Nashi.

Email conversations featuring the group's press secretary, Kristina Potuphick, uncovered the widespread practice of paying internet users to post comments on blogs in support of Mr Putin.

They also detailed various schemes to discredit anti-corruption blogger and opposition darling Alexei Navalny.

Observers note that while the trend is not new, the Kremlin has stepped up its actions to counter the threat of a protest movement that has thrived online.

"The authorities have tried to use every opportunity offered by the internet to broadcast their own point of view," said the well-known blogger and media critic Oleg Kozyrev.

He contends that the Kremlin has used illegal and semi-legal tactics such as "denial of service" attacks, email hacking and spam.

He said that the amount of "dirt" heaped on the opposition has made many anti-government Russians wary of standing behind particular opposition leaders.

"In general, the people who have come out to the mass street protests came not for one leader or another, but for the cause itself," Mr Kozyrev said.

Whether such tactics have been instrumental in turning the tide back in Mr Putin's favour is difficult to say, experts say.

They point to the fine print in the Levada poll. It found that 66 per cent of decided voters will vote for Mr Putin.

But Ben Judah, policy fellow at the European Council on Foreign Affairs, notes that the prime minister's level of electoral support is lower than it seems: at about 45 per cent of the total vote, it falls short of the 50 per cent required for a first-round victory.

"It's clear from the Levada poll that they haven't persuaded a majority of Russian citizens to go out and vote for Putin on election day," he said. "At first glance, the poll seems like a sign of strength, but actually it's a sign of weakness if you dig into it."

Signs that the Kremlin is still unsure of Mr. Putin's easy victory emerged on Monday when Russian state television reported that Russian and Ukrainian security services foiled an assassination plot against Mr. Putin. Critics claim it was a PR stunt engineered in a hurried attempt to secure a first-round win. The authorities are counting on a mix of falsification and propaganda to usher Putin back to the presidency, according to analyst and former Kremlin insider Stanislav Belkovsky.

"Putin's real rating is about 38 per cent now, but the result they are going to proclaim in the first round will be 58 per cent, so they need 20 per cent more than they can expect," he said. "That's why they're trying to invent anything and everything to improve the result."

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Will the pound fall to parity with the dollar?

The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.

Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.

New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.

“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.

The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.

The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.

Bloomberg

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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.

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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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