Russian President Vladimir Putin speaks during a plenary session of the State Duma (the lower house of Russia's Federal Assembly) in Moscow, Russia, March 10, 2020. EPA
Russian President Vladimir Putin speaks during a plenary session of the State Duma (the lower house of Russia's Federal Assembly) in Moscow, Russia, March 10, 2020. EPA
Russian President Vladimir Putin speaks during a plenary session of the State Duma (the lower house of Russia's Federal Assembly) in Moscow, Russia, March 10, 2020. EPA
Russian President Vladimir Putin speaks during a plenary session of the State Duma (the lower house of Russia's Federal Assembly) in Moscow, Russia, March 10, 2020. EPA

Russia passes bill extending Putin's grip on presidency


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The Russian parliament approved a sweeping constitutional reform in the third and final reading on Wednesday, a move that will allow President Vladimir Putin to stay in power for another 12 years after his current term ends in 2024.

The Kremlin-controlled lower house, the State Duma, endorsed a set of amendments to the constitution, including a provision resetting the term count for the presidential office, making it possible for Mr Putin to run again, something the current constitution forbids.

A total of 383 State Duma lawmakers voted in favour of the changes, with 43 abstentions and none against.

The measures must now be approved by the upper house federation council and be put to a public vote scheduled for April 22.

Mr Putin, 67, has dominated the Russian political landscape for two decades as either president or prime minister and opened the door to the constitutional changes on Tuesday when he made an impromptu appearance in parliament.

In January, Mr Putin unveiled a major shake-up of Russian politics and a constitutional overhaul, but is currently required by the constitution to step down in 2024 when his second sequential and fourth presidential term ends.

But when he addressed the State Duma on Tuesday, he gave his qualified blessing to a proposed change to the constitution that would formally reset his presidential term tally to zero.

If, as Putin's critics suspect, the constitutional court gives its blessing to the amendment and it is backed in a nationwide vote in April, the president could serve another two back-to-back six-year terms.

Were he to do that, and his health and electoral fortunes allowed, he could stay in office until 2036 at which point he would be 83.

Kremlin critic and opposition politician Alexei Navalny has criticised the plan saying that Mr Putin seeks to be president for life.

The president has not spelt out what his plans for the future are after 2024, but has said he does not favour the Soviet-era practice of having leaders who die in office.

The changes backed by the State Duma on Wednesday will now be reviewed by other parts of the Russian legislative branch, including by Russia's upper house of parliament later on Wednesday. No opposition is expected.

A politician revered in Russia as the first woman in space first proposed scrapping the two-term limit for presidents or stopping the clock so the law would not apply to Mr Putin.

The Russian leader and the lower house of Parliament quickly backed the proposal put forward by former cosmonaut Valentina Tereshkova, 83, who flew into space in 1963.

In a speech to MPs debating a package of amendments, Mr Putin said he opposed doing away with the presidential term limit but backed stopping the count and restarting it in 2024, if the Russian Constitution were revised.

With over 20 years in office, Mr Putin is Russia’s longest-serving leader since Joseph Stalin.

After serving two presidential terms in 2000-2008, he shifted to the Russian prime minister’s office while protege Dmitry Medvedev served as a placeholder president.

After the length of a presidential term was extended to six years under Mr Medvedev, Mr Putin reclaimed the position in 2012 and won another term in 2018.

Observers speculated that to continue leading the country, Mr Putin could use constitutional amendments he unveiled in January to scrap term limits, become prime minister with strengthened powers, or continue calling the shots as the head of the State Council.

But he dismissed those suggestions.

Russian President Vladimir Putin, right, shakes hands with former President of Kazakhstan Nursultan Nazarbayev during their meeting in Kremlin in Moscow, Russia, Tuesday, March 10, 2020. AP
Russian President Vladimir Putin, right, shakes hands with former President of Kazakhstan Nursultan Nazarbayev during their meeting in Kremlin in Moscow, Russia, Tuesday, March 10, 2020. AP

“I propose to either lift the presidential term limit or add a clause that after the revised constitution enters force, the incumbent president, just like any other citizen, has the right to seek the presidency,” Ms Tereshkova said to raucous applause in the State Duma.

After Ms Tereshkova unveiled her proposal, Mr Putin addressed Parliament.

He said he was aware of public calls for him to stay on as president and emphasised that Russia needs stability, above all.

“The president is a guarantor of security of our state, its internal stability and evolutionary development,” Mr Putin said.

“We have had enough revolutions.”

But he said that because the constitution was a long-term document, scrapping the term limit was not a good idea.

“In the long-term perspective, society must have guarantees of regular government rotation,” Mr Putin said. “We need to think about future generations.”

He said he viewed positively Ms Tereshkova’s alternate proposal to restart the term count when the changed constitution entered into force.

“As for the proposal to lift restrictions for any person, any citizen, including the incumbent president, to allow running in future elections, this option is possible,” Mr Putin said.

He said the Constitutional Court would need to judge if the move were legal.

Mr Putin also quashed speculation that the Kremlin might call an early parliamentary election for the fall, saying he considered it unnecessary.

His statement came as MPs were considering amendments in a crucial second reading when changes in the document are made.

The Kremlin-controlled lower house, the State Duma, quickly endorsed the proposed amendments by a 382-0 vote with 44 abstentions.

A vote on a third reading will be a quick formality. A nationwide vote on the proposed amendments is set for April 22.

Andrei Klishas, a senior politician who co-chaired a Kremlin working group on the constitutional reform, said the amendment allowing Mr Putin to run again would be welcomed by many Russians who “worry they would lose certain things, including social security, after Mr Putin steps down as president".

Russia’s leading opposition figure, Alexei Navalny, criticised the proposed change.

“Mr Putin has been in power for 20 years, and yet he is going to run for the first time,” Mr Navalny tweeted.

A group of opposition activists called for a March 21 protest rally in Moscow that they expect up to 50,000 people to attend.

Moscow authorities banned outdoor events with attendance of more than 5,000 until April 10, saying it was to prevent the spread of the new coronavirus.

Mr Putin’s approval ratings have remained high despite a recent drop amid Russia’s economic troubles and stagnant living standards.

It is unclear if the fragmented and disorganised Russian opposition can mount a serious challenge to the Kremlin.

The rouble’s sharp drop this week, caused by a steep fall in global oil prices after the collapse of the Opec+ agreement to control crude output, could herald deeper economic problems.

“It looks like this crisis situation has made Putin ... do something he had originally planned, and to do it quickly,” said Abbas Gallyamov, an independent political analyst.

Mr Putin vowed to Parliament that the coronavirus outbreak and plummeting oil prices would not destabilise Russia.

“Our economy will keep getting stronger and the key industries will become more powerful and competitive,” he said.

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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.

“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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- Abdullah Ishnaneh, Partner, BSA Law