MOSCOW // Praising a return to pragmatism and constructive co-operation, the US president, Barack Obama, and his Russian counterpart, Dmitry Medvedev, signed a raft of agreements yesterday including a preliminary arms-reduction deal to replace an expiring Soviet-era accord.
Highlighting what the two leaders called the "special responsibility" of their countries to limit the threat of nuclear weapons, Mr Obama and Mr Medvedev agreed to significantly reduce nuclear stockpiles and strategic delivery systems in a framework agreement to replace the Start-1 treaty. The deal also commits the updated treaty to lower longer-range missiles for delivering nuclear bombs to between 500 and 1,100. The limit for warheads would be in a range of 1,500 to 1,675 each. Between them, the two countries possess more than 90 per cent of the world's nuclear weapons.
The two leaders also signed a deal in which Russia would grant the US access to its airspace to transport weapons and equipment to Afghanistan for US-led military operations there. They agreed that there has not been as much progress as they would like to see in the fight against insurgents in Afghanistan.
Mr Obama said it is too soon to measure the success of his new strategy in Afghanistan, which includes the deployment of additional US troops.
He said after that country's election is completed, the United States can take another look at the situation. Mr Medvedev said that in some respects, progress has been "insignificant" in Afghanistan. He said it is hard to say how quickly the situation will improve.
They also issued a vague statement about jointly analysing missile threats in connection with Washington's plans to place elements of a missile defence system in Eastern Europe, which is fiercely opposed by Moscow. Beyond the deals signed at the first full US-Russian summit in seven years, however, the two presidents made visible efforts to show they are interested in repairing the battered bilateral ties they inherited from their respective predecessors, George W Bush and Vladimir Putin, now Russia's prime minister.
"We came to the conclusion that the current state of Russian-American relations is not reaching its potential and is not consistent with the possibilities of our countries," Mr Medvedev said. "Most importantly, [it] is not consistent with the needs of a new era."
Mr Obama landed on a rain-drenched afternoon in the Russian capital with his wife, Michelle, and their two daughters. After his official reception on the tarmac at Moscow's Vnukovo airport, Mr Obama laid a wreath at the Tomb of the Unknown Soldier outside the Kremlin walls before heading inside for his talks with Mr Medvedev.
While the two leaders were in talks, Michelle Obama and her daughters, Malia and Sasha, toured the Kremlin with Russia's first lady, Svetlana Medvedeva. "We are confident that we can continue to build on the excellent discussions that we had in London," Mr Obama told Mr Medvedev in comments before their talks in the Kremlin, referring to the leaders' first meeting at the G20 summit in April.
"And that on a whole host of issues ? the United States and Russia have more in common than they have differences and that if we work hard in these next few days we can make extraordinary progress."
Greeting Mr Obama in the Kremlin with a grin and referring to him as "Dear Barack", Mr Medvedev said he hoped the talks would help "close a number of difficult pages in Russian-American relations and turn a new page". Mr Obama today is scheduled to meet Mr Putin, who is widely seen as the country's true leader, in the first meeting ever between the two politicians. The US president declined to engage in speculation about who is actually in charge in Russia, saying that the Russian tandem works "very effectively" together.
"My understanding is, President Medvedev is the president ? and Prime Minister Putin is the prime minister," Mr Obama said.
Later, Mr Obama is to deliver a commencement address to the New School of Economics and will meet members of Russia's political opposition and civil society representatives. The Kremlin has bristled at such meetings between foreign leaders and some of its harshest critics. Although the meeting will include several vociferous Kremlin opponents - including liberal politician Boris Nemtsov and former world chess champion Garry Kasparov - some opposition politicians who will attend the meeting are echoing the conciliatory tone of the summit.
Sergei Mitrokhin, leader of the liberal Yabloko Party, which has taken the Kremlin to task for human rights abuses in Russia but remains on the political margins, said he would like to discuss with Mr Obama US-Russian co-operation in Afghanistan, a strategic partnership deal as well as a possible joint US-Russian missile defence system.
Mr Mitrokhin said issues of civil society and democracy should be addressed internally and that airing Russia's dirty laundry in front of Mr Obama would be counterproductive. "These are issues that Russia must deal with," Mr Mitrokhin said in an interview. Mr Obama "knows there are problems with human rights in Russia. He doesn't need us to tell him that."
* With additional reporting by the Associated Press
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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.”