As the war in Ukraine enters its second year, US President Joe Biden and Congress continue to deliver messages assuring Kyiv of Washington's long-standing commitment — one that has been marked by tens of billions of dollars in aid.
When President Volodymyr Zelenskyy addressed Congress in December 2022, he characterised his country's defence against Russia as an investment in US interests — global security and democracy. A democratic Ukraine, he said, is of paramount importance for America.
It is a message that resonated with US politicians even before the historic visit, and one they responded to by approving $45 billion in financial and military aid.
Since January 24, 2022, the US has committed $78 billion in humanitarian, financial and military assistance to Ukraine, data from the Kiel Institute's Ukraine Support Tracker shows, far outweighing the financial response of the rest of the world.
By comparison, the EU has committed $37.37 billion, though the vast majority of that sum ($32.33 billion) comes in the form of financial assistance.
Military and financial commitments to Ukraine grew throughout the year, data from IF-Kiel shows, in response to the prolonged war.
“The Americans are setting the pace in supporting Ukraine,” said Christoph Trebesch, head of the team producing the Ukraine Support Tracker and research centre director at the Kiel Institute.
“The Europeans' hesitancy in the first year of the war is a remarkable phenomenon, especially since financial resources can be quickly mobilised.”
Nowhere is the disproportionate amount of American aid more evident than when it comes to military aid.
Of the $78 billion the US has provided to Ukraine, more than half ($47.32 billion) has come in the form of military assistance.
That aid — announced in a string of packages ranging from $50 million to $2.8 billion — has come with a list of weapons, machinery, ammunition and other military gear the US has supplied to Ukraine.
As Congress responded to Mr Zelenskyy's requests for an increase in financial support, so, too, has Mr Biden mostly acceded to his requests for weapons.
Ukrainian soldiers are now equipped with thousands of drones, tactical vehicles, grenade launchers, High Mobility Rocket Systems (Himars), howitzers, laser-guided rocket systems, radar systems, ammunition and more.
The sizes of the military packages have increased as the war has dragged on, most notably with the inclusion of 31 M1 Abrams tanks that were part of a $400 million Ukraine Security Assistance Initiative package.
US Defence Secretary Lloyd Austin has hailed the Himars as particularly effective against curtailing Russian forces.
These weapons have mostly been provided in the form of presidential drawdowns, which allow for supplies to be speedily delivered from Pentagon stocks.
Others, like the Ground Launched Small Diameter Bomb, are still months away from seeing the battlefield.
In the days before Russia's invasion of Ukraine, the White House feared that Kyiv would fall within days.
A year later, there appears to be no end in sight to the war. The US and allies continue to pour relief into Ukraine, and Mr Zelenskyy must now convince leaders to continue their investment in the form of fighter jets.
For now at least, the answer to that request is “no”, Mr Biden said. But the US has not ruled it out altogether and Britain has appeared more willing.
And questions linger as to how long the US will have the resolve or ability to continue arming Ukraine.
America's own military preparedness could be compromised if the US continues to deplete its domestic weapons stockpiles, a senior adviser with the Centre for Strategic and International Studies wrote.
The newly seated Republican-controlled House of Representatives adds further complications to potential long-term aid, with House leadership sceptical of writing a “blank cheque” the way the previous session of Congress did.
Still, Mr Biden made his position clear on where the US stands when he announced a new $460 million security package during a surprise visit to Kyiv on Monday.
Walking the streets of the capital with Mr Zelenskyy beside him and air raid sirens blaring in the background, Mr Biden sent the message that America's commitment to Ukraine will continue under his administration.
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Tank warfare
Lt Gen Erik Petersen, deputy chief of programs, US Army, has argued it took a “three decade holiday” on modernising tanks.
“There clearly remains a significant armoured heavy ground manoeuvre threat in this world and maintaining a world class armoured force is absolutely vital,” the general said in London last week.
“We are developing next generation capabilities to compete with and deter adversaries to prevent opportunism or miscalculation, and, if necessary, defeat any foe decisively.”
MATCH INFO
Liverpool 2 (Van Dijk 18', 24')
Brighton 1 (Dunk 79')
Red card: Alisson (Liverpool)
Gifts exchanged
- King Charles - replica of President Eisenhower Sword
- Queen Camilla - Tiffany & Co vintage 18-carat gold, diamond and ruby flower brooch
- Donald Trump - hand-bound leather book with Declaration of Independence
- Melania Trump - personalised Anya Hindmarch handbag
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.”
Results
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