Donald Trump pictured on Friday. Andrew Harnik / AP
Donald Trump pictured on Friday. Andrew Harnik / AP

Trump won't advance a coherent foreign policy through constant disruption and personal volatility



From the outset of the Donald Trump presidency a year ago, I've argued that the biggest challenge it might pose to US foreign policy stems from unpredictability. Particularly in volatile regions such as the Middle East, beset by self-styled "revolutionary" forces such as Islamist terrorist groups or Iran and Hizbollah and their proxies, Washington's role as a status quo power and guarantor of international stability is fundamentally inconsistent with uncertainty and impulsivity.

The publication last week of Michael Wolff's sensationalist but informative White House exposé, Fire and Fury, kicked off another American argument about Mr Trump's fitness for office and the functionality of his White House. The book painted a relentless but entirely convincing portrait of a president who neither knows nor cares about most policy issues, either doesn't or can't read beyond headlines involving himself, tends to agree with the last person he has spoken with, and searches only for the latest "win" in what amounts to a reality TV show in which every day is a new episode.

That’s hardly an image to inspire confidence or instil fear either at home or abroad.

So, this week began with a public relations exercise designed to dispel that image. It was, at best, a wash.

Mr Trump hosted an hour-long “negotiation” about immigration policy with lawmakers from both parties. On the one hand, he seemed affable and collected. On the other, he seemed not to recall his own policies and had to be pulled back from the brink of endorsing a Democratic plan by panicked Republican representatives.

Shortly after the meeting, he reversed many of the positions he had apparently taken regarding his purported flexibility.

This week, Mr Trump also threatened to attack free speech rights; pushed his allies in Congress to interfere with special counsel Robert Mueller's investigation of Russian meddling in the last election; denounced the US legal system as "broken" because of a ruling he didn't like; and resumed his bitter criticism of his own FBI. On Thursday, he seemed profoundly confused about pending legislation, denouncing on Twitter a foreign surveillance authorisation his administration backs before reversing himself yet again and endorsing it.

On foreign policy, Mr Trump claimed to have "a very good relationship with Kim Jong Un," the North Korean leader with whom he usually trades highly personalised insults. He used a joint press conference with the Norwegian prime minister to resume his attacks on Hillary Clinton and call for the jailing of his enemies. Then he reportedly employed exceptionally vulgar language to denounce US allies in Africa, Central America and the Caribbean while calling, in explicitly racist terms, for more European immigrants to the United States from, for example, Norway.

In other words, a week that was crafted to refute the worst impressions created by Fire and Fury only reinforced and amplified them.

Over the past year, Mr Trump has been restrained by many factors, including the ongoing power of American institutions and the fact that many of his cabinet officials don't agree with him, from realising many of his most potentially damaging campaign vows. He abandoned the Paris climate accord and the Trans-Pacific Partnership, but those hadn't been implemented yet.  The real disruption may yet be brewing.

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While the North American Free Trade Agreement is still being renegotiated, it is certainly staring up at the axe.

Mr Trump has again avoided wrecking the Iran nuclear deal by continuing sanctions relief for Tehran, but insists he will abandon it soon unless it's renegotiated. There's still every danger that his coming moves on the issue could play directly into the hands of Iranian hardliners.

Yet despite his tough talk, Mr Trump is doing precious little to block the expansion of Iranian interests in the Middle East. Indeed, his administration has said nothing about a new joint Russian-Syrian offensive in so-called "de-confliction zones" in Syria, which can clearly only strengthen the regional hand of Iran. The reality is that Mr Trump's administration is no more engaged helping shape the outcome of the most strategically consequential conflict in the Middle East than Barack Obama's was.

Mr Trump may not agree with, or perhaps even understand, this but Washington’s global role is fundamentally that of a stabilising force safeguarding the status quo. Disruption, volatility, and lurching from thought to thought, apparently at random, cannot advance that goal except in the rarest of circumstances.

The administration's recently released National Security Strategy vividly illustrated the tension between traditional American policy goals and methods, most of which remain indispensable for both Washington and its allies, and Mr. Trump's own inchoate and ill-defined "America first" agenda.

Combined with his own evident volatility, deep-seeded prejudices, anger and resentment, and profound ignorance of, and disinterest in, almost all policy questions, a degree of confusion and uncertainty about US policy is virtually inevitable. What, for example, precisely is Washington's policy towards Jerusalem, following Mr Trump's recent statement on that issue? No one can be sure.

Mr Wolff’s book now seems, if anything, understated.

Mr Trump may enjoy chaos and keeping opponents off balance. But this approach cannot serve the US national interest or those of Washington’s closest allies.

Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Two products to make at home

Toilet cleaner

1 cup baking soda 

1 cup castile soap

10-20 drops of lemon essential oil (or another oil of your choice) 

Method:

1. Mix the baking soda and castile soap until you get a nice consistency.

2. Add the essential oil to the mix.

Air Freshener

100ml water 

5 drops of the essential oil of your choice (note: lavender is a nice one for this) 

Method:

1. Add water and oil to spray bottle to store.

2. Shake well before use. 

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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.”