For a trading route that went into decline more than 500 years ago, the Silk Road is remarkably popular these days. The term crops up in headlines about the rise of China, the development of Central Asia and the UAE's links with the rest of Asia. The phrase Silk Road certainly adds much-needed spice to the bland lexicon of economists who prefer to talk of "developing south-south trade".
Recently, however, the term has found another, more sinister usage. It has become diplomatic shorthand for a US exit strategy from Afghanistan.
In this sense, the "New Silk Route" is being promoted in Washington as a replacement for the failed US policy of turning Afghanistan into a flourishing democracy by force of arms.
The plan now is to transform Afghanistan from a blank spot on the world's trading map to a "crossroads of economic opportunities going north and south and east and west", in the words of Hillary Clinton, the US secretary of state.
Economic ties will become the universal solvent of hostilities among Afghanistan's neighbours, which all have their own proxies inside the country.
The plan has several advantages in Washington: it is a free-market vision, based on the ideas of opening up trade, reducing border restrictions and unleashing the commercial talents of the people of the region to spread prosperity. Afghanistan's mineral wealth would be the catalyst.
For the US Treasury, the great advantage is that it would cost American taxpayers very little at a time of rising government debt. This cut-price dream is touted as a replacement for the gritty reality of Afghanistan, where the rulers siphon millions of dollars abroad as they hide behind blast walls in the capital, Kabul, until it is time to flee.
America, of course, is the land of optimism and will always rush to replace failure with an inspiring vision.
It is indeed good psychology not to dwell on failure, but we should always be wary of fleeing from reality into the arms of an enticing grand scheme. The current state of the euro, the European common currency, is a lesson in where a lack of scepticism will lead.
There are many reasons why this new emperor has no clothes. The original Silk Road trading network fell into disuse because it was more reliable to transport goods by sea than to brave the unstable political currents of the land route.
Things are somewhat better these days. Kazakhstan, for example, is a good example of a stable country which looks both north to Russia and east to China and is intent on building durable links. But the rest of the region is characterised more by distrust among neighbours than by amity.
The second reason to doubt the Silk Road is that it is seen as an American plan that Washington does not have the right to implement, barring some miraculous transformation of Afghanistan over the next two years. Russia is keen to preserve its interests in Central Asia, and China has its own ideas of how to fit Afghanistan's mineral wealth into its development plans.
Anthony Cordesman, a defence expert at the Centre for Strategic and International Studies in Washington, is leading the charge against the New Silk Road plan, suggesting its proponents are more interested in "political cover for a rapid exit than a credible approach to reducing the problems of transition".
Mr Cordesman adds: "Even extremely favourable assumptions indicate the 'New Silk Road' has no practical prospect of dealing with the near- and perhaps mid-term problems of transition."
Apart from the excess of optimism, there is one glaring hole in this diplomatic ship: Iran, which by any standards was a key part of the original Silk Road and has to be part of any regional settlement for Afghanistan, is generally passed over in silence.
But Iran is a key neighbour of Afghanistan, with strong cultural and linguistic ties. It has its own proxies who can help to tip the country into deeper instability, or act as a useful counterweight to the power of the Taliban. It provides shelter for more than one million Afghans, and would have to accommodate more if the situation gets worse, a risk that the US does not face.
Any attempt to get the regional powers around a table must include Iran, if only to defuse the damage it can do if left outside. But Iran and the US have, since the 1979 Islamic Revolution, been locked in permanent hostility, with the US and its allies now trying to strangle Iran with sanctions.
It is no easy task to transform Iran from international pariah to positive contributor to a regional settlement for Afghanistan. Is it even possible? We do not know, but the effort is a necessary precondition for regional peace after the US exit.
This is one of the reasons why talks, held in Baghdad this week, on Iran's nuclear programme are so important.
There is no expectation of an instant resolution of suspicions, always denied by Iran, that it is creating the capability to make a nuclear weapon. But if these talks or later ones could produce a broad dialogue between Iran and its interlocutors - the five permanent members of the UN Security Council and Germany - it would be significant progress.
One of the issues for discussion should be a settlement for Afghanistan, and if it is going to work this should not be a US-led process, but one which springs from the interests of the regional powers.
Any progress here would be baby steps - uncontroversial issues such as trade, water resources or emergency responses to earthquakes. None of this is going to set pulses racing in Washington think tanks or yield a compelling headline.
But if the US really wants a regional solution, the regional states all have to get on board the same bus. They do not have to agree on everything, but they need to see engagement as in their interest. Now that is a real diplomatic challenge.
aphilps@thenational.ae
On Twitter @aphilps
UAE currency: the story behind the money in your pockets
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UAE currency: the story behind the money in your pockets
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
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23-man shortlist for next six Hall of Fame inductees
Tony Adams, David Beckham, Dennis Bergkamp, Sol Campbell, Eric Cantona, Andrew Cole, Ashley Cole, Didier Drogba, Les Ferdinand, Rio Ferdinand, Robbie Fowler, Steven Gerrard, Roy Keane, Frank Lampard, Matt Le Tissier, Michael Owen, Peter Schmeichel, Paul Scholes, John Terry, Robin van Persie, Nemanja Vidic, Patrick Viera, Ian Wright.
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Founded in 2002 and set up as a foundation in 2006, Health Valley has been an innovation in healthcare for more than 10 years in Nijmegen, the Netherlands.
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THE DETAILS
Solo: A Star Wars Story
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COMPANY PROFILE
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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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OPINIONS ON PALESTINE & ISRAEL
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The Al Barzakh Festival takes place on Wednesday and Thursday at 7.30pm in the Red Theatre, NYUAD, Saadiyat Island. Tickets cost Dh105 for adults from platinumlist.net
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Brief scores:
Day 2
England: 277 & 19-0
West Indies: 154
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.