US unhappy with Seoul's proposal for Pyongyang



BEIJING // When the South Korean president, Lee Myung-bak, announced his "grand bargain" to resolve the North Korean nuclear issue during his trip to New York last week, it was met with a cold response from the United States that threatened to sour diplomatic ties between the long-time allies. But beneath the surface, analysts say, there is a deeper complexity to the multilateral coalition, which is meant to be dealing with North Korea's recalcitrance, in which different countries are jockeying for leadership. In a speech at the Council on Foreign Relations in New York on September 21, Mr Lee proposed South Korea's plan to deal with the North Korean nuclear issue. It involves offering massive economic aid and security guarantees to North Korea if Pyongyang gives up its nuclear ambitions first. "We must have a comprehensive and integrated approach to fundamentally resolve the North Korean nuclear issue," he said. "Through the six-party talks, we must first dismantle the core component of the North Korean nuclear weapons programme and we will then be ready to provide North Korea with security assurances, as well as international assistance. This is what we mean by a 'grand bargain'." Surprisingly, the United States, South Korea's staunch ally, gave a chilled reaction to Mr Lee's initiative. When he was asked to comment on the South Korean president's new plan, the US state department spokesman, Ian Kelly, responded evasively, saying the plan was Mr Lee's policy and "these were his remarks". Kurt Campbell, a US assistant secretary of state, was more blunt, saying he was "not really familiar" with Mr Lee's plan, which he said had not even been mentioned during a meeting he had with the South Korean foreign minister the day of the president's speech. South Korea's media made the disagreement headline news. Many newspapers saw the fact that Mr Campbell, the highest-ranked US official dealing with the North Korean nuclear issue on a working level, was unfamiliar with Mr Lee's proposal indicated "a sign of trouble" between the two allies. The two governments went into diplomatic face-saving mode to downplay the incident. But more candid feelings about how Washington felt about Mr Lee's speech came one day later. Speaking on condition of anonymity, a senior government official told The New York Times that the South Korean approach was "far-fetched". "Washington is dissatisfied," said Shi Yinhong, a North Korea expert at Renmin University in Beijing. "The South Korean president's 'grand bargain' proposal was done without enough pre-consultation with the United States. So, there is a little tension over the 'grand bargain' between the two countries." Some believe that the South Korean proposal was frowned upon by Washington because, in July, Mr Campbell had already announced the "road map plan" - the Obama administration's own comprehensive strategy for dealing with North Korea. Technically speaking, the difference between the South Korean "grand bargain" and the US "road map" lies in the fact that the South's approach is a single step to dealing with North Korea, while the US "road map" is a gradual approach to denuclearisation. Washington's snubbing of the South Korean president's speech is exceptional enough to qualify it as a "diplomatic slight", said a former senior South Korean foreign ministry official who spoke to South Korea's newspaper, Hankyoreh, on condition of anonymity. Drew Thompson, who analyses East Asian security issues at the Nixon Center, a Washington-based policy think-tank, said the media had hyped what was essentially a normal diplomatic process between allies. "South Korea is not a colony of the US. It doesn't have to consult everything of what it does with the US," he said. Mr Thompson, who said he read Mr Lee's entire speech, believes that although the plan is technically different from Washington's, it is "essentially little different" in substance. Observers who agree on this view said Mr Lee's speech was more a rhetorical gesture, meant to serve the purpose of letting the United States know that South Korea has ideas of its own when it comes to dealing with its rogue neighbour. They also say the episode reflects a South Korean uneasiness with the "honeymoon situation" between the Obama administration and North Korea - a term used by the CIA director, Leon Panetta, this month, to describe the thawing in the countries' relationship since Pyongyang released two US journalists thanks to a flying visit from the former president, Bill Clinton, to meet with the North's leader, Kim Jong Il. "Their difference is inevitable," said Dong Young-seung, head of the North Korean security team at the Samsung Economic Research Institute in Seoul, noting the philosophical difference between the conservative government of Mr Lee, who was elected on the pledge of getting tough on the North, and the Obama administration, which is still in engagement mode. Some say the incident also highlighted how different countries involved in the multilateral coalition of persuading North Korea to give up its nuclear drive are also in a delicate game of chess among themselves to assert their own leadership. For example, while the US is exploring opportunities for bilateral negotiation with North Korea, China is pressuring Pyongyang to return to the six-nation nuclear negotiations of which Beijing is the host and is therefore keen to maintain its platform, as a moderating force. Mr Dong predicted that the United States will eventually accommodate the South Korean proposal because "it's essentially the same concept of what Kurt Campbell said earlier." Mr Shi agreed: "Although the US is not pleased by South Korea, which is trying to assert a 'leadership' role in the negotiation ? America is likely to combine its own 'road map' deal with the South Korea's 'grand bargain' design." foreign.desk@thenational.ae

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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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Real estate tokenisation project

Dubai launched the pilot phase of its real estate tokenisation project last month.

The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.

Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.

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In numbers: PKK’s money network in Europe

Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010

Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille

Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm

Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year

Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”

Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners

TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013 

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