Kim Jong Il cancer reports set off debate



BEIJING // A report claiming that Kim Jong Il, North Korea's leader, has cancer has set off a fresh debate about his health as well as the ability of his heir apparent to lead the world's most reclusive nation. Citing unnamed intelligence sources, YTN, South Korea's cable news broadcaster, reported from Beijing that Mr Kim, 67, has pancreatic cancer, which is often fatal and commonly discovered only at a terminal stage, and was diagnosed around the time he had a stroke last summer.

Mr Kim's health has been the object of intense international attention because of concerns about the famine-stricken country's instability and a possible power struggle. Recent pictures from North Korea's official news agency showed him looking thinner and wearier and with less hair on his head, despite the fact that they were all carefully chosen for public viewing. "Kim Jong Il's health has become significantly deteriorated, although we are not sure whether he really suffers from pancreatic cancer as was reported," said Cheong Seong-chang, a senior analyst at Sejong Institute, a security think tank just outside Seoul.

A well-placed South Korean government official in Beijing, when reached for confirmation, said Mr Kim's condition was "yet to be verified". The South's unification ministry and foreign ministry all said there was "no information". According to the American Cancer Society, about 20 per cent of people live at least one year after they discover they have pancreatic cancer but that fewer than five per cent survive as long as five years.

Last weekend, South Korea's Chosun Ilbo newspaper reported the CIA had notified its South Korean counterpart that Mr Kim is likely to die in five years. The newspaper reported, citing an unnamed government source, that the CIA recently conducted a "thorough" analysis on the health status of Mr Kim and concluded that there is a 71 per cent chance he will die within five years. This is the first time the US intelligence agency has conducted a specific prognosis of Mr Kim's life expectancy, based on his age, medical history, physical state and the timing of his stroke. The CIA also was reported to have used a brain scan of Mr Kim that it received from the South Korean intelligence agency.

"All this information is adding up to something that is obviously and gravely serious about Kim's health," said Tim Peters, a North Korea expert in South Korea who founded Helping Hands Korea, an aid organisation that helps North Korean refugees to seek asylum. The reports about Mr Kim's health have sparked debate about whether the father-to-son power transition of the North's leadership will go smoothly and whether the heir apparent is up to the task. The ailing Mr Kim, it has been reported, picked his third and youngest son, Jong Un, as heir.

Analysts say the transition process itself will proceed without a glitch, but problems could follow. "The power transition will be smooth. Very little chance for something to go wrong. No coup. Jong Un has quite a stable group of generals supporting him," Mr Cheong said. Mr Peters agreed. "For the last 60 years, a single monolithic system has been very carefully put together in order to support a single leader, and that has always been a leader from the Kim family," he said. "Even if some type of resistance or disagreement or dissidence happens within the hierarchy, that person will be very quickly eliminated and filtered out."

Jang Song Thaek, Kim Jong Il's brother-in-law, has been frequently mentioned by some as privately hiding an ambition to snatch the crown. But Mr Cheong dismissed the notion. "Such a view is flawed. Jang critically didn't have the support from the Worker's Party and the military." Han Suk-hee, a North Korea expert at Seoul's Yonsei University, said Jong Un's two older brothers are also out of the picture. "If you visit Jong Nam's house in Macao, you will know why he's not interested in politics. He has three luxurious houses and a beautiful wife. He's very wealthy. And he prefers to live as a 'free man'."

Experts also say the second son, Jong Chul, does not pose a threat because of health problems caused by suspected steroid use. Observers also said both Jong Nam and Jong Chul have negligible power bases. Analysts say the real test will come after Jong Un takes power. "It all depends on Jong Un's leadership. Although he is young, he is known to be a tough cookie," Mr Cheong said, adding that although he was known to be "conservative", he had lived abroad for four years in Switzerland and "he saw the outside world and knows what it is like. So, he is not likely to believe that if he chooses capitalism, the country will collapse. It's possible that he turns out to be a reformer."

Mr Peters is less optimistic. "I think it's impossible to imagine that Jong Un has any kind of capability or leadership training that would even begin to help him to address the enormous problems facing North Korea," he said. "At the very most, he would just be a symbol of succession. "There would be other powers behind the crown to actually pull the levers of power and make actual decisions." Chinese analysts are much more cautious, pointing out that although Jong Un has reportedly been picked as Kim Jong Il's heir, the North Korean government has yet to publicly announce it. "After all, it's all speculation," said Jin Jingyi, a North Korea expert at Peking University.

Xue Li, a security analyst at the Chinese Academy of Social Sciences, said: "These are all predictions. But China wants North Korea to go through a stable change. And it's likely that that's how it's going to happen." slee@thenational.ae * With additional reporting by the Associated Press

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.”

What is the Supreme Petroleum Council?

The Abu Dhabi Supreme Petroleum Council was established in 1988 and is the highest governing body in Abu Dhabi’s oil and gas industry. The council formulates, oversees and executes the emirate’s petroleum-related policies. It also approves the allocation of capital spending across state-owned Adnoc’s upstream, downstream and midstream operations and functions as the company’s board of directors. The SPC’s mandate is also required for auctioning oil and gas concessions in Abu Dhabi and for awarding blocks to international oil companies. The council is chaired by Sheikh Khalifa, the President and Ruler of Abu Dhabi while Sheikh Mohamed bin Zayed, Abu Dhabi’s Crown Prince and Deputy Supreme Commander of the Armed Forces, is the vice chairman.