US cannot kill its way to victory, says Gates



WASHINGTON // Saying the United States "cannot capture or kill its way to victory", the US defence secretary has urged the military to do more to prepare for the kind of unconventional battles he believes will define global warfare in the years ahead. In an article to be published in the next issue of Foreign Affairs journal, Robert M Gates - who has served the past two years under George W Bush but been asked to stay on in the Obama administration - says the US should be "modest" in its view of what military force and technology alone can accomplish. And he offers criticism, albeit veiled, of the belief held in the Bush administration in 2003 that the "shock and awe" campaign in Iraq would mean outright, and quick, defeat. "The Taliban were dispatched within three months; Saddam's regime was toppled in three weeks," Mr Gates writes. "But no one should ever neglect the psychological, cultural, political and human dimensions of warfare? We should look askance at idealistic, triumphalist or ethnocentric notions of future conflict? that imagine it is possible to cow, shock or awe an enemy into submission, instead of tracking enemies down hilltop by hilltop, house by house, block by bloody block." The article by Mr Gates is in part a look back at the defence department of the Bush administration. But it also provides a look ahead at how the Pentagon may change under Barack Obama, even with Mr Gates still at the helm. In it, Mr Gates argues that the US must modernise - and maintain the technological edge held by - its conventional military forces. But he says the battles of tomorrow will not necessarily resemble the battles of today or yesterday, or conform to the traditional American view of warfare as direct military conflict. He holds that the states that pose the greatest threats to the United States now are not powerful states but failing ones. Quoting Carl von Clausewitz, the military theorist who wrote the famous treatise On War, Mr Gates says the US must have a military that can, with equal skill and competence, kick down the door and then clean up the mess afterwards. But the use of conventional force may become less common. "The United States is unlikely to repeat another Iraq or Afghanistan - that is, forced regime change followed by nation building under fire - anytime soon," Mr Gates writes. "But that does not mean it may not face similar challenges in a variety of locales." In his view, the US strategy is for an indirect approach: working alongside partner governments and their security forces to "prevent festering problems from turning into crises" that might later demand military intervention. Mr Obama, who takes office on Jan 20, has called Afghanistan the central front in the "war on terror", and about 20,000 additional US troops are headed there as the force size in Iraq is trimmed; the first new brigade will arrive next month. Mr Gates says Afghanistan poses "an even more complex and difficult long-term challenge than Iraq" and will require significant and ongoing military and economic investment from the US. He calls the war on terror itself a "prolonged, worldwide irregular campaign" and a "struggle between the forces of violent extremism and those of moderation". "Direct military force will continue to play a role in the long-term effort against terrorists and other extremists," Mr Gates writes. "But over the long term, the United States cannot kill or capture its way to victory." If the US fails in either Iraq or Afghanistan, it would be a "disastrous blow" to US credibility, he says, as would even just the perception of defeat. eniedowski@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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Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
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MATCH INFO

Uefa Champions League semi-final, first leg

Tottenham 0-1 Ajax, Tuesday

Second leg

Ajax v Tottenham, Wednesday, May 8, 11pm

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