The last time I came up close to the Russian army it was barely capable of projecting force anywhere, even within its own borders. Sometimes it looked as if there were more officers than soldiers. At the Mozdok airbase in southern Russia, from where war planes and attack helicopters took off to fight the Chechen rebels, even the man with the clipboard at the gate was a lieutenant-colonel.
At the paratroop base in Ryazan the officers were so poorly paid that they recruited their wives as uniformed army contractors to make ends meet. Not surprisingly, the ill-equipped and half-trained conscripts at that time were easy prey for the Chechen separatists.
That was in the 1990s, when Russia and its armed forces were on their knees. This week, after a 10-year-modernisation programme overseen by President Vladimir Putin, the Russian armed forces are putting on their biggest show for at least 40 years, a military exercise in the Russian Far East including 300,000 personnel, 36,000 tanks and armoured vehicles, 1,000 aircraft, and ships from the Pacific Fleet.
Even more surprising is the presence of some 30,000 Chinese soldiers, taking part in domestic Russian manoeuvres for the first time to demonstrate that the Russia-Chinese border, once one of the most heavily defended in the world, is now a bridge of peace.
The scale is epic, even if foreign observers suspect that some of the figures may be exaggerated. By contrast, when the Nato alliance put on a show of force in Central Europe to deter Russia’s suspected designs on its old satellites, it could deploy no more than 8,000 soldiers.
The exercise is named Vostok (“East”) 18, which neatly mirrors the Soviet Union’s huge display of armoured firepower in 1981, the Zapad (“West”) 81 manoeuvres. This turned out to be the USSR’s swansong, the last time that Nato thought an invasion of Western Europe was a credible threat.
The message that Mr Putin wants to send to the West, and to President Donald Trump in particular, is clear: Russia is back as a military power, capable of defending itself and not friendless.
Russia, says government adviser Andrey Kortunov, “is getting to the final stage of its large-scale modernisation programme and is now testing its capabilities.” The exercises, he says, are “another step in the direction of an even closer Russian-Chinese political and military alliance.”
These manoeuvres are far from Syria, but there is no doubt that they convey a message that Russia is intent on ending that war on its own terms, despite fears of a bloodbath in the looming assault by Syrian regime forces on the final rebel stronghold of Idlib.
To reinforce the message that Russia is the dominant power in Syria, separate live-fire exercises have been taking place in the Mediterranean – another first – involving 26 ships and marines storming the Syrian beaches near where Russia has naval and airbases. Russian representatives have said the exercises are necessitated by the “difficult situation” in Syria.
No one expects to see huge numbers of Russian troops on the front line in the assault on Idlib, but there will be in the background and in the air. Already, 63,000 have seen combat in Syria and the Russian air force has made 39,000 sorties.
There is no doubt that Russia has learnt a lot about force projection in Syria. The Chinese, who have no experience of fighting foreign wars, will be keen to learn from the Far Eastern manoeuvres what the Russians can do. So will Western armies.
For all that, the bravado of Vostok 18, Mr Putin's priority is to end the Syrian war. Disquiet is mounting at home at the cost of foreign adventures and the effect of economic sanctions imposed on Russia. On Sunday more than 1,000 people were reported detained during protests against plans to raise the pension age by five years, to 65 for men and 60 for women.
The military show of force is Mr Putin’s way of showing his people that 10 years of huge investments in the army, at the expense of Russian health and welfare budgets, have paid off. Opinion polls suggest, however, that people want more spending on improving life at home rather than grandstanding abroad.
With no enemy conceivably about to attack Russia, the purpose of the exercises must be seen as more political than military – to distract attention from declining living standards caused by sanctions and to showcase the rapidly improving relations with China.
But will this nascent alliance last? It suits China’s leader, Xi Jinping, to team up with Russia at a time when Mr Trump is orchestrating a trade war with Beijing. Russia is now China’s main supplier of oil and has swallowed its concerns about supplying high-tech aircraft to the Chinese air force.
But the two countries are hardly equals. China has the money to fashion its neighbourhood according to its wishes. Russia’s finances are so stretched that the once-pampered defence budget was cut by 20 per cent last year, according to the Stockholm International Peace Research Institute, the first fall in Mr Putin’s era.
In this light, the huge deployment of materiel looks rather nostalgic, as if hankering to show that Russia has at last caught up with the Soviet Union in its prime.
It seems all the more anachronistic since Russia's recent military achievements have been due to stealth, or at least reducing the number of boots on the ground to a minimum – the near bloodless takeover of Crimea, the hamstringing of Ukraine by the use of deniable proxies and well-targeted propaganda, and the reversal of the tide of the Syrian war by the use of air power.
The Russian military has clearly clawed its way back from the weakness of the 1990s, but unless the Russian economy improves, the Vostok 18 manoeuvres will be seen as a high point – as is the case with the Kremlin’s 1981 show of force - rather than a springboard for ever-growing military capability.
Alan Philps is editor of The World Today magazine of international affairs
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The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
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.”
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
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
THE SPECS
Cadillac XT6 2020 Premium Luxury
Engine: 3.6L V-6
Transmission: nine-speed automatic
Power: 310hp
Torque: 367Nm
Price: Dh280,000
Results
1. Mathieu van der Poel (NED) Alpecin-Fenix - 3:45:47
2. David Dekker (NED) Jumbo-Visma - same time
3. Michael Morkov (DEN) Deceuninck-QuickStep
4. Emils Liepins (LAT) Trek-Segafredo
5. Elia Viviani (ITA) Cofidis
6. Tadej Pogacar (SLO UAE Team Emirates
7. Anthony Roux (FRA) Groupama-FDJ
8. Chris Harper (AUS) Jumbo-Visma - 0:00:03
9. Joao Almeida (POR) Deceuninck-QuickStep
10. Fausto Masnada (ITA) Deceuninck-QuickStep