Recep Tayyip Erdogan, then the Turkish premier, with US president Barack Obama in December 2009. Shawn Thew / EPA
Recep Tayyip Erdogan, then the Turkish premier, with US president Barack Obama in December 2009. Shawn Thew / EPA

Erdogan heads to Washington at time of frayed Turkish-US relations



ISTANBUL // Turkish president Recep Tayyip Erdogan flew to the United States on Tuesday for only the second visit of his presidency at a time when relations between the two Nato allies are severely tested by widening differences over the Syrian conflict and human rights.

Mr Erdogan, who became president in August 2014 after over a decade as prime minister, has yet to hold talks with president Barack Obama at the White House as head of state, and no such encounter is planned for this trip in a glaring symbol of the current troubles in relations.

Turkish officials insist the main point of Mr Erdogan’s trip is to attend the two-day Nuclear Security Summit in Washington, beginning on March 31, and also open a Ottoman-style mosque in Maryland, a new statement of Turkey’s desire to spread its cultural and religious influence abroad.

The White House said on Monday that there were no plans for bilateral talks between Mr Obama and Mr Erdogan, who last visited the US for the UN General Assembly in September 2014.

Leaving for Washington from Istanbul airport, Mr Erdogan said he would meet the US president on the sidelines of the nuclear summit but indicated that it was still undecided what form the encounter should take.

A Turkish presidential statement did not mention Mr Obama, but said Mr Erdogan would hold talks on the anti-terror fight following the Brussels attacks and those that rocked Istanbul and Ankara earlier this month.

According to Turkey's Hurriyet newspaper, Mr Erdogan had wanted to open the new mosque in Maryland — touted by Turkey as the only one in the United States with two minarets — alongside Mr Obama but the US president turned down the idea.

Turkey — which joined Nato in 1952 as a US ally after staying neutral for almost all of World War II — has long been seen as Washington’s key Muslim partner in the Middle East.

But tensions have grown over the conflict in Syria, with the US urging Turkey to do more to fight ISIL and Ankara growing ever more frustrated over American backing for Kurdish fighters.

While defeating ISIL is the US’ top priority in Syria, Turkey’s main aim is the overthrow of president Bashar Al Assad, a prospect that has become less likely with Russian intervention in his support.

In addition, Washington has been backing Kurdish Syrian fighters of the Democratic Union Party (PYD) as the best force in the fight against ISIL.

Turkey, meanwhile, categorises the PYD as the Syrian branch of the Kurdistan Workers Party (PKK), which has fought a decades-long insurgency against the Turkish state.

“The relationship between the US and Turkey is strained generally because of the differing priorities of the two allies in Syria and more specifically due to their perceptions of the PYD,” said Ozgur Unluhisarcikli, Ankara office director of the non-profit German Marshall Fund of the United States, which aims to strengthen transatlantic cooperation.

He said Turkey and the US were “stepping on each other’s toes” in Syria.

“Until either or both of the sides revise their approach to PYD, the US-Turkey relationship will continue to be poisoned by this issue,” he added.

Adding to the strains are US concerns over freedom of expression in Turkey under Mr Erdogan, with tweets by the US embassy supporting prosecuted academics and journalists making ambassador John Bass a hate figure for hardliners.

“We don’t always agree on everything — media freedom is one of them,” said US state department spokesman John Kirby.

Meanwhile, the surprise arrest in the US last week of Turkish-Iranian businessman Reza Zarrab who was implicated in a 2013 corruption scandal that also ensnared Mr Erdogan’s close circle, has been hailed by the president’s foes.

During his trip to the US, Mr Erdogan will also meet leaders of the American Jewish community, as Turkey seeks to repair its damaged ties with Israel.

* Agence France-Presse

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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.

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“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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