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China, obviously, is an increasingly important player in the region. Its Belt and Road Initiative has become a juggernaut
of political influence-buying, in the guise of infrastructure investment. The Chinese have a hand in a range of showcase megaprojects, from tunnels under Cairo to an airport in Dubai, as well as growing activity by the Export-Import Bank of China and Sinosure, its export credit insurer.
It is not yet a serious political player, though, and for all its headline withdrawal, it is impossible to escape the extent to which the US is still the last superpower, especially when it works in – often strained, these days – partnership with the EU. Even considering the COVID-era slowdown, China has been the largest foreign direct investor in the MENA region and the Arab States’ largest trading partner, but the US remains the primary security power in the region, and money from the region heads to the West, not the East.
Russia somehow has to find a place for itself between China and the US. President Vladimir Putin is committed to asserting Russia’s status as a great – global – power, and part of this entails a role in addressing every important world issue. None can be resolved without Moscow being at the table and, by extension, if it is not, then it will ensure that there can be no resolution. Its involvement in Libya and, to a lesser extent,
TURKEY INSIGHT:
Morgan Stanley warns Turks MSCI Frontier Markets status may be around corner
Akin Nazli in Belgrade
Morgan Stanley Capital International (MSCI) is considering launching a consultation on a proposal to reclassify the MSCI Turkey Index to the Frontier Markets or Standalone Markets status if the accessibility level of the Turkish equity market further deteriorates, the company said on June 23.
As highlighted in the MSCI 2020 Market Accessibility Review released on June 17, the accessibility level of Turkey’s equity market has been adversely impacted by the introduction of short-selling and stock lending bans in October 2019 and February 2020, respectively, MSCI noted.
These bans severely restrict the ability of institutional investors to express views in active investment and hedge portfolio risk, it added.
Opinion 63 Syria and Afghanistan reflect this determination to inject Russia
into problem areas to acquire a degree of leverage and status.
This is not a new “scramble for Africa”, as Emily Couch has noted. It does not have “imperial goals” in the Middle East.
Indeed, there is no real strategy, nor yet a belief that Moscow can prevent either Beijing from buying what it wants or Washington from remaining the pre-eminent political and security influence in the region. There is no dream of regional dominance, let alone a philosophical bloc rejecting Western (or Christian) culture. Rather, there is an opportunistic series of short-term, low-risk and low-cost adventures and deals, hoping to make whatever profit and political capital can be won in this historical moment in which the tide of American power is ebbing, and the tide of Chinese money has yet truly to come in.
Dr Mark Galeotti is director of the consultancy Mayak Intelligence and also an honorary professor at UCL School of Slavonic & East European Studies, a senior associate fellow at RUSI and a senior non-resident fellow at the Institute of International Relations Prague. He blogs at In Moscow’s Shadows and tweets as @MarkGaleotti.
Net Portfolio Flows to Turkey vs USD/TRY
“While volatility increased dramatically due to the COVID19 pandemic, global equity markets remained accessible and continued to function well, allowing issuers to raise capital and investors to manage risk during the crisis,” Dimitris Melas of the MSCI said.
“In the last 12 months, two important Emerging Markets, Argentina and Turkey, suffered substantial deterioration in market accessibility that could lead to their exclusion from the MSCI Emerging Markets Index,” he observed.
MSCI also pointed out that it reclassified Iceland as
a Frontier Market from Standalone Market after capital controls, including a special reserve ratio, were removed on March 6, 2019.
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