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The information and material contained in this website are designed to provide information on Martin Currie and is only directed at Institutional Investors and Consultants.

By accepting where indicated, you hereby acknowledge, agree and represent to Martin Currie that you are eligible by confirming that you are based in the UK, you are an authorised to conduct regulated activities in the UK and that you have read and understood the "Legal & Regulatory Information", which applies to any investment in our products referred to in this website.

The information contained within this website does not constitute an offer of or an invitation to apply for securities:

In any jurisdiction where such offer or invitation is unlawful or
In which the person making such offer is not qualified to do so or
To whom it is unlawful to make such offer or solicitation.

Martin Currie Investment Management Limited is authorised and regulated in the UK by the Financial Conduct Authority.

The distribution of this information in written format is restricted to the UK. The information contained in this site has been compiled with considerable care to ensure its accuracy at the date of publication. But no representation or warranty, express or implied, is made to its accuracy or completeness. Any research or analysis contained in this website has been procured by Martin Currie for its own use. It is provided to you only incidentally, and any opinions expressed are subject to change without notice.
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For advisors, professional wealth managers and wholesale investors

Important information

The information and material contained in this website are designed to provide information on Martin Currie and is only directed at Institutional Investors and Consultants.

By accepting where indicated, you hereby acknowledge, agree and represent to Martin Currie that you are eligible by confirming that you are based in the UK, you are an authorised to conduct regulated activities in the UK and that you have read and understood the "Legal & Regulatory Information", which applies to any investment in our products referred to in this website.

The information contained within this website does not constitute an offer of or an invitation to apply for securities:

In any jurisdiction where such offer or invitation is unlawful or
In which the person making such offer is not qualified to do so or
To whom it is unlawful to make such offer or solicitation.

Martin Currie Investment Management Limited is authorised and regulated in the UK by the Financial Conduct Authority.

The distribution of this information in written format is restricted to the UK. The information contained in this site has been compiled with considerable care to ensure its accuracy at the date of publication. But no representation or warranty, express or implied, is made to its accuracy or completeness. Any research or analysis contained in this website has been procured by Martin Currie for its own use. It is provided to you only incidentally, and any opinions expressed are subject to change without notice.
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Please read this important information. If you cannot make the representations below, please do not enter the website.

By clicking on this link, you agree and represent to Martin Currie that you are a resident of or incorporated in the United Kingdom have read and understood the "Important Information and Risk Factors", which apply to any investment in our products referred to in this website, and that you are categorised as a per se or elective Professional Client for the purposes of COBS 3 of the FCA Handbook or rules and guidance. The information on this section of the website is not intended for use by any other person, including members of the public.

Martin Currie Investment Management Limited, registered in Scotland (no SC066107) is authorised and regulated by the UK Financial Conduct Authority. Martin Currie Fund Management Limited, registered in Scotland (no SC104896) is authorised and regulated by the UK Financial Conduct Authority as a full-scope UK AIFM.

For the avoidance of doubt, nothing excludes, limits or restricts our obligations to you under the UK Financial Services and Market Act 2000 or any other applicable law or regulation.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you. This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

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Please read this important information. If you cannot make the representations below, please do not enter the website.

By clicking on this link, you agree and represent to Martin Currie that you are a resident of or incorporated in the United Kingdom have read and understood the "Important Information and Risk Factors", which apply to any investment in our products referred to in this website, and that you are categorised as a per se or elective Professional Client for the purposes of COBS 3 of the FCA Handbook or rules and guidance. The information on this section of the website is not intended for use by any other person, including members of the public.

Martin Currie Investment Management Limited, registered in Scotland (no SC066107) is authorised and regulated by the UK Financial Conduct Authority. Martin Currie Fund Management Limited, registered in Scotland (no SC104896) is authorised and regulated by the UK Financial Conduct Authority as a full-scope UK AIFM.

For the avoidance of doubt, nothing excludes, limits or restricts our obligations to you under the UK Financial Services and Market Act 2000 or any other applicable law or regulation.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you. This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

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Important Information:

We do not give investment advice so you need to decide if an investment is suitable for you. If you are unsure whether to invest, you should contact a financial adviser.

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By clicking on this link, you agree and represent to Martin Currie that you have read and understood the "Important information and risk factors", which apply to any investment in our products referred to in this website, and that you are incorporated in a country listed below and that you are either an institutional investor, a corporate professional investor or a consultant business. The information on this section of the website is not intended for use by any other person in any other jurisdiction, including members of the public. If you cannot make these representations, please do not enter the website.

All residents of Hong Kong: Neither Martin Currie Investment Management Limited nor Martin Currie Inc. carries on a business in a regulated activity in Hong Kong or is licensed by the Securities and Futures Commission. The content of this section of the website is intended for Professional Investors only.

All residents of Singapore: The information in this section of the website is intended for institutional investors (as defined in the Securities and Futures Act, Chapter 289 of Singapore, as amended) and consultants in Singapore only.

All residents of China: Neither Martin Currie Investment Management Limited nor Martin Currie Inc. is authorised by the China Securities Regulatory Commission to market its strategies in China. By clicking on this link, you warrant and represent that you are entering this website on your own initiative and without being influenced or induced by any third party to do so.

All residents of South Korea: The information in this section of the website is intended only for qualified professional investors and consultants based in South Korea.

Martin Currie Investment Management Limited, registered in Scotland (no SC066107). Martin Currie Inc, incorporated in New York and having a UK branch registered in Scotland (no SF000300), Saltire Court, 20 Castle Terrace, Edinburgh EH1 2ES Tel: (44) 131 229 5252 Fax: (44) 131 222 2532 www.martincurrie.com. Both companies are authorised and regulated by the UK Financial Conduct Authority. Martin Currie Inc, 620 Eighth Avenue, 49th Floor New York, NY 10018 is also registered with the Securities Exchange Commission as an investment adviser for the purposes of the Investment Advisers Act 1940.

For the avoidance of doubt, nothing excludes, limits or restricts our obligations to you under the UK Financial Services and Market Act 2000, the Investment Advisers Act 1940 or any other applicable law or regulation.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you. This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

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Please read this important information

By clicking on this link, you agree and represent to Martin Currie that you have read and understood the "Important information and risk factors", which apply to any investment in our products referred to in this website, and that you are incorporated in a country listed below and that you are either an institutional investor, a corporate professional investor or a consultant business. The information on this section of the website is not intended for use by any other person in any other jurisdiction, including members of the public. If you cannot make these representations, please do not enter the website.

All residents of Hong Kong: Neither Martin Currie Investment Management Limited nor Martin Currie Inc. carries on a business in a regulated activity in Hong Kong or is licensed by the Securities and Futures Commission. The content of this section of the website is intended for Professional Investors only.

All residents of Singapore: The information in this section of the website is intended for institutional investors (as defined in the Securities and Futures Act, Chapter 289 of Singapore, as amended) and consultants in Singapore only.

All residents of China: Neither Martin Currie Investment Management Limited nor Martin Currie Inc. is authorised by the China Securities Regulatory Commission to market its strategies in China. By clicking on this link, you warrant and represent that you are entering this website on your own initiative and without being influenced or induced by any third party to do so.

All residents of South Korea: The information in this section of the website is intended only for qualified professional investors and consultants based in South Korea.

Martin Currie Investment Management Limited, registered in Scotland (no SC066107). Martin Currie Inc, incorporated in New York and having a UK branch registered in Scotland (no SF000300), Saltire Court, 20 Castle Terrace, Edinburgh EH1 2ES Tel: (44) 131 229 5252 Fax: (44) 131 222 2532 www.martincurrie.com. Both companies are authorised and regulated by the UK Financial Conduct Authority. Martin Currie Inc, 620 Eighth Avenue, 49th Floor New York, NY 10018 is also registered with the Securities Exchange Commission as an investment adviser for the purposes of the Investment Advisers Act 1940.

For the avoidance of doubt, nothing excludes, limits or restricts our obligations to you under the UK Financial Services and Market Act 2000, the Investment Advisers Act 1940 or any other applicable law or regulation.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you. This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

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Please read this important information

By clicking on this link, you agree and represent to Martin Currie that you are an Australian wholesale client for the purposes of section 761G of the Corporations Act 2001 (Cth) and have read and understood the "Legal and Regulatory Information”", which apply to any investment in our products referred to in this website. The information on this section of the website is not intended for use by any other person, including members of the public. If you cannot make these representations, please do not enter the website.

Important Information:

Martin Currie Australia is a division of Legg Mason Asset Management Australia Limited (ABN 76 004 835 849). Legg Mason Asset Management Australia Limited is a wholly owned subsidiary of Franklin Resources, Inc., and holds an Australian Financial Services Licence (AFSL No. 240827) issued pursuant to the Corporations Act 2001.

Martin Currie Investment Management Limited, registered in Scotland (no SC066107) is authorised and regulated by the UK Financial Conduct Authority.

The FCA's regulatory regime differs from the Australian regulatory regime.
This material is provided on the basis that you are a wholesale client within the definition of ASIC Class Order 03/1099. Martin Currie is registered as a foreign company under the Corporations Act 2001 (ARBN 131 134 613). It is exempt from the requirement to hold an Australian Financial Services Licence under the Corporations Act 2001 in respect of financial services provided to Australian wholesale clients by virtue of the application of ASIC Class Order 03/1099.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you. This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

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Intermediary investor

For advisors, professional wealth managers and wholesale investors

Please read this important information

By clicking on this link, you agree and represent to Martin Currie that you are an Australian wholesale client for the purposes of section 761G of the Corporations Act 2001 (Cth) and have read and understood the "Legal and Regulatory Information”", which apply to any investment in our products referred to in this website. The information on this section of the website is not intended for use by any other person, including members of the public. If you cannot make these representations, please do not enter the website.

Important Information:

Martin Currie Australia is a division of Legg Mason Asset Management Australia Limited (ABN 76 004 835 849). Legg Mason Asset Management Australia Limited is a wholly owned subsidiary of Franklin Resources, Inc., and holds an Australian Financial Services Licence (AFSL No. 240827) issued pursuant to the Corporations Act 2001.

Martin Currie Investment Management Limited, registered in Scotland (no SC066107) is authorised and regulated by the UK Financial Conduct Authority.

The FCA's regulatory regime differs from the Australian regulatory regime.
This material is provided on the basis that you are a wholesale client within the definition of ASIC Class Order 03/1099. Martin Currie is registered as a foreign company under the Corporations Act 2001 (ARBN 131 134 613). It is exempt from the requirement to hold an Australian Financial Services Licence under the Corporations Act 2001 in respect of financial services provided to Australian wholesale clients by virtue of the application of ASIC Class Order 03/1099.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you. This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

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For consultants, pension schemes, insurers and professional investors

Please read this important information

Please read this important information. The information on this section of the website is not intended for use by any other person in any other jurisdiction, including members of the public. If you cannot make the following representations, please do not enter the website.

All residents of Luxembourg, Republic of Ireland, Netherlands, Germany, Sweden, Finland, Norway, Denmark, Italy, Belgium and France: By clicking on this link, you agree and represent to Martin Currie that you have read and understood the "Important information and risk factors", which apply to any investment in our products referred to in this website, and that you are categorised as a per se or elective Professional Client for the purposes of Directive 2014/65/EU (“MiFID II”). The information on this section of the website is not intended for use by any other person, including members of the public.

All residents of Switzerland: By clicking on this link, you agree and represent to Martin Currie that you have read and understood the "Important information and risk factors", which apply to any investment in our products referred to in this website, and that that you are resident in or incorporated in Switzerland and that you are a Qualified Investor for the purposes of Article 10 of the Collective Investment Schemes Act. The information on this section of the website is not intended for use by any other person, including members of the public.

Martin Currie Investment Management Limited, registered in Scotland (no SC066107) is authorised and regulated by the UK Financial Conduct Authority. Martin Currie Investment Management Limited has a MiFID II passport to provide investment services to Professional Clients in the European Union.

For the avoidance of doubt, nothing excludes, limits or restricts our obligations to you under the UK Financial Services and Market Act 2000 or any other applicable law or regulation.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you. This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

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For advisors, professional wealth managers and wholesale investors

Please read this important information

Please read this important information.

All residents of Luxembourg, Republic of Ireland, Netherlands, Germany, Sweden, Finland, Norway, Denmark, Italy, Belgium and France: By clicking on this link, you agree and represent to Martin Currie that you have read and understood the "Important information and risk factors", which apply to any investment in our products referred to in this website, and that you are categorised as a per se or elective Professional Client for the purposes of Directive 2014/65/EU (“MiFID II”). The information on this section of the website is not intended for use by any other person, including members of the public.

All residents of Switzerland: By clicking on this link, you agree and represent to Martin Currie that you have read and understood the "Important information and risk factors", which apply to any investment in our products referred to in this website, and that that you are resident in or incorporated in Switzerland and that you are a Qualified Investor for the purposes of Article 10 of the Collective Investment Schemes Act. The information on this section of the website is not intended for use by any other person, including members of the public.

Martin Currie Investment Management Limited, registered in Scotland (no SC066107) is authorised and regulated by the UK Financial Conduct Authority. Martin Currie Investment Management Limited has a MiFID II passport to provide investment services to Professional Clients in the European Union.

For the avoidance of doubt, nothing excludes, limits or restricts our obligations to you under the UK Financial Services and Market Act 2000 or any other applicable law or regulation.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you. This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

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Please read this important information. If you cannot make either of the representations below, please do not enter the website.

Investors resident in the Canada: By clicking on this link, you agree and represent to Martin Currie that you have read and understood the "Important information and risk factors", which apply to any investment in our products referred to in this website, and that you are resident in, or incorporated in, Canada and are a Permitted Client for the purposes of NI 31-103. The information on this section of the website is not intended for use by any other person, including members of the public.

Investors resident in the United States of America: By clicking on this link, you agree and represent to Martin Currie that you have read and understood the "Important information and risk factors", which apply to any investment in our products referred to in this website, and that you are either incorporated in, or a resident of, the United States of America and that you meet the definition of an Accredited Investor as defined in Rule 501 of the United States Securities Act of 1933, as amended (‘The 1933 Act’). The information on this section of the website is not intended for use by any other person in any other jurisdiction, including members of the public.

Martin Currie Inc, incorporated in New York with its registered office at 620 Eighth Avenue, 49th Floor New York, NY 10018 and having a UK branch registered in Scotland (no SF000300), Saltire Court, 20 Castle Terrace, Edinburgh EH1 2ES Tel: (44) 131 229 5252 Fax: (44) 131 222 2532 www.martincurrie.com, is registered with the Securities Exchange Commission as an investment adviser for the purposes of the Investment Advisers Act 1940 and is also authorised and regulated by the UK Financial Conduct Authority. Martin Currie Inc. operates under the International Adviser Exemption with the Ontario Securities Commission (‘OSC’) and is therefore currently not required to be registered as a portfolio manager for the purposes of MI 31-103.

For the avoidance of doubt, nothing excludes, limits or restricts our obligations to you under the UK Financial Services and Market Act 2000, the Investment Advisers Act 1940, National Instruments or any other applicable law or regulation.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you. This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

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Intermediary investor

For advisors, professional wealth managers and wholesale investors

Please read this important information

Investors resident in the Canada: By clicking on this link, you agree and represent to Martin Currie that you have read and understood the "Important information and risk factors", which apply to any investment in our products referred to in this website, and that you are resident in, or incorporated in, Canada and are a Permitted Client for the purposes of NI 31-103. The information on this section of the website is not intended for use by any other person, including members of the public.

Investors resident in the United States of America: By clicking on this link, you agree and represent to Martin Currie that you have read and understood the "Important information and risk factors", which apply to any investment in our products referred to in this website, and that you are either incorporated in, or a resident of, the United States of America and that you meet the definition of an Accredited Investor as defined in Rule 501 of the United States Securities Act of 1933, as amended (‘The 1933 Act’). The information on this section of the website is not intended for use by any other person in any other jurisdiction, including members of the public.

Martin Currie Inc, incorporated in New York with its registered office at 620 Eighth Avenue, 49th Floor New York, NY 10018 and having a UK branch registered in Scotland (no SF000300), Saltire Court, 20 Castle Terrace, Edinburgh EH1 2ES Tel: (44) 131 229 5252 Fax: (44) 131 222 2532 www.martincurrie.com, is registered with the Securities Exchange Commission as an investment adviser for the purposes of the Investment Advisers Act 1940 and is also authorised and regulated by the UK Financial Conduct Authority. Martin Currie Inc. operates under the International Adviser Exemption with the Ontario Securities Commission (‘OSC’) and is therefore currently not required to be registered as a portfolio manager for the purposes of MI 31-103.

For the avoidance of doubt, nothing excludes, limits or restricts our obligations to you under the UK Financial Services and Market Act 2000, the Investment Advisers Act 1940, National Instruments or any other applicable law or regulation.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you. This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

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Institutional investor

For consultants, pension schemes, insurers and professional investors

Please read this important information

Please read this important information. If you cannot make the representations below, please do not enter the website.

By clicking on this link, you agree and represent to Martin Currie that you have read and understood the "Important information and risk factors", which apply to any investment in our products referred to in this website, and that: (i) you are an institutional investor, an intermediary investor a consultant or other professional investor; and (ii) you are entering this website on your own initiative and without being influenced or induced by any third party to do so. The information on this section of the website is not intended for use by any other person, including members of the public.

Martin Currie Investment Management Limited, registered in Scotland (no SC066107). Martin Currie Inc, incorporated in New York and having a UK branch registered in Scotland (no SF000300), Saltire Court, 20 Castle Terrace, Edinburgh EH1 2ES Tel: (44) 131 229 5252 Fax: (44) 131 222 2532 www.martincurrie.com. Both companies are authorised and regulated by the UK Financial Conduct Authority. Martin Currie Inc, 620 Eighth Avenue, 49th Floor New York, NY 10018 is also registered with the Securities Exchange Commission as an investment adviser for the purposes of the Investment Advisers Act 1940.

For the avoidance of doubt, nothing excludes, limits or restricts our obligations to you under the UK Financial Services and Market Act 2000, the Investment Advisers Act 1940 or any other applicable law or regulation. The information on this website has not been reviewed by any competent regulatory authority in any jurisdiction.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you. This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

Accept and enter

Intermediary investor

For advisors, professional wealth managers and wholesale investors

Please read this important information

Please read this important information. If you cannot make the representations below, please do not enter the website.

By clicking on this link, you agree and represent to Martin Currie that you have read and understood the "Important information and risk factors", which apply to any investment in our products referred to in this website, and that: (i) you are an institutional investor, an intermediary investor a consultant or other professional investor; and (ii) you are entering this website on your own initiative and without being influenced or induced by any third party to do so. The information on this section of the website is not intended for use by any other person, including members of the public.

Martin Currie Investment Management Limited, registered in Scotland (no SC066107). Martin Currie Inc, incorporated in New York and having a UK branch registered in Scotland (no SF000300), Saltire Court, 20 Castle Terrace, Edinburgh EH1 2ES Tel: (44) 131 229 5252 Fax: (44) 131 222 2532 www.martincurrie.com. Both companies are authorised and regulated by the UK Financial Conduct Authority. Martin Currie Inc, 620 Eighth Avenue, 49th Floor New York, NY 10018 is also registered with the Securities Exchange Commission as an investment adviser for the purposes of the Investment Advisers Act 1940.

For the avoidance of doubt, nothing excludes, limits or restricts our obligations to you under the UK Financial Services and Market Act 2000, the Investment Advisers Act 1940 or any other applicable law or regulation. The information on this website has not been reviewed by any competent regulatory authority in any jurisdiction.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you. This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

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If none of the above applies to you, please go to our corporate site.

Climate change and the impact on geopolitics

Kim Catechis, Head of Investment Strategy, discusses how climate change will influence the investment outlook as it causes shifts in geopolitics.

Geopolitics

Geopolitical considerations have an influence on investment returns, via their impact on policy direction in the affected countries, either directly or indirectly. Geopolitical factors are, in turn, becoming increasingly driven by the direct effects of climate change.

The primary and secondary socioeconomic impacts can affect all geographies but are more pronounced in low income countries where central government finances are weak, natural disaster planning is sub-optimal and the effectiveness of institutions is uneven. Unfortunately, these are also many of the countries that are likely to experience the most serious physical impacts of climate change.

For investors, these considerations are absolutely relevant, as they will have a potentially short-term and direct impact on the cash flow generation and growth of investee companies in many countries. This implies restriction of valuation potential and hence investment returns.

Migration

There are many potential transmission mechanisms of climate change impact on investment returns, but at the simplest level it is likely to be via regulatory or taxation changes to finance palliative action or to compensate segments of society and business.

Or it could be via population movements and subsequent erosion of economic conditions. In any case, it is important to be clear-eyed about the constraints of different countries’ structural positioning (sovereign financials, geo-economic strength, healthcare security, demographic challenges etc.).

This report seeks to demonstrate by the use of case studies, that geopolitical risk is driven higher by climate change-related events, which then cause ripple effects on neighbouring countries, or even countries farther afield. The case of Syria provides an illustration of a particular set of circumstances which it could be argued inflamed an already tense society living under an oppressive regime. The case of India provides an entirely different background, of a plural, established democracy currently on the path to facing significant challenges, which do not appear to be on investors’ radars.

Water stress

The second theme covers water as a driver of risk of geopolitical conflict in areas where river basins lie across national borders. There is an increasing unreliability of water supplies where a combination of historically poor governance, fast population growth and changing weather patterns have conspired to drive these factors higher.

Egypt, for example, has major concerns about the Grand Renaissance Dam under construction in Ethiopia on the Blue Nile, only 40 kilometres from the Sudanese border. India and Bangladesh are similarly concerned that China’s need for freshwater resource in the north of the country might one day mean that Beijing’s know-how in water diversion is applied to the Brahmaputra River. What’s more, Pakistan and India have not yet reached a level of comfort over the 1960 treaty covering access to the Indus river. Clearly, there are many multinational organisations working to ensure these tensions are minimised, but these concerns have not gone away.

Climate change

Climate change has a direct impact on geopolitics as well as on investment returns.

The physical impacts of climate change manifest themselves in many ways including rising air and sea temperatures, increasing sea levels, changing rainfall patterns resulting in more severe floods and droughts, and increasingly frequent extreme weather events. It exacerbates countries’ structural weaknesses, such as poor sovereign financials, healthcare security, or low capacity for emergency response – extreme weather events interfere with the normal process of government policy making and become the focus for social unrest, prejudicing governance.

This also places a strain on governments’ ability to deliver promises and forces policy reprioritisation. Finally, climate change can augment tensions between countries, over water, air, pollution or environmental degradation.

Climate change has a direct impact on geopolitics as well as on investment returns.

Case Study: Syria

The Syrian Arab Republic gained its independence from France in 1946. Part of the famed ‘fertile crescent1’, Syria has a long-established agricultural tradition.

The newly independent Syrian economy consistently aspired to be self-sufficient in staples, which led to 76%2 of the country’s land being used for agriculture. This remained an important driver of the economy, accounting for3 21% of GDP and (officially) 21% of the labour force in 2005. Although the cause and effects are still contested today, it is clear that from 2006 onwards a series of consecutive droughts had a catastrophic effect on Syrian agriculture. This triggered a large-scale flow of rural populations into the cities, to escape the drought.

The coincidence of this additional strain on infrastructure with the Arab Spring in early 2010s in neighbouring countries and an existing low-intensity guerrilla war against the Damascus government tipped the country into all-out civil war. One impact of the war is the population loss – Syria now has around 16 million citizens, down from a peak of 21.3 million in 20104. In 2018, the United Nations High Commissioner for Refugees (UNHCR)5 estimated that Syrian refugees numbered 6.6 million, by far the biggest population of forcibly displaced people in the world at the time.

Total number of forcible displaced people by origin country 2018

Total number of forcibly displaced people by origin country 2018

Source: Statista, UNHCR

Of the overall Syrian refugee population, 3.6 million went to neighbouring Turkey. They were welcomed there initially, as the AKP government was keen to burnish its credentials as a regional Muslim champion. Nine years later and the welcome has frayed. These people are now being pushed outwards into the EU as a mechanism of applying pressure and thereby seeking funds from member countries. Meanwhile a Turkish military ground offensive into northern Syria, if successful, will result in resettlement of the rest in the ‘cleared’ areas. Lebanon, a country of 6 million has taken in 944,000, Jordan, with a population of 10 million has accepted 676,000. Germany has taken in 532,000, Sweden 109,000 (all figures from the UNHCR and Statista6).

This flow of refugees, along with the many other migrants, has constituted one of the gravest challenges for the EU, resulting in some countries refusing to accept their allotted numbers and exacerbating internal tensions with Brussels. The World Bank has estimated the cost of reconstruction of Syria at up to US$41 billion7 in 2016, but that does not account for the collateral costs.

Undeniably, the geopolitical tensions in the region were there well before the Syrian Civil War began in earnest. But it is a clear example of a situation of geopolitical stress being exacerbated and broadened by climate change-related issues. Iran, Iraq, Turkey, Jordan, Lebanon and Egypt have been directly impacted, but so have the 27 members of the European Union, who were not actors in the regional drama. And finally, this situation has resulted in the entry of Russia as a powerful broker and shaper of events in the Middle East, following so fast on the heels of the US withdrawal that Russian special forces moved into camps abandoned by the US military literally within hours of their departure8.

1The ‘fertile crescent’ is a crescent shaped stretch of fertile agricultural land stretching from modern day Iraq, through Syria and south-eastern Turkey, to the lower Nile valley in Egypt. The first known settled agricultural communities settled here and formed complex societies.
2Source, as at June 2020: World Bank Data https://data.worldbank.org/indicator/AG.LND.AGRI.ZS?locations=SY
3Source, as at June 2020: UN Data http://data.un.org/en/iso/sy.html
4Source, as at June 2020: World Bank https://data.worldbank.org/country/syrian-arab-republic
5Source: Statista and UNHCR, 2018.https://www.statista.com/chart/18436/total-number-of-refugees-by-origin-country/
6Source: Statista and UNHCR, 2018. https://www.statista.com/statistics/740233/major-syrian-refugee-hosting-countries-worldwide/
7Source: Statista, 2016. https://www.statista.com/statistics/742090/cost-of-civil-war-by-sector-syria/
8https://www.militarytimes.com/news/2019/10/16/what-it-means-for-us-bases-in-syria-to-be-occupied-by-syrian-and-russian-forces/

Case Study: India

India’s historic culture of the harmonious co-existence of man and nature is part of the country’s heritage and of traditional practices.

This respect for all of nature is captured in the Vedas, (meaning knowledge in Sanskrit, a collection of poems written in the second millennium BCE by Indo-European peoples living in what is now Northwest India). One of these poems heads the Indian government’s own Intended Nationally Determined Contribution (INDC) submission9 as part of the Paris Agreement on Climate Change: ‘Unto Heaven be Peace, Unto the Sky and the Earth be Peace, Peace be unto the Water, Unto the Herbs and Trees be Peace’.10

The submission, presented in 2015, estimated the cost of delivering its INDC was US$1 trillion at the time.

India is the seventh-largest country in the world and has the second largest population – 1.35 billion in 2019, according to the World Bank. The annual growth rate of the population is 1.14% per annum and the average age is 29 years11. India has the second-lowest score in emerging markets on the World Bank’s Human Capital Index, at 0.4412 out of 1.0 (the index measures the human capital that a child born today can expect to attain by his/her 18th birthday, given the risks of poor health and poor education in the country where he/she lives).

This is partly down to the high infant mortality ratio of 32/1,000 and the relatively low levels of educational achievement, as 57% of young people do not finish secondary school.

The key elements of India’s climate change vulnerability are a 7,517 kilometre coastline, and a large population reliant on agriculture, forestry and fishing which contributes 14.6%13 to India’s GDP, but employs 43.21% of the country’s workforce. Fishing specifically accounts for 20% of all agricultural exports and employs over 14 million people, according to the country’s National Fisheries Board14.

More importantly, the agricultural sector accounted for over 39% of male employment in 2019. This is particularly relevant in India because the country has the worst gender imbalance in the world, with 107 males to 100 females15. What this means is that approximately 4.5 million young men with only basic education join the job market, with inevitably low chances of a decent job, or of starting a family.

Heatwaves have become more frequent in India. The definition of the conditions that must be met to qualify for the term is set by the Indian Meteorological Department. It stipulates that there must be consecutive days of at least 40ºC in the plains, 37ºC in the coastal regions and 30ºC in the hilly regions. The consequences of heatwaves include lower (agricultural) productivity, increased heat-stress and increased mortality.

According to the country’s Meteorological Department16, the average frequency of heatwaves was 8.5 per annum until 1999. From 2000 onwards, that annual frequency jumped to 74, with an especially brutal rise in 2017, which recorded 524, followed by 484 in 2018. The official numbers are not yet out for 2019, but it is estimated that 65% of the population were impacted by heatwaves last year, including the longest duration heatwave on record, reaching 48ºC in Delhi in June17, a record for that month.

India heat map

Source: NASA Earth Observatory

Heatwaves are projected to increase in frequency, duration and intensity in the future, at least partly due to the lower regularity of pre-monsoon showers, which are valuable in bringing moisture to the country.

Another phenomenon is that the monsoon season itself is arriving later and further south than the long-term frequency rate suggests. If this trend of higher temperatures and lower rainfall continues, the adverse impact on agriculture and on food supply is very clear, not to mention the human cost as it has averaged 631 heat-related deaths18 per annum in the five years from 2014 to 2018. Putting all that together with the sectarian divide (around 200 million Indian citizens are Muslim19, the gender imbalance and the low educational attainment, there would seem to be significant potential for social unrest and/or emigration.

If Indians decide to emigrate, affordability and religious affiliation are key. For those who can afford the fee of US$40,000 (estimated as the going rate) to be smuggled illegally into the United States, there are flights to Europe or Central America and then Mexico to negotiate first. The US Border Patrol statistics20 bear this out: over the last decade, the numbers of Indian citizens who are apprehended trying to enter the US illegally has been growing steadily at a rate of 38% to reach 8,027 in 2019. In the UK, the immigration statistics21 are older (year end March 2019), showing only 1,855 Indian citizens arrested for attempted illegal entry.

For Muslims, Pakistan to the west, or Bangladesh to the east might appear to be potential destinations, but both are poor countries with relatively weak economies, facing the same if not worse challenges from climate change. The traditional route would be west to the Gulf States and Saudi Arabia but there are problems there too, especially in the matter of personal security and individual rights, amplified during the COVID-19 pandemic. China to the northeast, is simply not an option. Myanmar has an ethnic Indian population estimated at 3 million, which may or may not constitute a draw. What follows is less easy to predict.

If this trend of higher temperatures and lower rainfall continues, the adverse impact on agriculture and on food supply is very clear...

Water

The idea of geopolitical tensions increasing over water is not new.

To date, we have not seen full-scale war being waged over access to water, as most disputes over the resource seem to be domestic. But for many areas of the world, the conditions are set for a potential conflict. The EU’s Science Hub has used a machine-learning approach to identify the factors that contribute to conflict and the results are published in a report22 identifying the hotspots for potential transnational water disputes in the world, focusing first on those geographies where water scarcity in shared resources such as river basins is being felt already.

Climate change map

Source: An innovative approach to the assessment of hydro-political risk: a spatially explicit, data driven indicator of hydro-political issues – 2018 F. Farinosi, C. Giupponi, A. Reynaud, G. Ceccherini, C. Carmona-Moreno, A. De Roo, D. Gonzalez-Sanchez, G. Bidoglio.

The study has set out a series of tools designed to help policymakers calibrate their responses, including an index and a model which complements the United Nations Sustainable Development Goals23 (SDG) indicator ‘6.5.2 Proportion of transboundary basin area with an operational arrangement for water cooperation’.

The conclusions point to the combined effect of climate change and population growth increasing the likelihood of water-related tensions by between 75% and 95%, unless the level of preparation and engagement by the countries concerned can result in significant alleviation measures.

Likelihood of hydro-political interaction

Source: An innovative approach to the assessment of hydro-political risk: a spatially explicit, data driven indicator of hydro-political issues – 2018 F. Farinosi, C. Giupponi, A. Reynaud, G. Ceccherini, C. Carmona-Moreno, A. De Roo, D. Gonzalez-Sanchez, G. Bidoglio.

The most vulnerable areas are around the Nile, Ganges-Brahmaputra, Indus and the Tigris-Euphrates According to the report, on a scale of 0-1, where 0 = minimum and 1.0 = maximum risk, the basins rank as follows:

Water related tension graph

The Nile Delta basin rating is driven by the high potential for water scarcity issues, where it seems likely that there will be shortages in densely populated areas; this alongside the likely impact of rising sea levels. In the case of the Ganges-Brahmaputra Basin, which has the highest rating at 1.0 and the Indus (0.675), the key factors are low governance, high population density, physical water stress and an almost complete dependence on agriculture. India has two of the three highest-rated flashpoint areas in the report, one of which it shares with Pakistan, a country it has fought two wars and a number of limited conflicts with already since Partition. This unhappy history will hopefully prioritise engagement and agreements around water use.

The Future

The debate around climate change has so far resulted in widespread acceptance of the risks (and opportunities) for investment outcomes.

The direct impact that climate change has on geopolitics is less well known and accepted, probably because of the relatively sparse research on the subject. That makes it critical to investigate the links and causality, using real world examples. I have chosen Syria as the example of how badly things can spiral out of control when geopolitical, sectarian and socioeconomic tensions are literally inflamed by climate change-induced shocks.

India represents a good example of a high-profile, functioning plural democracy. But like all countries, it has economic and social weaknesses, which could be exacerbated by climate change-related shocks. Ultimately, as the negative impacts of climate change continue to raise the obstacles to living a normal life in certain low-income countries, the ‘weaponisation’ of migrants will be the main driver of an escalation of geopolitical tension around the globe.

Climate change has failed to hold the attention of many of the main players in world geopolitics, so there has been a singular lack of prioritisation and tangible cooperation. COVID-19 could have acted as a catalyst for greater cooperation across competing powers, all facing the common enemy.

Unfortunately, it hasn’t so far. If the two biggest economic powers cannot reach an accommodation at a time of global pandemic, then all the other countries are left in the lurch, forced to band closer together to defend their common interests (like the Europeans) or fend for themselves in an increasingly tougher, Hobbesian world. Every dormant or low-intensity geopolitical stress point on the planet will now become more amplified. Effectively, this means everyone will feel free to ratchet up his/her own priority list.

For most countries, there are sources of geopolitical or even existential risk that have lain dormant for over 70 years and are reawakening now. Foremost among these is of course the US–China confrontation, but there is a myriad of other, less widely reported, from the South China Sea to the jungles of South America.

Conclusion

There is no doubt that geopolitical concerns drive economic, foreign and defence policy and consequently are instrumental in shaping investment outcomes over the longer term. Climate change is a powerful influence on geopolitics, as it can drive rapid and radical structural changes in the economy and the demographics of affected countries, creating ripple effects on neighbours and others with linkages, with mostly irreversible results.

A country’s ability to deal effectively with these risk factors is dependent on its structural positioning (sovereign financials, geo-economic strength, healthcare security, demographic challenges, etc), the calibre of its technocratic planning and its government’s ability and willingness to execute decisively.

For long-term investors like ourselves, it is very important that these considerations are pragmatically considered, but it does not drive investment decisions per se. Rather they serve to build a clear-eyed view of the limits of policymaking and the country risks implicit in company investment, whether via equity or fixed interest.


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