Netanyahu’s erratic behaviour widens rift with the US


Jonathan Cook
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Benjamin Netanyahu, the prime minister of Israel, has been increasingly embattled. And the result of his travails could augur well for the Palestinian cause.

The context for his troubles was his commitment in 2009, under great pressure from a newly elected US president, Barack Obama, to support the creation of a Palestinian state. It was a concession he never wanted to make and one he has regretted ever since.

The US secretary of state, John Kerry, has vigorously exploited that pledge by imposing the current peace talks. Now Mr Netanyahu faces an imminent “framework agreement” that may require him to make further commitments towards an outcome he abhors.

Mahmoud Abbas, the head of the Palestinian Authority, is piling on the pressure. Last week he said Israel could take a leisurely five years removing its soldiers and settlers from a key piece of Palestinian territory, the Jordan Valley. The Palestinian state would remain demilitarised, while Nato troops could stay “for a long time, and wherever they want”.

The Arab League is another thorn. It has obliged by renewing its offer from 2002, the Arab Peace Initiative, that promises Israel peaceful relations with the Arab world in return for its agreement to Palestinian statehood.

Meanwhile, the European Union is gently turning the screws. It trumpets condemnation of Israel’s settlement-building frenzy. And in the background sanctions loom, especially over settlement goods. European financial institutions are providing a useful barometer of the mood among the 28 member states. They have become the unexpected pioneers of the boycott, divestment and sanctions (BDS) movement, with a steady trickle of banks and pension funds pulling out their investments.

A widening boycott is alarming Israeli business leaders too, who have thrown their considerable weight behind the US diplomatic plan. They believe that a Palestinian state is the key to Israel gaining access to lucrative regional markets.

Mr Netanyahu must have been disconcerted by the news that among those meeting Mr Kerry to express support at the World Economic Forum in Davos last month was Shlomi Fogel, the prime minister’s long-time intimate.

Pressure on these various fronts may explain Mr Netanyahu’s hasty convening at the weekend of his senior ministers to devise a strategy to counter the boycott trend. Proposals include a $28 million media campaign, legal action against boycotting institutions, and intensified surveillance by the Israeli security services.

On the domestic scene, Mr Netanyahu is getting a rough ride as well. He is being undermined on his right flank by rivals inside the coalition. Naftali Bennett, the settlers’ leader, provoked a chafing public feud with Mr Netanyahu this month, accusing him of losing his “moral compass”. At the same time, Avigdor Lieberman, the foreign minister from the far-right Yisrael Beitenu party, has dramatically changed tack, cosying up to Mr Kerry. Mr Lieberman’s unlikely statesmanship has made Mr Netanyahu’s run-ins with the US look, in the words of a local analyst, “childish and irresponsible”.

It is in the light of these mounting pressures tearing at Mr Netanyahu that one should view his increasingly erratic behaviour – and the growing rift with the US.

Last week Mr Netanyahu unleashed his closest cabinet allies to savage Mr Kerry again, with one calling his pronouncements “offensive and intolerable”.

Susan Rice, Mr Obama’s national security adviser, tweeted a shot across the bows, saying the attacks were “totally unfounded and unacceptable”. Any doubt she was speaking for the president was later dispelled when Mr Obama praised Mr Kerry’s “extraordinary passion and principled diplomacy”.

But despite outward signs, Mr Netanyahu is less alone than he looks – and far from ready to compromise. He has the bulk of the Israeli public behind him, helped by media moguls like his friend Sheldon Adelson who are stoking the national mood of besiegement and victimhood.

But most importantly he has a large chunk of Israel’s security and economic establishment on side too.

The settlers and their ideological allies have deeply penetrated the higher ranks of both the army and the Shin Bet, Israel’s secret intelligence service. Haaretz newspaper revealed this month the disturbing news that three of the four heads of the Shin Bet now subscribe to this extremist ideology.

Moreover, powerful elements within the security establishment are financially as well as ideologically invested in the occupation. In recent years the defence budget has rocketed to record levels as a large class of military officer, serving and retired, exploits the occupation to justify feathering its nest with grossly inflated salaries and pensions.

There are also vast business profits in the status quo, from hi-tech to resource-grabbing industries. Indications of what is at stake were illuminated recently with the announcement that the Palestinians will have to buy from Israel at great cost two key natural resources – gas and water – they should have in plentiful supply were it not for the occupation.

With these interest groups at his back, a defiant Mr Netanyahu can probably face off the US diplomatic assault this time. But Mr Kerry is not wrong to warn that in the long term yet another victory for Israeli intransigence will prove pyrrhic.

These negotiations may not lead to an agreement, but they will mark a historic turning-point nonetheless. The delegitimisation of Israel is truly under way, and the party doing most of the damage is the Israeli leadership itself.

Jonathan Cook is an independent journalist based in Nazareth

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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.”

Low turnout
Two months before the first round on April 10, the appetite of voters for the election is low.

Mathieu Gallard, account manager with Ipsos, which conducted the most recent poll, said current forecasts suggested only two-thirds were "very likely" to vote in the first round, compared with a 78 per cent turnout in the 2017 presidential elections.

"It depends on how interesting the campaign is on their main concerns," he told The National. "Just now, it's hard to say who, between Macron and the candidates of the right, would be most affected by a low turnout."

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The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

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