Obama's Israel visit gives no sign of hope for Palestinians


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Air Force One is to touch down in Tel Aviv today, for the first time during Barack Obama's presidency. The visit is also the beginning of the first foreign trip of his new term.

Israel has been a constant thorn in Mr Obama's side since he took office in 2009. For most of his presidency, Israel's prime minister has been the intransigent Benjamin Netanyahu, whose dysfunctional leadership led Mr Obama to remark, late last year, that "Israel doesn't know what its own best interests are".

What, then, can Mr Obama achieve, since he is evidently unwilling to take on the pro-Israel lobby in Washington and unable to do anything about Mr Netanyahu's hardline policies and the even harder ones of his new coalition partners?

It must mean something, optimists say, that Mr Obama has made Israel and Palestine the first foreign destinations of his final term. But he has been down this road before: in his first term he pushed Mr Netanyahu to pause in the building of illegal settlements, only to be outmanoeuvred by the prime minister.

While the Israeli cabinet is determined, the Palestinian leadership remains sadly split. So with neither side ready to move, there is almost no prospect of any meaningful initiative now, even from the most powerful nation on Earth.

Mr Obama's people are saying he will bypass the leaders on both sides and speak directly to the Palestinian and Israeli peoples. This is a standard approach when faced with a roadblock at the political level, but this time there is little reason to think it will help. As the results of their elections seemed to highlight, Israelis are showing little interest in the moribund peace process.

Such is the power of the settler lobby, however, that although members of the new Knesset were chosen mainly on economic issues, Mr Netanyahu's new coalition is radical and pro-settler.

Clearly, time is running out. When Jordan's King Abdullah points out that Israel will have to choose between "apartheid and democracy", he is highlighting what is becoming increasingly obvious: that the window for a two-state solution is closing.

The relentless expansion of settlements across the occupied West Bank is reaching a tipping point, after which it will become impossible to drag Israel back to a two-state solution. Mr Obama might be the last US president to use the words "two-state solution" in anything but a historical sense.

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.”

COMPANY PROFILE
Company name: BorrowMe (BorrowMe.com)

Date started: August 2021

Founder: Nour Sabri

Based: Dubai, UAE

Sector: E-commerce / Marketplace

Size: Two employees

Funding stage: Seed investment

Initial investment: $200,000

Investors: Amr Manaa (director, PwC Middle East)