Only 'red line' in Syria is the one that harms US interests


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If one thing is clear in the Syrian crisis as it escalates towards an uncontrollable proxy regional war, it is that the US president, Barack Obama, bitterly regrets ever having used the term "red line". Red lines, in Middle Eastern politics, are usually drawn to demonstrate power and determination. In the case of Mr Obama's use of the term, he is accused of timidity, fecklessness and dithering.

The original "red line" seems to have been the one drawn by Israel in 1978 along the Litani River in southern Lebanon, as the southernmost point that it would tolerate the presence of Syrian troops. If the Syrians crossed the Litani, it was war.

Red lines came to encompass more complex stipulations, such as where the Syrians were allowed to install anti-aircraft missiles or other military materiel. Now the term has come to mean a statement by a government defining any acts which merit a forceful, usually military, response.

So it was unwise of Mr Obama, in August of last year, to declare that the Syrian regime using or moving around "a whole bunch" of chemical weapons was a "red line" for which the US had prepared contingency plans. Everyone understood that to mean that America would intervene with military force.

Since then there have been credible reports of the use of chemical weapons by the regime - and perhaps by the armed rebels too, which would mean that the regime had lost control of its arsenal.

The use seems to be small scale. The tactic of the Assad regime has been to escalate its use of weaponry in baby steps - helicopters, air force bombers and missiles - and gauge the reaction (inevitably feeble) of the western powers. So it would not be surprising if it had experimented with the odd sarin shell, to show it will stop at nothing to stay in power.

The White House has been dissociating itself from Mr Obama's August statement, implying that it was made off the cuff, during an election campaign and the nuances have been forgotten. But this is hardly the whole truth. In the same month the term red line was used by Hillary Clinton, then secretary of state, and a Pentagon spokesman.

Cue outrage from Mr Obama's opponents on the right, and from some of his allies who fear that US credibility is taking a terminal knock. Jennifer Rubin, a right-wing blogger for the Washington Post, contrasted the White House's equivocation with the Israeli military action. "When Israel draws a red line, it means it," she wrote admiringly about the Israeli raids on a consignment of missiles which were apparently being transferred to Hizbollah, the Assad regime's Lebanese Shia allies.

Rosa Brooks, professor of law at Georgetown University in Washington, points out that US presidents, and not just Mr Obama, have a long history of making empty threats - over North Korea, Iran and now Syria. "It's not at all clear how US interests are advanced by declaring behaviour to be unacceptable when we have no intention of doing anything about it," she writes.

From this debate the United States appears as a paralysed colossus, while only tiny Israel can flex its muscles at will. But this is a trite comparison. The deeper truth is that a superpower which ultimately has to take responsibility for the peace of the world should not be setting headline-grabbing red lines. It has to speak softly and carry a big stick, as Theodore Roosevelt said.

A country such as Israel, which always prefers military action to diplomacy, is different. It has nothing to lose - in the short term, at least - by backing up its red lines with military force every time.

So where, then, are Mr Obama's red lines in this conflict? First, he does not want to get involved in another war in the Middle East. The American public is tired of foreign adventures. Those goading him to military action would attack him even more harshly when US intervention fails to go according to plan, which is inevitable in such a complex arena.

The second red line is never announced: Washington does not want the rebels to defeat the Assad regime. For all the anti-Assad rhetoric over the past two years, Washington views a military victory by the rebels as a threat: given the lack of clear leadership in the rebel ranks and the growing power of Jabhat Al Nusra and other jihadist groups, there is a strong possibility of anti-American forces taking over in Damascus, which could reignite the Iraq civil war, destabilise Jordan and tip Lebanon back into sectarian conflict.

While Washington has been paying lip service to red lines, John Kerry, the US secretary of state, has been in Moscow to try to patch up a deal with the Assad regime's Russian ally. He has agreed with Sergei Lavrov, the Russian foreign minister, to convene a peace conference to bring together the regime and the rebels for the first time to discuss a transitional government.

To achieve this agreement, Mr Kerry has conceded that Mr Assad's government will have a say in the future government of Syria. How this could be accepted by the rebels, or who will speak for the them, is unclear. The whole conference idea may be pie in the sky.

But the logic of this peace process is clear: the war will continue at least until next year, when Syria is scheduled to hold presidential elections. The president could be persuaded by his allies, Russia and Iran, not to stand and thus open the way for a compromise candidate.

Here we have the opposite of red lines: cynical realpolitik born of the assessment that Washington has no really good options.

US policy is to help its allies among the rebels, the Free Syrian Army, so that it can balance the fighting power of the jihadists, but not enough so that the Assad regime crumbles. It is possible that all this diplomatic activity may be sunk by some catastrophic event that may force Mr Obama to opt for a more interventionist stance - say by enforcing a no-fly zone. But it is just as likely that the prospect is another grim year of fighting.

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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.”

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