The US and UK are likely to offer a measured response to the drone attack on an oil tanker in the Arabian Sea last week, analysts said.
The attack, which Washington and London blamed on Iran, killed a Briton and a Romanian.
Any response will be heavily influenced by the fact that the attack happened before a new round of nuclear deal negotiations and the inauguration of a hardline president in Iran.
As successive previous administrations have discovered, this is what 'pivoting away from the Middle East' looks like – malign actors sense a vacuum
Charles Lister
Charles Lister, the director of the Countering Terrorism and Extremism Programme at the Middle East Institute think tank in Washington, said it was hard to imagine the UK and allies responding in kind, through an equally significant military action.
But a punitive response is certainly possible.
“To respond in the Gulf, or Iran itself, would arguably align with something more 'appropriate', but it would markedly raise the risk of uncontrollable escalation," Mr Lister told The National.
"In acting asymmetrically, the IRGC [Islamic Revolutionary Guard Corps] enjoys a substantial advantage in this equation.
“We could feasibly see a more pointed set of strikes against Iranian proxies in Iraq and Syria, perhaps bolstered by a targeted set of multinational sanctions on IRGC entities.
"Whether the IRGC intended to kill a British citizen is academic at this point — deploying a suicide drone against a civilian shipping target is an extraordinary violation of any basic red lines.”
US Secretary of State Antony Blinken and Israeli Foreign Minister Yair Lapid said on Sunday that they would consider the “appropriate next steps” with international partners.
Israeli Prime Minister Naftali Bennett said Israel had intelligence connecting Iran to the attack.
The Israeli-managed Mercer Street was attacked on July 29 off the coast of Oman on its way from Dar Es Salaam in Tanzania to Fujairah port in the UAE.
Images show damage caused by what analysts said were explosive-laden drones that punctured the Japanese-owned and Liberian-flagged vessel.
The two deaths are the first of civilians in a series of similar attacks in the region in recent months, all blamed by Israel on Iran, which denies any responsibility.
Saudi Foreign Minister Prince Faisal bin Farhan accused an “emboldened” Iran on Tuesday of threatening the freedom of international navigation.
On the same day, the Panama-flagged tanker Asphalt Princess was hijacked by armed men in the Gulf of Oman.
No one has claimed responsibility for the attack, which happened near the Strait of Hormuz, through which about a fifth of the world's seaborne oil exports pass. But ship tracking services showed the vessel being sailed towards Iran after the incident.
Possible unilateral action
For Israel, domestic politics will factor into any response, said Michael A Horowitz, head of intelligence at Le Beck International, a Middle East and North Africa security consultancy.
“Israel's new government likely feels like it needs to prove it is up to the challenge after being accused of being weak by former PM [Benjamin] Netanyahu,” Mr Horowitz told The National.
The Israeli foreign minister said he discussed the crisis with his British and American counterparts to formulate a substantive international response to the July 29 attack.
“This could give Israel enough diplomatic room to manoeuvre, should it choose to respond forcefully,” Mr Horowitz said.
“I think this attack really crossed a red line for Israel, with the question being whether Iran did seek to inflict casualties or not.
"From the initial elements we've got, including pictures of the impacts and the fact that some Iranian outlets have depicted the attack as a response to the death of an IRGC officer in Syria, I am inclined to say that this was deliberate, and that Iran was looking to up the ante.”
Citing unnamed sources, Iran's state-run Al Alam TV said on Sunday that the attack was carried out by “resistance forces” as retaliation for last week's suspected Israeli air strike on Al Dabaa Military Airport in Syria.
The Iranian foreign ministry categorically denied the attack and demanded Israel, the UK and the US show proof of Tehran's complicity.
It called the accusations “groundless propaganda”.
Tension in the Arabian Sea has been high for months after several attacks on oil tankers.
There have been also periodic confrontations in recent years between IRGC and the US military, which accused the Iranian Navy of sending fast-attack boats to harass US warships as they transit the Strait of Hormuz.
There are further concerns about the approach of new Iranian President Ebrahim Raisi towards negotiations with the US and European powers to revive the Joint Comprehensive Plan of Action.
The deal imposed stringent restrictions on Tehran’s nuclear programme in exchange for lifting sanctions.
Washington's desire to reach a new agreement seems to inevitably be reaching a limit, as an increasingly hardline Iranian state displays its lack of interest in diplomacy, Mr Lister said.
“As successive previous administrations have discovered, this is what 'pivoting away from the Middle East' looks like – malign actors sense a vacuum and diplomatic weakness, and they pounce in pursuit of advantage,” he said.
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
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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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Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Visit Abu Dhabi culinary team's top Emirati restaurants in Abu Dhabi
Yadoo’s House Restaurant & Cafe
For the karak and Yoodo's house platter with includes eggs, balaleet, khamir and chebab bread.
Golden Dallah
For the cappuccino, luqaimat and aseeda.
Al Mrzab Restaurant
For the shrimp murabian and Kuwaiti options including Kuwaiti machboos with kebab and spicy sauce.
Al Derwaza
For the fish hubul, regag bread, biryani and special seafood soup.
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
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Oct 8: Malaysia (h)
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Explainer: Tanween Design Programme
Non-profit arts studio Tashkeel launched this annual initiative with the intention of supporting budding designers in the UAE. This year, three talents were chosen from hundreds of applicants to be a part of the sixth creative development programme. These are architect Abdulla Al Mulla, interior designer Lana El Samman and graphic designer Yara Habib.
The trio have been guided by experts from the industry over the course of nine months, as they developed their own products that merge their unique styles with traditional elements of Emirati design. This includes laboratory sessions, experimental and collaborative practice, investigation of new business models and evaluation.
It is led by British contemporary design project specialist Helen Voce and mentor Kevin Badni, and offers participants access to experts from across the world, including the likes of UK designer Gareth Neal and multidisciplinary designer and entrepreneur, Sheikh Salem Al Qassimi.
The final pieces are being revealed in a worldwide limited-edition release on the first day of Downtown Designs at Dubai Design Week 2019. Tashkeel will be at stand E31 at the exhibition.
Lisa Ball-Lechgar, deputy director of Tashkeel, said: “The diversity and calibre of the applicants this year … is reflective of the dynamic change that the UAE art and design industry is witnessing, with young creators resolute in making their bold design ideas a reality.”