The National

Mideast peace is bigger than a lone mediator

The US and its Israeli partners should realise that the Palestinians are moving ahead with a state on their own. The outgoing US envoy, Geroge Mitchell, understood this. It¿s time for others to as well.

National Editorial

May 15, 2011

Five years after the Arab League chief Amr Moussa announced that the Middle East peace process was "dead", another blow has befallen the long-vexing struggle between Israel and the Palestinians. George Mitchell, the skilled US diplomat and veteran negotiator, tendered his resignation on Friday, becoming the latest victim in this intractable conflict.

Mr Mitchell leaves without achieving much over his two years of shuttle diplomacy. But this is less an indictment of him than an illustration of the intransigence he has had to confront. Peace may not be dead, but it certainly is on life support.

Mediation requires willing partners. As Mr Mitchell rapidly discovered, that has not always been the case here. Neither side has been willing to enter serious talks, with the Israelis refusing to budge on settlement construction and West Bank land grabs. As the recent Palestinian Papers suggest, the Palestinians have seemed at times to put more on the table, but even they have fallen short.

There is, of course, plenty of blame to go around, and Mr Mitchell's departure is more a symptom of circumstance than a sign of failed strategy. And yet even in this period of renewed uncertainty there is reason for optimism for the weeks ahead.

Fatah and Hamas, long at odds, reached a reconciliation deal last month to form a temporary government. It is hoped that this renewed unity will lend credence to the prospects of official recognition for a Palestinian state, when the UN General Assembly takes up the issue this autumn.

Hamas is still not willing to recognise Israel, and there are doubts about its commitment to peace. But so far the signs are positive; Israel should perceive this unity as a move that will moderate Hamas.

There is no question that Mr Mitchell's departure will leave a void, one that the US president, Barack Obama, should seek to fill immediately. This week Mr Obama will speak to his nation about America's Middle East policy. He is not expected to go into detail on the Israeli-Palestinian conflict, though he should touch on the issue. Silence in the wake of Mr Mitchell's departure would speak volumes. America has long been the only true power broker in this dispute.

Most importantly, though, the US and its Israeli partners should realise that the Palestinians are moving ahead with a state on their own. The outgoing Mr Mitchell understood this. It's time for others to as well.

Skewed figures

In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458. 

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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