US Secretary of State Antony Blinken. Getty Images
US Secretary of State Antony Blinken. Getty Images
US Secretary of State Antony Blinken. Getty Images
US Secretary of State Antony Blinken. Getty Images

Blinken returns to the Middle East with little hope of ceasefire breakthrough


Hamza Hendawi
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US Secretary of State Antony Blinken is flying to the Middle East for his 10th visit to the region since the Gaza war began 11 months ago. However, unlike previous visits, it comes without optimistic projections by Washington that a breakthrough was imminent in Gaza's ceasefire negotiations and the release of hostages.

Mr Blinken is expected to co-chair with Egyptian Minister of Foreign Affairs Badr Abdelatty on Wednesday the opening of the US-Egypt Strategic Dialogue, a ministerial forum designed to explore ways to bolster relations between the long-time allies and iron out differences. The meeting comes at a time when Egypt-US relations are closer than they have been in years.

The State Department last week pointed to Cairo's important role in Gaza peace efforts when it announced that the administration planned to give the most populous Arab nation its full $1.3 billion in military aid, overriding congressional requirements that Washington hold back some of the funding if Egypt fails to show adequate progress on human rights.

Mr Blinken's two-day visit to Cairo, however, will be primarily focused on finding a way to break the months-long deadlock in mediation efforts by the US and close Arab allies Egypt and Qatar to reach a Gaza ceasefire and secure the release of Israeli and other hostages held by Hamas since October.

A Palestinian woman at the site of an Israeli strike on a tent camp sheltering displaced people at the Al-Mawasi area in Khan Younis in the southern Gaza Strip. Reuters
A Palestinian woman at the site of an Israeli strike on a tent camp sheltering displaced people at the Al-Mawasi area in Khan Younis in the southern Gaza Strip. Reuters

US President Joe Biden's administration now says it is working with Egypt and Qatar to come up with a revised final proposal to try to at least get Israel and Hamas into a six-week ceasefire that would free some of the hostages held by Hamas in exchange for Palestinian prisoners held by Israel.

US, Qatari and Egyptian officials still are consulting “about what that proposal will contain, and … we're trying to see that it's a proposal that can get the parties to an ultimate agreement,” State Department spokesman Matthew Miller said on Monday.

However, sources with direct knowledge of the negotiations said a breakthrough appeared unlikely and were sceptical whether the latest proposals offered anything new.

“Blinken is here to try to move the negotiations forward but Hamas will not budge and neither will Israel,” said one of the sources. “Talking about revised proposals that require the two sides to make concessions is too hopeful. Washington just wants Egypt and Qatar to pressure Hamas to agree to a deal.”

Hamas, explained the sources, has been left with little to lose 11 months into a war that has most likely depleted its military capabilities and personnel, killed more than 41,000 Palestinians and devastated the coastal enclave and displaced most of its 2.3 million residents. The group is unlikely to give in to pressure now, the sources said.

The war was caused by an attack on southern Israel by Hamas that, according to Israeli tallies, killed about 1,200 people. The attackers also kidnapped about 250 people, of whom only about 100 remain in captivity in Gaza. About a third of the captives are believed to be dead, according to Israel's military,

Hamas leader Yahya Sinwar said that the group is gearing up to keep fighting, bolstered by fighters and regional support. AFP
Hamas leader Yahya Sinwar said that the group is gearing up to keep fighting, bolstered by fighters and regional support. AFP

In a letter to Yemen's Houthis, Hamas leader Yahya Sinwar said the group was readying to fight on with assistance from fighters and support from across the region. “We have prepared ourselves to fight a long war of attrition,” he said.

Hamas, said the sources, remained uncompromising when it comes to its core demands: A full Israeli withdrawal from the Gaza Strip, a permanent ceasefire and the unconditional return home for Palestinians displaced by the war in Gaza, including those whose homes are in the north of the territory.

The militant group was also unwilling to release a large number of hostages during the first phase of the US-proposed deal as demanded by Israel, they said, pointing out that the estimated 100 hostages still held by the group are the biggest bargaining chip it has.

They said Israel was also taking inflexible positions on key areas. It insists on retaining a security role in postwar Gaza, the exclusion of Hamas from any future Gaza administration and continued posting of its military on a narrow strip of land that runs the entire length of the Gaza-Egypt border on the Palestinian side.

Israel also wants its military to remain at the so-called Netzarim corridor, a road it has built which cuts the Gaza Strip in half, to prevent the infiltration of Hamas fighters into northern Gaza where they can pose a threat to southern Israeli communities.

Israeli soldiers patrolling the Philadelphi Corridor, or the Salah Al Din strip, on the Gaza-Egypt border. Reuters
Israeli soldiers patrolling the Philadelphi Corridor, or the Salah Al Din strip, on the Gaza-Egypt border. Reuters

Egypt has been deeply angered by Israel's capture in May of the border strip, Salah Al Din, widely known as the Philadelphi Corridor, as well as the Palestinian side of the Egypt-Gaza border crossing at the town of Rafah.

It maintains that the continued posting of Israeli troops and hardware in the land strip violates the two nations' 1979 peace treaty and subsequent accords and insists it would only deal with a Palestinian entity, not necessarily Hamas, on the other side of the Rafah crossing, which Cairo has closed since May.

Egypt, the sources said, has been looking to the US, by far Israel's biggest backer, to pressure the government of Prime Minister Benjamin Netanyahu to pull out from the area, but is beginning to realise that Washington might be unable to exercise sufficient influence on Israel in an election year, according to sources.

“Israel is clearly working towards prolonging the war until after the US election in November. Washington could have effectively influenced Israel if it had not been for the election,” said another source, alluding to the US presidential vote on November 5 that's contested by former president Donald Trump and current Vice President Kamala Harris.

Mr Blinken has no public plans to go to Israel this time round to meet Mr Netanyahu, whose public statements and unbudgeable demands have complicated earlier diplomatic efforts.

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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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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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Courtesy: Carol Glynn, founder of Conscious Finance Coaching

Updated: September 17, 2024, 1:59 PM