An ultra-Orthodox party has quit Israeli Prime Minister Benjamin Netanyahu's coalition in a long-running dispute over mandatory military service, leaving his government with a razor-thin majority amid public protests over the Gaza war.
The departure of United Torah Judaism leaves Mr Netanyahu with 61 seats in the 120-seat Knesset. If ultra-Orthodox party Shas also quits over the issue, as Israeli media reports suggest they will this week, the government will be left with only 50 seats.
The two parties have not said whether they will join the opposition to try to dissolve parliament, which would trigger elections. Their departures will only come into effect after 48 hours, giving Mr Netanyahu a window to salvage the situation.
United Torah Judaism’s move is the latest in wrangles over whether Israel’s growing ultra-Orthodox population should serve in the military, as all other Jewish Israelis are obliged to do.
The issue has been a political lightning rod for years, but is drawing particular anger during the Gaza war as Israel’s military says it is facing a shortage of personnel. Many Israelis are saying the ultra-Orthodox community is shirking its responsibility.
It is also a divisive issue within Mr Netanyahu’s far-right coalition, which contains ultra-nationalist Zionist parties whose supporters are disproportionately represented in military units fighting on the frontlines.
A spokesman for one of the factions that makes up UTJ said the party was making the decision after the government repeatedly failed “to fulfil their obligations to regulate the legal status of the dear yeshiva students”, referring to ultra-Orthodox Jewish religious schools that focus on the study of Torah and rabbinic traditions.
Currently, men enrolled in these schools are exempt from military service. But a court ruled in June last year that this exemption was no longer legal. In response, the community wants the government to legislate on a permanent exemption, but that process has been stalled. Mr Netanyahu has reportedly directly intervened in the drafting of the long-debated bill, which faces stiff resistance from influential politician Yuli Edelstein, of Mr Netanyahu’s Likud party.
A wave of departures from the coalition was prevented last month after Mr Edelstein agreed to limit some sanctions against draft dodgers listed in an earlier version of the bill.
The ultra-Orthodox community also receives significant subsidies to continue its secluded way of life, which many Israelis criticise as an unfair financial burden that encourages its members not to integrate.
While some ultra-Orthodox Jews do serve in specialised branches of the armed forces, they represent a tiny proportion of the fast-growing community, whose leaders overwhelmingly encourage men to pursue full-time religious study.
Community leaders fear that military life draws men away from the isolated group – significant swathes of which are non-Zionist – and its strict, insular interpretation of Judaism.
The Israeli opposition has made military exemption a central issue in its strategy to attack the government.
“We will not forget: while Netanyahu fought yesterday to promote draft evasion, he knew about the three fatalities and the soldier who took his own life,” wrote opposition leader Yair Lapid in a post on X on Tuesday, following news of Israeli soldiers dying in Gaza.
Former prime minister Naftali Bennett, a favourite in polls for future elections, said on Monday that as soldiers were dying, “in the corridors of the Knesset, coalition members are moving heaven and Earth to create a draft-dodging law”.
“This gap is unbearable. We are at war. Our sons are there. In Gaza, in the north, wherever they are needed,” he added. “This is a disgraceful government, unworthy of our good people.”
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Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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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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Results
Stage three:
1. Stefan Bissegger (SUI) EF Education-EasyPost, in 9-43
2. Filippo Ganna (ITA) Ineos Grenadiers, at 7s
3. Tom Dumoulin (NED) Jumbo-Visma, at 14s
4. Tadej Pogacar (SLO) UAE-Team Emirates, at 18s
5. Joao Almeida (POR) UAE-Team Emirates, at 22s
6. Mikkel Bjerg (DEN) UAE-Team Emirates, at 24s
General Classification:
1. Stefan Bissegger (SUI) EF Education-EasyPost, in 9-13-02
2. Filippo Ganna (ITA) Ineos Grenadiers, at 7s
3. Jasper Philipsen (BEL) Alpecin Fenix, at 12s
4. Tom Dumoulin (NED) Jumbo-Visma, at 14s
5. Tadej Pogacar (SLO) UAE-Team Emirates, at 18s
6. Joao Almeida (POR) UAE-Team Emirates, at 22s
