Abraham Accords 'overturned' by Hamas and Israeli extremists, senior Emirati official says


Vanessa Ghanem
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The Abraham Accords have been derailed by Hamas and Israeli extremists, a senior Emirati official warned on Monday.

"We always knew that there was an inherent risk that extremists would seek to overturn the vision of the Abraham Accords," said Lana Nusseibeh, Assistant Minister for Political Affairs and Envoy of the Minister of Foreign Affairs, addressing the Hili Forum in Abu Dhabi.

"That is what happened when Hamas's terror attack on Israel on October 7 and Israel's horrific war in Gaza exploded the risk of radicalisation and instability in the region."

The accords, signed in 2020 during US President Donald Trump's first term, led the UAE, Bahrain and Morocco to establish relations with Israel. Ms Nusseibeh said last week that the Israeli annexation of the occupied West Bank would constitute a red line for the UAE and undermine the vision and spirit of the accords.

Her comments came after far-right Israeli Finance Minister Bezalel Smotrich presented a plan to annex the majority of the West Bank, urging Prime Minister Benjamin Netanyahu to “make a historic decision to apply Israeli sovereignty to all open areas" in the territory.

Israel has taken other steps in recent weeks that undermine the prospect of a Palestinian state, including its approval of the construction of E1 – an illegal settlement with thousands of homes near Jerusalem.

"The future of Palestine continues to be the cornerstone of a peaceful future for the Middle East," Ms Nusseibeh told the forum. "Five years ago, when the UAE signed the Abraham Accords, it was not simply a diplomatic act or a bilateral relationship with the state of Israel. It was a statement of belief that mistrust can give way to coexistence, and that the children of a region deserve a future different from our past, one predicated on the full integration of Israel in our region and the creation of an independent state of Palestine. Today, those hopes are being tested."

Ms Nusseibeh said that "annexation by Israel of Palestinian land, if pursued, would not only close the door to peace and integration, it would betray the very spirit of the Abraham Accords".

"For the UAE, this is not a matter of politics alone. It is a matter of principle, and it is a matter of peace for our region," she added.

Regional and global frustration has been growing over Israel's actions in Gaza, where more than 64,000 Palestinians have been killed by the Israeli army and millions have been displaced, with the UN declaring famine in Gaza city and warning that starvation is being used as a weapon of war.

Last week, UAE President Sheikh Mohamed and Saudi Crown Prince Mohammed bin Salman emphasised the need to forge a path to peace in Gaza during talks in Riyadh. They reiterated that a two-state solution is crucial to efforts to bolster security and stability after nearly two years of war in the besieged enclave.

Iran's nuclear programme

Ms Nusseibeh said Gaza was not the "only fault line in the region", adding that, across the Middle East, instability and opportunity sit side by side.

"Iran's nuclear programme has long unsettled our region's security," she said. "Unaddressed, it risks a dangerous confrontation, as the strikes on Iranian facilities earlier this summer remain painfully clear. That moment should have underscored the urgency of diplomacy."

Tehran has repeatedly said it will not return to the negotiating table under the same conditions that existed before the June war with Israel. In April, the US and Iran embarked on a series of nuclear negotiations, hosted in Muscat and Rome, that aimed to revive dialogue on uranium enrichment and sanctions relief after years of stalemate.

But in June, Israel launched strikes on Iran’s nuclear and military infrastructure. The US joined in the attacks, escalating the conflict into a broader war that severely disrupted diplomatic progress.

During the 12-day conflict, Iran chose to strike a Gulf country to retaliate against the US attacks on its underground nuclear sites. It launched a ballistic missile strike on Al Udeid Air Base in Qatar – the largest US military site in the Middle East. The attack was condemned by all Gulf states.

Before, during and after the war, the UAE and its Gulf partners consistently pressed for diplomacy to de-escalate tensions. "Consider Iran's nuclear programme, by pressing for negotiations, we are not acting just to protect the Gulf from confrontation. We are also helping to sustain the non-proliferation regime," said Ms Nusseibeh.

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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