Israel’s creeping annexation of the occupied West Bank is now virtually complete, even if undeclared, a Palestinian diplomat has warned.
The UK, France and other countries are preparing to recognise Palestine at the UN this month, setting a historic challenge to Israel as it wages war in Gaza.
But they should also be braced for Israel to take steps in retaliation, said Dr Husam Zomlot, who leads the Palestinian mission to the UK.
He warned that the West Bank could be officially annexed soon, as Israeli troops were stationed around every Palestinian village.
“Israel de facto has already annexed the West Bank. They are just waiting for the moment to announce it. It is destroying entire apparatus of Palestinian government,” he said, speaking at Chatham House in London on Tuesday.
Dr Zomlot had just returned from a month in the West Bank, where he said the scenes there “shocked him to the core”.
“Each town, each village is surrounded by barbed wires, one gate with one gate keeper. The settlements are becoming the central urban infrastructure of the West Bank,” he said.
Israel has led a “suffocating” economic blockade of the West Bank since October 7, with more than 250,000 Palestinians no longer able to work in Israel, and the same number of Palestinian Authority civil servants unable to claim their salaries.
“The economic and financial strangulation of the West Bank has led to a situation of complete suffocation” he said.
“We are at an existential moment. Even I was not prepared for what I have seen,” he said.
Though the international attention was “rightly” focused on Gaza and the famine, and he feared that what was left of the strip would soon be destroyed as Prime Minister Benjamin Netanyahu scorned ceasefire efforts.
“What is left of Gaza is a few neighbourhoods in the city. Israel is preparing as we speak to destroy that,” he said.
“A deal is on the table. Netanyahu is refusing a deal that would see the release of hostages, the exchange of hostages, a deal that would see the reconstruction of Gaza,” he said.
The UK’s pledge to recognise Palestine was key to the “correction of the historic injustice” of the Balfour Declaration of 1918, which gave parts of the Palestinian land for the creation of Israel.
But Dr Zomlot criticised its conditionality, and warned further steps would need to be taken to ensure Israel ends its war in Gaza and military occupation of Palestinian territories.
“Recognition is the first meaningful step but it is by no means the last. Has to be followed by actual sanctions,” he said.
He urged the UK and others to follow the “three main rules” established in by the International Court of Justice’s advisory opinion on the situation in Palestine last year.
Israel’s occupation of the Palestinian territories, and Jewish settlements in the West Bank were found to be illegal. “The ICJ, the highest world court, deliberated and decided that this is no longer a military occupation, this is annexation,” he said.
Therefore, countries were advised to “cease immediately to provide material, political, legal, support” to the illegal settlements in the West Bank, he said.
The UK government was trailing behind a youth movement for Palestine that had been the “most active and the most aware” on the issues.
“The UK government have taken some steps, but it is always too little and always too late,” he said.
“This is not about punishing Israel – it is about saving Israel and saving the rest of us.”
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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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