In April 2016, the journalist Jeffrey Goldberg interviewed former US president Barack Obama on his foreign policy legacy for The Atlantic. Mr Obama touched far and wide on global affairs, but it was his remarks on the Middle East that raised eyebrows in the region.
“The competition between the Saudis and the Iranians – which has helped to feed proxy wars and chaos in Syria and Iraq and Yemen – requires us to say to our friends as well as to the Iranians that they need to find an effective way to share the neighbourhood and institute some sort of cold peace,” Mr Obama said. Not only did the former president place an ally and an enemy on the same footing, he implied that it was up to regional states to impose a balance of power so that the Americans could concentrate on other parts of the world.
Mr Obama’s critics saw in his phrase an abandonment of the US’s Arab allies. However, there was also something else involved, namely a traditional, realist political worldview that implicitly accepted that both Iran and Saudi Arabia were entitled to seek power to fulfil their interests, as all states do. To ensure that this impulse would not lead to conflict, Mr Obama suggested, the different parties had to find a modus vivendi among themselves.
In many regards, the region has come around to the vision Mr Obama outlined in his interview. And the Americans are discovering they don’t like it. Two prime examples of this situation, chosen at random, have been Turkey’s attempts to snuff out de facto Kurdish autonomy in northern Syria, against US wishes. And more recently, the decision in October of the Opec+ group to cut oil production, which was reaffirmed in December.
America's former allies have found it more advisable to hedge their bets
Turkey, under the dominant Justice and Development Party, began taking a more independent line with regard to Washington almost two decades ago, when it refused to allow US forces to invade Iraq from its territory. Since then, Turkey’s then prime minister, now president, Recep Tayyip Erdogan, has systematically favoured Turkish national interests, regardless of whether they clashed with American preferences.
Lately, his threat to mount a new military intervention against Kurdish-controlled areas in northern Syria, amid signs that Turkey might normalise relations with the Assad regime, has worried Washington. For the US, the Kurds are the main force preventing a revival of ISIS. Yet, Turkey sees the consolidation of Kurdish autonomy in Syria as an existential threat, which could inspire Turkey’s own Kurds to follow a similar path.
The Saudi decision to push for an oil production cut in October also angered the Americans. At a time of rising inflation, a conflict with Russia over Ukraine, and the onset of congressional elections, the Biden administration wanted to lower global oil prices. However, Saudi Arabia – which must finance development plans of its own to transition away from oil, and which has refused to break with its Opec+ partner Russia – ignored Washington.
While the decision led to an angry backlash in the US, it underlined that the region was changing inexorably. The Pax Americana that had shaped the Middle East since the end of the Cold War was over. With the Americans "pivoting" away from the region, the Saudis had to find other means to enhance their security and diversify their oil buyers. This included maintaining ties with Russia and expanding the relationship with China.
Such steps have not pleased Washington. Yet, to many regional states, the US wants to have its cake and eat it too. The Americans don’t want to protect their allies, but they somehow want these same allies to embrace American foreign policy priorities as their own. Understandably, that’s not an attitude that can go far in today’s Middle East.
Indeed, it has become a norm for major regional states to maintain good relations with all the great powers, rather than choosing sides. This applies as much to Turkey and Saudi Arabia as to the UAE and Egypt, all of which have realised that the US is of two minds on its regional sway. Amid persistent uncertainty and ambiguity about what the Americans really want, former allies have found it more advisable to hedge their bets.
Accepting the consequences of this situation will take time for policymakers in Washington. But it’s also true that the Americans may have surrendered much power for little real gain. If the regional balance is disrupted to Washington’s disadvantage, for instance, the US might opt to intervene militarily again. In other words, wanting to disengage from the region does not necessarily mean the Americans will be liberated from its troubles down the road.
That is why Mr Obama’s abstract vision of the region was so problematic. As president, he viewed the region largely in cold, theoretical terms. That the countries of the Middle East are now taking the implications of his message to heart could mean that his advisers who are in the current administration may regret what their former boss wished for.
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David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
Jetour T1 specs
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Recycle Reuse Repurpose
New central waste facility on site at expo Dubai South area to handle estimated 173 tonne of waste generated daily by millions of visitors
Recyclables such as plastic, paper, glass will be collected from bins on the expo site and taken to the new expo Central Waste Facility on site
Organic waste will be processed at the new onsite Central Waste Facility, treated and converted into compost to be re-used to green the expo area
Of 173 tonnes of waste daily, an estimated 39 per cent will be recyclables, 48 per cent organic waste and 13 per cent general waste.
About 147 tonnes will be recycled and converted to new products at another existing facility in Ras Al Khor
Recycling at Ras Al Khor unit:
Plastic items to be converted to plastic bags and recycled
Paper pulp moulded products such as cup carriers, egg trays, seed pots, and food packaging trays
Glass waste into bowls, lights, candle holders, serving trays and coasters
Aim is for 85 per cent of waste from the site to be diverted from landfill
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.”
Look north
BBC business reporters, like a new raft of government officials, are being removed from the national and international hub of London and surely the quality of their work must suffer.
WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
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The Breadwinner
Director: Nora Twomey
Starring: Saara Chaudry, Soma Chhaya, Laara Sadiq
Three stars