What will US engagement in the Middle East look like under President Joe Biden? This is a question that has been ruminated on since last summer, when the idea of the former vice president potentially succeeding Donald Trump in the White House was first being considered as a reality.
In recent weeks, an answer has been crystallising.
The Biden administration has set bold targets, seeking in particular to tackle three massive issues: the climate emergency, the Covid-19 pandemic and creating millions of jobs for Americans.
Alongside these high-priority policy goals has been a decision to pull US troops out of Afghanistan, reconfigure the American military role in Iraq and a move to begin negotiations for a new nuclear deal with Iran. All three have ramifications for the Middle East’s security and stability.
Taken together, at first glance, these developments might be seen as the fruition of a scenario that most worried policymakers a year ago when they first contemplated Mr Biden as President – that US engagement in the region would begin to diminish in favour of other priorities.
It might be obvious to many, but it is worth restating that America’s continued interest in the affairs of the Middle East is of immense significance. Beyond the security parameters that might most concern various governments, the people living in the region do care about what the US does here.
For example, young Arabs have strong views about it. The Arab Youth Survey 2020 found that 56 per cent of 18-to-24-year-olds saw America as an ally – up from 35 per cent in 2018. However, 43 per cent of respondents describe it as an enemy.
If we view the relationship between the US and this region only through the prism of security, then we lose sight of risks
This contradiction does nothing to undermine the idea that the US’s attitude and actions in the Middle East will continue to be under intense scrutiny.
Such survey results also reflect the multi-faceted nature of the world’s largest economy, still the leading military, technological and diplomatic power today.
Equally, when discussing what US engagement looks like, we must also be willing to explore more complex notions of how it might manifest. It cannot simply be that the scale of American military assets or boots on the ground will determine how much focus Mr Biden gives the region.
Of course, such criteria are still very important, as we continue to see in Iraq, but it is also an old-fashioned metric, an overhang from the new world order after the Second World War.
As Secretary of State Antony Blinken took great pains to say amid the worried reaction to the announcement of a withdrawal of US forces from Afghanistan by September 11, the nature of risks being faced have changed and so the response to them must similarly evolve, even as he insisted that overall levels of engagement would continue to be high.
Likewise, in Iraq, the ambition is to move away from a combat role, but there seems no desire by Washington to let go completely of its support for the country.
In any case, by making climate change, the pandemic and the economy his main areas of focus, Mr Biden has made a commitment to a global outlook knowing that there cannot be an exclusively American solution for any of them.
For example, he is hosting an online climate summit on Thursday with 40 world leaders as the US takes the lead on action on climate change. Among them are representatives from countries in the Middle East, which is as much on the front lines of climate impact as anywhere else.
In terms of the coronavirus pandemic, it is understood by the Biden administration that mitigating the risk of “catastrophic biological threats” requires acknowledging “our interconnected world”. There will be dialogue with all nations in this regard, including in the Middle East.
Also, to pay for his $2 trillion jobs plan, Mr Biden is tackling corporate tax rates globally. His treasury secretary, Janet Yellen, has said, "We will fare better if we work together and support each other." To be effective, there cannot be any outlier nations that allow companies the opportunity to undermine Mr Biden's goals on this front. Extensive negotiations will be needed and the Middle East will have an important role to play.
To make a success of all of his plans, the US will need the support of America's allies in the region as much as elsewhere. To this point, the special envoy on climate John Kerry was in Abu Dhabi recently for a regional dialogue where 11 countries pledged to ensure the success of the 2015 Paris Agreement.
Yet, it is not just climate change on which the US will continue to engage actively with the Middle East. Economic and investment ties remain critical.
If we view the relationship between the US and this region only through the prism of security, then we will lose sight of some of the risks facing all of us, whether it be climate change or future pandemics.
US engagement is needed on all fronts to help the region to meet such crises, and ensuring stability while we tackle such issues will remain paramount. Whether US troops are here or not will be prove to be largely immaterial.
As US foreign policy adapts under Mr Biden, engagement with the Middle East will look different and feel different, but it will likely still be productive.
Mustafa Alrawi is an assistant editor-in-chief at The National
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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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Benedict Wells
Translated from the German by Charlotte Collins
Sceptre
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Pool A – Dubai Exiles, Dubai Hurricanes, Bahrain, Dubai Sports City Eagles
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Pool D – Dubai Tigers, UAE Shaheen, Sharjah Wanderers, Amman Citadel 2
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Pool B – Dubai English Speaking College 2, Jumeirah College, Dubai College A, Abu Dhabi Harlequins 2
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Pool D – Al Ain Amblers, Repton Royals, Dubai Exiles, Gems World Academy Dubai
Pool E – JESS A, Abu Dhabi Sharks, Abu Dhabi Harlequins 1, EC
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Pool B – Arabian Knights, Dubai Hurricanes, Al Ain Amblers, Abu Dhabi Harlequins
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Starring: Dennis Quaid, Michael Ealy, Meagan Good
One star
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