The nuclear game
The nuclear game

For US, Israel’s nuclear arsenal is the elephant in the room



In order to hold a sound debate, it is said, opposing sides must first have an agreed-upon set of facts, a common view of what constitutes reality. It’s no surprise, then, that debates about nuclear arms in the Middle East – including over Iran’s contentious nuclear programme – tend to run amok.

In this case, the reality in the region is that only one country, Israel, maintains a stockpile of the world’s most dangerous weapons. Despite this being exposed in 1986 by an Israeli whistle-blower, Mordechai Vanunu, Israel has never acknowledged its arsenal, estimated to be between 80 and 200 bombs. In what has since become the official line on its nukes, then-deputy defence minister Shimon Peres told US president John Kennedy in 1963: “Israel will not be the first to introduce nuclear weapons to the Middle East” – leveraging an almost comically narrow definition of the word “introduce”.

More curiously, Israel’s main backer, the United States, won’t acknowledge reality either. Since a late-1960s agreement with Israel, US officials, ranging from members of Congress to nuclear scientists, are barred from publicly acknowledging Israel’s nuclear arsenal. Last year, an analyst at a US government nuclear lab lost his job after mentioning Israel’s nukes in an academic journal article.

That ridiculous dynamic, however, may be giving way to tacit acknowledgement. A quiet shift occurred recently when the US defence department released a previously classified 1987 report on Israel’s nuclear research. It came to light as part of a Freedom of Information lawsuit by Grant Smith of the Institute for Research: Middle Eastern Policy.

Issued by the Pentagon-funded Institute for Defence Analysis (IDA), the report suggests US complicity in Israel's development of its nuclear capabilities. William Greider, writing for The Nation magazine (to which I am a contributor), reported that the IDA's findings "seem to hint at a copy-cat process in which the US government either actively helped or at least looked the other way while Israel borrowed or purloined technologies to establish a parallel nuclear system that looks a lot like America's".

The report doesn’t state outright that Israel has the bomb, but describes in detail an Israeli nuclear infrastructure of immense proportions.

The timing couldn’t be worse for Israel. Tensions with the US are high and prime minister Benjamin Netanyahu is feverishly working every lever of influence in America to block a potential nuclear deal with Iran.

Israel is the world’s most outspoken critic of Iran’s nuclear programme and a vociferous opponent of the diplomacy between Iran and world powers, including the US, to peacefully constrain that programme.

Israel persistently calls for heightened transparency with regard to Iran’s programme – for example, by denouncing the reported deal on the table now for not going far enough. But what one academic calls “nuclear opacity” stands as a weak spot in Israel’s activism on Iran. Avner Cohen has said the policy is “anachronistic, even counterproductive”; indeed, the Iranians haven’t shied away from exploiting the hypocrisy as a propaganda cudgel against their regional foes.

After Mr Netanyahu’s speech to US Congress earlier this month, Iranian president Hassan Rouhani lashed out at the contradiction. “People of the world and America are too smart to take advice from [Israel],” he said, “which has pursued, produced and stockpiled a large number of atomic bombs in violation of international laws and away from the eyes of international inspectors.” Iran, he noted, is – unlike Israel – a signatory to the Nuclear Non-Proliferation Treaty.

Because of its complicity in keeping Israel’s nuclear secret, the US takes a propaganda hit, too. Not least of the US aims at stake is that of a Nuclear Weapons-Free Zone in the Middle East. While Africa, Latin America, the South Pacific, South-east Asia and Central Asia have agree to go nuke-free, one of the world’s most explosive regions can’t even kick-start its conversation because of Israel’s posture.

A planned 2012 conference aimed at creating such a zone reportedly collapsed because of Israel’s refusal to participate. Iran, again, gained the upper hand in its propaganda war by agreeing to join the effort (though only when it already appeared the talks wouldn’t proceed).

But Iran’s point scoring isn’t the only cost: talks toward a nuke-free zone that included Israel would’ve been a milestone not just for non-proliferation in a dangerous region, but also Israel’s efforts to gain diplomatic relations with its neighbours. A region-wide conference including Israel would have been unprecedented, amounting to de facto recognition.

In this regard and others, Israel has created a Catch-22 with “nuclear opacity”. Last year, a spokesman at the Israeli embassy in Washington noted: “Israel supports a Middle East free of all weapons of mass destruction following the attainment of peace.” And yet Israel’s nuclear weapons are among the reasons the larger international community views it as a pariah state.

Would a more bold US acknowledgement of Israel’s nukes help Israel in its goals of regional recognition and international acceptance? The answer is not clear. It would, however, certainly remove America’s complicity in Israel’s obfuscation of clear realities. US officials, after all, not Israelis, have to sit across from the Iranians at the negotiating table.

Indeed, the US has its own imperatives. Abiding by Israel’s policy of “opacity” hurts America’s credibility in pursuing its own aims of international non-proliferation. The US position, as the former CIA analyst Paul Pillar put it, is “not just a double standard but living a lie”.

One can’t help but regard the US’s own commitment to non-proliferation as something of a joke when, for example, Barack Obama answered a 2009 question about Israel’s nuclear programme by saying: “With respect to nuclear weapons, you know, I don’t want to speculate.”

The logic behind “nuclear opacity” – that acknowledging Israeli nuclear weapons would lead to a rush among Middle Eastern countries for their own bombs – has long since become irrelevant. If Israel’s enemies were going to move towards acquiring nuclear arsenals, it would not be because of Israel’s public recognition of something that they already knew two decades ago.

There’s no upside of Israel maintaining its ambiguous posture, only costs such as Israel’s isolation and damage to US credibility. The recently released Pentagon report is only a chink in the armour, but the candour is welcome. It’s time the US stopped participating in this farce.

Ali Gharib is a reporting fellow with the Investigative Fund at the Nation Institute, where he focuses on US foreign policy

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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.”