'Peace process' is a fig leaf for Quartet

Nobody should be surprised that the "deadline" to resume peace talks expired yesterday with hardly a whimper. The Palestinian Authority president Mahmoud Abbas, rightly, refused to resume talks in Amman unless Israel made some commitment on borders for a two state-solution. He asked for a commitment that talks would actually be meaningful. Israel, as was to be expected, declined.

Even the Middle East Quartet, which set this date in October, watched the deadline pass in something resembling resignation. More than it harms the already-defunct peace process, this seems to drive another nail in the coffin of the Quartet's relevance in the region.

Renewed talks were part of the back-room deal to avert a United Nations Security Council vote on Palestinian statehood late last year. The bait and switch worked. The momentum that the Palestinian Authority gained from its UN bid, and Unesco's recognition of Palestine, has largely evaporated.

We knew in October that this Israeli government would not agree to realistic talks. The Quartet's proposal for renewed progress in negotiations beggared belief, and leaders from Washington to Moscow knew it. The proposal for talks just alleviated pressure on Israel and conferred on the Quartet a pretence of usefulness. All the while Israel was laying the foundations of more illegal settlements on occupied West Bank land.

Without a unified Palestinian political force, without a renewed peaceful resistance and without significant international pressure, Israel will not bend. This is not to say that negotiations should be off the table. Mr Abbas had agreed to resume direct talks largely because of the urging of King Abdullah II, who reportedly has said Jordan is willing to bring pressure to bear through its 1994 peace treaty with Israel. That pressure must be supported and redoubled.

EU members, much more than the United States, wish to see movement on this issue. But how many times do we need to hear that the peace process is dead? Amr Moussa, the former Arab League chief, pronounced the corpse in 2006; last May, the veteran US negotiator George Mitchell resigned after accomplishing almost nothing. Negotiations require a more realistic view from Israel. Concerted diplomatic pressure, not arbitrary deadlines, is the only way forward.

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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'Peace process' is a fig leaf for Quartet

Yet another deadline has passed fruitlessly in Israeli-Palestinian talks. The Quartet has accomplished nothing except to delay while Israel keeps building.

The National's picks