The 'house Bush built' drags on America's reputation



One year ago, on the second anniversary of US President Barack Obama's historic Cairo University address, the Arab American Institute released the results of our 2011 Arab world polling. The findings were devastating, though not wholly unexpected. What we found was that America's overall favourable ratings across the Arab world were lower in 2011 than they had been in the last year of the Bush Administration.

Domestic opponents of President Obama rather shamefully leapt for joy, refusing to acknowledge that this collapse of hope for change was in no small measure due to their obstructionism. And they appeared unconcerned with the consequences this loss of trust was having on America's ability to function across the region. More troubling than the precipitous decline in America's standing in the Arab world are the constraints this situation has imposed on the ability of the United States to play a constructive role in regional affairs.

We live in what I call the house that Bush built. Both in the US and abroad, the impact of the sometimes neglectful and other times reckless policies of the last administration are everywhere in evidence. In the Middle East alone, Americans witnessed two failed wars that have been costly beyond measure in lives and treasure; abominable behaviours that sullied the United States' honour (torture, Guantanamo, Abu Ghraib, "black sites", rendition and more); an emboldened hard-line government in Israel, coupled with the collapse of the Palestinian Authority and a failed peace process; an unleashed and aggressive Iran, flexing its muscles throughout the region; and the spread of destabilising extremist currents.

This was the mess that greeted President Obama when he entered the White House. What is most galling is that his opponents had supported the policies that landed us in this mess in the first place, and now they continue to oppose every effort to change direction.

They denounced the withdrawal of combat forces from Iraq and now advocate an indeterminate involvement in Afghanistan. They have criticised Mr Obama's condemnation of torture, rebuking him for "apologising for America". They blocked all efforts to close Guantanamo. They have publicly embraced Israeli prime minister Benjamin Netanyahu, siding with the intransigent Israeli leader against Mr Obama while, at the same time, attempting to cut off aid to the Palestinians. They have denounced efforts to negotiate with Iran to rein in its nuclear programme, advocating a more muscular approach while publicly supporting Israel's "right" to bomb that country. And they have refused support for programmes the president has proposed that would provide needed capacity-building in Arab countries currently undergoing democratic transformations.

It is possible to see this destructive dynamic at work in the partisan debate that has developed in face of the sustained and horrific violence that is now rocking Syria.

Responding quite soberly to the tragic Syrian situation last week, the US ambassador to the United Nations, Susan Rice, made clear that as horrific as the violence has been, it could get worse. She correctly cautioned against a military approach, laying out in detail her concerns, noting for example that "funnelling more weapons" into Syria risks creating "an all-out civil war and regional war". Speaking for the administration, Ms Rice said a diplomatic and negotiated end to the fighting and to the regime was preferable.

What the administration also knows is that given the strategic position of Syria, the fragility of the country and its neighbours and America's low political standing in the region, US involvement in another ground war in the heart of the Middle East is the last thing the region needs at this time.

Mr Obama's opponents, on the other hand, have sought to take advantage of the public's outrage over the atrocities they see occurring in Syria and to irresponsibly use it for political advantage. Republican presidential hopeful Mitt Romney, for example, criticised the White House last week, terming Mr Obama weak and indecisive. Mr Romney's supporters went further, with Senator Lindsey Graham advocating US-led aggressive military action, and Senator John McCain calling on the administration to arm the Syrian opposition and set up a "safe haven" within Syria in which the rebels can operate against the regime.

But how could this be done without international legitimacy? How would a US-led assault be received in the region, where despite distaste for the Syrian regime people are less trusting of America? And what would be the effect of all this on vulnerable populations in Syria, or on Lebanon, Iraq, Jordan or Turkey?

This push for forceful action by the US may resonate with some, but in the world in which we live these calls for military blows represent nothing more than the same dangerous reckless adventurism that landed the US in the mess it's in.

To be fair, the loss of American standing across the region is not just the fault of domestic opponents. In several instances, the administration hasn't helped itself. Over reliance on drone strikes to assassinate suspected terror targets, for instance, has delivered a blow to America's claim to uphold international law.

So here we are, three years after the remarkable speech in Cairo. The Arab world is undergoing significant and sometimes destabilising change, and the promised change in US policy is not yet on the horizon.

We are now in the midst of an election year; if change is to come at all, it will most likely have to wait until after November.

James Zogby is the president of the Arab American Institute

On Twitter @aaiusa

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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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Selma Abdelhamid, the group's moderator, offers her guide to guide the cost of having a young family:

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