HERZLIYA, ISRAEL // Israeli settlement building in occupied territory is undermining chances of a two-state solution and leading instead to a one-state solution, Mahmoud Abbas, the chairman of the Palestine Liberation Organisation, told an English newspaper in remarks published yesterday.
In an interview with The Guardian, Mr Abbas also said he was nevertheless positively inclined towards a suggestion to begin negotiations with so-called proximity talks - direct but lower-level talks - and said he would accept face-to-face negotiations if Israel instituted a full settlement freeze for three months, lowering his demand from last year when the Palestinians wanted a settlement freeze for a year or longer.
Mr Abbas's remarks come as Israeli policymakers, politicians and experts take turns presenting their positions at the Herzliya Conference.
The governance and policy conference north of Tel Aviv is traditionally identified with the right-wing in Israel but has gathered enormous mainstream attention since Ariel Sharon, the former Israeli prime minister, used it as the platform to announce his decision to unilaterally withdraw from Gaza Strip settlements in 2003.
The mantra of the current Israeli government, which announced a partial and temporary settlement construction freeze in the West Bank minus East Jerusalem in November, is that it is the Palestinians who are now the obstacle to a resumption of negotiations.
On Sunday, Uzi Arad, the national security adviser to Benjamin Netanyahu, the Israeli prime minister, told delegates in Herzliya that it was "a fact that the Palestinians are the naysayers" when it comes to the peace process, something he said that has not escaped the US administration's attention. Mr Arad also went on to say that what is known through the media is not necessarily what is happening behind closed doors, and suggested that US efforts to see negotiations resume might bear fruit in the "near- to mid-term".
Yesterday, however, Tzipi Livni, the head of Kadima, the main opposition party, said the fault for the lack of negotiations lies with Israel.
"Negotiations with Palestinians have ceased because of the change in the Israeli political climate," said Ms Livni, who served as foreign minister in the previous Israeli government with which, according to Mr Abbas, negotiations came "closer than ever". It was one of Israel's two main concerns to ensure peace with the Palestinians, she continued, a peace that could come only in the context of a two-state solution.
Such a two-state solution is under threat, however, Mr Abbas told The Guardian because Israeli settlement construction is making it a practical impossibility. The Palestinians have long warned that Israeli settlement building in occupied territory undermines the emergence of a Palestinian state by colonising land that any new state needs to use for its own purposes and severs East Jerusalem from the rest of Palestinian territory.
There have been growing calls in recent years among Palestinians to abandon two-state talks in favour of a civil rights movement that would call for equal rights within a single, binational state. Some of those arguments have come from supporters of a two-state solution who believe Israeli settlement construction over the years has proven that the country is not serious about reaching an equitable negotiated two-state solution.
Indeed, the call for a full settlement construction freeze is partly a test of Israeli intentions in negotiations.
That Mr Abbas appears to be slowly climbing down from last year's position that any construction freeze should last for at least one year, however, also indicates that US pressure is beginning to show.
George Mitchell, the US envoy to the region, held talks with both Israeli and Palestinian leaders recently in which he suggested that negotiations could start with lower-level contacts focused on specific issues.
To The Guardian, Mr Abbas said it all depends on Israeli intentions. "If there is any substance in the response from the Israeli side - for example, if they accept the framework of a two-state solution based on the 1967 borders and an end to occupation, with timelines and mechanisms - then there will be progress," Mr Abbas said.
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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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Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.