Israeli Prime Minister Benjamin Netanyahu has tough negotiations ahead as he fell two seats short of a majority. AP
Israeli Prime Minister Benjamin Netanyahu has tough negotiations ahead as he fell two seats short of a majority. AP
Israeli Prime Minister Benjamin Netanyahu has tough negotiations ahead as he fell two seats short of a majority. AP
Israeli Prime Minister Benjamin Netanyahu has tough negotiations ahead as he fell two seats short of a majority. AP

Netanyahu wins election battle but hurdles for political survival remain


Rosie Scammell
  • English
  • Arabic

Israel’s Prime Minister Benjamin Netanyahu has outperformed his rival in elections but hurdles remain for the country’s longest-serving leader, who on Tuesday appeared short of a majority while Arab politicians celebrated a surge in support.

With ballots from Monday’s election still being counted, Mr Netanyahu’s right-wing Likud party was forecast to pick up 36 seats while Benny Gantz’s centrist Blue and White party was on track to clinch 32.

Although partial results show the premier doing better than expected in the country’s third election in less than a year, Mr Netanyahu currently stands two seats short of a governing majority in the 120-member Knesset.

Intense negotiations are due to begin with smaller parties from the right-wing block, with the possibility of poaching a couple of lawmakers from the centre or left appearing more likely than a unity government with Mr Gantz.

Despite pulling in an impressive 15 seats according to the latest tally, the Arab-led Joint List is expected to once again be excluded from coalition talks. But as the third-largest alliance in parliament, Israeli Arabs will wield greater political influence.

The Joint List’s Ahmad Tibi said the results were an “unprecedented achievement”,  while decrying Mr Netanyhau’s election success as a “black day” for Israel.

“We will do everything possible to block Benjamin Netanyahu” from forming a government, he told public broadcaster Kan.

President Reuven Rivlin is expected to task Mr Netanyahu with putting together a coalition, and politicians will be under pressure to co-operate rather than push the electorate to a fourth election.

Avigdor Lieberman stands as a potential kingmaker, as his far-right Yisrael Beiteinu is set to win 7 seats. Giving his support to Mr Netanyahu would secure the necessary majority, but the former defence minister ruled out joining a coalition with Likud’s ultra-Orthodox allies after September’s poll.

Beyond the corridors of power, the prime minister is preparing to stand trial on corruption charges later this month after rescinding his request for parliamentary immunity.

Winning another term in office could have a marked impact on the legal process, according to Yossi Shain from Tel Aviv University.

“I think he will be able to undermine the system more and more, perhaps delay his trial for years, and basically get out of it,” he said, warning of an ongoing assault on the judiciary.

While a sitting prime minister is not required to step down until all avenues of appeal have been exhausted, an Israeli NGO launched a legal challenge on Tuesday against Mr Netanyahu being given the mandate to form a government.

Even if the incumbent is able to form a working majority and stay in power, political analyst Dahlia Scheindlin said he would be unable to delay the trial.

“He would need a legal basis; he would have to pass laws,” she said. “He will face a significant backlash if he does try.”

While Mr Netanyahu’s legal woes failed to deter voters, Likud’s strong performance at the polls also gives him the green light to push ahead with annexing swathes of the occupied West Bank.

The election pledge to annex land where more than 400,000 Israeli settlers live was a cornerstone of a Middle East peace plan unveiled in January by the US administration; a policy rejected by the Palestinians.

Top Palestinian negotiator Saeb Erekat on Tuesday said “settlement, occupation and apartheid have won the Israeli elections,” writing on Twitter.

Annexation is likely to be a condition for smaller pro-settlement parties to join Likud in government, but the timing may be determined by US President Donald Trump.

“If he has 61 (seats) then he has four years, he doesn’t have to do it in the first year,” said Gayil Talshir from Jerusalem’s Hebrew University.

“I think it will be put on the agenda and it will play out in relation to Trump’s needs from Netanyahu,” she added.

The Joint List, which gets most of its support from Palestinian citizens of Israel, does not have enough parliamentary clout to prevent Mr Netanyahu pushing ahead with annexation.

But they have emerged from the elections as a “stronger voting force”, Ms Scheindlin said, which could lead to greater Jewish-Arab political partnership in the Knesset.

“It’s part of a long-term shift in political perceptions about the role of Arab citizens in the political landscape,” she added.

Israeli Arabs make up around 20 per cent of the population and have until recently registered low turnout in national elections. A backlash against the premier’s anti-Arab rhetoric saw the trend reversed in recent months, with the Joint List making considerable gains in Monday’s poll.

With a larger share of MPs, the Joint List is better-positioned to lobby the government to improve the lives of Arab Israelis.

“Now because of Netanyahu’s incitement against them, they achieved a role in Israeli politics,” said Ms Talshir. “They will play politically the way they never did before.”

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.”

Jurassic%20Park
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ESteven%20Spielberg%3Cbr%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Sam%20Neill%2C%20Jeff%20Goldblum%20and%20Richard%20Attenborough%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%205%2F5%3C%2Fp%3E%0A