Barack Obama, the US president,said force is an option but urges patience on sanctions against Iran at the at the American Israel Public Affairs Committee.
Barack Obama, the US president,said force is an option but urges patience on sanctions against Iran at the at the American Israel Public Affairs Committee.

Obama attacks 'loose talk' of Iran war



WASHINGTON // Barack Obama delivered his most explicit threat yet that the United States would use force to prevent Iran from obtaining nuclear weapons.

But the US president also said international sanctions should be given more time, and blamed "too much loose talk of war" for helping Tehran and driving up the price of oil.

Mr Obama told delegates from the most influential pro-Israel advocacy group in America that Israelhad a "sovereign right" to make its own security decisions.

"Iran's leaders should know that I do not have a policy of containment; I have a policy to prevent Iran from obtaining a nuclear weapon. And as I've made clear time and again during the course of my presidency, I will not hesitate to use force when it is necessary to defend the United States and its interests," he said.

Mr Obama was speaking at the opening session of the annual policy conference of the American Israel Public Affairs Committee (Aipac). His remarks come at the beginning of a crucial series of meetings this week between US and Israeli leaders in Washington and amid a growing clamour from Israel for a stronger US position on Iran's nuclear programme.

The focus on Iran means that for the first time in years the Palestinian issue is not the top priority in US-Israel talks. Some analysts even wonder if the peace process will be discussed at all today when Mr Obama meets Benjamin Netanyahu, the Israeli prime minister.

Mr Obama did tell Aipac delegates that the pursuit of peace remained "more important, not less" in view of the Arab Spring.

"I believe that peace is profoundly in Israel's security interest. The reality that Israel faces - from shifting demographics, to emerging technologies, to an extremely difficult international environment - demands a resolution of this issue."

But the bulk of his speech was spent reassuring his audience that the US "will insist upon Israel's security and legitimacy" and that a nuclear-armed Iran is not only "completely counter" to Israel's security interests, "it is also counter to the national security interests of the United States".

"I have said that when it comes to preventing Iran from obtaining a nuclear weapon, I will take no options off the table, and I mean what I say. That includes all elements of American power. A political effort aimed at isolating Iran; a diplomatic effort to sustain our coalition and ensure that the Iranian programme is monitored; an economic effort that imposes crippling sanctions; and, yes, a military effort to be prepared for any contingency."

Mr Obama, however, will also urge Israel to cool talk of a military strike on Iran when he meets Mr Netanyahu today. In his speech to Aipac he said the US would use force only "when the time and circumstances demand it".

The US and Israel openly differ on the urgency with which to attempt any violent disabling of Iran's nuclear programme. Israeli leaders have said time is running out to stop Iran from acquiring nuclear weapons, but the US wants to give international sanctions more time.

Avigdor Lieberman, the Israeli foreign minister, said yesterday Israel would decide whether to strike Iranian nuclear targets as an "independent state". Shimon Peres, Israel's president, who also spoke at the Aipac conference, also chimed in.

"Iran is an evil, corrupt regime," he told delegates. "Iran's ambition is to control the Middle East so it can control a major part of the world economy. It must be stopped, and it will be stopped."

Tehran denies that it is seeking nuclear weapons. Ayatollah Ali Khamenei, Iran's supreme leader, last month repeated his position that holding such weapons was "a sin" in Islam.

Israel is convinced, however, that Iran is forging ahead with a weaponisation programme and that international sanctions will not be enough to deter Tehran. Ehud Barak, the Israeli defence minister, has invoked a "zone of immunity" that if reached, would render any Israeli attack on Iran's nuclear sites less effective.

Mr Obama will have to persuade Mr Netanyahu today to trust that the US does not "bluff" when it says all options are on the table, as he said in an interview with The Atlantic magazine published on Friday, and allow sanctions more time.

The challenge for Mr Obama is to convince Israel - a country that wants to be able to dominate its regional environment unaided - to rely on the US, said Robert Danin of the Council on Foreign Relations.

"The Israelis want a clearer indication of a serious American military threat in order for them to feel comfortable in standing down," Mr Danin said.

"We are coming to what the Israelis believe is a decisive moment, after which their ability to act is going to be severely hampered and they are going to have to entrust another country with their national security."

The focus on Iran has shunted aside talk over the faltering peace process with the Palestinians, and the topic might not come up at all when the Mr Obama and Mr Netanyahu meet, said Mark Perry, an independent Washington-based military and political analyst.

Mr Obama made the Palestinian-Israeli peace process an early priority for his administration, but Israeli intransigence on settlement construction in occupied territory has haunted attempts to establish a credible negotiations process. Now, suggested Mr Perry, should the topic come up on Monday, the differences will still be there, but any US criticism of Israel would be "mild".

But the administration also has to contend with a domestic political environment in which there is blanket support for Israel in the US Congress. In December, and over White House wishes, the Senate voted 100-0 - a very rare unanimous vote - to target Iran's central bank in sanctions against the country.

And with a presidential election looming later this year, Mr Perry said, Republican presidential hopefuls see the Iran issue as an opening to criticise Mr Obama for being soft on Iran and tough on Israel.

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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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Formula Middle East Calendar (Formula Regional and Formula 4)
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