New York // Barack Obama’s top foreign policy adviser says Washington’s scaled-back policy towards the Middle East reflects the administration’s determination not to be “consumed 24/7 by one region, as important as it is”.
“There’s a whole world out there,” the US president’s national security adviser Susan Rice told The New York Times. “And we’ve got interests and opportunities in that whole world.”
At Mr Obama’s direction, Ms Rice worked over the summer on mapping out a new role for the US in the Middle East that would allow him to refocus his second-term global agenda on America’s growing interests in East Asia and away from the turmoil that has monopolised Washington’s attention and resources.
Mr Obama presented the review’s results in his speech to the United Nations General Assembly last month that centered almost exclusively on his new Middle East priorities: negotiating a nuclear deal with Iran; renewed Israeli-Palestinian peace talks; and containing the violence in Syria.
Diplomatic opportunities such as the Iranian president Hassan Rouhani’s goal of sanctions relief, would be pursued, but the speech cast doubt on whether Mr Obama would ever consider broad military involvement in the region, except to protect the free flow of oil, stop nuclear proliferation or in counterterrorism operations.
There was also little emphasis on previously central policy issues such as Egypt or on democracy promotion in post-Arab Spring countries, a stark change in tone from 2011 and an implicit acceptance of the position that the US has a limited ability to shape outcomes in countries where revolts have devolved into war or violently polarised societies.
“He thought it was a good time to step back and reassess, in a very critical and kind of no-holds-barred way, how we conceive the region,” Ms Rice told the Times in an interview published on Saturday.
Her comments reflect a growing view in Washington that the Middle East is declining in relative importance and the interests that sustained the traditional US role are changing, due in part to its increasing domestic energy production.
While the US will remain involved in the Middle East “for a long time”, “this is something quite substantial,” said Daniel Serwer, a professor at the Johns Hopkins School of Advanced International Studies. “It’s not an abandonment, but it’s a re-dimensioning of how much attention they pay.”
“The shift in Washington is about making an effort to conserve American power,” said Mr Serwer. “There is a feeling that from 2001 on we exhausted ourselves in Iraq and Afghanistan and we can’t afford either financially or in terms of national esprit to continue in that direction.”
He said Washington was also preoccupied with the slow economic recovery and the political budget crisis in Congress. The administration thinks that it is no longer feasible for the US to be the Middle East’s policeman and that conserving power and restoring the country’s economic health will allow the US to be “an effective fireman when the need truly arises”.
The new policy has its share of critics in Washington, many of whom say that simply reacting to crises as they emerge will be detrimental to US interests in the longer term, when it will be forced to engage despite its efforts to remain on the sidelines.
“The place where that’s most obvious is in Syria, where to limit America interests exclusively to chemical weapons is just a mistake,” Mr Serwer said. “The question of extremists and the destabilising of the region are serious questions that demand American attention.”
Mr Obama’s stated first-term goal of “pivoting” away from the Middle East to East Asia, where the US sees its future economic interests as well as where it must contain China, was stillborn in the wake of the Arab Spring and spreading conflict. Ms Rice’s policy review was meant to correct the US course in Asia, which was also hampered by the budget crisis in Washington.
Every Saturday morning in July and August, Ms Rice, 48, who was promoted from her former position as UN ambassador, met with a team of White House foreign policy experts to reassess America’s core interests in the Middle East and what was realistically achievable.
“It would have been easy to write the president’s speech in a way that would have protected us from criticism,” Philip H Gordon, the coordinator for the Middle East and North Africa on the National Security Council, told the Times. “We were trying to be honest and realistic.”
During its intense debates, the team papered Ms Rice’s office wall with notes, as it worked to meet Mr Obama’s UN speech deadline. The president was updated daily throughout the process and he prompted Ms Rice to emphasise and develop particular issues that reflected the change in his thinking since 2011.
No State Department or Pentagon staff were involved in the policy review, which likely allowed for a relatively swift and coherent doctrine to emerge, Mr Serwer said, unlike the administration debate over Syria policy, which dragged on for years without a clear strategy.
tkhan@thenational.ae
The story of Edge
Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, established Edge in 2019.
It brought together 25 state-owned and independent companies specialising in weapons systems, cyber protection and electronic warfare.
Edge has an annual revenue of $5 billion and employs more than 12,000 people.
Some of the companies include Nimr, a maker of armoured vehicles, Caracal, which manufactures guns and ammunitions company, Lahab
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
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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Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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UAE currency: the story behind the money in your pockets
New UK refugee system
- A new “core protection” for refugees moving from permanent to a more basic, temporary protection
- Shortened leave to remain - refugees will receive 30 months instead of five years
- A longer path to settlement with no indefinite settled status until a refugee has spent 20 years in Britain
- To encourage refugees to integrate the government will encourage them to out of the core protection route wherever possible.
- Under core protection there will be no automatic right to family reunion
- Refugees will have a reduced right to public funds
Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE