Israel-Saudi Arabia normalisation ‘inevitable’, former US ambassador says

Joseph Westphal, a former US ambassador to Saudi Arabia, has said the normalisation of ties between Saudi Arabia and Israel is “inevitable” and that President Joe Biden should seek a reset of relations with Riyadh during his coming trip.

“I think [normalisation is] coming, that’s absolutely coming and it's inevitable. It's inevitable,” Mr Westphal told The National on Monday.

Now a professor at the Lauder Institute at the University of Pennsylvania's Wharton School, Mr Westphal served as ambassador to Riyadh during former president Barack Obama's administration between 2014 and 2017.

Preparations under way for Biden Israel visit

Saudi Arabia never established diplomatic relations with Israel after its foundation in 1948, but recent efforts — including a push by the Biden administration before the president's trip to the region begins on Wednesday — have opened the door for the gradual improvement of ties.

Mr Westphal said the inevitability of normalisation is due to a generational shift in the kingdom, and a confluence of security and economic interests.

Saudi Arabia's "King Salman, who I got to know very well when I was there as ambassador and have huge respect for him, he is from the generation that really believes that we should do more to help the Palestinian people”, he said.

Crown Prince Mohammed bin Salman, however, “is of a different generation that sees the world with a different set of lenses”.

“Eventually it will shift as long as we [the US] continue to work to do something and support the Palestinian people,” Mr Westphal said.

Saudi Arabia's Prince Mohammed bin Salman receives Iraqi Prime Minister — in pictures

The diplomat and former secretary of the US Army said the normalisation would be gradual.

“You’ll see more and more Saudi Arabia and Israel coming together and [establishing] diplomatic relations,” he said.

He pointed to technological, cyber, economic and security co-operation with Israel as some of the main incentives for Riyadh.

Mr Biden will be the first US president to fly from Israel to Saudi Arabia on Friday. His predecessor, Donald Trump, was the first to make the journey from Riyadh to Tel Aviv in 2017.

The former ambassador described Mr Biden's visit as extremely important in the context of bilateral, regional and global politics, especially due to the fact that current US-Saudi relations are “fractured”.

For the past year and a half, US-Saudi tension has increased due to the killing of Saudi journalist Jamal Khashoggi and Riyadh's position on oil production, particularly following the Russian invasion of Ukraine.

“[The relationship is] fractured for a lot of reasons, some of which are political posturing on the part of everybody involved,” Mr Westphal said. “It’s time to reset it.”

Biden: Middle East trip not aimed at pressuring Gulf states for oil

The situation is becoming urgent for the US, he said, pointing to how China has made inroads in the Middle East both financially and economically.

“And that's not in our best interest,” he said. “We're losing a huge trade opportunity and a huge commercial opportunity.”

Mr Westphal — who worked directly with Mr Biden from 2009 to 2016 when he was vice president — expressed optimism over the president's ability to establish a working relationship with Prince Mohammed despite past remarks and criticism of Saudi Arabia's human rights record.

“I know President Biden. I've known him forever … One of his strongest characteristics is [that] he is a negotiator,” Mr Westphal said.

“He is a bridge builder. He did it for years and years in the Senate, with Republican opponents and sometimes with his own Democrats who opposed him … He will come around and find a way to work with Prince Mohammed and to restore this relationship in a positive [manner].”

The former ambassador added that Prince Mohammed has enacted sweeping social and economic reforms.

“We have to recognise that this is a leader that has made significant progress … along the way, he's made mistakes and he's realised those mistakes and now it's time to you to put everything on the table,” Mr Westphal said.

“It's time to recommit to our relationship and go forward.”

Security and regional defence issues will be at the top of the agenda during Mr Biden's visit, Mr Westphal said, especially during the meetings with the Gulf Corporation Council and Jordan, Iraq and Egypt (GCC+3), which will take place on Saturday.

The US plays unique role in the security of the region, he said.

“We have to step up. We can't say we're going to protect the sovereignty of a country and then when they get attacked, we don't do anything, which is what happened when the Iranians bombed Aramco [in 2019].”

Mr Trump decided not to respond to the attack despite his bombastic rhetoric on Tehran.

Mr Westphal supported the idea of a regional defence coalition within the GCC+3 framework.

“It focuses on things like security, cyber security, intelligence, as well as economic trade and development. In other words, to create a better union of these countries to protect the trade routes.”

This would require the US providing those countries “with the right defence mechanisms and equipment that they need, whether it's Patriot batteries or missile systems to equipment to counter ballistic missiles”.

Asked what would constitute a successful visit, the former ambassador said the proof would be in the follow-up meetings.

“This would be just the beginning, the first step, then we will send the secretary of defence, the secretary of state, the secretary of commerce, engage the private sector and others within the region to talk about how we work on all these issues,” Mr Westphal said.

Killing of Qassem Suleimani

National Editorial: Suleimani has been killed, now we must de-escalate

Jack Moore: Why the assassination is such a monumental gamble

Matthew Levitt: Iran retains its ability to launch terror attacks

Damien McElroy: A CEO tasked with spreading Iran's influence

Hussein Ibish: Trump's order on solid constitutional ground

Simon Waldman: Cautious Israel keeping a low profile

• Remittance charges will be tackled by blockchain

• UAE's monumental and risky Mars Mission to inspire future generations, says minister

• Could the UAE drive India's economy?

• News has a bright future and the UAE is at the heart of it

• Architecture is over - here's cybertecture

• The National announces Future of News journalism competition

• Round up: Experts share their visions of the world to come

Desert Warrior

Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley

Director: Rupert Wyatt

Rating: 3/5

More coverage from the Future Forum

• Remittance charges will be tackled by blockchain

• UAE's monumental and risky Mars Mission to inspire future generations, says minister

• Could the UAE drive India's economy?

• News has a bright future and the UAE is at the heart of it

• Architecture is over - here's cybertecture

• The National announces Future of News journalism competition

• Round up: Experts share their visions of the world to come

While you're here

Mohamed A El-Erian: Why Joe Biden really needs a smooth transition

Sulaiman Hakemy: What would Trump’s path to the Supreme Court look like?

James Reinl: Isolated Trump loses media allies while trying to salvage presidency

THE%C2%A0SPECS

%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.4-litre%20four-cylinder%0D%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20210hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20320Nm%0D%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20Starting%20from%20Dh89%2C900%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%0D%3Cbr%3E%3C%2Fp%3E%0A

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.”

HEADLINE HERE

I would recommend writing out the text in the body
And then copy into this box
It can be as long as you link
But I recommend you use the bullet point function (see red square)
Or try to keep the word count down
Be wary of other embeds lengthy fact boxes could crash into
That's about it

JAPAN SQUAD

Goalkeepers: Masaaki Higashiguchi, Shuichi Gonda, Daniel Schmidt
Defenders: Yuto Nagatomo, Tomoaki Makino, Maya Yoshida, Sho Sasaki, Hiroki Sakai, Sei Muroya, Genta Miura, Takehiro Tomiyasu
Midfielders: Toshihiro Aoyama, Genki Haraguchi, Gaku Shibasaki, Wataru Endo, Junya Ito, Shoya Nakajima, Takumi Minamino, Hidemasa Morita, Ritsu Doan
Forwards: Yuya Osako, Takuma Asano, Koya Kitagawa