Iranian relatives mourn for the victims of Wednesday's bombings in Kerman, Iran. Getty Images
Iranian relatives mourn for the victims of Wednesday's bombings in Kerman, Iran. Getty Images
Iranian relatives mourn for the victims of Wednesday's bombings in Kerman, Iran. Getty Images
Iranian relatives mourn for the victims of Wednesday's bombings in Kerman, Iran. Getty Images


Will ISIS succeed in further destabilising the Middle East?


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January 07, 2024

Last Thursday, ISIS claimed responsibility for the blasts that killed nearly a hundred people in the Iranian city of Kerman on the previous day. This is potentially a significant development for several reasons.

The terror group could be seeking to thwart any potential detente between Iran and the US. It might view the current events unfolding in the Middle East as an opportunity to reassert its itself. It may even be trying to diminish other extremist groups by reviving its own objectives, as rival outfits attempt to exploit the Palestinian cause to further their agendas.

If the Israel-Gaza war ends up helping resurrect ISIS, then this is no trivial matter.

Many will be worried about this development, especially the administration of US President Joe Biden, which is trying to prevent the Gaza conflict from escalating into a regional war – including through efforts to engage with Tehran.

Part of the problem is a focus on containment. It may be appropriate as a transitional solution similar to the truces that previous efforts have focused on, but by itself it is a fragile policy. For containment is one thing, and finding lasting solutions is another. Entities such as ISIS excel at exploiting this fragility, which contributes to the overall problem.

To be fair, the Biden administration is striving to achieve both: truces and containment as necessary short-term transitional goals, on the one hand; and on the other, working in parallel on available opportunities following the events of October 7 and their aftermath to secure a regional settlement and sustainable peace.

But the resurgence of ISIS on Mr Biden’s watch will provide ammunition for his critics. Some will hold his administration more broadly responsible, especially given its leniency towards Iran. This is particularly true if ISIS did carry out the Kerman attack, and with the objective of thwarting any understanding being forged between Washington and Tehran.

It is evident that a possible Lebanon-Israel breakthrough will not occur before a ceasefire in Gaza is announced

This logic may sound flawed but in an election year, flawed logic is often useful during campaigning.

Mr Biden’s likely opponent, former president Donald Trump, strongly opposes any rapprochement with the Iranian regime, even if the goal remains to contain the expansion of the Gaza war. This is because the Trump team distrusts Iran and its ambitions in the Middle East.

The governing Democratic Party, arguably, is banking on Iran to prevent a regional war. The latter, in turn, prefers the Democrats to remain in the White House, particularly out of concern for what the Republican Party, especially Mr Trump, might have planned after he had repealed the nuclear agreement previously signed by Democratic predecessor Barack Obama with Tehran.

As the Iran nuclear weapons programme nears completion, its leaders are reluctant to take any risks, especially given the timing of Hamas’s attack three months ago. The Islamic Revolutionary Guard Corps is averse to a war between Israel and Hezbollah in Lebanon, not only because it wishes to avoid direct engagement with Israel but also because Hezbollah remains a valuable card for it and isn’t inclined to use it prematurely.

Further, there are tangible benefits for Iran to co-operate with the Biden administration, including unlocking billions of dollars, trying to lift sanctions, and leveraging the cautious opening to the Gulf countries.

All of these factors heighten the suspicions of Trump supporters, who argue that Iran’s ideology has not changed.

One of Mr Trump’s closest advisers told me that a US administration under the former president will not succumb to Iranian blackmail. He said a Trump administration won’t allow Tehran to hold Washington hostage by threatening that Israel’s conflict with Hezbollah would trigger Iran’s direct intervention that, in turn, could potentially escalate into a direct confrontation with the US.

In this adviser’s view, the Biden administration is falling victim to Iranian blackmail, leading to covert deals with Tehran. He believes that this will harm American interests, empower Tehran and its proxies, and even increase the risk of the US getting entangled in a war with Iran.

Whatever the merits of this line of thinking, the Biden administration must be credited for preventing, so far, an Israel-Lebanon war that could be a precursor to a regional conflict. Credit can partially be attributed to Tehran, too, for restraining Hezbollah.

Moreover, the Biden team, which assigned Amos Hochstein the Lebanon file, has worked towards a qualitative settlement between Israel and Hezbollah, leading to a breakthrough in Lebanon-Israel relations. After Mr Hochstein helped demarcate the Lebanon-Israel maritime border with the approval of Iran and Hezbollah, along with diligent work from Speaker Nabih Berri, the two countries began negotiations to delineate their land borders.

Amos Hochstein, the US senior adviser for energy security, arrives in Beirut, Lebanon, last August. Reuters
Amos Hochstein, the US senior adviser for energy security, arrives in Beirut, Lebanon, last August. Reuters

Today, following military clashes between Israel and Hezbollah and the assassination of Hamas deputy leader Saleh Al Arouri in Beirut earlier in the week, notable statements have been issued that warrant attention. For example, Hezbollah chief Hassan Nasrallah expectedly adopted an angry rhetoric full of promises of revenge.

In parallel, however, the US with European support continues to persuade Lebanon and Israel to go beyond truces and containment and address the remaining points of disagreement between the two countries before demarcating the land borders and implementing Resolution 1701 that aims to resolve the 2006 Lebanon War.

It is evident that a breakthrough will not occur before a ceasefire in Gaza is announced. But there are indications that this is possible independent of how the Israel-Gaza war ends and a roadmap for the “day after” is laid out. After all, Israel needs its citizens to return to its north, a scenario that will unfold peacefully once the Lebanon-Israel borders are demarcated and Resolution 1701 is implemented by both Lebanon and Israel.

For its part, Hezbollah is not interested in one-upping armed Palestinian factions and does not want the resurgence of ISIS. Its leadership understands Iran’s strategic ambitions.

The challenge for the Biden administration, though, is in dealing with the far-right Israeli government with which it has an awkward relationship. Indeed, while the Iranian regime is likely to prefer Mr Biden’s re-election this November, Israel’s governing politicians will probably hope for Mr Trump’s return to the White House.

Nevertheless, Mr Trump is not opposed to the demarcation of the Lebanon-Israel borders, and he does not desire a war involving Lebanon. This shared perspective of the US’s presidential rivals could well be key to Lebanon’s political future.

Match info

Uefa Champions League Group B

Barcelona v Tottenham Hotspur, midnight

The President's Cake

Director: Hasan Hadi

Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem 

Rating: 4/5

Women%E2%80%99s%20T20%20World%20Cup%20Qualifier
%3Cp%3EFrom%20September%2018-25%2C%20Abu%20Dhabi%0D.%20The%20two%20finalists%20advance%20to%20the%20main%20event%20in%20South%20Africa%20in%20February%202023%0D%3Cbr%3E%20%0D%3Cbr%3EGroup%20A%3A%20United%20States%2C%20Ireland%2C%20Scotland%2C%20Bangladesh%0D%3Cbr%3EGroup%20B%3A%20UAE%2C%20Thailand%2C%20Zimbabwe%2C%20Papua%20New%20Guinea%0D%3Cbr%3E%20%0D%3Cbr%3EUAE%20group%20fixtures%3A%0D%3Cbr%3ESept%2018%2C%203pm%2C%20Zayed%20Cricket%20Stadium%20%E2%80%93%20UAE%20v%20Thailand%0D%3Cbr%3ESept%2019%2C%203pm%2C%20Tolerance%20Oval%20-%20PNG%20v%20UAE%0D%3Cbr%3ESept%2021%2C%207pm%2C%20Tolerance%20Oval%20%E2%80%93%20UAE%20v%20Zimbabwe%0D%3Cbr%3E%20%0D%3Cbr%3EUAE%20squad%3A%20Chaya%20Mughal%20(captain)%2C%20Esha%20Oza%2C%20Kavisha%20Kumari%2C%20Rinitha%20Rajith%2C%20Rithika%20Rajith%2C%20Khushi%20Sharma%2C%20Theertha%20Satish%2C%20Lavanya%20Keny%2C%20Priyanjali%20Jain%2C%20Suraksha%20Kotte%2C%20Natasha%20Cherriath%2C%20Indhuja%20Nandakumar%2C%20Vaishnave%20Mahesh%2C%20Siya%20Gokhale%2C%20Samaira%20Dharnidharka%0D%3C%2Fp%3E%0A

Veil (Object Lessons)
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The cost of Covid testing around the world

Egypt

Dh514 for citizens; Dh865 for tourists

Information can be found through VFS Global.

Jordan

Dh212

Centres include the Speciality Hospital, which now offers drive-through testing.

Cambodia

Dh478

Travel tests are managed by the Ministry of Health and National Institute of Public Health.

Zanzibar

AED 295

Zanzibar Public Health Emergency Operations Centre, located within the Lumumba Secondary School compound.

Abu Dhabi

Dh85

Abu Dhabi’s Seha has test centres throughout the UAE.

UK

From Dh400

Heathrow Airport now offers drive through and clinic-based testing, starting from Dh400 and up to Dh500 for the PCR test.

What is blockchain?

Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.

The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.

Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.

However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.

Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.

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.”

UAE currency: the story behind the money in your pockets
Updated: January 07, 2024, 2:00 PM