Israel and Iran: masters of the art of stalling



For all their foaming-at-the-mouth antipathy towards each other, Israel and Iran share one thing in common: they have perfected the art of stalling. Today, the delays and evasions of the Middle East's two most formidable powers hold the region in thrall.

It was no surprise that Benjamin Netanyahu, the Israeli prime minister, seemed content after his meeting with Barack Obama, the US president, and Mahmoud Abbas, the Palestinian president, yesterday in New York. Even the Obama administration acknowledged beforehand that the meeting would probably not produce any results. Instead, Ian Kelly, a state department spokesman, noted tepidly that the talks would "advance our efforts towards our ultimate goal" and would show that Mr Obama "is personally engaged in the effort". Mr Netanyahu could rest easily.

In fact, the Israeli leader's satisfaction represents another victory for delay diplomacy, which has succeeded in defying the Obama administration over Jewish settlements in the West Bank and once again staved off pressure for peace talks with the Palestinians. For a time after Mr Netanyahu took office in March, it did not appear that the usual Israeli stalling tactics would prevail. First, the Israeli premier tried to change the subject, saying the principal issue facing the world was Iran's nuclear ambitions.

When the shifting-the-goalposts gambit failed to keep Washington at bay, Mr Netanyahu turned to another manoeuvre in Israel's diplomatic playbook. Through aides, he complained that Mr Obama was applying more pressure on West Bank settlements than his government could bear. Since then, the my-government-is-too-fragile-to-make-concessions stall has been coupled, with considerable success, to another oft-used talking point, this one suggesting that US and Palestinian attempts to hold Israel to the commitments it made regarding settlements in the 2003 "road map" peace plan were counterproductive, even cruel.

This week, for instance, The New York Times quoted an unnamed "top Israeli official" as saying that the Palestinians should not object to the construction of kindergartens or other new public buildings inside existing settlements because if those communities are ultimately transferred to the Palestinians, those buildings would go to them. It was a particularly polished example of diplomatic spin. For one thing, it suggested that Palestinians were undermining their own self-interest by demanding that Israel live up to its pledges regarding settlements. For another, it intimated that Palestinians were against children and education.

The tactic - at once trivialising, sensationalising and disparaging - was nothing new. In 2004, George W Bush asked Ariel Sharon why Israel was violating its commitments on settlement growth. Mr Sharon reportedly replied: "What do you expect me to do - to ask the settlers' wives to have abortions?" Even Mr Bush, the closest friend Israel has had in Washington in years, was said to have been stunned.

Perhaps the most effective stall in the Israeli diplomatic playbook leading up to yesterday's meeting was the suggestion that inherent weaknesses in Palestinian society make them ineligible and undeserving of statehood. Final status talks, therefore, are a waste of time. The most frequently cited example is the divided rule of the Palestinian territories. From the trivial to the ingenious, the goal of the stalling tactics by Israel's political establishment is simple, Palestinians say. While it publicly professes to support the formation of a Palestinian state and have its hand perennially "extended in peace", it continues inexorably to make conditions for such a state all but impossible.

According to sceptics about official pronouncements out of Tehran, the goal of Iran's stalling tactics over its nuclear programme also is simple. By dawdling on the dance floors of various international institutions such as the United Nations and the International Atomic Energy Agency, they say, Tehran is buying time to complete the uranium enrichment process and build a nuclear weapon. Upon completing a bomb, it will unveil its membership in the nuclear club and dare the world to expel it.

Tehran is simply denying the existence, as it were, of the goalposts: it has proposed a meeting agenda that seems to include everything but its uranium enrichment activities. Along with the US shuttle diplomacy that is expected to follow yesterday's meeting in New York, the coming weeks will determine whether Iran and Israel can continue the delay game, which is slowly paralysing the region. Owing to the power of his office, Mr Obama may be the one person who can stop the game, change the rules and relieve the region of two predicaments that have drawn it into the mire. With Cairo a faded memory, the day of reckoning for the US president appears to be drawing near.

Mr Obama already has said there will have to be an "assessment" of Tehran's position by the end of the year. But with his hopes for health care reform and re-election lurking in the back of his mind, what will he stake in a showdown with Iran, let alone Israel? To complicate matters further, Israel's own atomic arsenal is a factor in the Iranian nuclear debate. Ehud Barak, the Israeli defence minister, indicated last week that Israel's arsenal would not be included in any regional disarmament discussion. In a variant on the they-aren't-ready-for-primetime theme, Mr Barak said the Muslim world must first "behave like Western Europe".

With confrontation looming, there persists the hope - at least among some in Israel - that the US president will cease to be a factor at all and that the delay game will be able to continue apace. "My right-wing friends say Obama is getting weaker, and soon they'll find out that he wasn't even born in the US," one Israeli recently confided. cnelson@thenational.ae

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While you're here

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.”