TEL AVIV // Israel yesterday decided to continue withholding about US$100 million (Dh367 million) of tax revenues that it owes to the Palestinian Authority, two weeks after it suspended the transfer in protest of Palestine's admission to a major United Nations agency.
The money is important to the cash-strapped Palestinian Authority and was bound to spur further financial troubles for the West Bank-based government. The Palestinian Authority uses much of the money to pay the tens of thousands of people that it employs, including police scattered throughout the Israeli-occupied territory charged with maintaining security arrangements with Israeli authorities.
The Israeli decision was passed by a narrow margin in a vote in the security cabinet, reflecting discord on the issue. The main disagreement was between Ehud Barak, the defence minister, who claims the suspension would hurt Israel by prompting instability in the West Bank, and the Finance Minister Yuval Steinitz, a hardliner who wants to punish the Palestinians for initiating unilateral moves for international recognition.
Mr Barak was reportedly worried that extending the freezing of the customs, border and income taxes would lead to anger and violence among West Bank Palestinians. Israel must collect the funds for the Palestinians as part of the 1993 Oslo Accords and release them every month.
The cut-off of funds was first announced on November 1, a day after the United Nations Educational, Scientific and Cultural Organisation, or Unesco, accepted Palestine as a member, infuriating Israel and the US because it handed the Palestinians more international legitimacy. The money is usually transferred in the first three days of the month and its suspension took place right before a Muslim holiday. Salam Fayyad, the Palestinian prime minister and a respected economist, had said he would borrow from local banks to make sure government workers were paid before the holiday began.
The Palestinians' request for admission to Unesco had been part of a broader effort to gain UN recognition of their independent statehood, a request officially submitted in late September.
Unesco has encountered significant financial difficulties after accepting Palestine's membership, with the US ceasing its transfer of some $60m to the agency and Canada following suit. The US and Canada altogether accounted for about a quarter of the total contributions to the agency.
After the US and Canadian fund suspensions, Ban Ki-moon, the secretary-general of the UN, had warned that "millions" of beneficiaries in the world could be hurt if Palestine's admission into other UN agencies led to further cut-offs of contributions.
In the meantime, the Palestinians were facing an uphill challenge with their bid for UN recognition, as the institution's top body appears to be deadlocked over the request.
On Friday, the Security Council adopted a report that said its members had failed to agree on the Palestinian application. Riyad Mansour, the Palestinian UN envoy, told reporters over the weekend they would "intensify" their efforts for UN recognition and were "dead determined to succeed".
The US, a permanent member of the UN Security Council, has vowed to veto the Palestinian request should it come up for a vote and has lobbied intensively along with Israel to prevent the Palestinians from garnering the necessary nine votes out of 15 to approve membership.
Mahmoud Abbas, the president of the Palestinian Authority, was due to meet Arab League officials tomorrow to decide whether to seek a Security Council vote after all or try for an upgraded observer status with a statehood recognition vote by the wider general assembly.
Israel's decision to continue withholding funds came as Israeli officials met in Jerusalem with representatives of the Mideast Quartet, made up of the US, UN, European Union and Russia. The Quartet has hoped to bridge the rift between Israel and the Palestinians and return the two sides to the negotiation table.
However, prospects for a renewal of peace talks - in deadlock for more than a year after Israel rejected the Palestinian demand to freeze Jewish settlement expansion in the West Bank - appeared to be dim. On Sunday, Mr Abbas told David Hale, a US envoy, that the Palestinians would not resume talks unless Israel ceased all settlement activity and halted construction of Jewish homes in mostly Arab East Jerusalem. Mr Abbas also said that Israel must accept that the borders of the future Palestinian state would be based on the Israeli frontiers that existed before the 1967 Arab-Israeli war.
vbekker@thenational.ae
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
VEZEETA PROFILE
Date started: 2012
Founder: Amir Barsoum
Based: Dubai, UAE
Sector: HealthTech / MedTech
Size: 300 employees
Funding: $22.6 million (as of September 2018)
Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
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.”
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances