At this week’s summit at Camp David, both American and Gulf Cooperation Council (GCC) leaders will be genuinely hoping for a reset in their recently frayed relations. The challenges are difficult, but hardly insurmountable.
The single most important issue is international nuclear negotiations with Iran. Washington initiated the meeting explicitly as a means of addressing the concerns of Gulf Arab states regarding the talks with Iran. The American side will try to explain what, precisely, Washington is trying to accomplish, and how all the states in the region will benefit from a nuclear agreement.
The Americans will undoubtedly point out that such negotiations are the only viable means short of a conflict to prevent Iran from gaining nuclear weapons. They will say that a conflict would be potentially devastating to all parties, including the Arab Gulf states. They will make the case that gaining leverage with Iran allows the United States to pursue a whole range of concerns in order to modify Tehran’s behaviour and curb its excesses.
The GCC states are a willing, but somewhat sceptical, audience on these points. Their concerns do not lie entirely, or even mainly, in the problem of whether or not Iran will eventually acquire a nuclear weapon. Instead, they tend to focus on the spread of Iran’s regional influence and its foothold in Arab countries such as Syria, Iraq, Lebanon and Yemen. And what they fear, above all, is that, for one reason or another, American policy is beginning to “tilt” towards Tehran and away from traditional US allies in the region.
Even if the United States and its negotiating partners secure an agreement with Iran that ultimately prevents the development of a “Persian bomb”, a nightmare scenario for the Arab states might still emerge. If, as part of an elaborate quid pro quo, the traditional American opposition to Iran’s expanded influence in the region were to be dropped or reduced in importance without a significant alteration of Iranian policies that would be a disaster from a GCC perspective.
As the United States insists that it’s not “tilting” towards Tehran, the GCC states will seek corroborative evidence through deeds rather than words. In particular, they will want to see how far the United States is willing to go in rolling back the influence of Iran and its allies in Syria, Iraq and/or Yemen. There is particular dissatisfaction with the increasingly ambiguous American stance towards Syrian dictator Bashar Al Assad, and the widespread impression, right or wrong, that Washington has discarded its former position that he must go. But in the Obama administration there is little appetite for a more assertive Syria policy, beyond the campaign against ISIL.
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Read more about the US role in the region:
■ Strained relations within GCC affect US security interests
■ The growing Iranian footprint
■ Ties with Iran need cautious approach
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The Gulf states will also be looking for enhanced security arrangements and guarantees. Specifically, as the UAE ambassador to Washington Youssef Al Otaiba put it last week: “We need something in writing.” But the administration is not even going to try to sell Congress and the American public on new strategic treaty obligations towards the Gulf countries that would mandate a greater commitment in the Middle East. On the contrary, the dominant American political sentiment at almost all levels of society is to reduce rather than expand Middle East deployments, obligations and entanglements.
The Arab side may have to settle for a little less than what they hope for on multiple fronts.
Instead of a new formal security treaty, they might be able to secure, in writing, something like a reiteration of the 1980 Carter Doctrine, which pledged to defend Gulf security from any external threats. And they might be able to establish a consultative mechanism for urgent strategic threats, perhaps loosely modelled on Nato’s Article 4 process that allows signatories to convene emergency meetings.
Just as the Gulf seeks a qualitative military edge over Iran, Israel seeks to maintain one over the Arab states, and this complicates GCC requests. So, instead of the very highest level of military technology transfer, such as F-35 fifth-generation fighter jets, they may get other forms of new technology such as the (initially unarmed) Predator drones due to be sold to the UAE. New high-tech weapons sales can be backed-up with greater intelligence sharing and coordination and joint military exercises.
And instead of being placed under a direct and automatic American “nuclear umbrella”, the Gulf states are reportedly likely to be offered American assistance in developing their own, joint missile-defence programme.
If the GCC states press the Americans too hard, and possibly even if they don’t, they could find themselves answering some pointed questions themselves. The American side might not only raise familiar concerns about intolerant rhetoric among clerics and others and financial support for extremists by wealthy individuals. They might also pursue Mr Obama’s idea that the “biggest threat” US Arab allies face is “dissatisfaction inside their own countries”.
But the frank airing of concerns by both sides at the meetings should pose no obstacle to a reset. There are ample grounds for significant progress because the US and GCC members have numerous shared vital interests.The summit should be just the beginning of a much longer, intensified dialogue between two parts of the world that, like it or not, still need each other as much as ever.
Hussein Ibish is a senior resident scholar at the Gulf Arab States Institute in Washington
On Twitter: @ibishblog
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.”
Israel Palestine on Swedish TV 1958-1989
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Rating: 5/5
UAE currency: the story behind the money in your pockets
What is graphene?
Graphene is extracted from graphite and is made up of pure carbon.
It is 200 times more resistant than steel and five times lighter than aluminum.
It conducts electricity better than any other material at room temperature.
It is thought that graphene could boost the useful life of batteries by 10 per cent.
Graphene can also detect cancer cells in the early stages of the disease.
The material was first discovered when Andre Geim and Konstantin Novoselov were 'playing' with graphite at the University of Manchester in 2004.
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- Always check the weather forecast before setting off
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- Set off early to avoid sudden weather changes in the afternoon
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If you go...
Fly from Dubai or Abu Dhabi to Chiang Mai in Thailand, via Bangkok, before taking a five-hour bus ride across the Laos border to Huay Xai. The land border crossing at Huay Xai is a well-trodden route, meaning entry is swift, though travellers should be aware of visa requirements for both countries.
Flights from Dubai start at Dh4,000 return with Emirates, while Etihad flights from Abu Dhabi start at Dh2,000. Local buses can be booked in Chiang Mai from around Dh50
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