x Abu Dhabi, UAEMonday 24 July 2017

Pushing Middle East peace to the top of Obama's agenda

President Mahmoud Abbas along with leading advisers to President-elect Obama, say the peace process demands the incoming president's immediate attention. After six years the Arab League plan is finally gaining traction. Citigroup is running short on time and options as its stock price gets hammered. Citi's CEO, Vikram Pandit, has a philosophical outlook that gives him a sense of calm that the banking giant's shareholders obviously lack.

"Palestinian president Mahmoud Abbas on Saturday urged US president-elect Barack Obama to apply himself to the Middle East peace process as soon as he enters the White House on January 20," AFP reported. " 'Ending the occupation and creating an independent Palestinian state with Jerusalem as its capital are the key to security, peace and stability in the region, and we turn towards the new administration headed by Barack Obama,' Abbas said. "He was speaking more than 200 foreign businessmen in the northern West Bank city of Nablus at a conference on investment in the Palestinian territories. " 'We urge him to immediately apply himself to the peace process, on the basis of implementing international resolutions linked to the Palestinian question, including the Arab plan,' he said. " 'For six years we have talked about the Arab initiative which can be summed up thus: withdraw from Palestine, the (occupied Syrian) Golan Heights and the Shebaa farms (on the Lebanon-Syria-Israeli border) and 57 Arab and Islamic states will recognise you,' Abbas said, addressing the Israelis. " 'What more do you want? Instead of living in an island of peace you will live in an ocean of peace.' " In Haaretz, Akiva Eldar said there are three things that have suddenly brought the Arab League plan to centre stage: "Barack Obama's election as the next American president, the likelihood of Likud chairman Benjamin Netanyahu becoming Israel's next prime minister in February, and fear that Mahmoud Abbas' already shaky rule in the Palestinian Authority will collapse. And since Obama will be sworn in 20 days before Israel's election, he might be able to influence the outcome by publicly supporting the Saudi peace plan: Anyone who voted for Netanyahu would then know he was defying Obama." In an analysis for Haaretz, Amir Oren said: "Eight weeks before Barack Obama is sworn into office, signs have emerged over the weekend that point to what is turning out to be the new administration's plan to resolve the Israeli-Palestinian conflict. This is the conclusion that one reaches when considering the upcoming appointment of Hillary Clinton to the position of secretary of state; the reports that Obama could name retired general James Jones to the position of national security adviser; and the president-elect's reliance on the advice of Brent Scowcroft, who served as national security adviser in the administrations of Gerald Ford and George HW Bush. Obama and Scowcroft are said to have spoken at least twice since the election. "Despite the attention being paid to Clinton, no less important is the move made two days ago by Scowcroft and the man who succeeded him in office as national security adviser to Jimmy Carter, Zbigniew Brzezinski. In an op-ed piece penned for The Washington Post, Scowcroft (whom John McCain considered naming as a special envoy to the Middle East) and Brzezinski (who was close to Obama during the initial stages of his candidacy for president) offered a kind of first draft of 'The Obama Plan'.... "Even though they do not name names, one can clearly notice an effort to influence on the election results in Israel so as to favor moderate candidates - Tzipi Livni and Ehud Barak - over Benjamin Netanyahu." Meanwhile, McClatchy Newspapers reported: "Israel has pushed the Gaza Strip to the brink of a humanitarian crisis by cutting off the supply of most aid, choking off the flow of fuel for Gaza's only power plant and restricting the transfer of most supplies. "Beyond that, Israel is barring most diplomats, aid workers and international journalists from going into Gaza - an unprecedented and sweeping ban that's entering its third week. " 'It's very precarious,' John Ging, director of the United Nations refugee program in Gaza, said Friday. 'It's really a matter of brinksmanship and we're in a perpetual state of collapse.' "The new crackdown comes as Israeli leaders are increasingly acknowledging what critics have long argued: That they need to develop different strategies to try to change the political realities in Gaza. " 'Everybody involved in this is advocating very strongly for a change in approach of punitive sanctions through closure of the crossings,' Ging said. 'It's devastating from a human perspective, but also for the prospects for security, prosperity and peace.'" Reporting on the conflict between Hamas and Fatah, Al Ahram Weekly said: "Moussa Abu Marzouk, the Damascus-based deputy chief of the Hamas politburo, is non-committal about the fate of Palestinian national reconciliation talks that were called off before they began in Cairo earlier this month. He is, however, clear about one thing: on 9 January the presidency of Mahmoud Abbas, leader of Fatah and an angry adversary of Hamas, ends. Any attempt to extend it by force, direct or indirect, will create a serious political problem on the Palestinian scene - much serious than what has been unfolding over the past two years of animosity between Hamas and Fatah. "Intimating Hamas's possible reaction, 'Yes, we could have two presidents,' Abu Marzouk stated in his Damascus residence this week. "For Hamas, and some argue for the Islamic Jihad and other Islamist and leftist Palestinian factions, Abbas will automatically lose his legitimacy on 9 January. 'Any attempt to re-interpret Palestinian basic law to extend his term in office would be simply void of legitimacy. We will not acknowledge him as a president one day beyond 9 January. So he has [less than two months] to go,' Abu Marzouk said."

Citigroup under pressure to make tough choices

"Less than two months ago, Citigroup emerged from the wreckage of the financial crisis as one of the last titans left standing on Wall Street," The New York Times reported. "Now, in a stunning turnabout, the banking giant has sunk to its knees after a series of blows that have driven its stock price to a mere $3.77 on Friday - and left it running short on time and options. "In the decade since Citigroup was born from the merger of Citicorp and Travelers Group, it weathered many storms that threatened to pull it apart. But the current turmoil can be traced back to the last weekend of September, when it sought to reassert itself by swallowing Wachovia, the stricken bank based in Charlotte, NC, whose vast deposit base would have turned Citi into one of America's dominant lenders. "As the global financial crisis drove Wachovia toward collapse, the government frantically engineered their marriage. At a bargain price of $1 a share, Vikram S Pandit, Citigroup's chief executive, was happy to oblige: The deal would have greatly enhanced Citi's retail banking presence and added more stable consumer deposits to a balance sheet staggered by billions in write-downs on bad mortgage loans and related securities. "But like so many other things for Citigroup over the last several years, it fell apart. Less than a week later, Wells Fargo, the powerful San Francisco-based bank, swooped in with a higher offer. Citi was left in the lurch, without a business that was vital to its future." Time magazine said: "Most analysts believe Citigroup can survive its current market woes, though probably not without some changes. In a report out on Friday, Deutsche Bank analyst Mike Mayo, who has been a long-time bear on Citi, says the company has adequate capital to survive. When you factor in the $25 billion Citi got from the Treasury's Troubled Asset Relief Program, Mayo estimates the bank has as much as $100 billion in cash cushion. "And Citi's lending business has actually performed relatively well in this environment. In the third quarter, the company said it had $5 billion in loans on which customers were no longer making payments. In all, Citigroup has set aside $24 billion for loan loss reserves. For most firms, that's a lot of IOUs to go bad. But for Citi it's peanuts. In fact, $24 billion is just under 3.5 per cent of Citi's overall loan book of $718 billion. And that's not a bad charge-off rate during a time when sub-prime mortgage loans are defaulting in double-digit rates. " 'The issue with Citi is the degree to which the downtrend in its stock price affects fundamental factors, as seen with other financial firms over the past few months,' Mayo wrote in the report. "So to avoid the fate of Lehman or Bear, the firm's board may feel like it needs to do something to boost it's stock price. One option would be to boot chief executive Vikram Pandit. Some on Wall Street believe Pandit has not been quick enough to react to the problems of the firm and could still be in denial. On Friday, Pandit told top executives that he doesn't believe Citi needs to sell off parts of its business to raise capital. Investors don't seem to agree. The stock fell on the news." The Financial Times said that Mr Pandit: "has told friends that he is frustrated, and often angered, by the destruction of shareholder value that is taking place under his watch but remains determined to carry out his task: cleaning up Citi's balance sheet and reviving its fortunes. "So far, Citi's strategic needs have played to his strengths. The bank needed capital and he raised $50bn from investors earlier, and on better terms, than many rivals. Expenses and toxic assets had to be reduced and he set about the job with the zeal of a proven risk manager. "But Citi's woes might call for more visionary and charismatic leadership than he can offer. Sir Win Bischoff, Citi chairman, who has also come under internal fire, says those fears are unfounded. 'In the current environment, I would rather have a leader who is very good at understanding the nuts and bolts of the business than a glad-handing type.' "Mr Pandit points to his traditional Indian upbringing as a source of calm. 'I cannot deny that a piece of my Indian upbringing stayed with me,' he says. 'As I go about my life, there is a clear sense of Karma, that the tide is going to come and go and the main thing you have to do is influence where you are on the tide.' "Citi's shareholders must hope he will not be swept away by the waves of selling that have rocked a once-dominant financial group."

pwoodward@thenational.ae