US President Joe Biden and Saudi Crown Prince Mohammed bin Salman during the Jeddah Security and Development Summit in Saudi Arabia, in July 2022. Reuters
US President Joe Biden and Saudi Crown Prince Mohammed bin Salman during the Jeddah Security and Development Summit in Saudi Arabia, in July 2022. Reuters
US President Joe Biden and Saudi Crown Prince Mohammed bin Salman during the Jeddah Security and Development Summit in Saudi Arabia, in July 2022. Reuters
US President Joe Biden and Saudi Crown Prince Mohammed bin Salman during the Jeddah Security and Development Summit in Saudi Arabia, in July 2022. Reuters

Senior US officials arrive in Riyadh to discuss Iran and strengthen ties with GCC


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A high level US government delegation will travel to Riyadh to meet representatives from GCC governments to discuss “shared priorities” in the region, especially strengthening security, a US government statement said.

The delegation is scheduled to visit from February 13-16 to participate in the US-Gulf Co-operation Council Working Group meetings and will include officials from the State Department, Pentagon and the National Security Council, which includes US cabinet officials and specialist advisers.

According to Dana Stroul, Deputy Assistant Secretary of Defence for the Middle East, dealing with Iran and countering terrorism, as well as the prospect of creating an integrated air and missile defence system in the region will be the main topics of discussion, alongside maritime security.

The US delegation for the working group on Iran will be led by Rob Malley, Special Envoy for Iran, Christopher Landberg, US Special Envoy for the Global Coalition to Defeat ISIS, and several other senior state department officials.

We are strategic partners and we've been friends for over 80 years, and we've stood by each other where it counts and where it matters
Princess Reema bint Bandar,
Saudi Arabia's Ambassador to the US

Representatives from Nasa, US Air Force Central Command, Defence Security Co-operation Agency, US Navy Central Command and Defence Intelligence Agency will also be present in Riyadh. The Defence Intelligence Agency is the military branch of US intelligence.

“What’s very clear to the US, and what is very clear to our partners, is that the threats of today and the threats of tomorrow do not respect borders and therefore call for updating and upgrading how we partner together,” Ms Stroul said.

She said that proliferation of unmanned aerial vehicles, or drones, was just one challenge to security in the region.

The US continues to invest heavily in cost effective ways to intercept drones, which fly at much lower altitudes than expensive conventional radar systems and air defence missiles are configured for.

In this handout infrared photo from the U. S. Marine Corps, the USS Portland fires a laser weapon system at a target floating in the Gulf of Aden on Tuesday, Dec. 14, 2021. The U. S. Navy announced Wednesday it tested a laser weapon and destroyed a floating target in the Mideast, a system that could be used to counter bomb-laden drone boats deployed by Yemen's Houthi rebels in the Red Sea. (Staff Sgt. Donald Holbert/U. S. Marine Corps via AP)
In this handout infrared photo from the U. S. Marine Corps, the USS Portland fires a laser weapon system at a target floating in the Gulf of Aden on Tuesday, Dec. 14, 2021. The U. S. Navy announced Wednesday it tested a laser weapon and destroyed a floating target in the Mideast, a system that could be used to counter bomb-laden drone boats deployed by Yemen's Houthi rebels in the Red Sea. (Staff Sgt. Donald Holbert/U. S. Marine Corps via AP)

Special radar systems and sensors are already being deployed to protect US forces in Iraq from Iran-made drones, which are smaller than manned aircraft and have a smaller radar signature than missiles, making them hard to detect until it is too late. The US has in some cases used laser weapons to burn the electronics of enemy drones.

Ms Stroul also called for stronger efforts to combat the smuggling of weapons and drugs across the region, and called for multilateral co-operation to stop states from arming and training proxy militias and terror groups in the region.

This is the second time officials will convene after the first working group meetings took place last March. The US put off the follow up meeting officially scheduled for last October, reportedly due to political tension over the decision by OPEC+ members to slash oil output.

Xi Jinping and Joe Biden's visits to Saudi Arabia compared
Xi Jinping and Joe Biden's visits to Saudi Arabia compared

Despite the Biden administration stating that it would review its relationship with Saudi Arabia, Saudi Arabian officials continue to refer to the US as a strong partner.

In January, Saudi Arabia’s ambassador to the US Princess Reema bint Bandar said the relationship of the two countries is “beyond critically necessary for the world”.

Princess Reema said “there is disagreement sometimes but there is also a strong partnership — the partnership creates a more stable world”.

“We are strategic partners and we've been friends for over 80 years, and we've stood by each other where it counts and where it matters,” she said during a World Economic Forum panel at Davos.

H.R.H. Princess Reema Bint Bandar Al-Saud, Vice-President for Development and Planning, Saudi Arabian General Sports Authority, Saudi Arabia during the Session "Building Saudi Arabia's Future Economy " at the Annual Meeting 2018 of the World Economic Forum in Davos, January 25, 2018. Copyright by World Economic Forum / Boris Baldinger
H.R.H. Princess Reema Bint Bandar Al-Saud, Vice-President for Development and Planning, Saudi Arabian General Sports Authority, Saudi Arabia during the Session "Building Saudi Arabia's Future Economy " at the Annual Meeting 2018 of the World Economic Forum in Davos, January 25, 2018. Copyright by World Economic Forum / Boris Baldinger

This week’s meetings are meant to showcase the significance the US places on ties with GCC members.

All GCC members including Saudi Arabia, Oman, Bahrain, Kuwait, Qatar and the United Arab Emirates have condemned Iran’s “malign behaviour” and for supplying weapons to Yemen.

Iran is also accused of breaching UN resolutions by providing drones to Russia for its onslaught on Ukraine, believed to be delivered directly by air.

Iran supports Yemen's Houthi rebels whose weapons have been used to attack the UAE and Saudi Arabia.

Saudi Arabia continues to be a target of missile and drone attacks from Yemen since it launched a military campaign against the Iranian-backed Houthis in 2015 in a coalition with the GCC countries.

Attacks have decreased recently and in January, Saudi Arabia and Houthi rebels discussed ways to strengthen the informal ceasefire, according to Saudi Arabian, Yemeni and UN officials.

However on Monday, the British government revealed it had captured an illegal Iranian weapons shipment to Yemen, which included cruise missiles and anti-aircraft missiles.

“Once again the Iranian regime has been exposed for its reckless proliferation of weapons and destabilising activity in the region,” said Britain's Middle East minister Lord Tariq Ahmad. He said that Iran's continued violation of the arms embargo has “stoked further conflict and undermined UN-led peace efforts”.

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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.”

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