Saudi Arabia's foreign minister visited Chatham House in London. Photo: SPA
Saudi Arabia's foreign minister visited Chatham House in London. Photo: SPA
Saudi Arabia's foreign minister visited Chatham House in London. Photo: SPA
Saudi Arabia's foreign minister visited Chatham House in London. Photo: SPA

Gulf

Saudi Arabia

Saudi Foreign Minister says Syria dialogue could pave way for Arab League return

Prince Faisal bin Farhan Al Saud said Riyadh was open to Iran talks

The National

March 08, 2023

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Increased engagement with Syria might pave the way for its return to the Arab League as ties thaw after more than a decade of isolation, Saudi Arabia's Foreign Minister has said.

Prince Faisal bin Farhan Al Saud said consensus was building in the Arab world that isolating Syria was not working and that dialogue with Damascus was needed, particularly to address its humanitarian situation, though he said it was "too early to discuss" its return just yet.

"An engagement in order to address these concerns is necessary. And that may well lead eventually to Syria returning to the Arab League ... but for now, I think it's too early to discuss," he told reporters in London.

Syria was largely isolated from the rest of the Arab world following President Bashar Al Assad's crackdown on protests that erupted against his rule in 2011.

The Arab League suspended Syria's membership in 2011 and many Arab countries pulled their envoys out of Damascus.

But Mr Assad has benefited from an outpouring of support from Arab states following the devastating earthquake on February 6, which killed thousands of Syrians.

Speaking to Saudi-owned broadcaster Al Arabiya, Prince Faisal bin Farhan also stressed that the nuclear agreement with Iran is not ideal in its current form and that it must address the concerns of neighbouring countries.

"We are open to dialogue with Iran," he said.

The deal Iran reached with the UK, China, France, Germany, Russia and the US collapsed after Washington's unilateral withdrawal in 2018 under former US President Donald Trump.

On Monday, Iran's Foreign Ministry spokesman Nasser Kanani expressed the hope that International Atomic Energy Agency head Rafael Grossi’s visit would pave the way for a resumption of negotiations to revive the 2015 agreement.

When Algeria hosted the first Arab League summit since 2019, Damascus stayed away after Algeria failed to persuade other Arab states to end Syria's suspension.

Saudi Arabia will host this year's Arab League summit. Asked whether Syria would be welcome, Prince Faisal said: "I think it's too early to talk about that."

"But I can say that ... that there is a consensus building in the Arab world, that the status quo is not tenable. And that means we have to find a way to move beyond that status quo."

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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.”

Updated: March 08, 2023, 6:48 AM
Saudi ArabiaSyriaIran