• A woman inspects damage in a children's room following an overnight attack in Erbil, the capital of the northern Iraqi Kurdish autonomous region. All photos by AFP
    A woman inspects damage in a children's room following an overnight attack in Erbil, the capital of the northern Iraqi Kurdish autonomous region. All photos by AFP
  • Damage at a shop.
    Damage at a shop.
  • A man inspects the damage at his home.
    A man inspects the damage at his home.
  • The damaged studio at the Kurdistan 24 TV building.
    The damaged studio at the Kurdistan 24 TV building.
  • Twelve missiles were fired early on Sunday, the state news agency and local leaders said.
    Twelve missiles were fired early on Sunday, the state news agency and local leaders said.
  • A man cleans debris in the Kurdistan 24 TV building.
    A man cleans debris in the Kurdistan 24 TV building.
  • A damaged building after the overnight attack in Erbil. US officials, speaking to AFP, said the missiles came from Iran.
    A damaged building after the overnight attack in Erbil. US officials, speaking to AFP, said the missiles came from Iran.
  • Ziryan Wazir rests at home after being wounded in the attack.
    Ziryan Wazir rests at home after being wounded in the attack.

Iran missile attack in Iraq was 'warning' that could backfire on Tehran


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The volley of ballistic missiles Iran fired at Erbil was a clumsy warning to political opposition parties in Iraq, analysts and Iraqis have told The National.

Iraq is undergoing a fraught government formation process in which parties opposed to Iran-backed groups could take the lead in selecting Cabinet ministers.

The attack wrecked a mansion owned by prominent businessman Baz Karim Barzinji, chief executive of the KAR oil company, and occurred close to the under-construction US consulate, wounding two civilians. Such a large number of missiles could have easily caused mass casualties.

Iran insists the attack’s target was an Israeli secret service site in revenge for a string of Israeli attacks in Syria and Iran, the latter allegedly against a drone base near Kermanshah in western Iran.

Michael Knights, at the Washington Institute for Near East Policy, said the attack was, in part, designed to give a message to parties poised to deal a blow to Iran-backed political groups diminished after October’s election results.

In Baghdad, Iraqi parties are at loggerheads over which has the biggest political bloc in parliament, a group that can take the lead in forming a government. Iran’s interests are at risk.

Mr Knights says the use of missiles for intimidation could backfire for the IRGC on all fronts, hardening the resolve of Iraqi political parties not aligned with Iran.

Qasim Al Araji, Iraq’s National Security Advisor and member of the Iran-backed Badr Organisation, visited the ruined house and Mr Barzinji on Sunday, following the announced formation of a joint Iraqi-Kurdish security committee to investigate the attack.

Iraq’s government formation

Moqtada Al Sadr, whose Sadrist bloc won the most seats in Iraq’s parliament after October’s bitterly contested elections, has formed an alliance with leading Sunni parties, notably the leading Kurdish Democratic Party, based in Erbil, where Sunday’s missile attack occurred.

He is also allied to parliament speaker Mohammed Al Halbousi’s Taqaddum and an array of smaller parties, placing their so-called “tripartite alliance” in pole position to form the government.

Taqaddum and KDP MPs have faced a range of threats and assassination attempts amid a fierce rejection of the election results by parties closely allied with Iran, including the Badr Organisation, Asaib Ahl Al Haq and former PM Nouri Al Maliki’s State of Law Coalition, which suffered humiliating losses in the low-turnout election.

All have armed militias, or are linked to Iran-backed armed groups. Militiamen loyal to Sadr, himself once backed by Iran, have in the past clashed with Iran-backed militias.

Political violence has long been the modus operandi of Iran-backed parties who stand accused of intimidating and killing hundreds of opposition activists.

On January 26, rockets were fired at the headquarters of Mr Al Halbousi’s political party in Anbar. On January 14, a KDP official escaped an assassination attempt in Baghdad, hours after grenades were thrown at a KDP office. Those attacks followed an attempt to kill PM Mustafa Al Kadhimi in November, in what analysts said resembled a signature Iran-proxy attack.

After the attack on Sunday, which injured two civilian bystanders, Moqtada Al Sadr issued a strong statement against the violence. He said “Iraqi soil in the north, south, east and west, must not be used as theatre for political, military and security conflicts,” expressing strong solidarity with the Kurds.

“The attack targeted a civilian structure that’s owned by a very successful businessman associated with the Barzani family,” Mr Knights said, an explanation of the attempt to pressure Sadr and the KDP to make concessions to Iran-backed groups.

Mossad claims dismissed

“Regarding to what happened few days ago in Kurdistan, they established a base for the Israelis from which they conspire against us and plan operations,” said Iraj Masjedi, Iran’s ambassador to Iraq, who is also a member of the IRGC, on Monday.

“Iran claims that this building was used by Israeli intelligence agents to help orchestrate a drone attack inside Iran on February the 14th, 2022. But there’s no evidence that that is the case,” Mr Knights says.

Kurdish officials stringently deny the allegations.

“This is not the first time they repeated [the allegation of an Israeli presence] it’s happened more than once,” says Safeen Dizayee, head of the department of foreign relations in the Kurdish regional government.

“We refuse it this is as propaganda. And we call on the Iranian government to come and check and give us the proof regarding to what they said before, and what they say about the Mossad,” he said.

Mr Dizayee said the Iraqi government of Mr Al Kadhimi had been supportive of the KRG after the attack.

“The Iraqi government announced the establishment of a committee with the Kurdistan Region,” he says, noting the committee’s investigations into the attack will be led by security forces. Mr Al Kadhimi, along with senior defence officials, has visited the site of the attack, holding meetings with the Kurdish leadership.

On Tuesday, Mr Dizayee summoned Iran’s Consul General in Erbil, Nasrollah Rashnoudi, amid widespread anger in the Kurdish region.

“The Iranians certainly seem to believe that there’s also the additional bonus messaging from Iran and Iran’s proxies in Iraq to the Kurdistan Region,” Mr Knights said.

The attack aims to put pressure on the alliance with Moqtada Al Sadr in Baghdad to form the next government, he said.

Mr Knights also said the missile attacks follow other Iranian strategies including pressuring Iraq’s Supreme Federal Court to rule that Kurdish oil exports are unconstitutional, a direct political and financial attack on the KDP.

“Iranian pressure is having the opposite effect than they had hoped. And it’s also strengthening Moqtada Al Sadr’s determination to make a deal with the Kurds,” he said.

Suggesting Iraq should remove Masjedi’s diplomatic credentials – making him persona non grata – Mr Knights says the time for Iranian ambassadors also being members of the IRGC, as is standard practice, must come to an end.

“Perhaps the Kurdistan Region might want to temporarily close down the Iranian consulate in Erbil and remove their diplomatic staff who are undoubtedly involved in helping to select the targets for last night's attacks. And for other attacks inside Erbil over the last year,” Mr Knights says.

If the Kurds can show this resolve, the extent that Baghdad will be supportive remains an open question.

On Tuesday, Hakim Al Zamili, Deputy Parliament Speaker and senior Sadrist MP, visited the scene of the attack, leading a parliamentary delegation that reportedly included members of Iran-backed parties including Fatah.

“We are not a weak country or subordinate and we respect all neighbouring countries we just want the neighbouring countries to respect us,” he said.

“Parliament will have its say after conducting the field investigation to know the motives behind the attack and what happened. Our opinion will be clear and fair and not biased because we represent the Iraqi people.”

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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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UAE currency: the story behind the money in your pockets
Updated: March 21, 2022, 12:02 PM