US troops on a joint military exercise in Jordan.
US troops on a joint military exercise in Jordan.
US troops on a joint military exercise in Jordan.
US troops on a joint military exercise in Jordan.

US conducts exercises with Jordan amid concern over Syrian border security


Khaled Yacoub Oweis
  • English
  • Arabic

Jordan and the US have launched joint exercises covering border security alongside other allied militaries, the Jordanian armed forces said.

The kingdom is in the midst of an effort to bolster border defences, countering the challenge of Captagon smuggling from Syria, which has been linked to pro-Iranian militias in the region.

The “Ready Lion” exercises on Sunday came as a US State Department official visited Amman to discuss details of US aid to the kingdom. The aid was renewed for seven years in 2021, remaining steady at an annual $1.45 billion.

Jordanian army spokesman Mustafa Al Hiyari said 4,000 troops from Jordan, the US and more than 20 “friendly” countries are taking part of the in the 11-day manoeuvres.

“The border is under control and is stable. The nature of the threats in the field requires alliances,” he said.

Jordan and the US signed a military pact last year that committed the kingdom to provide more logistical and other support for 3,000 US troops in the country.

Jordanian authorities say that security forces have been stepping up operations to curb lawlessness in regions on the border of Syria, accusing pro-Iranian militias of playing a central role in Captagon trafficking.

Arab security officials say the smuggling, mainly from government-held areas of Syria to Jordan and then to the Arabian Peninsula, is worth several billion dollars a year and has become a major source of financing for Hezbollah, the Lebanese Shiite group supported by Iran.

Hezbollah denies any involvement in the drugs trade. The US Treasury has placed sanctions on Hassan Muhammad Daqou, who is accused of being a key figure in regional drug smuggling networks, accusing him of coordinating with Hezbollah — which the US also says has profited from drug smuggling.

Regional alliances

Although Jordan is staunch US ally and depends on aid from Washington to boost meagre revenue, the kingdom has embarked on several foreign policy initiatives without apparent US support in the last three years.

Chief among them has been normalising ties with the Bashar Al Assad government. Jordan has also not criticised the Russian invasion of Ukraine and endorsed the Russian intervention in Syria in support of the regime.

Until recently, Jordan has refrained from any direct criticism of Hezbollah or its sponsor Iran, despite indicating a rise in drug flows across its borders over the last three years.

But last month Jordan’s King Abdullah II criticised what he called “Iranian interference” and said Jordan is “facing regular attacks on our borders by militias linked to Iran”.

A Jordanian army statement said the exercises will be covering “scenarios that mimic probable threats and challenges emanating from the regional environment”.

Washington is also Jordan’s biggest donor.

Liz Allen, senior official for public diplomacy and public affairs the State Department, arrived in Amman at the weekend and met Jordanian Foreign Minister Ayman Al Safadi.

The Jordanian Foreign Ministry said Ms Allen and Mr Al Safadi discussed a seven-year, $10.15bn aid package announced by President Joe Biden after he met King Abdullah in Washington in July.

The United States has provided Jordan with $20bn in aid since 1951. A significant proportion was spent on the Jordanian military, as well as on civil projects, such as an irrigation canal in the Jordan valley.

Since the Syrian conflict in 2011 the US has also donated at least $1.7bn in aid for Syrian refugees in Jordan, including aid for Jordanian towns and cities where the refugees live.

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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