Iraq's Prime Minister Mohamed Shia Al Sudani at a joint press conference with the Iranian president after their meeting in Tehran in November. Photo: Iranian Presidency
Iraq's Prime Minister Mohamed Shia Al Sudani at a joint press conference with the Iranian president after their meeting in Tehran in November. Photo: Iranian Presidency
Iraq's Prime Minister Mohamed Shia Al Sudani at a joint press conference with the Iranian president after their meeting in Tehran in November. Photo: Iranian Presidency
Iraq's Prime Minister Mohamed Shia Al Sudani at a joint press conference with the Iranian president after their meeting in Tehran in November. Photo: Iranian Presidency

Iraqi PM warns of persistent challenges amid rise in Iran-backed militia attacks


Sinan Mahmoud
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Iraq is going through a dangerous period with several concurrent challenges, including the presence of rogue Shiite militant groups, the country’s Prime Minister has warned.

His latest speech was a rare condemnation of the groups, some of which are linked to his political allies.

It marks the first time that Prime Minister Mohammed Shia Al Sudani has departed from the optimistic tone he has struck in public speeches since taking office in October last year.

“Honestly speaking, we are at a crucial juncture in Iraq’s history,” Mr Al Sudani told the Interior Ministry’s Federal Police on Sunday in a meeting to mark the sixth anniversary of ISIS' defeat.

“The juncture is not devoid of danger as challenges persist and that it necessitates our proactive approach to face these challenges,” Mr Al Sudani said.

The escalation between Iran-backed Shiite militants and US forces is due to Washington's support of Israel's bombardment of the Gaza Strip, the militias say and has put the government in a difficult position.

After a year where there was little violence in Iraq, the Shiite militias resumed their rocket and drone attacks against US troops, although attacks by the groups in Syria had been more frequent, including an attack in March that killed one.

The US has 2,500 troops in Iraq and 900 in neighbouring Syria to advise and assist local forces trying to prevent a resurgence of ISIS, which in 2014 seized vast areas of both countries but was later defeated.

They have said the attacks are aimed at expelling US forces from Iraq and to pressure Israel to stop operations in Gaza after an attack from Hamas militants on October 7 killed about 1,200 people, most of them civilians.

Since then, US forces in Iraq and Syria as part of the global anti-ISIS coalition, have been attacked about 84 times, according to the Pentagon. The US has responded with several strikes that have killed at least 15 militants in Iraq and about seven in Syria.

On Friday, several rockets were fired at dawn towards the Green Zone in Baghdad where the US embassy is located. Some rockets landed in the embassy compound while several others hit the headquarters of the Iraqi National Security Service, according to Iraqi security officials. The attacks caused no casualties.

Unlike other attacks, no group immediately claimed responsibility.

Mr Al Sudani denounced the attacks as “acts of terrorism” and vowed to apprehend those responsible and called for an urgent meeting for his backers the Co-ordination Framework, an umbrella group of Iran-backed political parties, many of which are linked to the militias.

“While this government, formed a year ago, is exerting exceptional efforts across all ministries – be it in services, the economy or security – it faces individuals, groups and entities attempting to position themselves as guardians over Iraq,” the Prime Minister said on Sunday.

He warned that they are trying to “seize control over the decisions of the constitutional and legal state institutions and to give itself the authority to announce war and peace”.

“We will confront this challenge,” he added.

On the weekend, the Tehran-allied Kataib Hezbollah militia rejected attempts to stop the attacks and vowed to continue them.

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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: December 11, 2023, 8:53 AM