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The death of Iran's president and his foreign minister in Sunday’s helicopter crash could significantly set back the process of normalising relations between Tehran and Cairo and ending decades of tension, sources have told The National.
They said relations between the two regional powerhouses had cooled off before President Ebrahim Raisi's death, with the normalisation process stalling, mostly over Iran’s seeming reluctance to persuade its Houthi allies in Yemen to halt attacks on Red Sea shipping.
The attacks, carried out to show solidarity with the Palestinians in the war between Israel and Iranian-backed Hamas in Gaza, have cost Egypt 60 per cent of its revenue from the Suez Canal so far this year, a significant blow to a country whose economy is struggling to recover from its deepest crisis in living memory.
“President Raisi was the architect of and driving force behind the normalisation of relations with Egypt,” said one of the sources, who have direct knowledge of the process.
“His death sets those relations back several steps given the volatility of the whole region.”
Egypt has also been under significant pressure from the US, Cairo’s chief ally and foreign benefactor, not to forge close ties with Tehran. Iran is Washington’s archfoe whose regional ambitions and support for non-state players like Hezbollah and the Houthis are widely seen as disruptive to regional stability, according to the sources.
The process of normalising relations between Cairo and Tehran was launched last year, with mid-ranking diplomats and intelligence officials meeting behind closed doors in Baghdad to iron out differences and contentious points.
The talks shifted to Oman, which has a history of mediating between Iran and foreign nations, including the US.
In May 2023, Iran's supreme leader, Ayatollah Ali Khamenei, approved the restoration of full diplomatic relations with Egypt. He said he would “welcome” the restoration of ties with Egypt during a meeting with the visiting Sultan of Oman, Haitham bin Tariq.
However, unlike Egypt’s successful normalisation of relations with former foe Turkey, the Cairo-Tehran efforts never came to full fruition, although the two nations' foreign ministers have frequently held talks over the past year both in person and on the phone.
The two Muslim nations had been expected to exchange ambassadors before the end of 2022, but that step was never taken. Moreover, both have yet to finalise the ground rules for key aspects of their relations, like tourism, trade and technology co-operation.
Some analysts noted that Egyptian Foreign Minister Sameh Shoukry's attendance of Mr Raisi's funeral – rather than President Abdel Fattah El Sisi or Prime Minister Mustafa Madbouly- is perhaps a reflection of the current state of relations between the two nations.
Relations between Iran and Egypt had been fraught with distrust and tension since the 1979 Islamic revolution in Iran. Relations suffered more when the then Egyptian leader Anwar Sadat welcomed the deposed Shah Mohammad Reza Pahlavi to Egypt and a year later allowed his burial in Cairo.
There was a relative thaw after the overthrow of Hosni Mubarak in 2011 and the election of Mohammed Morsi a year later, a member of the now-banned Muslim Brotherhood. Mr Morsi briefly allowed Iranians to visit religious shrines in 2012.
Mr Morsi was removed from power in 2013 and relations with Tehran cooled after Mr El Sisi took office the following year.
More recently, relations have been tense over what Cairo sees as Iran’s meddling in the internal affairs of Arab nations such as Iraq, Syria, Lebanon and Yemen.
In a thinly veiled reference to Iran, Mr El Sisi has repeatedly declared Egypt's willingness to come to the aid of its Gulf Arab allies and benefactors if they faced an external threat.
Egyptian officials believe on the other hand that normalised relations with Iran would secure Tehran's goodwill in relation to Cairo's efforts to forge closer economic and commercial ties with countries where Tehran wields considerable influence, like Iraq, Syria and Lebanon.
Egypt is also known to be eyeing Iranian-made attack drones as possible additions to its military arsenal. It may also be looking for compensation, possibly in the form of oil and gas, for the heavy losses it has incurred as a result of the Red Sea attacks on shipping by Tehran’s Houthi allies, according to the sources.
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
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'Laal Kaptaan'
Director: Navdeep Singh
Stars: Saif Ali Khan, Manav Vij, Deepak Dobriyal, Zoya Hussain
Rating: 2/5
RedCrow Intelligence Company Profile
Started: 2016
Founders: Hussein Nasser Eddin, Laila Akel, Tayeb Akel
Based: Ramallah, Palestine
Sector: Technology, Security
# of staff: 13
Investment: $745,000
Investors: Palestine’s Ibtikar Fund, Abu Dhabi’s Gothams and angel investors
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
The biog
Favourite book: You Are the Placebo – Making your mind matter, by Dr Joe Dispenza
Hobby: Running and watching Welsh rugby
Travel destination: Cyprus in the summer
Life goals: To be an aspirational and passionate University educator, enjoy life, be healthy and be the best dad possible.
Florida: The critical Sunshine State
Though mostly conservative, Florida is usually always “close” in presidential elections. In most elections, the candidate that wins the Sunshine State almost always wins the election, as evidenced in 2016 when Trump took Florida, a state which has not had a democratic governor since 1991.
Joe Biden’s campaign has spent $100 million there to turn things around, understandable given the state’s crucial 29 electoral votes.
In 2016, Mr Trump’s democratic rival Hillary Clinton paid frequent visits to Florida though analysts concluded that she failed to appeal towards middle-class voters, whom Barack Obama won over in the previous election.
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.”
The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
