One year into the Sudanese civil war with the fighting showing no signs of abating, Iran appears to be attempting to exert its influence in the conflict.
The fighting erupted on April 15, 2023, pitting the Sudanese armed forces, led by Gen Abdel Fattah Al Burhan, against the paramilitary Rapid Support Forces, commanded by Gen Mohamed Dagalo.
A recent report from Reuters suggested the Sudanese military may be using Iranian-made drones to gain ground around the capital Khartoum, where much of the conflict over the past year has been focused.
The report cites sources in Khartoum who say Sudanese military drones have been tracking RSF movements and hitting them with precision strikes in Omdurman, across the Nile from Khartoum.
Omdurman is home to several major military bases, including the headquarters of the army's engineering corps.
In the early months of the conflict, the RSF managed to capture large parts of the city. While the conflict there eventually ground into a stalemate, fighting has intensified in the past month.
"The SAF have started to regain some territory: they breached the siege around the centre of Omburdman in mid-February and won a significant battle in early March by reclaiming the headquarters of the national radio and television in Omburdman, historically a focal point for Sudanese coups," Pierre Pahlavi, a professor at the Canadian Forces College who focuses on Iran, told The National.
Mr Pahlavi said that despite recent gains, it was unlikely that Iran's support would "tip the balance" of the conflict.
A Dutch peace organisation which has been monitoring the use of drones in the conflict believes there is evidence that Iran has supplied the Sudanese military with new drones.
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“They have a long-standing relation with Sudan and have provided drones in the past starting off in 2008, 2009,” Wim Zwijnenburg, project leader at Pax, told The National.
“But we had indications after a couple of Iranian drones were shot down early January, that they were provided new drones, which indicates that Iran has restarted their export to Sudan.”
Mr Zwijnenburg said that there is evidence that the Sudanese military is using a relatively new Iranian drone called the Zargil-3, an updated version of a previous drone, which can drop heavy mortar rounds and could potentially be armed with guided missiles.
He added that, with the help of online sleuths, his organisation had tracked an Iranian flight believed to be carrying weapons to Sudan – though without the plane’s manifest, there is no way to say exactly what was on the flight.
“We found the presence of the Boeing 747 at Port Sudan Airport, so these are known Iranian airlines being involved in arms because they are owned by the Iranian government, known to be transporting arms, including also to Syria, which was an indication that Iran has been shipping weapons to Port Sudan,” he said.
That Iran is wading into the conflict in Sudan is not surprising.
“Iran's involvement in Sudan is part of its broader strategy for expanding its presence in the Red Sea, building off of its success in supporting and building up the Houthis,” said Gregory Brew, an Iran analyst at the Eurasia Group.
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“Iran also sees Sudan's embattled government as a potential ally, one that it can cultivate through arms deals and drone sales.”
Tehran has also been accused of providing military equipment including drones to Russia for its war in Ukraine. It also supplies drones to Yemen's Houthis, who have carried out a series of attacks on commercial shipping in the Red Sea.
"Iran also seeks to gain a significant avenue of influence, particularly in eastern Sudan and Port Sudan, which it has informally designated as its capital," Mr Pahlavi said.
"This strategic position, with around 700 kilometres of maritime shorelines, provides Iran with a substantial asset to disrupt maritime passage in the Red Sea region."
The US has spoken with allies in the region and asked them to urge Iran not to become further involved in the conflict.
"We've encouraged them to encourage other countries, like Iran, not to engage," said Linda Thomas-Greenfield, US ambassador to the UN.
Both the Sudanese military and the RSF have been accused of committing atrocities in the year-long war.
A February UN report, based on interviews with 303 victims and witnesses, said the army and the RSF had “used explosive weapons with wide-area effects, such as missiles fired from fighter jets, unmanned aerial vehicles, anti-aircraft weapons and artillery shells in densely populated areas”.
The UN estimates that between 10,000 and 15,000 people have been killed in the war, which has pitted the
About eight million people have been displaced since fighting began.
Early attempts to broker peace, led by the US and Saudi Arabia, fell through.
Last month, Washington's special envoy for Sudan Tom Perriello said the US hoped to resume talks in April.
America has said that peace talks with the warring parties in Saudi Arabia would need to be inclusive, including the UAE, Egypt, regional East African bloc IGAD and the African Union.
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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