A copy of Iranian daily Aftab with a picture of Joe Biden and Kamala Harris and a headline 'New chapter of US' is displayed in front of a kiosk in Tehran. EPA
A copy of Iranian daily Aftab with a picture of Joe Biden and Kamala Harris and a headline 'New chapter of US' is displayed in front of a kiosk in Tehran. EPA
A copy of Iranian daily Aftab with a picture of Joe Biden and Kamala Harris and a headline 'New chapter of US' is displayed in front of a kiosk in Tehran. EPA
To judge by Tehran's response to US President-elect Joe Biden's victory, Iran is entertaining optimistic expectations that the new American administration will renew Washington's commitment to their controversial nuclear deal.
But while it is true that, during the course of the gruelling election campaign, Mr Biden and his supporters intimated that they wanted to reset relations with Tehran, many significant obstacles will first need to be overcome before any meaningful rapprochement can take place.
In the long history of confrontation between Iran and the US, which in recent times dates back to the 1979 revolution and the subsequent long-running hostage crisis, the Democrats have had just as many bruising encounters with the regime as their Republican counterparts.
Russian contractors are seen working at the Bushehr nuclear reactor site in south of Iran, Tuesday, April 3, 2007. Photographer: Yalda Moaiery/document IRAN/ Bloomberg News.
One of the major factors why former Democratic president Jimmy Carter lost the 1980 election was because Iran only agreed to release the 52 American citizens, who had been held captive after the Islamic Revolutionary Guard Corps stormed the US embassy compound, after the 1980 election race had been concluded.
The constant images broadcast on American television of the hostages during the election played a significant factor in Ronald Reagan, the Republican candidate, ultimately securing victory.
Bill Clinton is another former Democratic president who had to contend with Iran’s malign activities in the region after Imad Mughniyeh, the Hezbollah terrorist mastermind who worked closely with the IRGC, was implicated in the 1996 Khobar Towers suicide truck bomb attack in Dhahran that killed 19 people.
Even former US president Barack Obama, who Mr Biden served for eight years as vice president, came to understand the frustrating reality of trying to encourage Tehran to behave more responsibly on the world stage.
Despite investing a great amount of personal political capital in persuading Iran to sign up to the Joint Comprehensive Plan of Action (JCPOA), the nuclear deal’s official title, in 2015, Mr Obama was ultimately disappointed by Iran’s attitude once the deal had been completed. He had hailed the deal as offering the promise of a “more hopeful world”, and remarked that: “This deal offers an opportunity to move in a new direction. We should seize it.”
But rather than heralding a new era of constructive engagement on the part of Iran with its Middle East neighbours and the West, the deal marked the start of a new campaign by the IRGC to expand its influence in the region, as well as intensifying efforts to develop sophisticated missile technology, which was not covered by the terms of the JCPOA.
Iranian Foreign Minister Mohammad Javad Zarif led discussions that resulted in the 2015 nuclear deal. AP Photo
Mr Biden and his supporters will be well aware of the profound disappointment the Obama administration felt. As a consequence, the President-elect is likely to tread cautiously in any effort the new administration might make to re-engage with the JCPOA framework.
Indeed, there are many reasons why, even if Mr Biden wanted to restore the deal, it is unlikely to be a straightforward process.
For a start, the uncompromising tone adopted by senior representatives of the regime after Mr Biden claimed victory suggests that Iran will seek to dictate the terms in any future negotiations relating to its nuclear activities.
Even before the outcome of the US presidential contest had been decided, Ayatollah Ali Khamenei, the country’s Supreme Leader, had tweeted disparaging remarks about the entire American electoral system, declaring that, “this is an example of the ugly face of liberal democracy in the US. Regardless of the outcome, one thing is absolutely clear: the definite political, civil, and moral decline of the US regime”. In another speech denouncing the US, Mr Khamenei argued the election result would have "no effect" on Tehran's policies stating that "Iran followed a sensible and calculated policy which cannot be affected by changes of personalities in Washington".
Meanwhile, President Hassan Rouhani, who played a key role in the JCPOA negotiations, warned that Mr Biden should make amends for President Donald Trump’s policies towards Iran. Mr Biden’s victory, he said, was “an opportunity for the next US government to make up for past mistakes and return to the path of adhering to international commitments with respect to global rules”.
Moreover, with Iran due to hold its own presidential election contest in June next year, the hardliners will be looking to consolidate their position by maintaining their uncompromising stance towards the US, irrespective of who occupies the White House.
There are many other significant obstacles that are likely to impede any attempt to revive the JCPOA, not least of which are Iran’s own violations of the accord, such as its recent decision to resume work on uranium enrichment.
Weapons supplied by Iran to the Houthi militias in Yemen were put on display at a press conference by the Saudi-led Arab coalition on Tuesday. Victor Besa / The National
In addition, Iran has been accused of building a new network of bomb-proof underground bunkers to store its nuclear facilities. Work has also continued to develop a variety of sophisticated weapons systems, including ballistic missiles. Many of the military drones, for example, used by Houthi rebels in Yemen to attack targets in Saudi Arabia have originated from Iran.
The other important consideration the incoming administration will need to take on board in any attempt to re-engage with Tehran will be the potential adverse effect it could have on Mr Trump’s success in reviving the Israeli-Arab peace dialogue.
The establishment of diplomatic ties between Israel and the UAE, Bahrain and Sudan heralds the possibility of a more peaceful era in the region. But all that good work could be undermined if, rather than building on the success of the Abraham Accords, the President-elect instead tries to establish a dialogue with an uncompromising Iran, the one country that is fundamentally opposed to any diplomatic ties between Israel and the rest of the region.
Con Coughlin is a defence and foreign affairs columnist for The National
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.”
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Profile
Company: Justmop.com
Date started: December 2015
Founders: Kerem Kuyucu and Cagatay Ozcan
Sector: Technology and home services
Based: Jumeirah Lake Towers, Dubai
Size: 55 employees and 100,000 cleaning requests a month
Funding: The company’s investors include Collective Spark, Faith Capital Holding, Oak Capital, VentureFriends, and 500 Startups.