The US policy on Iran is universally known in diplomatic circles in Tehran as “maximum pressure”, but if anything this underestimates how far Washington is willing to go.
As the name implies, the toll on Iran is heavy. The signs are the regime is starting to crack but can do little to save itself.
In pursuit of its containment goals, the US is steadily turning up the heat by phasing out waivers for states that have been buying the country's crude output. While Brian Hook, the US State Department envoy, stopped short of a complete shutdown of US concessions when he spoke on Friday, the measures are being steadily curtailed.
Remember, Donald Trump wants to force Iran to the table. A serious foreign policy rupture is under way, as the regime turns inward to shore up its hold on power.
Most experts in Iranian affairs were caught out by the powerful effect of Trump’s decision to pull out of the 2015 accord less than three years after the pact temporarily mothballed the country’s nuclear programme.
At the time of the decision, the Iranians affected a lack of concern. President Hassan Rouhani and his US-educated foreign minister Mohammad Javad Zarif made two key assumptions. Asia would keep buying Iranian oil and Europe would keep Iran's international trade system going.
Both theories have now proven wrong, and Mr Zarif is scrambling to come up with a plan B.
But Iran has alienated the very partners it needs to rescue its rapidly collapsing economy.
The IMF predicts it will shrink by six per cent this year. Middle-class Iranians are feeling the pinch more than ever and prices have risen by sharply in the past 12 months.
Oil exports are already down by 1.6 million barrels since the Trump announcement – and now Washington has set its sights on pushing the figure closer to zero.
For a government that was elected twice on a mandate of stabilising the living standards of ordinary Iranians, this is disastrous. Presenting a more amenable face to the world has not delivered for the Iranian population.
The revamp failed because Iran blew the chance to change its role on the international stage. The country is seen as part of the problem in Yemen. It played an outsized role in events in Syria, but is now marginalised in the reconciliation talks – both those led by Russia and those led by the UN – because of its sectarian bias and links to the regime of Bashar Al Assad.
On the global stage, Iran continues to misjudge its position with Europe. The ground is shifting markedly against any more concessions to Tehran, just when Iran needs them most.
When Donald Trump pulled the plug on the Joint Comprehensive Plan of Action (JCPOA), European diplomats were adamant that the deal should not be overturned.
European nations are increasingly exasperated by missiles targeting Riyadh and bellicosity over the Strait of Hormuz shipping lanes
US sanctions to curb European business deals with Iran were considered illegal by the EU Commission. Britain, France and Germany moved to act as co-guarantors for Instex, a trade mechanism that sheltered transactions from the US Treasury’s punitive measures.
Iran has since complained that the impact of this support has fallen short of expectations. It now cries foul that there has been no broader rescue plan to justify continued compliance with the deal.
Iranian officials warn that the JCPOA must, in effect, be renegotiated. A policy of “less for less” is being mooted by figures such as Abbas Araghchi, the deputy foreign minister, as he speaks with European counterparts.
However, there are dangers for the Iranians. European frustration with Iran could soon go the other way. Instead of concessions, there is pressure for more sanctions to target Iran’s missile development activities.
The production of longer-range and more advanced missiles has been a story of flagrant expansion to contrast with the nuclear shutdown.
European nations are increasingly exasperated by regional concerns over missiles targeting Riyadh and bellicosity over the Strait of Hormuz shipping lanes.
There is also recognition of the need to align policy with the US as the smoke clears from the original meltdown of transatlantic ties.
Tehran has also done its own work to alienate states around Europe. The detention of Nazanin Zaghari-Ratcliffe, a dual UK-Iranian national, is a key example. Active assassination plots have been uncovered in six countries, including the Netherlands and Denmark. When the trials of the arrested suspects start in the coming months, the consequences of Tehran will be severe.
At the same time, Iran is looking beyond the Rouhani era. The rise of the Islamic Revolutionary Guard Corps commander Qassem Soleimani has taken on an air of inevitability.
The pressure on the regime has translated into a focus on survival. The IRGC has captured swathes of the government and many lucrative economic franchises.
Its last outstanding goal is to take the presidency. For the hardliners, the price of power comes on the back of collapse. President Trump has poisoned the prize.
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Which honey takes your fancy?
Al Ghaf Honey
The Al Ghaf tree is a local desert tree which bears the harsh summers with drought and high temperatures. From the rich flowers, bees that pollinate this tree can produce delicious red colour honey in June and July each year
Sidr Honey
The Sidr tree is an evergreen tree with long and strong forked branches. The blossom from this tree is called Yabyab, which provides rich food for bees to produce honey in October and November. This honey is the most expensive, but tastiest
Samar Honey
The Samar tree trunk, leaves and blossom contains Barm which is the secret of healing. You can enjoy the best types of honey from this tree every year in May and June. It is an historical witness to the life of the Emirati nation which represents the harsh desert and mountain environments
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.”
Results
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Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
The biog
Favourite film: Motorcycle Dairies, Monsieur Hulot’s Holiday, Kagemusha
Favourite book: One Hundred Years of Solitude
Holiday destination: Sri Lanka
First car: VW Golf
Proudest achievement: Building Robotics Labs at Khalifa University and King’s College London, Daughters
Driverless cars or drones: Driverless Cars
Living in...
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.
The Word for Woman is Wilderness
Abi Andrews, Serpent’s Tail
Results
Ashraf Ghani 50.64 per cent
Abdullah Abdullah 39.52 per cent
Gulbuddin Hekmatyar 3.85 per cent
Rahmatullah Nabil 1.8 per cent
UAE currency: the story behind the money in your pockets
How Islam's view of posthumous transplant surgery changed
Transplants from the deceased have been carried out in hospitals across the globe for decades, but in some countries in the Middle East, including the UAE, the practise was banned until relatively recently.
Opinion has been divided as to whether organ donations from a deceased person is permissible in Islam.
The body is viewed as sacred, during and after death, thus prohibiting cremation and tattoos.
One school of thought viewed the removal of organs after death as equally impermissible.
That view has largely changed, and among scholars and indeed many in society, to be seen as permissible to save another life.
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.
