Iranian foreign minister Mohammad Javad Zarif has been widely mocked for his undiplomatic tweet (AFP / ATTA KENARE)
Iranian foreign minister Mohammad Javad Zarif has been widely mocked for his undiplomatic tweet (AFP / ATTA KENARE)
Iranian foreign minister Mohammad Javad Zarif has been widely mocked for his undiplomatic tweet (AFP / ATTA KENARE)
Iranian foreign minister Mohammad Javad Zarif has been widely mocked for his undiplomatic tweet (AFP / ATTA KENARE)

Iran’s childish tweet has a serious side


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What is the diplomatic protocol for responding to an impetuous and patronising tweet, like that sent out on Wednesday evening by the foreign minister of Iran? After Mohammed Javad Zarif wrote an op-ed for The New York Times in which he painted Iran as the perennial victim in the Middle East, he received extensive mocking on social media. That, perhaps, is unsurprising, given some of the startling claims: the foreign minister of the country that has destabilised four Arab countries had the temerity to write, “Iran has no desire to escalate tension in the region”. Mr Zarif clearly has a career in satire.

The reply from the UAE’s Foreign Minister, Sheikh Abdullah bin Zayed, was both entertaining and relevant. “I thought the writer to be the foreign minister of a Scandinavian country,” he quipped. Certainly, someone unfamiliar with the Middle East would have thought the op-ed was penned by a party uninvolved in the wars of the region – as opposed to the primary firestarter.

Still, the worst was yet to come. Mr Zarif – a representative, let’s not forget, of a nation of nearly 80 million people, many with extensive links of family, business and friendship to countries of the Arab world and especially the Gulf – replied: “Diplomacy is the domain of the mature; not arrogant nouveau-riche.”

Ah, the old criticism. Iran has long thought of itself as the great power of the Gulf, despite the fact that its heydays are long behind it. Few countries face such a disconnect between their aggrandised self-image and the reality of their country. The political, cultural and military power of the Gulf has passed to the Arab states.

Worse, it is the Gulf states that have had to use their riches to clean up the mess of the Iranians. Look at Iran’s friends: the butcher of Damascus, starving and bombing his people. The sectarian politicians of Iraq. The untrustworthy Houthis of Yemen. These are the best alliances of Iran’s “mature” diplomacy?

Yet the tragedy of such silly diplomacy belongs to the Iranian people themselves. That the heirs to such a glorious civilisation should find themselves ruled by such leaders is a tragedy. Iranians rightly look across the Arabian Gulf with envious eyes: the rule of law, the chance of building a decent career, a cosmopolitan civilisation without the fear of the secret police. This is what the Gulf states have built on this side of the water. What have Mr Zarif and his comrades built on theirs?

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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.”

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