Chilcot inquiry over Iraq continues


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Top civil servants were grilled today over fears Iraq was developing weapons of mass destruction ? used to support the 2003 invasion but never borne out ? at a British inquiry into the conflict. On day two of public hearings in London, senior officials revealed they had found some evidence of contact between Iraq and al Qa'eda, but that this had scaled down after the September 11, 2001 attacks in the United States.

They also addressed an infamous claim by Britain's government in 2002 that Iraq had WMDs and could launch a chemical or biological strike within 45 minutes. Former British prime minister Tony Blair, who took Britain into the war shoulder-to-shoulder with then US president George W Bush, will be among those giving evidence, although not until January. Current premier Gordon Brown could also be called.

Among the most eye-catching revelations during often highly technical exchanges today were of links between Iraq and al Qa'eda extremists. "We did find some evidence of contacts between Iraqi officials and individual members of al Qa'eda in the late 1990s," Tim Dowse, then Foreign Office head of counter-proliferation, told inquiry chairman John Chilcot. "But the judgement we came to was that these had been quite sporadic contacts ... they hadn't been anything that looked like a relationship between the Iraqis and al Qa'eda".

The Iraqis "stepped further back" from al Qa'eda after 9/11, Mr Dowse added. Mr Chilcot asked another witness, William Ehrman ? then director of international security at the Foreign Office and now British ambassador to China ? if Britain had talked to the United States about this issue. "They put more weight on some of the links ... than we did but our view was there was no evidence to suggest serious collaboration of any sort between al Qa'eda and Saddam Hussein's regime," Mr Ehrman said.

Mr Dowse said this assessment was shared by colleagues in US intelligence, although implied this may not have been the case among some in the Bush administration. The two senior officials were also quizzed by Mr Chilcot, a former top civil servant, about the 45-minute claim. This caused a major political row in Britain at the time after the BBC alleged that the intelligence dossier containing the claim was "sexed up" to strengthen the case for war.

That was fiercely denied by the government. Government weapons expert David Kelly killed himself in 2003 amid claims he was the source of the BBC story, prompting an official inquiry. Mr Dowse said he had not been surprised by the 45-minute claim when he first heard of the BBC report, despite the "rather iconic status" it subsequently assumed. "When I saw the 45 minutes report, I didn't give it particular significance because it didn't seem out of line (with assessments at the time)," he said.

"It subsequently took on a rather iconic status which I don't think those of us who saw the initial report (expected) ... it wasn't surprising." The inquiry heard that, to officials, the 45-minute claim would have referred to chemical weapons for battlefield use, not for interstate use. They also noted that in terms of nuclear proliferation, countries like Iran, North Korea and Libya were of greater concern than Iraq in 2001, although Iraqi leader Saddam Hussein's "history of aggression" fuelled concerns about his intentions.

Asked if there were concerns that Iraq was about to become a nuclear power, Mr Dowse said: "Not imminently, no" ? while stressing that if sanctions were removed, officials thought Saddam would try to rebuild his nuclear capability within five years. The inquiry, the third official probe into the war, is looking at all elements of Britain's involvement in Iraq between 2001 and 2009, when nearly all its troops withdrew. It is due to report by the end of 2010.

* AFP

WRESTLING HIGHLIGHTS

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.”