Iran has responded to reports from the UN’s nuclear body over concerns Tehran is stonewalling on access to sites that may have been part of an old, secret nuclear weapons programme.
In a nine-page response Iran said it had received the International Atomic Energy Agency (IAEA) report with “deep regret and disappointment” and reiterated its list of grievances with the watchdog’s inspections regime.
Since last year, the IAEA has been grappling with Iran’s decision to renege on its 2015 nuclear deal with world powers and has admonished the country over its failure to answer questions about past nuclear activities at three sites.
Iran has also denied inspectors access to two of the three sites linked to what US intelligence agencies and the IAEA believe was a clandestine nuclear programme that was discontinued in 2003.
Information gleaned from an archive of Israeli-obtained intelligence on Iran’s past nuclear activity has given the UN watchdog further insight into the Islamic republic’s previous activities before 2015.
Iran has, in particular, taken issue with the IAEA’s use of foreign intelligence to inform its findings. Its response outlines that it believes the information to be “fabricated”.
The report issued to member states detailed suspected activities and materials including “the possible presence … of natural uranium in the form of a metal disc” at a site that “underwent extensive sanitisation and levelling in 2003 and 2004,” a term that means it was scrubbed of nuclear material.
The report also described “the possible use and storage of nuclear material at another location specified by the agency where outdoor, conventional explosive testing may have taken place in 2003, including in relation to testing of shielding in preparation for the use of neutron detectors”.
While one of the three sites underwent “sanitising”, another “underwent significant changes … including the demolition of most buildings” and at the other the IAEA reported “activities consistent with efforts to sanitise part of the location” from July 2019 onwards.
Though the agency has sought to investigate Iran’s activities prior to 2015, the Islamic republic has, since July 2019, steadily broken the terms of the nuclear deal.
The US withdrawal from the agreement, whereby Tehran agreed to give up its nuclear weapons ambitions in exchange for relief on economic sanctions, lies at the heart of escalating regional tensions.
The US quit the deal in 2018 saying Iran was failing to live up to the spirit of the agreement by carrying out ballistic missile tests and backing proxies in a number of regional conflicts.
The remaining signatories, China, France, Russia, the UK, and Germany, have attempted to salvage the deal but in the intervening months relations between the US and Iran have continued to deteriorate.
US President Donald Trump has sought to impose a campaign of "maximum pressure" against Iran after his predecessor, Barack Obama, pursued a policy of relative rapprochement.
Since withdrawing the US from a nuclear deal in May 2018, Washington has repeatedly hit Iran with sweeping sanctions.
The two sides appeared to retreat from the brink of direct conflict several times in the past two years with the tensions reaching their highest point in January of this year with the US killing of Islamic Revolutionary Guard commander Qassem Suleimani.
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.”
