KUWAIT CITY // Iran’s foreign minister assured Gulf Arab states yesterday his country’s nuclear deal with the West is in their interest and announced plans to visit Saudi Arabia.
Improving relations with Gulf countries is a central plank of Iran’s diplomatic policy under its new president, Hassan Rouhani.
Asked about three UAE islands occupied by Iran, the foreign minister, Mohammad Javad Zarif, said Tehran was ready to talk about one of the islands, Abu Musa.
Mr Zarif’s trip comes after the Islamic republic last Sunday struck a landmark deal in Geneva with Western powers on Iran’s disputed nuclear programme. While the accord was welcomed by Gulf countries, some, especially Saudi Arabia, expressed caution.
“The solution to this issue serves the interests of all countries in the region. It is not at the expense of any state in the region,” Mr Zarif said after meeting his Kuwaiti counterpart Sheikh Sabah Khaled Al Sabah.
“Be assured that the nuclear deal is in favour of the stability and security of the region.”
Mr Zarif said that Iran was looking to open a new page in relations with the Gulf. He also praised the outcome of a visit last week by Sheikh Abdullah bin Zayed, the UAE Foreign Minister, who became the first Gulf official to visit Tehran since the agreement was signed.
Mr Zarif is also visiting Oman during his current tour and confirmed plans to visit Saudi Arabia although no date has yet been set.
“We look at Saudi Arabia as an important and influential country in the region.”
The trip was Mr Zarif’s first official visit to a Gulf country was he was to travel to Oman after Kuwait.
Both world powers and Israel suspect Tehran’s nuclear ambitions include acquiring a nuclear weapon, a charge Iran vehemently denies.
Iran’s nuclear chief Ali Akbar Salehi said yesterday Tehran will never abandon the Arak heavy-water reactor, considering it a “red line” in talks with world powers.
“Your actions and words show you don’t want us to have the Arak heavy-water reactor which means you want to deprive us of our rights,” Mr Salehi said.
“But you should know that it is a red line which we will never cross, likewise enrichment” of uranium.
Arak is of concern because, in theory, it could provide Iran with plutonium, an alternative to highly enriched uranium used for a nuclear bomb.
Relations between the six Gulf Cooperation Council (GCC) nations and Tehran have also clashed over Iran’s support for Syria’s President Bashar Al Assad.
Mr Zarif said the Geneva deal does not satisfy all of Iran’s demands or “the goals of the other party, but it is important to implement it”.
“We will implement the deal and are convinced that implementing it will build the trust,” he said.
Mr Zarif said the “political option” is the only solution to the Syrian conflict and warned that the civil war could cause the spread of extremism and sectarianism in the region.
“We believe that Syria’s future should be determined by the Syrian people only through ballot boxes,” he said.
“There is no solution to the Syrian crisis except by a political settlement. The military solution is an illusion.”
Iran will attend the Geneva 2 peace conference on Syria “if invited” but will not accept preconditions, Mr Zarif said.
* Agence France-Presse with additional reporting by Reuters
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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