Japan's Prime Minister Shinzo Abe greets Iranian President Hassan Rouhani, right, during the 2014 meeting of the World Economic Forum in Davos. Reuters
Japan's Prime Minister Shinzo Abe greets Iranian President Hassan Rouhani, right, during the 2014 meeting of the World Economic Forum in Davos. Reuters
Japan's Prime Minister Shinzo Abe greets Iranian President Hassan Rouhani, right, during the 2014 meeting of the World Economic Forum in Davos. Reuters
Japan's Prime Minister Shinzo Abe greets Iranian President Hassan Rouhani, right, during the 2014 meeting of the World Economic Forum in Davos. Reuters

Iran gears up for high-stakes diplomacy ahead of Japanese visit


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Iran is preparing for a week of high-stakes diplomacy capped by the first visit of a Japanese prime minister to Tehran since its 1979 revolution.

Shinzo Abe will arrive on Wednesday in Iran after meeting US President Donald Trump, who has reimposed sanctions that were lifted after Tehran signed a 2015 accord to limit its nuclear programme.

German Foreign Minister Heiko Maas also will visit Tehran this week.

What Mr Abe can accomplish remains unclear, as Iran has already warned Europe that it will begin to enrich uranium closer to weapons-grade levels by July 7 if it does not come up with new terms to the deal.

Japan is also trying to negotiate trade deals with Mr Trump, who has been quick to impose tariffs on other nations.

But Mr Abe, whose nation relies heavily on Middle East oil to power its economy, has already acknowledged the challenge.

"Between Japan and the United States, there should be close collaboration so that this tension surrounding Iran should be mitigated and alleviated, and it shouldn't culminate in armed conflict," Mr Abe said alongside Mr Trump in Tokyo in May.

The crisis, in which the US hurried an aircraft carrier strike group and sent B-52 bombers in the region, was sparked by Mr Trump's decision last year to withdraw from the nuclear deal.

Under the accord, Iran agreed to limit its enrichment of uranium in exchange for lifting economic sanctions

Mr Trump said the accord did not limit Iran's ballistic missile programme or address Tehran's malign influence across the wider Middle East.

Those who struck the deal described it as a building block towards further negotiations with Iran, the government of which has had a tense relationship with the US since the 1979 takeover of the US embassy in Tehran and subsequent hostage crisis.

Some members of the Trump administration, particularly National Security Adviser John Bolton, previously supported the overthrow of Iran's government.

But Mr Trump has stressed that he wants to talk with Iran's rulers.

"I'm not looking to hurt Iran at all. I'm looking to have Iran say, 'No nuclear weapons'," Mr Trump said in Tokyo.

"We have enough problems in this world right now with nuclear weapons. No nuclear weapons for Iran. And I think we'll make a deal."

The reaction has been mixed in Iran. Its rial is trading at 128,000 to $1. It had been 32,000 to the dollar at the time of the 2015 deal.

Japan had once bought Iranian oil but it has stopped under threat of  American sanctions.

But Middle East oil remains crucial to Japan and recent threats from Iran to close the Strait of Hormuz, the narrow mouth through which a third of all oil traded by sea passes, has raised concerns.

Mr Abe will arrive in Tehran on Wednesday and will stay until Friday, Iran's state-run Irna news agency reported on Sunday.

Japanese Foreign Minister Taro Kono is expected to travel to Tehran before Mr Abe's arrival to meet his Iranian equal, Javad Zarif.

Mr Zarif, speaking at a high school in Tehran on Sunday, welcomed Mr Abe's visit but said Mr Trump had engaged in an "economic war" against Iran through the sanctions.

"We have said it clearly that economic war is not different from a military war at all," he said. "Mr Trump has announced that he is pursuing an economic war.

"Economic war targets ordinary people and is in fact terrorism. This policy must stop."

Meanwhile, Iran on Sunday announced what it described as a new surface-to-air missile battery it called the Khordad 15.

The system uses locally made projectiles that resemble the Hawk missiles the US once sold to the Shah and later delivered to Iran in the 1980s Iran-contra scandal.

The USS Abraham Lincoln, the aircraft carrier ordered to the region, remains in the Arabian Sea and has yet to cross the Strait of Hormuz to reach the Gulf.

This is probably to protect the ship as it is already within range of air strikes on Iran, and to not provoke a response from Iran's  Revolutionary Guard, which routinely harasses US naval ships.

Mr Maas will visit Tehran on Monday. Germany is one of the signatories to the nuclear deal and has sought to keep Iran in the accord.

The ministser visited Jordan and the UAE on Sunday. In Abu Dhabi, he said it was important to stop any military confrontation in the Gulf.

"We want to avoid any misunderstandings that would lead to automatic reactions that could lead to violence," Mr Maas said.

"All those involved bear responsibility to absolutely avoid a spiral of escalation and this is a view I will also express very clearly tomorrow, on the opposite shores of the Gulf."

He said Germany would not accept "less-for-less" in any negotiations over saving Iran's nuclear deal.

But Sheikh Abdullah bin Zayed, the UAE Minister of Foreign Affairs and International Co-operation, said any new nuclear deal would have to include concerns such as Iran's ballistic missile programme and regional behaviour.

"Any attempt to make this agreement successful, we think, needs all countries of the region to be a part of it," Sheikh Abdullah said.

F1 drivers' standings

1. Lewis Hamilton, Mercedes 281

2. Sebastian Vettel, Ferrari 247

3. Valtteri Bottas, Mercedes 222

4. Daniel Ricciardo, Red Bull 177

5. Kimi Raikkonen, Ferrari 138

6. Max Verstappen, Red Bull 93

7. Sergio Perez, Force India 86

8. Esteban Ocon, Force India 56

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.”

'The Sky is Everywhere'

Director:Josephine Decker

Stars:Grace Kaufman, Pico Alexander, Jacques Colimon

Rating:2/5

TOUCH RULES

Touch is derived from rugby league. Teams consist of up to 14 players with a maximum of six on the field at any time.

Teams can make as many substitutions as they want during the 40 minute matches.

Similar to rugby league, the attacking team has six attempts - or touches - before possession changes over.

A touch is any contact between the player with the ball and a defender, and must be with minimum force.

After a touch the player performs a “roll-ball” - similar to the play-the-ball in league - stepping over or rolling the ball between the feet.

At the roll-ball, the defenders have to retreat a minimum of five metres.

A touchdown is scored when an attacking player places the ball on or over the score-line.

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German intelligence warnings
  • 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
  • 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
  • 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250 

Source: Federal Office for the Protection of the Constitution

GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

THE LIGHT

Director: Tom Tykwer

Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger

Rating: 3/5

The Lowdown

Us

Director: Jordan Peele

Starring: Lupita Nyong'o, Winston Duke, Shahadi Wright Joseqph, Evan Alex and Elisabeth Moss

Rating: 4/5

Iftar programme at the Sheikh Mohammed Centre for Cultural Understanding

Established in 1998, the Sheikh Mohammed Centre for Cultural Understanding was created with a vision to teach residents about the traditions and customs of the UAE. Its motto is ‘open doors, open minds’. All year-round, visitors can sign up for a traditional Emirati breakfast, lunch or dinner meal, as well as a range of walking tours, including ones to sites such as the Jumeirah Mosque or Al Fahidi Historical Neighbourhood.

Every year during Ramadan, an iftar programme is rolled out. This allows guests to break their fast with the centre’s presenters, visit a nearby mosque and observe their guides while they pray. These events last for about two hours and are open to the public, or can be booked for a private event.

Until the end of Ramadan, the iftar events take place from 7pm until 9pm, from Saturday to Thursday. Advanced booking is required.

For more details, email openminds@cultures.ae or visit www.cultures.ae

 

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