French President Emmanuel Macron in Baghdad on Wednesday discussed solving Iraq's power cuts with nuclear energy and expressed support for Prime Minister Mustafa Al Kadhimi's push to contain armed groups outside the control of the state.
The French leader is the first western head of state to travel to the country since the new Iraqi government took office four months ago.
Mr Al Kadhimi said he discussed with Mr Macron "a future project" to use nuclear energy to produce electricity and solve decades-long power shortages.
He said the nuclear project would be under the supervision of the International Atomic Energy Agency and would create jobs.
In 1981, an Israeli strike destroyed the Osirak nuclear reactor south of Baghdad, which was being built with French help.
If realised, the project would place Iraq with the UAE and Iran as the only Middle East countries with civilian nuclear power.
The country has long power cuts and imports gas from Iran to operate its dilapidated power stations.
Jordan, Saudi Arabia and Turkey also have ambitions to become nuclear energy producers.
The electricity problem, along with collapse in other basic services and corruption and soaring unemployment, have contributed to mass discontent and a protest movement.
The authorities crushed the protests at the start of this year in co-operation with Iranian-aligned militias.
Mr Al Kadhimi has sought to create an independent foreign policy less governed by Iran since coming to power in May.
But his government has not managed to curb the sway of militants aligned with Tehran.
Mr Macron said all armed forces in Iraq should be "normalised", referring to a myriad militias supported by Iran outside the control of the government, but with associates and clients in the political system.
"There are many challenges to guarantee the sovereignty of Iraq, internally and in the region," Mr Macron said.
He said Iraq faced “foreign interference from multiple points".
European powers, with the exception of Britain, opposed the 2003 US-led invasion that toppled Saddam Hussein and have since shown little interest in the central government in Baghdad.
France and Germany have concentrated on building relations with the Kurdish administration in northern Iraq.
But France is a member of the international coalition against ISIS and Mr Macron said French soldiers are fighting "side by side" with the Iraqi military to ensure "the final defeat" of extremists.
Ali Shukri, an adviser to the Iraqi presidency, told the official news agency that Mr Macron would discuss issues related to the economy during his visit.
The Iraqi economy has been hard hit since February by the decline of oil prices.
Oil revenue, Iraq's main source of foreign currency, is providing about $2 billion (Dh7.34bn) a month, about $3bn short of covering public salaries.
French oil company Total operates in southern Iraq. It has also operated in the Kurdistan region since 2012.
It is a sensitive issue for Baghdad, which has had constant disputes with the Kurdistan Regional Government over oil revenue.
Mr Macron's visit comes a day after he met leaders in Lebanon to press for reforms after the explosion at the Beirut port last month killed at least 190 people.
The trip was not announced publicly until Tuesday evening, with officials in Paris and Baghdad keeping it quiet for security reasons.
On his final night in Beirut, Mr Macron announced that he was flying to Baghdad "to launch an initiative alongside the United Nations to support a process of sovereignty".
What drives subscription retailing?
Once the domain of newspaper home deliveries, subscription model retailing has combined with e-commerce to permeate myriad products and services.
The concept has grown tremendously around the world and is forecast to thrive further, according to UnivDatos Market Insights’ report on recent and predicted trends in the sector.
The global subscription e-commerce market was valued at $13.2 billion (Dh48.5bn) in 2018. It is forecast to touch $478.2bn in 2025, and include the entertainment, fitness, food, cosmetics, baby care and fashion sectors.
The report says subscription-based services currently constitute “a small trend within e-commerce”. The US hosts almost 70 per cent of recurring plan firms, including leaders Dollar Shave Club, Hello Fresh and Netflix. Walmart and Sephora are among longer established retailers entering the space.
UnivDatos cites younger and affluent urbanites as prime subscription targets, with women currently the largest share of end-users.
That’s expected to remain unchanged until 2025, when women will represent a $246.6bn market share, owing to increasing numbers of start-ups targeting women.
Personal care and beauty occupy the largest chunk of the worldwide subscription e-commerce market, with changing lifestyles, work schedules, customisation and convenience among the chief future drivers.
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.”
