US Secretary of State Mike Pompeo urged the UN Security Council on Tuesday to renew an arms embargo on Iran, saying that not doing so will allow Iran to "hold a sword of Damocles" over economic stability in the Middle East.
Mr Pompeo, speaking at a Security Council video meeting on non-proliferation, called on the global body to extend a the five-year ban on arms trade with Iran due to expire in October.
"This chamber has a choice: stand for international peace and security, as the United Nations' founders intended, or let the arms embargo on the Islamic republic of Iran expire, betraying the UN's mission and its finest ideals, which we have all pledged to uphold," Mr Pompeo said.
Warning of Iran's ability to purchase jets from Russia and China and arm its regional proxies, he said renewing the embargo was a national security issue and not a partisan one.
Addressing Russia and China, Mr Pompeo mentioned the instability that could hit energy markets if the embargo is not renewed.
“Iran will hold a sword of Damocles over the economic stability of the Middle East, endangering nations like Russia and China that rely on stable energy prices,” Mr Pompeo said. Russia has publicly opposed renewing the measure.
Mr Pompeo did not close the door to other options if the Security Council fails to act.
The US's "overwhelming preference is to work with this council to extend the arms embargo, to protect human life, to protect our national security, and to protect yours", he said.
Last week, the US threatened to impose multilateral sanctions if the embargo is not renewed.
“If at any time the United States believes Iran has failed to meet its commitments, no other state can block our ability to snap back those multilateral sanctions,” Mr Pompeo said from the State Department.
But that would require the Trump administration to return to the Iran nuclear deal that it abandoned in 2018. Such a move would all but guarantee that the agreement collapses.
At Tuesday's meeting, the EU's ambassador to the UN Olof Skoog called for "preserving the agreement" as a cornerstone for global security. He expressed concern, however, over Iran's breaches of the deal.
“It is deeply worrying that Iran has decreased its nuclear-related JCPOA commitments," he said. "We remain particularly concerned about Iran’s continued accumulation of low-enriched uranium in excess of the JCPOA stockpile and enrichment level thresholds, its continued expansion of R&D [research and development] with advanced centrifuges, and the enrichment activities in Fordow.”
Britain’s representative at the UN Jonathan Allen warned against letting the embargo expire.
“We believe the planned lifting of arms restrictions on Iran in October would have major implications for regional security and stability,” he said.
US-Iran tensions were on display in other ways – Iranian Foreign Minister Javad Zarif joined the video meeting only after US Secretary of State Mike Pompeo had left the session.
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Founder: Amir Barsoum
Based: Dubai, UAE
Sector: HealthTech / MedTech
Size: 300 employees
Funding: $22.6 million (as of September 2018)
Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
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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.”
Opening day UAE Premiership fixtures, Friday, September 22:
- Dubai Sports City Eagles v Dubai Exiles
- Dubai Hurricanes v Abu Dhabi Saracens
- Jebel Ali Dragons v Abu Dhabi Harlequins