The Special Representative for the UN Assistance Mission for Iraq, Jeanine Hennis-Plasschaert, speaks during a press conference in Baghdad. EPA
The Special Representative for the UN Assistance Mission for Iraq, Jeanine Hennis-Plasschaert, speaks during a press conference in Baghdad. EPA
The Special Representative for the UN Assistance Mission for Iraq, Jeanine Hennis-Plasschaert, speaks during a press conference in Baghdad. EPA
The Special Representative for the UN Assistance Mission for Iraq, Jeanine Hennis-Plasschaert, speaks during a press conference in Baghdad. EPA

'Pervasive corruption' cause of Iraq's dysfunctionality, says UN envoy


Adla Massoud
  • English
  • Arabic

The head of the UN’s Iraq mission said Baghdad has made some progress in fighting corruption but warned “many other areas” require the government’s immediate attention.

Jeanine Hennis-Plasschaert, the UN special representative for Iraq, told the Security Council that the Iraqi government has taken "important steps", including the recovery of stolen funds, but said but more must be done, particularly in the energy, environmental and security spheres.

Ms Hennis-Plasschaert said if Iraq plans to build a system serving the needs of its society instead of serving a closed community of “collusion”, then ensuring accountability “across the spectrum” was essential.

The UN special representative said “systemic change” is vital to address corruption and encouraged Baghdad to persevere, “as those who stand to lose will undoubtedly seek to hinder these efforts".

She stressed too many opportunities since 2003 to conduct meaningful reform have been wasted, citing pervasive corruption as a major root cause of Iraqi dysfunctionality.

In 2021, former president Barham Salih estimated that Iraq had lost $150 billion to embezzlement since 2003.

Corruption is rife in Iraq, which ranks 157 out of 180 countries listed in Transparency International's corruption perceptions index.

Turning to “persistent violations” of Iraq's territorial integrity, she warned, “messaging by strikes does nothing but recklessly heighten tensions, kill people and destroy property.”

The UN envoy said that established diplomatic instruments are “at everybody’s disposal, especially when neighbours are faced with perceived national security threats.”

Iraq’s Deputy UN representative, Sarhad Fatah, condemned the repeated aggressions by Iran and Turkey and rejected the pretext of “self-defence”.

He stressed on Thursday that Iraq should not become an arena for “settling scores.”

“We believe that internal issues of each state need to be resolved within its borders, not outside of them,” he said.

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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Updated: February 03, 2023, 2:49 AM