Raghida Dergham is the founder and executive chairwoman of the Beirut Institute, and a columnist for The National
February 13, 2022
The objective of the talks under way in the Austrian capital of Vienna is to revive the 2015 nuclear agreement – known as the JCPOA – between Iran on the one side and China, France, Germany, Russia, the UK and the US on the other. They cannot be viewed in isolation, however, as they play a role in any American-European and European-Russian negotiations that are currently focused on resolving the crisis in Ukraine.
Ukraine – which was a part of the Russian empire and, like Russia, a former Soviet republic thereafter – seeks to join Nato, a US-led western security alliance created more than seven decades ago as a bulwark against the Soviet-led communist bloc. Moscow fears Nato’s increasing post-Cold War influence in Eastern Europe and aims to stop it in its tracks. The immediate priority of the West, therefore, is to reach an agreement with Russia that will determine Europe’s security architecture for years to come.
While diplomats are working overnight to find a rapprochement on that front, there is also a sense that the Vienna talks need to arrive at a conclusion – either positive or negative – by the end of February. There is newfound optimism that an accord can be reached, which could shift Iran’s relations with the West in a positive direction. There have even been reports of direct American-Iranian meetings being held secretly.
Led by new German Chancellor Olaf Scholz, Berlin is playing an important role in trying to resolve both the Ukraine and Iran issues. The Russians view Germany as being instrumental for many reasons, not least the latter’s determination to ensure Russian gas supplies to Europe continue. The Iranians view Germany as a relatively friendly power that is leading a European bid to pressure the Biden administration to offer more concessions to Iran in return for the revival of the JCPOA. Last week, Mr Scholz went to Washington to meet US President Joe Biden. Now – amid fears that Russian troops will soon march into Ukraine – he is heading to Moscow to meet Russian President Vladimir Putin.
Meanwhile, Mr Biden and Mr Putin had a phone conversation to discuss the Ukraine crisis. As things appear, diplomacy will be carried out in full swing at least until the Beijing Winter Olympics end on February 20, or perhaps until the Paralympics conclude in March. Moscow, after all, has no desire to rain on China’s parade, particularly as it needs Chinese support in confronting the West. What happens thereafter is anyone’s guess. Iran, too, being Russia’s strategic partner, is preparing for both escalation and de-escalation. This is where the Vienna talks come in.
The eighth round of negotiations has reached its final stages, following which both the Iranians and the Europeans seem optimistic. There is talk that the Biden administration could agree to lifting 90 per cent of America’s sanctions on Iran, particularly on its ability to sell its oil and gas. This couldn’t happen soon enough for Iran, as the resumption of its biggest exports will give its economy a much-needed boost. Another sticking point is the US’s insistence that it be given access to Tehran’s nuclear programme; to this, the Iranian regime says the IAEA, the global nuclear watchdog, already has access. Other proposals include maintaining sanctions on the nuclear programme for a limited time, say for about six months, during which the international community determines whether Tehran is or isn’t importing prohibited material under the guise of procuring technology necessary for its so-called peaceful programme.
US President Joe Biden and German Chancellor Olaf Scholz leave after their joint news conference in the White House in Washington this month. EPA
Russia is keen to have sanctions lifted on Iran’s exports and imports, notably on its ability to buy weapons. Iran also has China's support, with the two sides engaging in a limited oil trade. The Chinese-Iranian-Russian grouping largely agrees on the substance of Iran’s demands.
The Europeans, too, are keen to on a deal, considering how much their own businesses stand to benefit from Iran’s integration into the global economy. They seem unperturbed by the Iranian regime’s malign behaviour in the Middle East, which involves exporting its so-called revolution to the Arab world. In fact, the Europeans continue to believe – without evidence – that the JCPOA will moderate Iran’s regional behaviour, even though the deal didn’t do anything of the sort after it was signed in 2015.
Mr Biden’s own willingness to conclude a deal he helped to secure with Iran, when he was Barack Obama’s vice president in 2015, could face opposition from the US Congress, which could force a vote on it. While Mr Biden’s Democrats have control of the legislature, political headwinds in an election year bring with them their own complications. And it’s highly unlikely that the Biden team will try to circumvent Congress by securing a deal during its February 21-25 recess, as some have speculated, given the political ramifications of such a move for the administration.
Russian President Vladimir Putin, left, and Iranian President Ebrahim Raisi, right, meet in the Kremlin in Moscow last month. AP Photo
There is undoubtedly an overlap between two of the world’s most compelling crises right now
In all this, one should not underestimate the role Israel may be playing in these talks, even though it is not part of the negotiations. The Biden administration seems to be seeking security guarantees for its strategic ally in the Middle East, which Iran considers to be its adversary. Could security guarantees for Israel, a domestic issue for America, pave the way for a deal?
Russia is seeking to play the role of a broker. It is convinced that it has leverage of its own over Israel, as the two countries enjoy extensive economic ties and have their own strategic objectives in Syria over which they can co-ordinate with each other. And while UK Foreign Secretary Liz Truss’s visit to Moscow earlier in the week is said to have led to a disappointing outcome vis-a-vis the Ukraine crisis, I am given to believe that her talks with Russian Foreign Minister Sergey Lavrov were positive in the context of the Iran issue.
There is undoubtedly an overlap between two of the world’s most compelling crises right now, and if the diplomatic efforts to resolve the Ukraine crisis become inexorably complicated, today’s positive climate regarding the Iran issue may not hold tomorrow either. Were goodwill to indeed evaporate, Russia would feel the need to use Iran as a sharp object of escalation with the West. It is in this context that Mr Scholz’s upcoming visit to Moscow is crucial.
Can the German Chancellor deliver a diplomatic victory in Moscow a week after French President Emmanuel Macron’s visit to the Russian capital ended with no meaningful rapprochement? That will depend on how much Mr Biden is willing to budge on Iran and, equally, how much Mr Putin is ready to concede on Ukraine.
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.”
First Job: Abu Dhabi Department of Petroleum in 1974
Current role: Chairperson of Al Maskari Holding since 2008
Career high: Regularly cited on Forbes list of 100 most powerful Arab Businesswomen
Achievement: Helped establish Al Maskari Medical Centre in 1969 in Abu Dhabi’s Western Region
Future plan: Will now concentrate on her charitable work
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
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