Adel Abdul Mahdi, the newly appointed Prime Minister attending a press conference at the headquarter of Iraqi parliament in Baghdad, Iraq, 02 October 2018. EPA
 Adel Abdul Mahdi, the newly appointed Prime Minister attending a press conference at the headquarter of Iraqi parliament in Baghdad, Iraq, 02 October 2018. EPA

Angry Iraqi MPs may topple prime minister-designate before he is sworn in



Iraqi Prime Minister-designate Adel Abdul Mahdi is likely to face serious opposition within parliament that could hinder the approval of his government, Iraqi political leaders and lawmakers told The National on Tuesday.

They are likely to protest against mechanisms adopted to nominate the ministers and the distribution of portfolios.

Abdul Mahdi will put his governmental program and the list of his cabinet to vote in the parliament on Wednesday evening, a statement issued by the Speaker of the Parliament on Monday said.

The ratification of any government requires a vote on each individual candidate, and a then vote on the whole package. The winning minister must receive at least 166 votes, representing half of the 329 members of parliament plus one.

One-hundred and twenty members of parliament from various blocs submitted a written request to the Presidency of the House of Representatives on Monday to adopt a secret vote on the ratification of the cabinet.

The secret vote would liberate the MPs from the influence of the heads of their political blocs and gives them freedom to violate the agreements concluded by the heads of the blocs and Mr Abdul Mahdi.

The key leaders of the ruling coalition that consists of the Reform Alliance, sponsored by the influential Shiite cleric Moqtada Al Sadr, and the Iranian-backed alliance of Al Binna’a, led by commander of the Badr Organisation Hadi Al Amiri, the most powerful Shiite armed faction, have given Abdel Mahdi the full right to nominate candidates who will occupy their share of ministries.

However, some of their deputies and their allies were upset because of this agreement, especially after the announcement made by Mr Abdul Mahdi that no current or former deputy will take any of the ministerial posts.

"MPs feel resentment and anger at the mechanics of choosing ministers," Jassem Mohammed Al Jaf, Minister of Immigration and leader of the Kurdistan Democratic Party told The National.

“There are many blocs and MPs within the blocs are not satisfied with the nomination of some names and some of them are dissatisfied with the share of ministries, therefore there is an intention not to vote for the whole list (of the cabinet),” he said.

“If the vote will be secret, certain names (of the nominated ministers) will fall. It is a kind of pressure until Abdul Mahdi gives up and responds to some demands.”

According to the Iraqi constitution, any government must include representatives of all the Iraqi communities: Shiites, Sunnis and Kurds. In addition, a gentleman’s agreement adopted by the Iraqi political forces in 2005 states they must share the ministerial posts according to the number of parliamentary seats of the blocs participating in the ruling coalition and its allies.

Mr Abdul Mahdi’s proposed government will consist of 22 ministries as well as two vice-presidents, one Sunni and the other Shiite and no deputies for the prime minister.

The map of the ministry distribution shows that Reform will get the ministries of Oil, Transport, Health, Electricity, Higher Education and Water Resources. These ministries will be occupied by Shiites, while Al Binna’a will get the ministries of Interior, Foreign Affairs, Agriculture, Labour, Communication and Housing and Construction.

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Sunnis within the two alliances will get the ministries of Defence, Plan, Trade, Education, Industry and Sport and Youth, while Kurds will get the ministries of Finance, Justice and Immigration.

Mr Sadr, Mr Amiri, Ammar Al Hakim, the head of Al Hikma, and Haider Al Abadi, the outgoing prime minister and head of the Al Nassir Alliance, have pledged to grant full freedom to Abdul Mahdi to choose who wants to occupy the portfolios that fall within their quotas. But their Shiite, Sunni and Kurdish partners have refused and insisted to maintain their right to nominate their ministers.

Most of the 120 names of MPs who signed the request to adopt the secret vote, belong to the Al Binna’a alliance and its Shiite, Sunni and Kurdish allies.

"A government that does not trust the MP and tries to distort the image of the legislature and harm it, is a government that does not deserve our trust,” Alliya Nassief, a lawmaker said in a statement.

Wednesday's session will include a vote on only 16 ministers, with the vote postponed for six ministries: defence, interior, planning, industry, education and agriculture. They are to be run by Abdul Mahdi for a while, Shiite negotiators told the National.

"Keeping a number of ministries vacant will keep some MPs and blocs hoping to get them, so they will not seek to abort his government," a key Shiite negotiator told The National.

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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.”

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