President Donald Trump signed a memorandum on Tuesday committing the US to a policy of “maximum pressure” against Iran, aimed at pushing its oil exports to “zero”, while also issuing a dire warning.
Mr Trump said he had left instructions ordering a strike to obliterate Iran if he is ever assassinated by Tehran, yet he also signalled a willingness to reset the relationship between the two countries. “If they do it, they get obliterated. There won't be anything left,” he told reporters at the White House.
He ordered the 2020 killing of Qassem Suleimani, who led the Iranian Islamic Revolutionary Guard Corps’ Quds Force. The Justice Department announced in November that an Iranian plot to kill Mr Trump before the presidential election had been thwarted.
Mr Trump's memo orders the US Treasury Secretary to impose “maximum economic pressure” on Iran, including sanctions and enforcement on those breaching existing penalties.
It also directs the Treasury and State Department to implement a campaign aimed at “driving Iran's oil exports to zero". US oil prices pared losses on Tuesday on the news that Mr Trump planned to sign the memo, which offset some weakness from the tariff drama between Washington and Beijing.
“It's very tough on Iran,” Mr Trump said of the memo.
Iran's Foreign Minister Abbas Araghchi said Mr Trump's "maximum pressure" policy had failed in the past, and he believed it would again, state news agency IRNA reported.
"If the main concern is that Iran should not pursue nuclear weapons, this is achievable and not a complicated issue. Iran’s position is clear: it is a member of the Non-Proliferation Treaty, and the supreme leader’s fatwa has already clarified our stance," Mr Araghchi said.
The US President's move indicates a return to a policy he used in his first term, when he withdrew America from the nuclear deal between Iran and world powers, known as the Joint Comprehensive Plan of Action, in 2018.
Yet Mr Trump indicated that he was open to a different relationship with Tehran and said he was “torn” about signing the memorandum.
“Iran cannot have a nuclear weapon,” Mr Trump said. “We don't want to be tough on Iran. We don't want to be tough on anybody, but they just can't have a nuclear weapon.”
He said he had hoped not sign the memorandum.
“Hopefully we're not going to have to use it very much,” Mr Trump said. “We will see whether or not we can arrange or work out a deal with Iran and everybody can live together, and maybe that's possible and maybe it's not possible.”
Mr Trump's hesitation appears to be a slight deviation from his more hardline approach towards Tehran during his first term.
"Mr Trump is signalling a return to maximum pressure in name, if not yet in fact, as he has not yet announced any new sanctions," said Gregory Brew, a senior analyst at the Eurasia Group, whose work focuses on Iran.
"His tone while signing the order sounded almost dejected, as though he was signing it under duress, but he's made it clear in the past that he hopes to resume sanctions pressure on Iran, particularly its oil exports, after what he sees as a period of lax enforcement under [former president Joe] Biden."
He recently revoked government security protection for former secretary of state Mike Pompeo and his top aide, Brian Hook, as well as his former national security adviser John Bolton, who have all faced threats from Iran after they took hardline stances against it during Mr Trump’s first administration.
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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.”
