Tom Tugendhat MP said: The actions of Iran not just in the region but in many other parts of the world as well has been extremely distressing to see and it’s a great shame"
Tom Tugendhat MP said: The actions of Iran not just in the region but in many other parts of the world as well has been extremely distressing to see and it’s a great shame"

Britain troubled by the threat from Iran, says UK foreign affairs chairman



It is end of term in the Palace of Westminster and the London landmark has lost much of its conspiratorial buzz.

Time for Tom Tugendhat, the influential chairman of the House of Commons Foreign Affairs Committee, to look beyond collegial obsessions over Brexit to the Gulf region, where Britain has a “long history” of “fruitful co-operation”.

It is a view troubled by the threat from Iran, which he says is fuelling proxy conflicts across its neighbours and by such actions should have forfeited the goodwill for wholesale sanctions relief after the 2015 nuclear agreement.

“The actions of Iran not just in the region but in many other parts of the world as well has been extremely distressing to see and it’s a great shame,” he told The National. “The reality is that the lifting of sanctions that the Iranians are now claiming should have happened was based on goodwill and when the Iranian government is testing missiles and then actively firing missiles into Riyadh, it’s very hard for any goodwill to arise.

“So I think the Iranian government needs to think very hard about what sort of future it seeks because the route it is on is seeing its people suffer, its prosperity diminished and it is not seeing an end to the sanctions because they rely on goodwill.”

The list of countries facing internal conflict that Iran orchestrates stretches far and wide, including Bahrain, Iraq, Syria and southern Lebanon. President Donald Trump is now reflecting the concerns over the 2015 agreement that Mr Tugendhat and many in the Gulf have long aired that Tehran has been unshackled and needs to bear responsibility for its activity. “Its not just Donald Trump, in fact Saudi Arabia and the UAE are well aware of it from the start,” he said.

A scholar of Arabic who studied the language in Yemen, Mr Tugendhat believes Iran’s role there must be confronted. “The international community has a role at the UN in talking to the Iranian government about their sponsoring of attacks on Saudi Arabia through, effectively, a proxy militia,” he said. “Those actions are unacceptable and they must stop.”

The former army officer hopes that the conflict can be part of the focus when Saudi Arabia’s Crown Prince Mohammed Bin Salman visits Britain next month. The concerns of British politicians, who had consistently put the conflict at the top of the agenda when dealing with regional leaders, is, he reflects, grounded in a real public sympathy for the country’s plight.

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“Firing missiles into Riyadh and into Jeddah is absolutely unacceptable and the Saudis have the right to self-defence. We must also do all we can to ensure the government of Saudi Arabia understands the issue as the British people see it when they look at what’s going on in Yemen,” he said.

“I hope that Mohammed bin Salman sees that when we seek to intervene diplomatically in areas like Yemen we are seeking to help a friend.

“I’m glad the blockade appears to have been lifted and I would urge the Saudis to use what they have, which is an extraordinary generosity and to flood Yemen with all the aid that they can muster.”

Enthused by the Vision 2030 reform agenda of the Crown Prince, Mr Tugendhat believes that Britain must pick up on the signal sent by his statement in October on Islam and overall emphasis on combating extremism.

He notes that Prince Mohammed has directed his comments to a domestic audience.

“I welcome enormously the reforms that Mohammed bin Salman has conducted recently. He is rightly showing a vision for Saudi Arabia that sees her taking her place as a player in the global economy and I think that is incredibly positive, not just for Saudi Arabia, but for the world,” he said.

“There has been a rise in extremism in certain societies that has caused tensions. Mohammed bin Salman was very clear in his speech and I was very pleased to hear him say it, not in English but in Arabic, that he was keen to return to a moderate form of Islam that Saudi Arabia has practised in the past. Indeed if you look at Saudi history there is a long history of Bedouin Islam being moderate and I look forward to that asserting itself.”

The shared concerns about extremism extend across the GCC region as a whole and reflecting on the Arab Quartet’s boycott of Qatar since the summer, Mr Tugendhat called for a united vision on combating the scourge. “It is the duty of every government to protect their citizens by stamping on these extraordinary extremist creatures who preach nothing but hate and destruction,” he said.

“The GCC has been such a positive force, it is a great shame it is going through period of difficultly as a result of deep and long-felt tensions between certain countries.”

A new report from the Foreign Affairs Committee, which Mr Tugendhat has led since last year, is sharply critical of the Britain's incoherent policies on Syria and Iraq, particularly in relationship to the Kurdish question. It is clear that the chairman often has difficulties with the leadership that Boris Johnson is providing, at one point telling a television interviewer that the Old Etonian could "cut-out the jokes" in order to exercise more influence with regional leaders.

While a strong proponent of the Remain argument in the 2016 vote, Mr Tugendhat is keen to stress that the British exit from Europe cannot mean a national eclipse. Speaking in a House of Commons meeting room with an etching of the 14th-century Siege of Calais on the wall, he observes the "essential truths of the United Kingdom won't change", even as it unpicks a four-decade partnership with the EU.

“It’s a moment when we have to think hard about what are the UK’s raw interests, our immediate interests but also the interests of our friends and allies. We have got to think hard about who counts in many ways.

“And then when we think about the Middle East there’s a long history of very deep and fruitful co-operation – nowhere more so than the Emirates.”

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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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