TEHRAN // If the uranium fuel exchange deal ultimately succeeds, it will likely ward off another round of sanctions against Iran and pave the way for wider negotiations between Tehran and global powers, if not defuse tensions, analysts said.
Western powers responded with caution while Iran portrayed the agreement, which is essentially a confidence-building measure, as an important starting point to broader negotiations.
Talks between Iran and world leaders - which Iran's president, Mahmoud Ahmadinejad, called for yesterday - would give the West the opportunity to press Tehran on the underlying issue of its uranium enrichment programme.
Key to the apparent breakthrough was the high-profile diplomacy of Turkey and Brazil - and symbolically important for Iran - that the negotiations took place in Tehran.
The involvement of the two emerging world powers - both non-permanent members of the United Nations Security Council ? "underscores the shift in the geopolitical global centre of gravity. A shift that Iran very much welcomes", said Trita Parsi, the director of the Washington-based National Iranian American Council.
The original fuel swap deal brokered by the United Nations last October stalled in part over Iran's deep mistrust of the West.
"Turkey and Brazil may have succeeded in filling in the trust gap," Mr Parsi added in an e-mail comment. And the fact the swap will take place in Turkey "makes it politically easier for the Iranian leadership".
Iran, in other words, can argue it did not bend to American pressure.
That Iran's supreme leader, Ayatollah Khamenei, met Brazil's president, Luiz Inacio da Silva, on Sunday may be interpreted as the Iranian leader's "tacit endorsement of the deal", said Mr Parsi. "If so, that would ? make it more difficult to turn the deal into a domestic political football [between the Iranian president and his rivals]." Although details of the swap have not been disclosed, apart from the designation of Turkey as the exchange location, the proposed deal appears to be close to the UN-drafted framework.
The agreement could reduce tension between Iran and the West if it can ensure the US and its western allies that Iran's enriched uranium cache cannot be used for making a nuclear weapon, analysts said. Fuel rods used in the reactor cannot be processed further for that purpose.
The new proposal, however, does not require Iran to cease its enrichment programme even if an agreement to swap low enriched uranium (LEU) for reactor-grade fuel is reached with the Vienna Group, the foreign ministry spokesman, Ramin Mehmanparast, said after the announcement of the trilateral agreement with Turkey and Brazil.
The Vienna Group consists of representatives from France, Russia, the US and the UN nuclear watchdog, the International Atomic Energy Agency.
"Reaching this agreement is an indication that our country's natural right to possess [nuclear] knowledge and enrichment activity is recognised and is confirmed by all countries ? We will produce 3.5 per cent nuclear fuel and swap it with 20 per cent uranium," Mr Mehmanparast said.
Scott Lucas, a professor of American studies and Iran expert at Birmingham University in England, said that the US may even have had indirect contacts with Iran through Brazil and Turkey.
Mr Ahmadinejad of Iran also needed an agreement now, experts believe. He hopes it will bolster his internal legitimacy nearly a year after his disputed re-election last June.
"The fact that this agreement takes place less than a month before the anniversary of the elections is not a coincidence," Mr Lucas said.
Sceptics will see Iran's agreement to send the bulk of its low-enriched uranium abroad as an 11th-hour attempt to scupper the western-led push for new sanctions.
But others believe there has been a major change in the way that the Iranian regime regards its nuclear file.
Mr Ahmadinejad had appeared to favour the initial fuel swap deal brokered by the UN last October. But he retreated swiftly in the face of domestic opposition from across the political spectrum.
Many conservatives, however, have moved closer to the reformist position, which promotes Iran's nuclear programme while tempering its speed to reduce the penalties in terms of sanctions and international isolation.
Among them is Ali Larijani, the powerful parliamentary speaker, who opposed the October accord but supports the new one. He is a key adviser on the nuclear issue to the supreme leader, Ayatollah Ali Khamenei,
"The reason why this deal is now on is because of the shift inside Iran," Mr Lucas said.
Reformists, while far from intrinsically opposed to a nuclear compromise, were concerned that a deal could bolster Mr Ahmadinejad's government internally. Hardliners, meanwhile, were reluctant to give up Iran's cherished LEU stockpile.
Even with the fuel swap deal ? if it works ? "Iran is less of a pariah", said Mr Lucas.
Iran's opposition green movement, however, is likely to fear that the international community, relieved by apparent progress on the nuclear issue, will become less vocal on Tehran's human-rights abuses.
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msinaiee@thenational.ae
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Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
A MINECRAFT MOVIE
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The Bio
Hometown: Bogota, Colombia
Favourite place to relax in UAE: the desert around Al Mleiha in Sharjah or the eastern mangroves in Abu Dhabi
The one book everyone should read: 100 Years of Solitude by Gabriel Garcia Marquez. It will make your mind fly
Favourite documentary: Chasing Coral by Jeff Orlowski. It's a good reality check about one of the most valued ecosystems for humanity
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Famous left-handers
- Marie Curie
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Haemoglobin disorders explained
Thalassaemia is part of a family of genetic conditions affecting the blood known as haemoglobin disorders.
Haemoglobin is a substance in the red blood cells that carries oxygen and a lack of it triggers anemia, leaving patients very weak, short of breath and pale.
The most severe type of the condition is typically inherited when both parents are carriers. Those patients often require regular blood transfusions - about 450 of the UAE's 2,000 thalassaemia patients - though frequent transfusions can lead to too much iron in the body and heart and liver problems.
The condition mainly affects people of Mediterranean, South Asian, South-East Asian and Middle Eastern origin. Saudi Arabia recorded 45,892 cases of carriers between 2004 and 2014.
A World Health Organisation study estimated that globally there are at least 950,000 'new carrier couples' every year and annually there are 1.33 million at-risk pregnancies.
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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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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
My Country: A Syrian Memoir
Kassem Eid, Bloomsbury
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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