Lebanon's finance ministry said it will receive $1.135 billion in reserve assets, known as Special Drawing Rights, from the International Monetary Fund on Thursday.
It comes after a breakthrough in the country's political impasse, when its leaders agreed to form a new government last week.
The allocation includes $860 million approved this year and $275m from 2009 that will be deposited to the Banque du Liban's account, the ministry said on Monday.
"The finance ministry had asked the IMF to transfer the right to SDRs to Lebanon, particularly those from 2009," it said.
Lebanese President Michel Aoun announced the formation of a government on September 10, after a year of political deadlock, paving the way for the country to restart talks with the IMF for an aid package.
On Monday, Mr Aoun said he hoped the new Cabinet's policy programme would include resuming talks with the IMF, according to a statement on Twitter.
The leaders agreed on a Cabinet line-up, headed by telecoms billionaire Najib Mikati as prime minister, after wrangling for weeks over the distribution of government ministries between Lebanon’s various political parties.
Central bank official Youssef Khalil was named the finance minister and Amin Salam as economy minister.
The IMF's allocation will be a much-needed boost to the country, which is facing one of the deepest financial and economic crises in modern history.
Seventy-eight per cent of Lebanon's population is now living in poverty as subsidy cuts have led to a steep rise in cost of staples such as fuel and bread, a recent UN report said.
The report, published by the UN Office for the Co-ordination of Humanitarian Affairs, called for $378.5m in funding for an emergency response plan to help alleviate the crisis.
Millions of Lebanese, along with Palestinian and Syrian refugee communities, have been affected by the economic crisis that the World Bank has ranked among the world’s top 10 crises – possibly even the top three – since the mid-19th century.
IMF special drawing rights are an international reserve asset created by the Washington-based lender to supplement the official reserves of its member countries.
They are the fund's unit of exchange and are made up of a basket of the world’s five leading currencies – the US dollar, the euro, the yuan, the yen and the British pound.
SDRs are distributed to countries in proportion to their quota shares in the IMF.
The IMF’s SDRs help to increase countries’ international reserves and reduce their reliance on more expensive domestic or external debt.
Once IMF members receive their allocation, they can hold it as part of their foreign exchange reserves.
The right to trade SDRs allows members to receive hard currencies. These are not priced according to the creditworthiness of the borrower.
The share of emerging market and developing economies is about 42.2 per cent in the IMF quota, which means about $275bn of the current SDR allocations is going to emerging and developing countries.
Of that amount, low-income countries will receive about $21bn, with allocations amounting to as much as 6 per cent of a country's gross domestic product in some cases, according to IMF data.
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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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.”
HIV on the rise in the region
A 2019 United Nations special analysis on Aids reveals 37 per cent of new HIV infections in the Mena region are from people injecting drugs.
New HIV infections have also risen by 29 per cent in western Europe and Asia, and by 7 per cent in Latin America, but declined elsewhere.
Egypt has shown the highest increase in recorded cases of HIV since 2010, up by 196 per cent.
Access to HIV testing, treatment and care in the region is well below the global average.
Few statistics have been published on the number of cases in the UAE, although a UNAIDS report said 1.5 per cent of the prison population has the virus.
What can victims do?
Always use only regulated platforms
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Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
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Fuel economy, combined 6.6L / 100km
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Explainer: Tanween Design Programme
Non-profit arts studio Tashkeel launched this annual initiative with the intention of supporting budding designers in the UAE. This year, three talents were chosen from hundreds of applicants to be a part of the sixth creative development programme. These are architect Abdulla Al Mulla, interior designer Lana El Samman and graphic designer Yara Habib.
The trio have been guided by experts from the industry over the course of nine months, as they developed their own products that merge their unique styles with traditional elements of Emirati design. This includes laboratory sessions, experimental and collaborative practice, investigation of new business models and evaluation.
It is led by British contemporary design project specialist Helen Voce and mentor Kevin Badni, and offers participants access to experts from across the world, including the likes of UK designer Gareth Neal and multidisciplinary designer and entrepreneur, Sheikh Salem Al Qassimi.
The final pieces are being revealed in a worldwide limited-edition release on the first day of Downtown Designs at Dubai Design Week 2019. Tashkeel will be at stand E31 at the exhibition.
Lisa Ball-Lechgar, deputy director of Tashkeel, said: “The diversity and calibre of the applicants this year … is reflective of the dynamic change that the UAE art and design industry is witnessing, with young creators resolute in making their bold design ideas a reality.”
