Saudi Arabia bans Lebanese fruit and vegetable imports over drug smuggling concerns


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Saudi Arabia on Friday announced a ban on the import of fruit and vegetables from Lebanon because of drug smuggling concerns, shortly after authorities announced the seizure of 5.3 million captagon pills and 2.4 pills of amphetamine.

The ban will go into effect on Sunday and will apply to produce that originates from Lebanon or has transited through the country, the Saudi interior ministry said.

The Saudi decision cuts off a major market for farmers in Lebanon, where a drawn-out economic crisis has raised fears of increasing lawlessness as poverty levels rise.

The Saudi ministry said the ban was prompted by an increase in attempts to smuggle drugs into the kingdom from Lebanon.

The ban will be lifted when the Lebanese authorities provide "adequate and reliable guarantees" that measures have been taken to prevent drug smuggling, it said, and urged Lebanon to "take the necessary action" to address the issue.

Lebanon's caretaker Foreign Minister Charbel Wehbe said in a statement that "the smuggling of drugs and their export is detrimental to the Lebanese economy, farmers and the country's reputation" and urged authorities to act.

The Saudi interior ministry said it would monitor other imports from Lebanon to decide if the ban should be widened.

The kingdom's General Directorate of Narcotics Control said on Friday that it had thwarted an attempt to smuggle 5,383,400 captagon pills and 2,466,563 pills of amphetamine hidden in a shipment of pomegranates coming from Lebanon.

Saudi Arabia's import ban will drive down the price of fruit and vegetables in Lebanon and affect growers, said Antoine Howayek, head of the Lebanese farmers association.

"Saudi Arabia is one of the main importers of Lebanese fruit and vegetables. They import potatoes, citrus fruits, grapes," he said.

If the kingdom halts imports of fruit and vegetables from Lebanon the decision will probably bring prices down in Lebanon because supply will exceed demand.

"Prices of certain produce, such as citrus fruit, may be halved, this will no doubt have a negative effect on farmers."

Lebanon has been suffering an economic crisis for the past year and a half, with inflation driving prices up amid growing food insecurity in a country that relies on imports for most basic foodstuffs.

While Saudi Arabia did not disclose the type of amphetamines it seized, captagon pills are the main illicit drug exported to the Gulf from Lebanon and Syria, according to Hassan Makhlouf, a professor at Lebanon University who studies drug trafficking.

“Captagon is easily made. In a basement lab they can make millions of pills,” he said.

The drug is primarily manufactured in the Bekaa Valley, a region bordering Syria where Hezbollah wields great influence.

Last July, Italian police seized the largest drug shipment of captagon on record, worth €1 billion, coming from the port city of Latakia, held by the Hezbollah-allied Syrian regime.

As the security situation deteriorates, Mr Makhlouf said, the trafficking of drugs and other illicit products will increase, especially as inflation has slashed the value of salaries for government employees, encouraging corruption.

“The situation is really dire. If the international community does not step in Lebanon will soon become a hub of illicit traffic and smuggling,” he said.

The country was previously known as centre of trafficking during its civil war from 1975 to 1990, a period of lawlessness when control of the country was divided between rival militias.

Farage on Muslim Brotherhood

Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.

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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.”