Jumblatt shifts with the wind, but so do Lebanese fortunes


Michael Young
  • English
  • Arabic

Always watch Walid Jumblatt carefully. The Lebanese Druze leader has been at the heart of Syria and Hizbollah's attempts to prevent the return of Saad Hariri as Lebanon's prime minister. It has often been said that where Lebanon goes, Mr Jumblatt follows - although on many occasions the contrary has been true. If so, a look back at his actions in the past few weeks will give us a better sense of the trials and errors this week that have heightened tension in Beirut.

The importance of Mr Jumblatt is that after the 2009 elections, it was his parliamentary bloc that could hand the majority to the Hariri-led March 14 coalition or, conversely, to the rival Hizbollah-led coalition. While the Druze leader's candidates were elected as allies of March 14, Mr Jumblatt was then preparing to move closer to Syria, after having been its most ardent foe following the assassination four years earlier of Rafik Hariri. The acrobat in Mr Jumblatt sensed that because of the Syrian-Saudi reconciliation in early 2009, Mr Hariri would be pushed by Riyadh to reconcile with Syria; therefore, Mr Jumblatt had to do so too, or he would be left hanging out to dry.

From that moment on, Mr Jumblatt was helpless. He had a Canossa to climb in order to regain Syrian approval (and the humiliations came hard and fast), and knew that his community was exposed militarily to Hizbollah, which had attacked Druze mountain villages in May 2008, to Mr Jumblatt's alarm. His parliamentarians were tallied with those of the majority led by March 14, but it was a matter of time before Syria would ask him to go all the way in his new alignments.

Two weeks ago the Hariri government was brought down when Hizbollah's ministers and their allies resigned. This was precipitated by two developments: continuing discord within the government over Hizbollah and Syria's demand that Mr Hariri take measures to sever Lebanon's relations with the Special Tribunal for Lebanon, set up to identify and try those involved in the Hariri assassination; and the breakdown in a Syrian-Saudi dialogue over Lebanon that, from Damascus's and Hizbollah's perspectives, was meant to facilitate this severing of relations. But Washington warned the Saudis that they should not endorse steps against the tribunal, and the dialogue ended.

To form a government, the president consults with parliamentary blocs, takes a poll and determines who has the most votes. After the recent government collapse, Hizbollah and its allies vowed that Mr Hariri would not return to office, fearing he would continue stalling on the tribunal. Mr Jumblatt, in contrast, announced that his bloc would nominate Mr Hariri as the most representative Sunni. Consultations were delayed, however, and within days Hizbollah had exerted pressure on Mr Jumblatt to give his votes to the opposition's candidate. Last week, the Druze leader yielded, announcing that he would side with the candidate of "Syria and the resistance", which many people took to mean Omar Karami, a former prime minister.

By Sunday, however, it was apparent that Mr Karami could not win against Mr Hariri. Mr Jumblatt's 11-member bloc was divided, with several parliamentarians promising to vote for Mr Hariri. Hizbollah agreed to what appeared to be a Syrian decision to replace Mr Karami with a more credible candidate: the former prime minister Najib Miqati. However, Mr Hariri warned that he would resist any effort by the opposition, Hizbollah in particular, to marginalise him politically despite his being the most legitimate Sunni leader.

At the end of two-day parliamentary consultations on Tuesday, Mr Miqati got the nod. He had sought to present himself as a compromise candidate, however Mr Hariri rejected this, warning that he and his allies would refuse to participate in a government formed by Hizbollah. Sunnis all around Lebanon began protesting against the decision to name Mr Miqati.

The fate of Mr Jumblatt is instructive in this regard. The Druze leader voted for Mr Miqati, but four of his bloc members abandoned him. Mr Jumblatt dissolved his Democratic Gathering bloc and renamed his remaining parliamentarians the National Struggle Front. However, he now will have to face the consequences of his actions. Two of Mr Jumblatt's Druze parliamentarians were elected in Sunni-majority districts and more than 30 per cent of the electorate in the Shouf (one of two electoral districts effectively controlled by the Druze leader) is Sunni. The Sunnis will not soon forget Mr Jumblatt's disloyalty, when his better instincts initially were to bring Mr Hariri back to office.

Hizbollah and Syria have placed themselves in a volatile situation, by opening up a Pandora's box of sectarian resentment. Even when the March 14 coalition was a majority, it never sought to impose its own candidate as speaker of parliament, a post reserved for the Shiite community. Under the circumstances, it will be tricky for Mr Miqati to form a broadly representative government, but there is still debate in the Hariri camp over whether to go back on a boycott. If the prime minister-elect can take office, his cabinet may still be viewed as a Hizbollah creation. Talk of a team of technocrats has circulated, but it would have little of the political cover required to take the contentious decision of cutting off Lebanon's ties with the special tribunal.

Mr Jumblatt's fortunes are a good illustration of what haste can do. The Druze leader has survived worse situations. However, in their hurriedness to cripple the tribunal, Hizbollah and Syria may have burnt valuable cards: Mr Miqati's repute has been gravely damaged and Mr Jumblatt was forced to take risks, potentially suicidal ones politically, in an endeavour whose outcome remains uncertain. And the dangerous aftershocks of the Miqati gambit are not yet over.

Michael Young is opinion editor of the Daily Star newspaper in Beirut and author of The Ghosts of Martyrs Square: An Eyewitness Account of Lebanon's Life Struggle

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.”

The specs

Engine: 4.0-litre V8 twin-turbocharged and three electric motors

Power: Combined output 920hp

Torque: 730Nm at 4,000-7,000rpm

Transmission: 8-speed dual-clutch automatic

Fuel consumption: 11.2L/100km

On sale: Now, deliveries expected later in 2025

Price: expected to start at Dh1,432,000

Electric scooters: some rules to remember
  • Riders must be 14-years-old or over
  • Wear a protective helmet
  • Park the electric scooter in designated parking lots (if any)
  • Do not leave electric scooter in locations that obstruct traffic or pedestrians
  • Solo riders only, no passengers allowed
  • Do not drive outside designated lanes

The Ashes

Results
First Test, Brisbane: Australia won by 10 wickets
Second Test, Adelaide: Australia won by 120 runs
Third Test, Perth: Australia won by an innings and 41 runs
Fourth Test: Melbourne: Drawn
Fifth Test: Australia won by an innings and 123 runs

Stats at a glance:

Cost: 1.05 billion pounds (Dh 4.8 billion)

Number in service: 6

Complement 191 (space for up to 285)

Top speed: over 32 knots

Range: Over 7,000 nautical miles

Length 152.4 m

Displacement: 8,700 tonnes

Beam:   21.2 m

Draught: 7.4 m

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