Syrian refugees living in an informal settlement, in Al Marj, in Bekaa, eastern Lebanon. Reuters
Syrian refugees living in an informal settlement, in Al Marj, in Bekaa, eastern Lebanon. Reuters
Syrian refugees living in an informal settlement, in Al Marj, in Bekaa, eastern Lebanon. Reuters
Syrian refugees living in an informal settlement, in Al Marj, in Bekaa, eastern Lebanon. Reuters

Lebanese minister dismisses as 'an affront' UN plan to pay refugee aid in US dollars


Nada Homsi
  • English
  • Arabic

Lebanon’s caretaker Social Affairs Minister Hector Hajjar has rejected a plan by the UN's refugee agency to pay aid to Syrian refugees in US dollars, dismissing the initiative an “affront” on Friday.

This followed a UNHCR announcement this week that Syrian refugees in Lebanon would be able to withdraw cash aid in dollars from late May, rather than in the unstable and devaluing Lebanese pound.

Eligible Syrian families can now receive a maximum of $125 a month in cash assistance from UNHCR and the UN's World Food Programme.

Previously, the maximum a family of five received was roughly the equivalent of $80, paid in Lebanese pounds.

At a press briefing, Mr Hajjar said his ministry had not received official notification of the change.

“How was this decision taken when the Ministry of Social Affairs responsible for this matter did not agree?” he asked.

He said UNHCR had proposed to the ministry to raise cash assistance to $140 – a basic $40 sum, plus $20 per family member, capped at five people.

Mr Hajjar said he had rejected this as “the amount is much higher than that of a first-level public sector worker”.

However, Mr Hajjar, who is close to the Free Patriotic Movement, known for its anti-refugee stance, did not mention a fourfold rise in public sector salaries last month.

Employees can also withdraw salaries at a favourable exchange rate through the Central Bank’s Sayrafa platform.

“The majority of Lebanese popular opinion rejects Syrian displacement in Lebanon and is comparing the different help the displaced receive in comparison to the very simple assistance that Lebanese receive,” he said.

Lebanon has taken in between one million and 1.5 million refugees from Syria's civil war, which began in 2011.

At a time when Lebanon is beset by a severe economic crisis, with most of the population living in poverty, this has further strained the country's resources.

In recent weeks, the Lebanese government has ramped up efforts to deport refugees seen as illegal. Deportations have been accompanied by an escalation in calls for other refugees to return to Syria.

Syrian refugees have been met with greater hostility since the onset of Lebanon’s economic crisis in 2019, because of a perception that Lebanese nationals must compete with Syrians for resources and that refugees are provided with large sums of cash from humanitarian organisations.

Some observers say this has largely been driven by political scapegoating, as Lebanon’s political class seeks to deflect from the country’s financial crash.

“Paying Syrians in dollars encourages them to stay in Lebanon and allows their integration into society,” Mr Hajjar said. “We need to get the wheel moving on returns, not staying.”

He demanded that UNHCR and other international groups provide aid to Syrian refugees not in Lebanon, but in Syria, in order to incentivise their return.

Although untrue, it was already a popular belief throughout the country that Syrian refugees were receiving cash aid in dollars.

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Engine: 2.0L, turbocharged in-line four-cylinder

Gearbox: Nine-speed automatic

Power: 252hp @ 5,500rpm

Torque: Torque: 352Nm @ 2,500rpm

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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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THE SPECS

Engine: 3-litre V6

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Torque: 580 Nm

Price: From Dh399,000

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Updated: May 26, 2023, 5:26 PM