A building reduced to rubble by an Israeli strike on the Lebanese border village of Odaisseh. AFP
A building reduced to rubble by an Israeli strike on the Lebanese border village of Odaisseh. AFP
A building reduced to rubble by an Israeli strike on the Lebanese border village of Odaisseh. AFP
A building reduced to rubble by an Israeli strike on the Lebanese border village of Odaisseh. AFP

Lebanese government pledges $20,000 to families of victims of border clashes


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Lebanon’s caretaker government plans to compensate those affected by Israeli attacks on the south of the country, although it was not clear how the state – which has been bankrupt since 2019 – will foot the bill.

The plan would provide $20,000 to the families of each person killed in southern Lebanon and $40,000 for each destroyed home, Lebanese daily newspaper Al Akhbar reported, citing a pledge by the country's caretaker prime minister Najib Mikati.

It said the government was in the process of securing funds and determining how to distribute the funds. The proposal is to come into effect after the cross-border conflict between Israel and Hezbollah ends.

The total funds necessary for the initiative will be determined through a survey by the Council for South Lebanon. It would then refer the findings to the High Relief Commission, a government body that oversees humanitarian assistance for vulnerable people.

Representatives from the High Relief Commission and Mr Mikati's office did not respond to The National's request for comment.

The report also said discussions were taking place to secure financial compensation for tobacco framers in border towns affected by the fighting, "especially in the towns of Rmeish, Aitaroun, Houla and Mays Al Jabal".

Since 2019, Lebanon has faced one of the worst financial crises in the modern world, with the state unable to support basic public services including electricity supplies. The savings of depositors remain trapped in the country's commercial banks due to capital controls imposed five years ago.

Cross-border violence between Israel and Hezbollah erupted on October 8, when the Iran-backed group declared support for Hamas in the Gaza Strip. AFP reported that at least 322 people have been killed in Lebanon. The vast majority were Hezbollah fighters, but 56 civilians have also been killed.

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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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