The empty presidential chair of former Lebanese president Michel Aoun after vacating the presidential palace at the end of his six-year term in 2022. EPA
The empty presidential chair of former Lebanese president Michel Aoun after vacating the presidential palace at the end of his six-year term in 2022. EPA

Lebanon must elect president during 60-day truce with Israel as part of ceasefire deal



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Lebanon “must” elect a president during the 60-day truce with Israel as part of the ceasefire deal that ended the war with Hezbollah, three official sources in Beirut told The National on Thursday, as parliament announced a new voting session in January after several failed attempts over the past two years.

The announcement followed the ceasefire deal reached with the Iran-backed Hezbollah, ending a devastating Israeli war that killed about 4,000 Lebanese, destroyed large parts of the country and inflicted unprecedented damage on the militant group.

The truce was largely holding on Thursday although the Israeli army said its air force struck a facility used by Hezbollah to store mid-range rockets in southern Lebanon.

“During the negotiations that led to the deal, it has been agreed with the mediators that Lebanon must finally elect a president during the 60-day truce,” a senior Lebanese security source close to the negotiations told The National. “It is part of the deal."

According to a governmental source, the ceasefire deal "included a side agreement to elect a president within the 60 days, and to form a government during this period. There was an agreement to reactivate the institutions of the Lebanese state".

Another senior political source in Beirut emphasised that “during the 60-day truce, a session will also be held to elect a President”, without elaborating further.

Lebanon has been without a president since October 2022. The US, France and other countries have been calling for the election of a new head of state to avoid a power vacuum and help stabilise the country's political life. US envoy Amos Hochstein, who mediated the ceasefire talks between Hezbollah and Israel, said that the election of the president is vital for Lebanon.

January 9

The country's deeply divided parliament, where no faction holds a majority, has repeatedly failed to agree on a successor to Michel Aoun. On Thursday, the state news agency announced that a session would be held next week, marking the first presidential election attempt since June last year, when votes were largely split between Jihad Azour and Suleiman Frangieh, neither of whom secured enough support to win.

Parliament Speaker Nabih Berri confirmed the session date, saying: “I had vowed to myself that immediately after the ceasefire, I would set a date for a session to elect a president for the republic. I am announcing from now on that a session will be set for January 9.” It remains unclear if the session will result in an election.

"The session will be fruitful and we have been given a month to reach an agreement among ourselves, and I will invite the ambassadors to attend it," he added.

The announcement came as French envoy Jean-Yves Le Drian was visiting Beirut. France is part of the so-called quintet for Lebanon, along with Saudi Arabia, Egypt, Qatar and the US. They have repeatedly urged members of parliament to elect a new president, with their respective ambassadors reputedly holding meetings with senior Lebanese leaders to break the deadlock.

Lebanon’s confessional system reserves the presidency for a Maronite Christian, the prime ministership for a Sunni Muslim, and the speaker of parliament for a Shiite Muslim. In the absence of a president, state authority lies with the Prime Minister and his cabinet. However, Najib Mikati’s caretaker government has limited powers, exacerbating Lebanon’s political and economic paralysis.

The country remains mired in one of the worst economic crises in modern history, worsened by the recent war with Israel, which left large areas of the country in ruins. Electricity, clean water and medicines are in critically short supply, further straining the already struggling population.

Hezbollah, represented in both parliament and government, has persistently backed Suleiman Frangieh, a close ally of Syrian President Bashar Al Assad. However, recent remarks from the group's leader Naim Qassem hinted at a potential shift. He suggested the group might adopt a more co-operative approach, supporting efforts to elect a president and contribute to reconstruction.

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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