A UN peacekeepers vehicle drives near a picture showing Lebanon's Hezbollah leader Hassan Nasrallah in Adaisseh village, near the Lebanese-Israeli border, in southern Lebanon. Reuters
A UN peacekeepers vehicle drives near a picture showing Lebanon's Hezbollah leader Hassan Nasrallah in Adaisseh village, near the Lebanese-Israeli border, in southern Lebanon. Reuters
A UN peacekeepers vehicle drives near a picture showing Lebanon's Hezbollah leader Hassan Nasrallah in Adaisseh village, near the Lebanese-Israeli border, in southern Lebanon. Reuters
A UN peacekeepers vehicle drives near a picture showing Lebanon's Hezbollah leader Hassan Nasrallah in Adaisseh village, near the Lebanese-Israeli border, in southern Lebanon. Reuters


Where does Hezbollah's and Iran's strategy of unifying the fronts against Israel lead?


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April 26, 2023

Earlier this month, a salvo of 34 rockets was fired at Israel from southern Lebanon. While this was portrayed as retaliation for attacks by Israeli police against Palestinians praying at Al Aqsa Mosque in Jerusalem, the episode had more profound implications. It was an effort by pro-Iranian groups, namely Hezbollah, Hamas and Islamic Jihad, to change the rules of engagement in their conflict with Israel.

In January, the secretary general of Hezbollah, Hassan Nasrallah, had linked the party’s actions to developments at Al Aqsa. Nasrallah had stated that any change in the status quo governing Israeli-Arab relations on Haram Al Sharif, where Al Aqsa is located, could lead to a regional explosion. His comments came amid signs that extreme right-wing elements in Israel’s government might try to alter this state of affairs.

However, Nasrallah’s threats had to be taken in the context of broader dynamics, namely Israel’s sustained attacks against Iranian and Hezbollah forces in Syria, which extended to bombing pro-Iranian militias on the Syria-Iraq border. Iran and Hezbollah have been unable to retaliate against such operations, creating an imbalance in the deterrence equation between Iran and its proxies and Israel.

UN peacekeeping vehicles pass a Hezbollah flag and a statue of the late Iranian General Qassem Soleimani, as they patrol on a road along the Lebanese-Israeli border town of Naqoura. AP
UN peacekeeping vehicles pass a Hezbollah flag and a statue of the late Iranian General Qassem Soleimani, as they patrol on a road along the Lebanese-Israeli border town of Naqoura. AP

Earlier this year, there were signs that Hezbollah was already trying to modify this reality. On March 13, an explosion at the Megiddo junction in northern Israel injured an Israeli citizen (who happened to be an Arab). The suspect who planted the bomb, and who has not been identified, infiltrated Israel from Lebanon, and was later killed in northern Israel. Israel concluded that Hezbollah was behind the action.

Two weeks later, the rockets were fired at Israel. Again, it was unclear who the perpetrators were, though the area from where the rockets were launched is known to be controlled by Hezbollah. While some commentators speculated that Hezbollah may not have known about the rocket attack, this appears far-fetched. Rather, it seemed part of a wider effort by the party and Iran to show that they too could strike Israel when and however they wanted to, while maintaining deniability.

As Iran and Hezbollah have been unable to consolidate a new front along Syria’s boundary with the occupied Golan Heights, they appear to have fallen back on an alternative plan. The plan is to co-ordinate more closely with Hamas and Islamic Jihad in such a way as to establish a unified front around Israel from the Gaza Strip to southern Lebanon to, when possible, south-eastern Syria.

Such a front, the Iranians appear to believe, would represent considerable leverage over Israel, particularly at a time when there is a genuine fear that the Israelis may try to impair Iran’s nuclear programme. With the US increasingly disengaged from the Middle East and with Saudi Arabia and Iran having recently reconciled, officials in Tehran may feel that Israel will act now before its window of opportunity closes.

The population of southern Lebanon is unlikely to welcome a situation where a Palestinian agenda leads to a resumption of Israeli attacks against their villages

The timing of the rocket attack soon after the Saudi-Iranian reconciliation did not appear to be coincidental. One of the prerequisites to that opening was a winding down of the Yemen conflict. In light of this, the Iranians appear to have shifted their focus to Israel. This has involved a key development on the Palestinian front.

Hezbollah is helping Hamas to build a military presence in Lebanon, while welcoming several of its leaders to the country, including Khalil Al Hayyeh and Zaher Jabareen, as well as Hamas’ deputy chairman Saleh Arouri. An apparent indication of this presence was an explosion in the southern Lebanese refugee camp of Burj Al Shemali in December 2021, which killed Hamza Shahin, a Hamas member.

It is unclear whether the explosion was an accident or the result of an Israeli military operation. However, as my colleague Mohanad Hage Ali, who has followed Hamas’ trajectory in Lebanon closely, observed, the explosion was preceded by an Israeli news report that Hamas had established a branch in Lebanon near Tyre, where the Burj Al Shemali camp is located. This hinted at the possibility of Israeli involvement.

There are definite risks for Hezbollah if it moves ahead with unifying the Lebanese and Palestinian fronts. The Shiite community has bad memories of the Palestinian guerrilla presence in Lebanon, starting in the late 1960s and ending in 1982. The community paid a high price from Israeli retaliation against Palestinian factions, and the Amal movement, today a close ally of Hezbollah, notably fought the Palestinians.

The population of southern Lebanon, a majority of which supports Hezbollah and Amal, is not likely to welcome a situation where a Palestinian agenda leads to a resumption of Israeli attacks against their villages. On top of this, the catastrophic economic situation in Lebanon has meant that many of them would not have the means to rebuild their homes and livelihoods after Israel engages in retribution.

This may suggest that Hezbollah hopes to maintain a limited level of operations, one preserving a facade of deniability. If so, the party's strategy may be to keep the southern front on a low burn, while playing an increasing role in internal Palestinian politics. The declining sway of the Palestinian Authority encourages such ambitions.

However, Hezbollah has to be careful that the situation does not get out of hand. A new war with Israel would represent a major setback for the party, at a time when the Lebanese have no cushion to accept a further blow to their economic well-being and that of their country. The aftermath of such a war would be very different than in 2006, and could turn most communities, among them the Shiites, decisively against Hezbollah.

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Nationality: Emirati

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The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.

Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.

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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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Updated: June 01, 2023, 3:58 PM