In a speech last week on the anniversary of the 2006 war between Hezbollah and Israel, the party’s secretary general, Hassan Nasrallah, let the mask slip a little further on his intentions. In the process, he indirectly showed that Hezbollah is entering an impasse on its future nationally, despite its significant military power.
In discussing the delineation of the Lebanese-Israeli border, Nasrallah declared that there would be no such process. Instead, he declared that there were 12 or 13 border points over which there was continued disagreement between the two sides. Israel was still deployed in these areas and had to withdraw from them, but Hezbollah believed this was an “international responsibility”, therefore the party had not conducted military operations to remove the Israelis from these places.
There were two implicit messages in Nasrallah’s comments on border delineation. First, the refusal to engage in delimiting the border was, in principle, aimed at underlining that the party would not give Israel any legal territorial recognition. Unlike the maritime border, the land border “was delineated” between 1920 and 1923, and these borders “were clear and Lebanon knows its borders”, he stated.
The second message was that Hezbollah seeks implicitly to maintain ambiguity in border delineations, to be able to say that Israel continues to occupy Lebanese territory. This, in turn, allows the party to justify its continued weapons arsenal, which Hezbollah would “not allow [anyone] to attack”, Nasrallah affirmed.
In other words, Nasrallah effectively set down a series of conditions that made it all but impossible for anyone to enter into negotiations with the party on surrendering its weapons and putting an end to what Hezbollah calls “the resistance”. This was hardly surprising, as the party has spent over two decades, since the Israeli withdrawal in May 2000, finding reasons to perpetuate the anomaly of an armed non-state actor preserving its weapons to secure ascendency in a weak state.
However, conceptually where is this likely to lead? In fact, Hezbollah is operating in a highly sectarian context, so that all the options it has left for itself are likely to lead to greater tensions inside Lebanon and potential problems for the party.
If Hezbollah’s goal is simply to consolidate the status quo, as it seems to be, and allow no change that might threaten its power, then all it is really doing is holding together a highly dysfunctional, even failing system. This will exacerbate resentment in the country, because Hezbollah is profoundly wary of all reform efforts that might ameliorate the social and economic situation of the Lebanese, seeing these as steps that may weaken the political elite on which Hezbollah depends to maintain domestic order.
Worse, this resentment will take on an increasingly sectarian colouring. Already, for instance, many Christians are openly opposed to the current, broken social contract, and are calling for greater separation among Lebanese religious communities, whether through federalist models or even partition. If the Shiite Hezbollah wants the state, the reasoning goes, then Christians want to limit their ties with this state.
Realising this situation, Hezbollah could decide to make selective concessions, so as to absorb sectarian discontent, while retaining control over the commanding heights of the state. It would be a case of changing everything so that everything remains the same, to borrow from Giuseppe di Lampedusa’s novel The Leopard.
However, this is unlikely to happen, since even attempts at cosmetic change can trigger dynamics that might reduce Hezbollah’s power. The Iranian leadership, through its supreme leader Ayatollah Ali Khamenei, reportedly regards Mikhail Gorbachev’s attempts at perestroika and glasnost in the Soviet Union as a cautionary tale. In trying to reform the system to preserve communist power, they believe, Mr Gorbachev only hastened its downfall.
A third option, to fundamentally rework the Lebanese constitutional order in such a way as to anchor Hezbollah’s domination, is equally problematic, especially in a sectarian environment where other communities would feel threatened by Shiite gains. In his speech, Nasrallah insisted the Shiite political parties were not seeking to change the constitution to enhance the community’s share of power. But he pointedly added that Hezbollah was willing to develop or alter the system if other Lebanese wanted it.
For now, Nasrallah seems focused on maintaining a status quo. He can do so because he is facing a divided Christian community and largely leaderless Sunni community. In fact, Hezbollah is taking steps to reconcile with the Christian Free Patriotic Movement, its former ally with which it had quarrelled over Hezbollah’s support for Suleiman Frangieh as candidate for the presidency. Hezbollah hopes this will again split the Christians, who have been surprisingly unified in rejecting Mr Frangieh.
The Sunnis are another matter. As, arguably, Lebanon’s largest community, Sunnis pose the main long-term challenge to Hezbollah. While nothing is likely to happen in the short term, Hezbollah’s unwillingness, even inability, to change anything and stabilise its supremacy in a volatile sectarian framework represents a risk. For most communities, Lebanon’s current situation is untenable. As the system erodes further, the party’s strategy of immobility will likely become costlier.
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 National selections
Al Ain
5pm: Bolereau
5.30pm: Rich And Famous
6pm: Duc De Faust
6.30pm: Al Thoura
7pm: AF Arrab
7.30pm: Al Jazi
8pm: Futoon
Jebel Ali
1.45pm: AF Kal Noor
2.15pm: Galaxy Road
2.45pm: Dark Thunder
3.15pm: Inverleigh
3.45pm: Bawaasil
4.15pm: Initial
4.45pm: Tafaakhor
Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
COMPANY%20PROFILE
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The specs
Engine: 6.2-litre V8
Transmission: ten-speed
Power: 420bhp
Torque: 624Nm
Price: Dh325,125
On sale: Now