Last Friday, the Lebanese army presented a plan to the government of Prime Minister Nawaf Salam to implement the government’s decision taken a month earlier to secure a monopoly over weapons. This policy priority has been opposed by Hezbollah.
While the plan hasn’t been made public, it avoided setting a timetable for disarmament in order to avoid a confrontation with Hezbollah. Instead, it reportedly has been subdivided into phases. Its implementation, armed forces commander Gen Rodolphe Haykal has said, will proceed according to the institution’s “available capacities”.
When the government initially approved the decision to impose a monopoly over weapons, it had set an end-of-year deadline for disarmament of all militias. This deadline corresponded more or less to the one the US envoy to Lebanon, Tom Barrack, had presented to the Lebanese in a plan formulated by the Americans.
However, on his last visit to Beirut in August – in which he was accompanied by his predecessor, Morgan Ortagus, and senators Lindsey Graham and Jeanne Shaheen, as well as representative Joe Wilson – the context changed. The Lebanese had expected Mr Barrack to obtain Israeli buy-in for his plan, in exchange for Lebanon’s approval of its disarmament commitment. They were looking for a reduction in Israel’s attacks and withdrawal from some areas of the south.
The Lebanese intention was that a step-by-step process would be put in place, whereby for every Lebanese step, Israel would make a concession of its own. In this way, positive momentum would build up and the government would have more leverage over Hezbollah to surrender its weapons.
Yet when Mr Barrack met Speaker of Parliament Nabih Berri, a key interlocutor with Hezbollah, he reportedly let him know that Israel had not agreed to such a process. Mr Berri told Asharq Al Awsatthat the Americans “came to us with the opposite of what they promised”, an apparent reference to earlier remarks from Mr Barrack that a step-by-step mechanism was possible.
Not long afterwards, Lebanese Deputy Prime Minister Tarek Mitri appeared on a talk show to say that the government no longer felt bound by the Barrack plan, which he deemed “valueless”, because Israel had not made any concessions, even if Lebanon remained committed to fulfilling a monopoly over weapons. This meant that Lebanon would no longer abide by the envoy’s tight timetable.
It did not help matters that during Mr Barrack’s visit, US officials only added to the confusion when it came to Israel’s intentions. Ms Ortagus said: “Israel is ready to move forward step by step with the government, now everything depends on deeds, not words. We will respond to every measure taken by the government with an action from Israel.” This implied that Israel had actually agreed to a step-by-step process, which Mr Berri and Mr Mitri subsequently denied.
Yet in a news conference, Mr Graham set a harsher tone. He stated: “[D]on’t ask me any questions about what Israel is going to do until you disarm Hezbollah. If you disarm Hezbollah, we’ll have a good conversation. If you don’t, it’s a meaningless conversation.” Mr Graham is very close to the Israelis, and his remarks appeared to stress that no step-by-step measures were in the works.
Who was telling the truth? It remains unclear. However, if the current deadlock prevails – with Hezbollah continuing to refuse to disarm and the government set on disarming all militias – there are two potential outcomes.
The first is that the Lebanese army will be pushed by the Americans to forcibly disarm Hezbollah. Mr Graham hinted at this in Tel Aviv, a day after his trip to Lebanon. “If we cannot reach a peaceful disarmament solution for Hezbollah, then we need to look at plan B. Plan B is disarming Hezbollah by military force,” the senator declared.
The US may be shifting towards encouraging Lebanon’s government to use force against Hezbollah. This is worrisome
However, Lebanese officials will want to avoid this at all costs. They are right to do so, as such an operation would probably get bogged down, lead to death and destruction, and alienate the Shiite community. Nor is it even clear that the army has the capacity to successfully carry through such a scheme.
The alternative is for Lebanon to advance more slowly and engage with Hezbollah in a dialogue over disarmament. Simultaneously, the army can increase its interventions to limit the group’s margin of manoeuvre, uncover arms caches and limit Hezbollah’s ability to transport weapons, in a process avoiding a head-on collision. This seems to be the preference in Beirut.
Still, the US and Israel probably want a process that is much more decisive and rapid, leaving the Lebanese with one of two bad options: either to embark on a domestic conflict that could morph into civil war; or face the likelihood of a new Israeli onslaught against Lebanon. Yet such a stark choice could have been avoided had the administration of US President Donald Trump shown diplomatic imagination.
Yet when it comes to Lebanon, neither the Trump administration nor the preceding Joe Biden administration has shown any distance with Israel. It is the Israelis who are calling the shots. When Mr Barrack tried to do so on prior trips, adopting positions not aligned with Israel on Hezbollah, pro-Israel think tanks in Washington produced articles demanding his resignation.
We are not far from a point where the US may shift towards encouraging Lebanon’s government to use force against Hezbollah. This is worrisome, when a far more sensible path is to return to a step-by-step process that could facilitate a political outcome. However, the US must be willing to push for Israeli flexibility first.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
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Friday:
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Saturday:
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Schedule in UAE time
5pm: Mohamed Yousuf Naghi Motors Cup (Turf), 5.35pm: 1351 Cup (T), 6.10pm: Longines Turf Handicap (T), 6.45pm: Obaiya Arabian Classic for Purebred Arabians (Dirt), 7.30pm: Jockey Club Handicap (D), 8.10pm: Samba Saudi Derby (D), 8.50pm: Saudia Sprint (D), 9.40pm: Saudi Cup (D)
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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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Did you know?
Brunch has been around, is some form or another, for more than a century. The word was first mentioned in print in an 1895 edition of Hunter’s Weekly, after making the rounds among university students in Britain. The article, entitled Brunch: A Plea, argued the case for a later, more sociable weekend meal. “By eliminating the need to get up early on Sunday, brunch would make life brighter for Saturday night carousers. It would promote human happiness in other ways as well,” the piece read. “It is talk-compelling. It puts you in a good temper, it makes you satisfied with yourself and your fellow beings, it sweeps away the worries and cobwebs of the week.” More than 100 years later, author Guy Beringer’s words still ring true, especially in the UAE, where brunches are often used to mark special, sociable occasions.