Supporters of Hezbollah attend a televised speech by the group's leader Hassan Nasrallah, in Lebanon on August 19, 2022. AFP/ Getty
Supporters of Hezbollah attend a televised speech by the group's leader Hassan Nasrallah, in Lebanon on August 19, 2022. AFP/ Getty
Supporters of Hezbollah attend a televised speech by the group's leader Hassan Nasrallah, in Lebanon on August 19, 2022. AFP/ Getty
Supporters of Hezbollah attend a televised speech by the group's leader Hassan Nasrallah, in Lebanon on August 19, 2022. AFP/ Getty


Hezbollah's dominance in Lebanon is not as assured as you might think


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February 15, 2023

February 16 is the day when, in 1985, Hezbollah released its so-called Open Letter, in which the party expounded on its identity and laid out its political programme. At the time, Hezbollah decried the Lebanese political system, proposing that the society instead choose an Islamist government. Ironically, today the party is still struggling with Lebanon’s sectarian order, which despite Hezbollah’s military dominance, poses the greatest threat to it down the road.

Since the Syrian military withdrawal from Lebanon in 2005, Hezbollah has come to play a central role in Lebanese political life. Due to its weapons, ability to mobilise large numbers of followers, and capacity to rally Syria’s allies, it has imposed itself as the actor with the final say on most matters that affect the country. Yet one thing Hezbollah has not been able to do is eliminate the sectarian system, with its unwritten rules, phobias and restrictions.

Three decades ago, Hezbollah hesitated to integrate into the sectarian system, seeing it as being contrary to an Islamist state. Indeed, in 1992, Hezbollah’s decision to participate in Lebanon’s parliamentary elections provoked a testy debate within the party. This was won by the current secretary general, Hassan Nasrallah, who had advocated for participation.

Lebanese army vehicles drive past a banner for the Lebanese Shiite Muslim movement Hezbollah with text in Arabic reading "the flag will not fall", in the southern city of Nabatiyeh, on May 15, 2022. AFP
Lebanese army vehicles drive past a banner for the Lebanese Shiite Muslim movement Hezbollah with text in Arabic reading "the flag will not fall", in the southern city of Nabatiyeh, on May 15, 2022. AFP

Yet, this did not eliminate the anomalies of the party within the system. While Hezbollah is sectarian, it is also an armed, authoritarian organisation with loyalty primarily to Iran. For a long time, it represented a contrast with other Lebanese sectarian parties, which have few ideological convictions, weak organisational structures, and for whom bargaining and making compromises over the state’s resources were common.

Hezbollah’s ideological beliefs and military strength tended to push it in an opposite direction of pursuing its political objectives without feeling it had to make concessions. As Hezbollah took on a more powerful role, however, the system began changing the party more than the party changed the system. Hezbollah could no longer ignore sectarian imperatives and the limitations they imposed on its behaviour.

The environment in which Hezbollah is functioning is shifting to its disadvantage

The paradox is that as Hezbollah has changed, the other religious communities in Lebanon have came to expect it to behave like all sectarian parties, and dealt with it accordingly. This has cut it down to size in the minds of others, despite its military prowess. When the party has tried to impose its preferences on others, without conceding anything, the result has been a potentially serious sectarian backlash.

In October 2021, Hezbollah and its main Shiite ally, the Amal Movement, sought to stop the investigation into the Beirut port explosion by organising a protest near Ain Al Remmaneh, a mainly Christian quarter. Most victims of the explosion were Christians, and the parties wanted to intimidate the inhabitants to give up support for the investigation. Instead, young men from the area fired at protesters entering their neighbourhood. This was followed by the intervention of the army, which killed several armed Hezbollah and Amal members.

Under the tenets of the sectarian system, for young Shiite men to enter a Christian area shouting sectarian slogans crossed a red line. This justified the armed reaction of the young men in Ain Al Remmaneh, while the army too validated its actions by saying it had avoided a new civil war. Hezbollah had no choice but to absorb the blow, as it too wanted to avert a conflict.

As Lebanon has faced economic collapse since 2019, Hezbollah has had to wrestle with the fact that it has remained the main backer of the sectarian political leadership, which many people blame for the country's dire situation. Regardless of its arms, Hezbollah is now routinely condemned by Lebanese of all political stripes, forcing it to resort to the politics of compromise when tactically necessary.

One of the more obvious costs the party must consider is whether it can enter into a conflict with Israel on Iran’s behalf. Hezbollah's role as a proxy for Iran is ingrained in its DNA, but in the sectarian Lebanese context today playing that role is fraught with risk. The destruction that Israel would visit on Lebanon would provoke a furious response from most religious communities, and even from some Shiites. A war could shake Hezbollah’s hold over the country, as many Lebanese would revolt against paying a price for Iran’s regional agenda.

Hezbollah is not facing an existential threat, but as the situation in Lebanon becomes more socially volatile, and as the party tries to protect its margin of manoeuvre, the environment in which it is functioning is shifting to its disadvantage. By trying to own the country after 2005, Hezbollah effectively owned all its problems, and its normal method of dealing with challenges, through coercion and force, became unsustainable.

Some in Israel and the US have suggested that Hezbollah and Lebanon are one and the same, so that undermining one would undermine the other. This equation, voiced by Israeli extremists and ideological think tanks in Washington, is inane. Anyone who watches what is going on would realise that Hezbollah, even if its power has remained the same, has entered a period of uncertainty, with its contradictions coming to the fore.

For a party that was always conscious of the need to anchor its anti-Israel militancy in a sympathetic society, this should be alarming. Hezbollah is operating in an increasingly antagonistic environment. How it addresses this will define its survivability in the long term.

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Based: Dubai, UAE

Number of employees: 10

Sector: AI, software

Cashflow: Dh2.5 Million  

Funding stage: Series A

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Etihad and Emirates fly direct from the UAE to Delhi from about Dh950 return including taxes.
The hotels
Double rooms at Tijara Fort-Palace cost from 6,670 rupees (Dh377), including breakfast.
Doubles at Fort Bishangarh cost from 29,030 rupees (Dh1,641), including breakfast. Doubles at Narendra Bhawan cost from 15,360 rupees (Dh869). Doubles at Chanoud Garh cost from 19,840 rupees (Dh1,122), full board. Doubles at Fort Begu cost from 10,000 rupees (Dh565), including breakfast.
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Amar Grover travelled with Wild Frontiers. A tailor-made, nine-day itinerary via New Delhi, with one night in Tijara and two nights in each of the remaining properties, including car/driver, costs from £1,445 (Dh6,968) per person.

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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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Al Mrzab Restaurant

For the shrimp murabian and Kuwaiti options including Kuwaiti machboos with kebab and spicy sauce.

Al Derwaza

For the fish hubul, regag bread, biryani and special seafood soup. 

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Updated: February 15, 2023, 9:07 AM