Protesters gather outside the Lebanese parliament in Beirut, to support independent lawmakers staging a sit-in to push for the election of a new president. Reuters
Protesters gather outside the Lebanese parliament in Beirut, to support independent lawmakers staging a sit-in to push for the election of a new president. Reuters
Protesters gather outside the Lebanese parliament in Beirut, to support independent lawmakers staging a sit-in to push for the election of a new president. Reuters
Protesters gather outside the Lebanese parliament in Beirut, to support independent lawmakers staging a sit-in to push for the election of a new president. Reuters


There is an opportunity coming up to stabilise Lebanon by finally electing a president


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January 31, 2024

Recently, the Lebanese Druze leader Walid Jumblatt, in an interview with Al-Akhbar, said he did not oppose the election of Suleiman Frangieh as Lebanon’s president. This came after a period in which Mr Jumblatt had said precisely the contrary. To many observers, the fact that Al-Akhbar is close to Hezbollah indicated that the Druze leader was sending a message to the party of his potential willingness to endorse its candidate.

Mr Jumblatt is considered a weathervane of Lebanese politics, and his step was carefully calculated. He underlined that his views of Mr Frangieh did not necessarily involve his parliamentary bloc (a useful fiction he often maintains), which is headed, officially at least, by his son Taymour. Therefore, if the bloc was to vote for Mr Frangieh, Mr Jumblatt implied, the candidate would have to make political concessions.

Mr Franjieh’s problem, given that Lebanon’s presidency is reserved for Maronite Christians, is that all the leading Christian parties oppose him. Therefore, the votes of the Jumblatt-led parliamentary bloc would be necessary for him to be elected by a non-Christian majority, along with the votes of some Christian parliamentarians affiliated with Muslim-led blocs. This puts Mr Jumblatt in an enviable position.

Suleiman Frangieh (left) with Maronite Patriarch Bechara Boutros Al Rai. Reuters
Suleiman Frangieh (left) with Maronite Patriarch Bechara Boutros Al Rai. Reuters

Mr Jumblatt’s move was probably motivated by a statement more than two weeks ago by Speaker Nabih Berri, who is a key Hezbollah ally. Mr Berri declared that Mr Frangieh was “the only candidate” for the presidency. The Druze leader always navigates close to Mr Berri and understood that his remark was a reaffirmation that Hezbollah would accept no one else.

It is with great anxiety that the Christians have watched their power wane in Lebanon

Since Mr Jumblatt has no intention of confronting Hezbollah, he saw the political benefit in trying to exploit any consensus around Mr Frangieh. Beyond that, however, why did Mr Jumblatt move at a time when the election of a president still seems to be far off, given the conflict in Gaza and Hezbollah’s decision to support Hamas by opening a Lebanon front? Several things explain the Druze leader’s calculation.

The first is tied specifically to the conflict in Gaza. Many Lebanese, Mr Jumblatt among them, anticipate that once the war along the border with Israel ends, Hezbollah will press to secure the election of a president in whom it has confidence, who will protect the “resistance” the party embodies. From the start, Hezbollah said it sought Mr Frangieh’s election because he would not “stab the resistance in the back”.

Walid Jumblatt is considered a weathervane of Lebanese politics, and his step to not oppose the election of Suleiman Franjieh as Lebanon's president was carefully calculated. Reuters
Walid Jumblatt is considered a weathervane of Lebanese politics, and his step to not oppose the election of Suleiman Franjieh as Lebanon's president was carefully calculated. Reuters

Currently, there is rising Israeli and US pressure for a durable agreement along the southern border. Hezbollah wants to ensure there is a president in place who can defend the party’s priorities in any negotiations, or, if the presidential election comes later, in the aftermath of such an agreement. The negotiations would probably involve the US, one of the members of a group of five countries that have formed a contact group on Lebanon, which also includes France, Saudi Arabia, Qatar and Egypt.

Hezbollah may also sense an opportunity here. If there is no presidential election before talks over an understanding on the Lebanese border, which Israel has set as a condition to not invade Lebanon, the party may link Mr Frangieh’s election to any concessions it might make. In other words, if it is asked to withdraw units away from the border, even symbolically, one of the things it may demand in exchange is that the group of five accept Mr Frangieh.

It is increasingly apparent to the group of five that Iran, through Hezbollah, will have a role to play in the presidential election, even though it is not represented in the group. Which is why the Lebanese took notice of a very friendly meeting last week between the Saudi and Iranian ambassadors in Lebanon. In the Gaza conflict, Riyadh has taken a stronger line against Israel, and refused to participate in a coalition of countries the US was trying to form to combat the Houthis.

Iran has welcomed this, and the Saudi-Iranian rapprochement is expected to have a positive impact on the Lebanese scene, perhaps paving the way for eventual Saudi acceptance of Mr Frangieh. This would be important, because if the kingdom comes around, it might be able to persuade its leading Lebanese Christian ally, the Lebanese Forces Party, to vote for Mr Frangieh, lending him communal legitimacy.

The five will reportedly meet in February, though no date has been set. But with some sort of settlement in the Gaza war now part of the equation, there is an opportunity to stabilise Lebanon by ending the presidential vacuum, as a way of stabilising the situation in the Levant.

The lingering question is whether the Lebanese Christian parties would go along. It is with great anxiety that the Christians have watched their power wane in Lebanon, and this can only increase if the most senior Maronite Christian post is decided mainly by non-Christian parties, backed by regional and international powers.

But Christian interests are the last thing on the minds of most countries fed up with Lebanon’s dysfunctional system. The war in Gaza has turned developments in Lebanon into one dimension of addressing the Palestinian-Israeli conflict. How ironic, then, that the five countries might sign off on an arrangement that ultimately strengthens Iran and its allies, who have already benefited greatly from this conflict.

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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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Ziina users can donate to relief efforts in Beirut

Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”

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Updated: January 31, 2024, 2:14 PM