The government led by Hassan Diab will not succeed in rescuing the Lebanese economy as long as its touted reforms are tailored to suit the needs of Hezbollah and its regional allies – and as long as the Prime Minister's No 1 priority is to remain in power at any cost. This government is essentially a fig leaf for a coalition of political parties led by Hezbollah, an entity that is loyal to the Iranian regime in Tehran.
The assessment in the Iranian capital today, as I have been told, is that the country's economic problems are continuing to pose a grave threat to the regime's hold over power. It has therefore opted to direct public attention away from its internal challenges in two ways: engage in high-stakes military operations in the region that would compel the US to respond in ways that could potentially cost President Donald Trump his re-election chances this year; and mobilise a regional front in Iraq and Lebanon that is opposed to America.
Lebanon's Prime Minister Hassan Diab may be unpopular but he has the backing of Hezbollah. AFP
With Hezbollah being an important weapon in its arsenal, Tehran has two objectives that it is determined to achieve in Lebanon. First, it intends to help consolidate Hezbollah’s dominance over the country by overturning its banking system, market economy, political system and the constitution. Second, it hopes to eliminate all possibilities of a popular uprising demanding reform and accountability, as this could not only topple the corrupt ruling class in Beirut but also expose Hezbollah’s power structure to major risks – a red line for Tehran.
It is therefore important for European powers to stop advocating, as they have, for the Diab government to be given time and a chance to prove that it is serious about reforms. This is not a technocratic government, as it claims to be, but a single-shade establishment powered by Hezbollah and its ally the Free Patriotic Movement, which is represented by President Michel Aoun and his son-in-law Gebran Bassil.
It is clear to all sides that there is no way to rescue Lebanon from collapse except through serious negotiations with the IMF, which would unlock external funds conditioned on serious reforms.
Hezbollah has rejected Beirut’s co-operation with the organisation except on its own terms, endorsed by President Aoun and Mr Bassil; the latter is known to hold the keys to Lebanon’s energy sector. In other words, this axis is bent on cherry-picking only that part of the IMF’s advice which suits it, while preventing any scrutiny of the government’s books, especially in the energy sector that has bankrupted the state.
The IMF has so far resisted the government’s pleas, including one for assistance to cope with the coronavirus pandemic; Beirut had hoped that this could pave the way towards securing loans without having to meet previously set conditions. But I have been reliably informed that the IMF’s response was to point to Lebanon’s default on its eurobonds as a reason for it to reject its request.
The key to foreign aid is clear: serious negotiations must be held with the IMF with a proven commitment to comprehensive reforms – not selective adjustments that overlook certain sectors for political reasons.
A demonstrator is seen next to a burning fire in front of a bank during a protest against growing economic hardship in Sidon, Lebanon. Reuters
A detained demonstrator stands near Lebanese army soldiers during a protest against growing economic hardship in Sidon, Lebanon. Reuters
Interior view of a damaged bank that was set ablaze by protesters in Tripoli, northern Lebanon. EPA
Lebanese people inspect a burnt out car of the Lebanese Internal Security Forces which was set ablaze by protesters in Tripoli, northern Lebanon. EPA
Anti-government protesters shout slogans during a protest against the collapsing Lebanese currency and the price hikes of goods, in front the central bank in Beirut, Lebanon. EPA
Anti-government protesters ride their motorcycles during a protest against the collapsing Lebanese currency and the price hikes of goods, in front the central bank in Beirut, Lebanon. EPA
Lebanese men inspect a burnt out car of the Lebanese Internal Security Forces which was set ablaze by protesters in Tripoli, northern Lebanon. EPA
Workers install metallic barriers on the facade of a bank as a protective measure against vandalism in Tripoli, northern Lebanon. EPA
Exterior view of a damaged bank that was set ablaze by protesters in Tripoli, northern Lebanon. EPA
Workers install metallic barriers along the facade of a bank as a protective measure against vandalism in the Lebanese capital Beirut. AFP
Anti-government protesters shout slogans during a protest against the collapsing Lebanese currency and the price hikes of goods, in front the central bank in Beirut, Lebanon. EPA
Lebanese riot control police watch as annti-government protesters gather during a demonstration against the collapsing Lebanese currency and the price hikes of goods, in Beirut, Lebanon. EPA
Anti-government protesters ride their motorcycles during a protest against the collapsing Lebanese currency and the price hikes of goods, in front the central bank in Beirut, Lebanon. EPA
A demonstrator smashes a window of a bank during a protest against growing economic hardship in Sidon, Lebanon. Reuters
Meanwhile, even as public anger continues to evidently grow on the streets, most of that focus seems to be directed at the banking sector. It should be stated that banks are not immune from the kind of political deal-making that has brought Lebanon to the brink of economic collapse. It is therefore the right of the citizens to hold accountable the Central Bank and its governor –as is currently the case– but this suits the Diab government.
First, it helps to deflect public fury away from itself. Second, it feeds into the narrative that Lebanon’s system that is based on constitutional and economic freedoms needs to be overturned. By trying to force a break away from existing financial and banking regulations, Hezbollah hopes to seize dollars from these banks and build for itself a foreign currency war chest that it can use to sponsor its regional battles. This puts the country in a dangerous situation.
Making this crisis worse is the spread of the coronavirus, which has not only claimed lives and livelihoods and destroyed the economy, but also left global powers preoccupied with more pressing priorities in their backyards. Of course, even as Lebanon is left to its own devices, one positive development has come in the form of Germany’s decision last week to put a stop on all Hezbollah activities on its soil and designate it a terrorist organisation.
The Trump administration, while seemingly less focused on Hezbollah than it is on its patrons in Tehran, is planning additional sanctions on Iran in the coming weeks. This move, as I have been told, could prompt Tehran to launch some form of military action as a show of force.
In the coming days and weeks, therefore, the difficulties for both Iran and Lebanon are set to increase. And as we expect an escalation in tensions, the dollar will become an ever more important weapon.
Raghida Dergham is the founder and executive chairwoman of the Beirut Institute
Tips for job-seekers
Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Types of fraud
Phishing: Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
Smishing: The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
Vishing: The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
SIM swap: Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
Identity theft: Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
Prize scams: Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
COMPANY PROFILE
Name: Lamsa
Founder: Badr Ward
Launched: 2014
Employees: 60
Based: Abu Dhabi
Sector: EdTech
Funding to date: $15 million
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.”
South Africa squad
: Faf du Plessis (captain), Hashim Amla, Temba Bavuma, Quinton de Kock (wkt), Theunis de Bruyn, AB de Villiers, Dean Elgar, Heinrich Klaasen (wkt), Keshav Maharaj, Aiden Markram, Morne Morkel, Chris Morris, Wiaan Mulder, Lungi Ngidi, Duanne Olivier, Vernon Philander and Kagiso Rabada.
Starring: Bria Vinaite, Brooklynn Prince, Willem Dafoe
Four stars
UAE SQUAD
Goalkeepers: Ali Khaseif, Fahad Al Dhanhani, Mohammed Al Shamsi, Adel Al Hosani
Defenders: Bandar Al Ahbabi, Shaheen Abdulrahman, Walid Abbas, Mahmoud Khamis, Mohammed Barghash, Khalifa Al Hammadi, Hassan Al Mahrami, Yousef Jaber, Salem Rashid, Mohammed Al Attas, Alhassan Saleh
Midfielders: Ali Salmeen, Abdullah Ramadan, Abdullah Al Naqbi, Majed Hassan, Yahya Nader, Ahmed Barman, Abdullah Hamad, Khalfan Mubarak, Khalil Al Hammadi, Tahnoun Al Zaabi, Harib Abdallah, Mohammed Jumah, Yahya Al Ghassani
Forwards: Fabio De Lima, Caio Canedo, Ali Saleh, Ali Mabkhout, Sebastian Tagliabue, Zayed Al Ameri
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
Notable groups (UAE time)
Jordan Spieth, Si Woo Kim, Henrik Stenson (12.47pm)
Justin Thomas, Justin Rose, Louis Oosthuizen (12.58pm)
Hideki Matsuyama, Brooks Koepka, Tommy Fleetwood (1.09pm)
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
Explainer: Tanween Design Programme
Non-profit arts studio Tashkeel launched this annual initiative with the intention of supporting budding designers in the UAE. This year, three talents were chosen from hundreds of applicants to be a part of the sixth creative development programme. These are architect Abdulla Al Mulla, interior designer Lana El Samman and graphic designer Yara Habib.
The trio have been guided by experts from the industry over the course of nine months, as they developed their own products that merge their unique styles with traditional elements of Emirati design. This includes laboratory sessions, experimental and collaborative practice, investigation of new business models and evaluation.
It is led by British contemporary design project specialist Helen Voce and mentor Kevin Badni, and offers participants access to experts from across the world, including the likes of UK designer Gareth Neal and multidisciplinary designer and entrepreneur, Sheikh Salem Al Qassimi.
The final pieces are being revealed in a worldwide limited-edition release on the first day of Downtown Designs at Dubai Design Week 2019. Tashkeel will be at stand E31 at the exhibition.
Lisa Ball-Lechgar, deputy director of Tashkeel, said: “The diversity and calibre of the applicants this year … is reflective of the dynamic change that the UAE art and design industry is witnessing, with young creators resolute in making their bold design ideas a reality.”
