The Lebanese military is a rare constant in the fractured nation. EPA
The Lebanese military is a rare constant in the fractured nation. EPA
The Lebanese military is a rare constant in the fractured nation. EPA
The Lebanese military is a rare constant in the fractured nation. EPA

Lebanon's army still deserves US aid


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In late May, the commander of the Lebanese Army, Joseph Aoun, was received in Paris by the French president Emmanuel Macron. The singular nature of the meeting – presidents don’t normally receive army chiefs from small countries – underlined the importance that France gives to Lebanon’s armed forces as an agent of stability at a time when Lebanon is collapsing economically and socially.

There appears to be a consensus among foreign governments that the army must not be allowed to fragment because of the Lebanese state’s bankruptcy. Indeed, an international conference has been scheduled in Paris for June 17 to support the institution. Soldiers’ salaries are now worth almost nothing because the Lebanese pound has lost around 93 per cent of its value. Last March, Gen Aoun made a much remarked address in which he stated: “The people are hungry, the people are poor and the members of the military are also suffering and are hungry”.

In that same speech, the commander publicly asked the political class, which has remained unable to form a government: “Where are we going? What are you waiting for? What do you plan to do? We have warned more than once of the danger of the situation.” Those remarks highlighted another side of Gen Aoun, that of the socially responsible official, an image the commander doubtless sought to project, given that he remains a prime candidate for Lebanon’s presidency.

The consensus in foreign embassies in Beirut, particularly that of the US, is that bolstering the army is a priority, as it remains the sole multi-sectarian national institution that continues to function relatively efficiently. If the army were to disintegrate, the thinking goes, this could not only have a devastating impact on security and stability, but on the very idea of reconstituting a cohesive state. If the economic catastrophe worsens, partisan groups could begin to protect their own areas of concentration and, conceivably, even form proto-militias to do so.

The US is a major backer of the Lebanese army, though there is a part of the right-wing firmament in Washington that would like to end all American funding to the institution. In June 2020, the congressional Republican Study Committee (RSC), a conservative caucus in the House of Representatives, recommended just that. In a report released at the time, the RSC had affirmed that as the army had not acted against Hezbollah, Washington should discontinue security assistance.

It is possible that the report’s section on Lebanon was written by employees of right-wing Washington think tanks that have influence over Middle East policy. The problem is that nowhere in the document was there any serious assessment of what might happen if funding were stopped, or if another one of the RSC proposals was implemented – that the US should pass legislation prohibiting any taxpayer money to the International Monetary Fund from going to a bailout of Lebanon.

However, from the perspective of the foreign embassies, the answers are all too clear. There is a strong consensus that Lebanon’s breakdown would only benefit Hezbollah, which alone has the means to weather the crisis that the country is facing today. The party would welcome a weakening of the army, which it has always considered a potential rival, even if it does have influence in the institution.

Lebanese army soldiers stand guard at a protest in the town of Antelias. Reuters
Lebanese army soldiers stand guard at a protest in the town of Antelias. Reuters

Hezbollah also realises that for as long as the army remains a potent institution, the party’s legitimacy as a “national resistance” will be questioned. Many Lebanese insist the armed forces, not the party, should be the sole defender of the country. Even during the civil war, the army remained popular as a remnant of the absent state that was against militia rule, to the extent that Lebanon’s former army commander and current president, Michel Aoun, first built his reputation on this yearning.

For those who argue, simplistically, that the army’s bona fides can only be proven if it opposes Hezbollah, what they are asking for is that the institution risk civil war and rifts within its own ranks to merit outside support. Yet the army is a mirror of Lebanese society, with its sundry sectarian loyalties and tendency to accept compromises to avert dangerous outcomes. Pushing it to take actions that only heighten its contradictions would be irresponsible.

Hezbollah would welcome a weakening of the army

But the armed forces’ effectiveness and broad appeal is not in doubt. As Dana Stroul, the US deputy assistant secretary of defence for the Middle East, recently remarked following a joint exercise between American and Lebanese forces, Washington is “interested in developing a long-term partnership with a national representative institution to provide an alternative to Lebanese Hezbollah.”

Such language irritates the American hardliners, because they argue that far from providing an alternative to Hezbollah, the army colludes with it. Certainly, it has co-ordinated with the party on issues, which is inevitable in a multi-sectarian country like Lebanon. However, what the critics refuse to grasp is that for as long as the army remains in place, it will indeed be seen as a far more consensual alternative to Hezbollah, albeit one the pro-Iranian party will do its best to neutralise.

For now, those demanding a cessation of aid to the Lebanese army are on the sidelines. Those with knowledge of Lebanon know that accelerating the armed forces’ demise would be folly when Lebanon may be entering a ruinous vacuum that could have regional repercussions, and would only reinforce Hezbollah. Western governments still trust their embassies over ideologically driven think tankers.

Michael Young is a Lebanon columnist for The National

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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

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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. 

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Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Stage result

1. Pascal Ackermann (GER) Bora-Hansgrohe, in 3:29.09

2. Caleb Ewan (AUS) Lotto-Soudal

3. Rudy Barbier (FRA) Israel Start-Up Nation

4. Dylan Groenewegen (NED) Jumbo-Visma

5. Luka Mezgec (SLO) Mitchelton-Scott

6. Alberto Dainese (ITA) Sunweb

7. Jakub Mareczko (ITA) CCC

8. Max Walscheid (GER) NTT

9. José Rojas (ESP) Movistar

10. Andrea Vendrame (ITA) Ag2r La Mondiale, all at same time

SERIE A FIXTURES

Friday Sassuolo v Torino (Kick-off 10.45pm UAE)

Saturday Atalanta v Sampdoria (5pm),

Genoa v Inter Milan (8pm),

Lazio v Bologna (10.45pm)

Sunday Cagliari v Crotone (3.30pm) 

Benevento v Napoli (6pm) 

Parma v Spezia (6pm)

 Fiorentina v Udinese (9pm)

Juventus v Hellas Verona (11.45pm)

Monday AC Milan v AS Roma (11.45pm)

Other workplace saving schemes
  • The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
  • Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
  • National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.

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.

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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.”

Lexus LX700h specs

Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor

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Transmission: 10-speed auto

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Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor

Power: 727hp

Torque: 1,000Nm

Transmission: 8-speed auto

Fuel consumption: 10.6L/100km

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The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

Part three: an affection for classic cars lives on

Read part two: how climate change drove the race for an alternative 

Read part one: how cars came to the UAE

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Engine: 1.5-litre

 

Transmission: 6-speed automatic

 

Power: 110 horsepower 

 

Torque: 147Nm 

 

Price: From Dh59,700 

 

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Roll of honour 2019-2020

Dubai Rugby Sevens
Winners: Dubai Hurricanes
Runners up: Bahrain

West Asia Premiership
Winners: Bahrain
Runners up: UAE Premiership

UAE Premiership
}Winners: Dubai Exiles
Runners up: Dubai Hurricanes

UAE Division One
Winners: Abu Dhabi Saracens
Runners up: Dubai Hurricanes II

UAE Division Two
Winners: Barrelhouse
Runners up: RAK Rugby

SERIE A FIXTURES

All times UAE ( 4 GMT)

Saturday
Roma v Udinese (5pm) 
SPAL v Napoli (8pm)
Juventus v Torino (10.45pm)

Sunday
Sampdoria v AC Milan (2.30pm)
Inter Milan v Genoa (5pm)
Crotone v Benevento (5pm)
Verona v Lazio (5pm)
Cagliari v Chievo (5pm)
Sassuolo v Bologna (8pm)
Fiorentina v Atalanta (10.45pm)

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Engine: AMG-enhanced 3.0L inline-6 turbo with EQ Boost and electric auxiliary compressor

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Price: Dh360,200 (starting)

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Transmission: eight-speed automatic

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Torque: 340Nm

Price: Dh155,800

On sale: now

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Price, base / as tested Dh137,000 / Dh189,950

Engine 3.6-litre V6

Gearbox Eight-speed automatic

Power 280hp @ 6,200rpm

Torque 360Nm @ 2,750rpm

Fuel economy, combined 11.7L / 100km