Demonstrators take part in protests near the site of the blast at the Beirut's port area in Lebanon. The country has been in foment owing to political dysfunction. Reuters
Demonstrators take part in protests near the site of the blast at the Beirut's port area in Lebanon. The country has been in foment owing to political dysfunction. Reuters
Demonstrators take part in protests near the site of the blast at the Beirut's port area in Lebanon. The country has been in foment owing to political dysfunction. Reuters
Demonstrators take part in protests near the site of the blast at the Beirut's port area in Lebanon. The country has been in foment owing to political dysfunction. Reuters

With Lebanon on Biden's radar now, what will his next step be?


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With his visit to Europe last week, US Secretary of State Antony Blinken has somewhat restored his country's favourable relations with the continent and with key Nato allies. Amid America's attempts to resurrect the international order, Mr Blinken has also helped deepen its co-operation with Asian powers such as India, Japan and Australia. These moves are being shaped by America's rivalries with China and Russia, as well as recent developments in the Asia-Pacific and the Middle East.

Two months into his inauguration, President Joe Biden is finding it difficult to make speedy progress on the Iran nuclear crisis and the war in Yemen. Hence, the administration is resetting its expectations. This has created an opportunity for Washington, its allies and regional powers to think out of the box on how to resolve some of the more vexed issues. It is becoming increasingly clear, for instance, that the Biden administration seeks to resolve the Yemen conflict in concert with the UN. Other issues, such as Lebanon's economic and political crisis, will be outsourced to European allies, led by France.

Mr Blinken is fluent in French and is not known for confrontation. These attributes have helped produce a shift in US relations with Europe away from the combative, improvised and score-settling style of the Trump administration. Today, there is a new tone of co-operation and co-ordination between Washington and Brussels. An example of this is the West's decision to place human rights sanctions on Chinese figures.

US Secretary of State Antony Blinken removes his mask as gives a press briefing at the end of a NATO Foreign Ministers' meeting. Reuters
US Secretary of State Antony Blinken removes his mask as gives a press briefing at the end of a NATO Foreign Ministers' meeting. Reuters

Yet, absent from the first round of US-Europe talks is policy clarity.

Discussions will no doubt have revolved around salvaging the 2015 Iran nuclear deal, which the US withdrew from three years ago but, under the Biden administration, seems determined to rejoin. Washington also wants Tehran to return to nuclear compliance without equivocation.

There is little to suggest that the Iranian regime intends to abandon its condition that sanctions be lifted before any talks on reviving the nuclear deal, or to show good faith by co-operating over regional issues such as Yemen. On the contrary, it seems that Iran will step up its policy of provocation and blackmail in areas where it has interests, such as in the Gulf, Yemen, Lebanon and Syria.

Aside from maintaining its focus on Iran, the Biden administration has decided not to withdraw US troops from Syria. It has lately shown an interest in Lebanon, too, perhaps having determined that it is running out of time before Lebanon may forever be lost to Iran through its proxy, Hezbollah.

There are myriad consequences if nothing is done to help fix Lebanon. It is becoming something of a failed state run by a corrupt political class, with its economy in tatters. There is potential for terrorism of various hues to grow within its boundaries. It could also lead to further illegal immigration to Europe and perhaps even conflict.

China and Russia have been trying to fill the vacuum left by US – at least prior to Mr Blinken’s visit to Europe. The Biden administration has activated its diplomacy, but it has yet to develop a clear policy that has teeth. And as long as sanctions against the Beirut's political leaders are not leveraged, and as long as Tehran believes it owns Lebanon as a precious bargaining chip, the country risks slipping away.

Our cartoonist's take on the situation with Lebanon's cabinet formation
Our cartoonist's take on the situation with Lebanon's cabinet formation
American and French diplomats need to think outside the box on Iran, Yemen, Syria, Iraq and Lebanon

As Ziyad Baroud, a Lebanese civil servant and activist, told me, it is in the international community’s interest that Lebanon does not fall into “total and severe state failure for many reasons”, including terrorism and a refugee crisis. “With a new, non-confrontational administration [in Washington], we have a chance that things evolve positively,” Mr Baroud pointed out, “and I believe that co-operation between France and the US would lead to good results.”

The question is whether the West has the clout to rescue Lebanon – and more broadly – to resolve some of the long-standing issues in the Middle East. Also worth asking is whether Washington’s regional allies can make a more significant impact. According to Seyed Hossein Mousavian, a Middle East security specialist at Princeton University, this will be the more sensible approach towards finding a resolution.

Mr Mousavian, one might recall, served on Iran’s nuclear diplomacy team during its negotiations with the EU and the International Atomic Energy Agency. My takeaway from a recent conversation with him was amply clear: there is no other way to tackle the region’s issues except through bilateral dialogue between Saudi Arabia and Iran. “Biden, at the moment, is [too] weak … to bring the Iranian nuclear deal back to implementation and then start on broader issues. They [the Americans] are too weak,” he said.

Instead of waiting for US-Iran rapprochement, he added, “we need to count more on rapprochement between the regional countries”. Mr Mousavian said: “I believe Iran and Saudi Arabia, the two powerhouses of the region, can sit and manage relations, stability in the Gulf and even solutions … like Yemen,” beginning with confidence-building measures. He also said that if there was to be an international initiative on Lebanon’s future, “and you believe that Iran is a key player, you need to invite the regional key players to the table”.

In any case, American and French diplomats need to think outside the box on Iran, Yemen, Syria, Iraq and Lebanon. And that cannot happen without serious engagement.

Mr Blinken’s visit to Europe is, no doubt, a promising step in this direction. Even though Washington’s Middle East policy remains fuzzy, it isn’t wrong for it to have outsourced the Lebanon dossier to Paris – provided it rallies Arab support for the French initiative. The Biden administration must also leverage the previous Trump administration’s carrot-and-stick approach to dealing with Beirut. If it takes its eye off the ball, it will end up ruing the day when Lebanon falls completely into Iran’s sphere of influence. Worryingly, that day may not be very far.

Raghida Dergham is the founder and executive chairwoman of the Beirut Institute and a columnist for The National

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Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

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2011 – lost to Uruguay on penalties in the quarter-finals

2015 – lost to Chile on penalties in the final

2016 – lost to Chile on penalties in the final

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14/11/2017, World Cup qualifier

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11/11/2017, World Cup qualifier

 

 

 

Results

5pm: Maiden (PA) Dh80,000 (Turf) 1,200m, Winner: ES Rubban, Antonio Fresu (jockey), Ibrahim Aseel (trainer)

5.30pm: Handicap (PA) Dh85,000 (T) 1,200m, Winner: Al Mobher, Sczcepan Mazur, Ibrahim Al Hadhrami

6pm: Handicap (PA) Dh80,000 (T) 2,200m, Winner: Jabalini, Tadhg O’Shea, Ibrahim Al Hadhrami

6.30pm: Wathba Stallions Cup (PA) Dh70,000 (T) 2,200m, Winner: AF Abahe, Tadgh O’Shea, Ernst Oertel

7pm: Handicap (PA) Dh85,000 (T) 1,600m, Winner: AF Makerah, Tadhg O’Shea, Ernst Oertel

7.30pm: Maiden (TB) Dh80,000 (T) 1,600m, Winner: Law Of Peace, Tadhg O’Shea, Satish Seemar

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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