For half a century, Lebanon has not had a reliable supply of power. Privately owned, diesel-powered generators are a staple of the country’s electricity infrastructure. Even this bootstrapped solution, however, has never quite managed to fill the shortfall caused by inadequate state facilities. Until the country’s financial crisis began in 2019, daily power cuts, normally lasting a few hours, were the norm.
In today’s Lebanon, such a sorry state of affairs would be considered a luxury. The financial crisis, prolonged by the inability of the country’s politicians to form a working administration, has become so acute that the state’s ability to keep the lights on has all but collapsed.
Last week, the electricity minister said the government, which relies on fuel for electricity production, can barely manage to produce 25 per cent of what is required. The amount is so low that private generators, which are also chronically low on fuel supplies, cannot come close to filling the gap. On any given day, most residents of Beirut are lucky to have two hours of electricity. They are having to learn to live without even the most basic appliances, such as refrigerators, while key institutions like Beirut airport and universities are having to operate with hardly any power.
The situation is especially critical in Lebanon’s hospitals. The country is still caught in the midst of the Covid-19 pandemic, but even without that the effects on health and the healthcare sector would be dire. Eighty per cent of Lebanese now live in poverty, and there is a nationwide shortage of most medicines.
One hospital worker in southern Lebanon told The National that patients are being advised to procure their own medication and bring it with them when they come in for treatment. And although hospitals have priority status when it comes to receiving meagre electricity supplies, many have had to endure power cuts lasting hours, significantly increasing the risk of infections and threatening the lives of patients relying on electrical devices, such as ventilators.
“A hospital without electricity simply does not exist,” Firass Abiad, the head of Rafik Hariri University Hospital, told The National earlier this week. “It’s like a car without petrol.”
But cars with empty fuel tanks are also a common sight now; the streets of Beirut are lined with them. Taxis and minibuses, the primary forms of public transport, are difficult to find, and the absence of working traffic lights have made road transport for those who can manage to drive more dangerous.
To further complicate matters, on Wednesday Riyad Salameh, the country’s central bank governor, who is currently facing a corruption probe in Switzerland, announced that fuel subsidies would be cut dramatically. These subsidies benefit both the poor and rich, but lifting them without a safety net will harm those who are most vulnerable. And to add injury to insult, on Sunday a tank storing precious fuel in Akkar, northern Lebanon, exploded, killing 22 people and wounding 79.
As things stand, the fuel shortage is expected to continue until Lebanon’s political leaders find a way to end their quarrelling and reach a lasting political settlement. The country’s allies in the West and the Arab world have demanded as much before they offer any significant aid, out of justifiable fears that corrupt leaders will loot or squander any donations, as they have in the past.
Last month, Lebanon signed a complex deal with Iraq to receive shipments of heavy fuel, unsuitable for Lebanese power plants, that it could resell to companies who could then turn it into useable fuel for the Lebanese market. It is a suitably imaginative proposal designed to avoid any free handouts, but it may take a long time to implement. The longer the circumstances persist, the question of whether and how to help Lebanon is becoming as much of a humanitarian issue as it is a political or economic one.
Company%20profile
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THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
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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UAE currency: the story behind the money in your pockets