BEIRUT // Saudi Arabia yesterday pledged $3 billion (Dh11bn) for the Lebanese army to buy military equipment from France.
It is the largest aid package in Lebanon’s history, said the president, Michel Sleiman.
The French president Francois Hollande, in Riyadh for talks with King Abdullah, said: “If requests are addressed to us, we will meet them.”
The military aid comes amid mounting sectarian tension in Lebanon over the war in Syria, where Iranian-backed Hizbollah Shiite militia are fighting beside Assad regime forces against rebels whom Saudi Arabia and many Lebanese Sunnis support.
Inside Lebanon the armed forces are woefully under-equipped compared with Hizbollah, the country’s best-armed and trained organisation.
Mr Sleiman, who made the surprise announcement in a televised national address, said French President Francois Hollande was to discuss the matter during his visit Sunday to Saudi Arabia.
“The Saudi king decided to give a generous, well-appreciated grant to Lebanon amounting to $3 billion for the Lebanese army, which will allow it to buy new and modern weapons,” Mr Sleiman said. “The king pointed out that the weapons will be bought from France quickly, considering the historical relations that tie it to Lebanon and the military cooperation between the two countries.”
Mr Sleiman said that he hopes Paris will quickly meet the initiative, and help the Lebanese army with arms, training and maintenance.
Fabrice Hermel, a spokesman for the French president, said he did not yet have details.
Fragile in the best of times, Lebanon is struggling to cope with the fallout from Syria’s civil war. That conflict has deeply divided Lebanon along sectarian lines, and paralysed the country’s political system to the point that it has been stuck with a caretaker government since April.
It has also seen a wave of deadly bombings and shootings that have fuelled fears that Lebanon, which suffered a brutal 15-year civil war of its own that only ended in 1990, could be slowly slipping back toward full-blown sectarian conflict.
In a nod to those concerns, Mr Sleiman said in his address that “Lebanon is threatened by sectarian conflict and extremism,” and said that strengthening the army was a popular demand.
The Lebanese army is generally seen as a unifying force in the country, and draws its ranks from all of Lebanon’s sects. But it has struggled to contain the escalating violence in the country since the outbreak of the Syrian conflict. The Saudi pledge appeared aimed, at least in part, at countering Hizbollah’s superior firepower.
Historically, the Lebanese army has been equipped by the United States and France.
Washington has provided hundreds of millions of dollars of military aid in recent years to Lebanon that has included armoured vehicles, heavy weapons and training for the Lebanese army. The US said the programme aimed to strengthen Lebanese government institutions.
Meanwhile Israel fired a barrage of shells into southern Lebanon on Sunday after five Katyusha-style rockets were launched into Israel on Sunday.
The attacks struck uninhabited areas of both countries without causing any casualties or damage.
Lebanon is particularly on edge after a car bombing in Beirut that killed Mohammed Chatah, 62, a prominent politician and critic of the Syrian regime. There was heavy security at his funeral yesterday. Mourners chanted slogans against Hizbollah, whom they accuse of his assassination.
* The National staff and agencies
The Land between Two Rivers: Writing in an Age of Refugees
Tom Sleigh, Graywolf Press
Boulder shooting victims
• Denny Strong, 20
• Neven Stanisic, 23
• Rikki Olds, 25
• Tralona Bartkowiak, 49
• Suzanne Fountain, 59
• Teri Leiker, 51
• Eric Talley, 51
• Kevin Mahoney, 61
• Lynn Murray, 62
• Jody Waters, 65
Results
Ashraf Ghani 50.64 per cent
Abdullah Abdullah 39.52 per cent
Gulbuddin Hekmatyar 3.85 per cent
Rahmatullah Nabil 1.8 per cent
The specS: 2018 Toyota Camry
Price: base / as tested: Dh91,000 / Dh114,000
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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.”