Lebanon's President Michel Suleiman meets with Saad al-Hariri in Beiteddine village, Mount Lebanon.
Lebanon's President Michel Suleiman meets with Saad al-Hariri in Beiteddine village, Mount Lebanon.
Lebanon's President Michel Suleiman meets with Saad al-Hariri in Beiteddine village, Mount Lebanon.
Lebanon's President Michel Suleiman meets with Saad al-Hariri in Beiteddine village, Mount Lebanon.

Hariri resigns as Lebanon's prime minister-designate


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BEIRUT // Saad Hariri, Lebanon's prime minister-designate, yesterday responded to the Hizbollah-led opposition's refusal to accept his proposed cabinet by resigning his post. The move was widely considered tough brinkmanship in a 73-day stalemate over the formation of a new government. Efforts by Mr Hariri to build a cabinet that included his political opponents have been stymied by both sides' refusal to compromise over which ministries, and which ministerial posts, would be allocated to Lebanon's diverse community of sectarian and political movements.

On Monday, Mr Hariri sent a formal proposal for a cabinet to President Michel Suleiman that was rejected by the opposition. The president had previously indicated that he would only approve a consensus cabinet. "Given that my commitment to forming a government of national unity has run up against difficulties that everyone now knows about, I announce that I have informed the president of the republic that I have abandoned trying to form a government," Mr Hariri told journalists in Beirut yesterday, according to news services.

"I worked for 73 days to achieve this objective but each time the rounds of negotiations were hampered one way or another," added Mr Hariri, saying the team he had proposed would have been a "real opportunity" but that this was "frittered away through conditions imposed" by the minority. Mr Suleiman accepted Mr Hariri's resignation and said he would pursue additional consultations with parliament. But as Mr Hariri's alliance still holds a considerable majority in that body, he can be reappointed to the post to begin again, if he chooses.

According to one of Mr Hariri's top supporters, the opposition's rejection of the first cabinet proposal was a mistake that they are likely to regret as it included compromises that are unlikely to be repeated in any subsequent deliberations. "We are back to point zero and we will have to look into a new formation and the balance it is going to have," said Amar Houry, a member of Mr Hariri's Future Movement.

"It will be hard for the rivals in the next government to get what they got in the last formation. They [already] received more than they deserved." Lebanon's complex sectarian system and long history of violent political conflict essentially mandates political co-operation among rivals, and although Mr Hariri's alliance won 71 of the 128 seats in parliament, he is widely seen as lacking the mandate to impose his political will.

"It's fairly unusual for the opposition to get to tell the winner of an election how to form a government," noted Paul Salem of the Carnegie Institute. "But the government cannot be formed without [Mr Hariri's] say-so. This is his way of reminding them of that." But Mr Salem noted that forming a cabinet was never likely to have been easy, considering the bitterly fought June elections and years of sectarian political struggle that preceded them.

"It's not very surprising as this has been a very contested situation since before the elections," he said. "There is a struggle inside and even outside the country to define the balance of things here." Mr Hariri's coalition is widely seen as pro-US and Saudi, whereas most of the opposition parties have close ties to Syria and Iran, making Lebanon's struggles a microcosm for the struggles between these regional rivals.

There was initial optimism that a deal could be forged after Mr Hariri was named premier on June 27 and a compromise was reached on the make-up of the national unity cabinet. With 15 seats to the majority, 10 to the opposition and five seats loyal to the neutral president, the formula met the requirements of all sides. But trouble began when Mr Hariri started selecting ministers to run specific portfolios.

While the opposition was irritated by Mr Hariri's insistence that he name the opposition and majority ministers, the most intractable conflict was over demands made by Hizbollah's top Christian ally, Michel Aoun. He vehemently insisted on a majority of the seven seats allocated to Maronite Christians, as well as demanding control of the critical interior and telecommunications ministries. It is widely believed that both Mr Hariri and Mr Suleiman have agreed that interior should remain in control of the current minister, Ziad Baroud, who is widely seen as neutral, and Mr Hariri is said to have rejected allowing Mr Aoun's son-in-law, Jibran Bassil, to remain as telecom minister. Lebanon's government-owned mobile phone networks represent a huge source of income for the state, and a proposal to privatise them could mean billions of dollars in revenue. But a key ally of Mr Aoun rejected the notion that his party was to blame for the impasse or that regional politics had played a role.

"I reject saying the [Free Pariotic Movement] is the obstacle in the formation, and I reject to say it's a regional problem as well," MP Ghassan Moukheiber told The National. "It is beyond that. There is a regional influence but for how long are we Lebanese going to wait to make a move? We all need to work on solving our problems for the sake of the country." And in keeping with a common talking point of the FPM, he warned that, by allowing this crisis to continue, Mr Hariri was threatening the stability of the country.

"It's the unknown we are now going though in Lebanon and I can't tell when we will have a government," he said. " I wish we had one a month ago. It's just not good at all, what happened today. It's taking us into crises." @Email:mprothero@thenational.ae

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.”

Du Football Champions

The fourth season of du Football Champions was launched at Gitex on Wednesday alongside the Middle East’s first sports-tech scouting platform.“du Talents”, which enables aspiring footballers to upload their profiles and highlights reels and communicate directly with coaches, is designed to extend the reach of the programme, which has already attracted more than 21,500 players in its first three years.

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Russia's Muslim Heartlands

Dominic Rubin, Oxford

Two-step truce

The UN-brokered ceasefire deal for Hodeidah will be implemented in two stages, with the first to be completed before the New Year begins, according to the Arab Coalition supporting the Yemeni government.

By midnight on December 31, the Houthi rebels will have to withdraw from the ports of Hodeidah, Ras Issa and Al Saqef, coalition officials told The National. 

The second stage will be the complete withdrawal of all pro-government forces and rebels from Hodeidah city, to be completed by midnight on January 7.

The process is to be overseen by a Redeployment Co-ordination Committee (RCC) comprising UN monitors and representatives of the government and the rebels.

The agreement also calls the deployment of UN-supervised neutral forces in the city and the establishment of humanitarian corridors to ensure distribution of aid across the country.

TEACHERS' PAY - WHAT YOU NEED TO KNOW

Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:

- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools

- average salary across curriculums and skill levels is about Dh10,000, recruiters say

- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance

- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs

- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills

- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month

- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues

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The President's Cake

Director: Hasan Hadi

Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem 

Rating: 4/5