Lebanon’s Kataeb in talks with opposition for united front in 2022 election

Lebanon’s Kataeb Party is holding talks with opposition groups and independent activists about the formation of a coalition that will contest the 2022 parliamentary elections.

Party leader Samy Gemayel resigned as an MP after the massive Beirut port explosion in August that killed at least 190 people, including Kataeb’s secretary general Nazar Najarian.

The blast was caused by the ignition of 2,750 tonnes of ammonium nitrate that had been stored at the port for more than six years.

Mr Gemayel, the son of former president Amine Gemayel and the nephew of assassinated president-elect Bachir Gemayel, announced his resignation alongside two other MPs at Najarian’s funeral.

Within a week of the explosion, eight politicians had resigned in protest against corruption and negligence in state institutions after it was revealed that the country’s top officials and security agencies knew about the dangers posed by the storage of ammonium nitrate at the port.

Even before the blast, the country’s economic crisis or its mass demonstrations, Mr Gemayel tried to shed the Kataeb Party’s image as a hardline, civil war-era Christian faction.

He backed calls for major reforms that would end sectarianism and ensure the country maintained its sovereignty.

He also backed the popular uprising that began last October over corruption and said his party met various groups to lay the ground for a framework that would unite “like-minded” opposition forces.

“For months, we have been meeting with opposition groups, former fellow lawmakers and independent activists from across Lebanon,” Mr Gemayel told The National at the party’s offices in Bikfaya, near Beirut.

“Hopefully, we will be able to make an announcement sometime in the near future.”

He said the focus of the talks was a sovereign and neutral Lebanon and the decentralisation of local elections.

“Neutrality would protect Lebanon against foreign meddling in the country’s affairs and, consequently, put an end to domestic infighting over regional or international issues, which would ultimately guarantee local stability,” he said.

Decentralisation would bridge the gap between the people and the state, reduce red tape and cronyism, and promote sustainable development, he said.

Mr Gemayel said his party submitted a draft law to this effect in 2014. Since then, a parliamentary subcommittee asked to review the proposal met 63 times to iron out the technical details.

The subcommittee achieved near consensus on major points such as the adoption of administrative and fiscal decentralisation, he said.

“The proposal could be enacted into law in the very near future if the political will exists,” he said.

“Do they intend to enact the law? Personally, I don’t think we have a choice, given how the centralised government is failing.”

He said decentralisation would ease political infighting over representation in the centralised government, a recurring theme since the country became independent.

Lebanon has not had a fully functioning government since the resignation of prime minister Hassan Diab after the port explosion.

The explosion resulted in damage worth about $15 billion dollars at a critical time when Lebanon faces its worst economic and financial crisis since the civil war ended.

According to the World Bank, Lebanon’s real gross domestic product growth is expected to fall sharply by 19.2 per cent this year, on the back of a 6.7 per cent contraction in 2019.

Since the collapse of Mr Diab’s administration, political bickering over the allocation of ministerial posts has complicated prime minister-designate Saad Hariri’s mission to form a government.

There is also mounting pressure from the US on Hezbollah, the Iran-backed militant group that Washington and others have called a terrorist organisation.

Hezbollah’s regional agenda and foreign ties have contributed to Lebanon’s isolation at an international level and undermined domestic stability, a must for the country to attract investment and foster a vibrant business environment, Mr Gemayel said.

He accused Hezbollah and the ruling political class of blocking reforms, opposing the formation of an independent Cabinet and resisting efforts to carry out a forensic audit of the central bank, a prerequisite for any financial support programme from the international community.

“The only peaceful course of action is to seek change through elections. As long as this ruling class is in charge, there will be no reforms because they won’t undermine their own interests,” he said.

Mr Gemayel said change was coming, even if elections are held under the current law that favours the country’s major political parties.

Politicians recently came together to discuss an electoral law tabled by Parliament Speaker Nabih Berri’s bloc.

The proposal, which calls for polls under a single electoral constituency and is based on a proportional representation system, drew fierce criticism from the country’s predominantly Christian parties, including President Michel Aoun’s Free Patriotic Movement and the rival Lebanese Forces.

Lebanon last held parliamentary elections in 2018. Polls that were originally scheduled for 2013 were postponed three times amid security concerns and disagreements over the adoption of a new election law that was approved in 2017.

The new law divided Lebanon into 15 electoral districts and embraced a complex proportional representation system by party list, as opposed to the previous winner-takes-all system.

Today, Mr Gemayel fears similar attempts to derail parliamentary elections scheduled for 2022 is the latest attempt by the country’s major parties to maintain their grip on power.

“This will be our next battle with the ruling class, because they know very well that they will lose ground in the coming elections,” he said.

Mr Gemayel said his party and other opposition groups intend to resist such plans and take to the streets to ensure elections are held in line with constitutional deadlines.

“We want a parliament that represents the aspirations of the Lebanese people,” he said.

He called for early elections and urged Mr Hariri to step down over his failure to form an independent Cabinet amid opposition from the parliamentary majority.

Mr Gemayel said his party’s vision of Lebanon was gaining support, particularly among youth of all confessions.

“Today, the divide is between those who want to build a country where the rule of law prevails and those who don’t,” Mr Gemayel said.

“This divide transcends sectarian lines and we are proud that people from across Lebanon have been joining the party recently including 200 new members from Tripoli.”

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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Lebanon’s Kataeb in talks with opposition for united front in 2022 election

Gemayel accuses country’s major political parties of seeking to maintain their grip on power

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