MASNAA, LEBANON // On a hot weekday afternoon at the Masnaa border crossing between Syria and Lebanon, few vehicles moved in either direction.
Despite the war raging on Syria’s side of the demarcation line, until early this year the crossing had remained busy. Before the Lebanese government made its refugee policy more restrictive, severely cutting down the number of refugees now allowed into the country, Lebanon sometimes saw thousands of Syrian refugees entering every day. And in the other direction, hardened lorry drivers would haul Lebanese goods on the long and potentially dangerous route through Syria to Jordan, Iraq and the Arabian Gulf.
But when Jabhat Al Nusra and Free Syrian Army units captured the Nassib border crossing between Jordan and Syria in April, Lebanon was left without an overland route into Jordan, Iraq and the Gulf.
The country’s overland exports have now dwindled to a trickle, with goods only reaching territory held by president Bashar Al Assad’s government as Syria — and now Lebanon — have turned into virtual islands.
Before the closure of the Nassib crossing, roughly a quarter of Lebanon’s total exports left the country overland, according to Marwan Barakat, chief economist at Bank Audi. But during the second quarter of this year — which followed the crossing’s closure — just 8.6 per cent of the country’s exports left this way.
Abu Mohammed, a Syrian lorry driver from Aleppo, was resting by his vehicle at the border last month after crossing into Lebanon. He used to haul goods from Lebanon and Syria to the Gulf, making up to US$2,000 (Dh7,345) a month. Now, he says, he earns half that amount.
“I’m barely surviving,” he said. “We [his family] barely have enough to eat. We have nothing extra.”
These days, Abu Mohammed only transports goods between Lebanon and regime-held areas inside Syria. On more dangerous roads — such as the one between Damascus and Homs — he travels in convoys with other lorries, paying between $100 and $150 per trip in protection money for government troops to escort the vehicles.
Despite this, however, Abu Mohammed says his situation is better than that of other lorry drivers who have not been able to survive the closure of the borders. “Some lorries are just parked with no business,” he said.
Lebanon’s agricultural industry has been hit especially hard by the border closures. With 65 per cent of Lebanese produce exports passing through the Nassib crossing before its closure, according to Mr Barakat, farmers are struggling to survive with the overland route gone.
Ahmed Hanniyeh, a farmer in the Bekaa Valley town of Taraya, said his profits are down 70 per cent because of the war in Syria. The war had driven profits down before, but the closing of the Nassib crossing was a death blow.
“The potatoes are still in the ground. We’re not even bothering to pick them,” he lamented at his farm last month.
Mr Hanniyeh is shipping some of his produce to Gulf markets by sea in refrigerated containers, but says this is expensive and that some food still spoils before it reaches its destination.
Lebanon has never been isolated as badly and for as long as now — even when war raged here — and Mr Hanniyeh is nostalgic thinking back to past conflicts.
“The civil war was better, it was the best business during the war,” he said. “Money was everywhere. We had electricity, we had everything. Now we don’t even have water. We can’t afford generators to pump water into the land because it is so expensive.”
Meanwhile, with lorries no longer able to make the route from Lebanon to the Gulf, exports from Beirut’s airport and port have stepped up.
Data from the International Chamber of Navigation, the body representing 45 shipping agencies in Beirut’s port, shows that the number of containers exported through the port jumped from 5,481 in June of last year to 9,920 in June of this year — an increase of 81 per cent.
Much of the increase in shipping activity is due to agricultural products shipped abroad in refrigerated containers. In June last year, 2,576 refrigerated containers were exported from the port, while in June of this year, 4,582 such containers were exported.
In August, the Lebanese government approved a $21 million treasury loan to the Investment Development Authority of Lebanon — a government agency that promotes investments in Lebanon — so that the body could subsidise farmers whose agricultural products are exported by sea to Jordan and the Gulf. But farmers complain that even if their applications to receive a subsidy are approved, it will not undo the damage of losing the overland export route through Syria.
Mr Barakat said exports from Beirut’s airport were up 28 per cent in the first half of 2015 compared to the same period in 2014.
“However, this has not totally compensated for the land route forgone,” he said. “The decline of land exports has been more important than the increase in exports at the port and airport.”
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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.”
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How to join and use Abu Dhabi’s public libraries
• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.
• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.
• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.
• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.
• For more information visit the library network's website.
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Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
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Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
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How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
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