US envoy to Beirut: Gebran Bassil was ready to separate his party from Hezbollah


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Lebanon's Gebran Bassil is ready to separate his Free Patriotic Movement from Iran-backed Hezbollah with conditions, US ambassador to Lebanon Dorothy Shea said on Monday.

Ms Shea was speaking days after Washington imposed sanctions on the former minister and son-in-law to President Michel Aoun.

But she said the Christian ally of the Iran-backed party lacked understanding of US policy after he criticised the sanctions as unjust and politically motivated.

Mr Bassil said they were imposed after he refused to submit to a US demand to break ties with Hezbollah, because that would put at risk national unity and peace in Lebanon.

US ambassador to Lebanon Dorothy Shea speaks in Beirut on June 29, 2020. Reuters
US ambassador to Lebanon Dorothy Shea speaks in Beirut on June 29, 2020. Reuters

“Mr Bassil might think that leaking selective information out of context about our mutual discussion serves his cause," Ms Shea said.

"This is not the way I usually work, but I will reveal one thing: he himself expressed his readiness to separate from Hezbollah, under certain conditions.

"He actually expressed gratitude that the United States had got him to see how the relationship is disadvantageous to the party."

In 2006, Mr Bassil's party signed an alliance with Hezbollah, giving the party the much-needed backing of a major Christian faction to demonstrate inter-religious support for keeping its weapons.

Since then he has defended the heavily armed group as vital to the defence of Lebanon.

"We will not refute every inaccurate point made in Mr Bassil's speech," Ms Shea said.

"There were many of them, where there was a misunderstanding of how the sanctions worked and a lack of understanding of US policy and the way it was made.

"Even key advisers told me that they encouraged Mr Bassil to take this historic decision."

She said the sanctions were on Mr Bassil, not his party, and that the US "does not punish or destroy the Free Patriotic Movement".

After Washington's move on Friday, Mr Aoun called on the Foreign Ministry to formally request any documents as evidence of Mr Bassil's alleged corruption, so the Lebanese judiciary could investigate and file charges if needed.

“All I can say is that we seek to make the largest amount of information available when the names are released, but as is often the case, some of this information is not releasable," Ms Shea said.

She said Mr Bassil was welcome to challenge the US move in the American legal system.

The US  "took this measure in solidarity with the Lebanese people who, for more than a year, have demanded their political leaders to end business as usual by working to chart a new direction devoted to reform and transparency, and uprooting rampant corruption from its roots", Ms Shea said.

Since last October, tens of thousands have protested in Lebanon demanding political reform, an end to corruption and competent leadership that can address the dire economic crisis.

On Sunday, Mr Bassil said he had been told by Mr Aoun that a senior American official had called him and said that the party leader must break its relationship with Hezbollah "immediately" or US sanctions would be imposed within four days.

He has held several positions in previous governments, including the communications minister, energy and water minister and foreign minister.

Mr Bassil is widely believed to hold ambitions of succeeding his father-in-law as president.

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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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