Lebanese caretaker Prime Minister Najib Mikati, right, has thanked Jordan's Bisher Al Khasawneh for Amman's support to help Beirut 'confront the challenges and deepen its stability'. Photo: EPA
Lebanese caretaker Prime Minister Najib Mikati, right, has thanked Jordan's Bisher Al Khasawneh for Amman's support to help Beirut 'confront the challenges and deepen its stability'. Photo: EPA
Lebanese caretaker Prime Minister Najib Mikati, right, has thanked Jordan's Bisher Al Khasawneh for Amman's support to help Beirut 'confront the challenges and deepen its stability'. Photo: EPA
Lebanese caretaker Prime Minister Najib Mikati, right, has thanked Jordan's Bisher Al Khasawneh for Amman's support to help Beirut 'confront the challenges and deepen its stability'. Photo: EPA

Jordan pursuing stronger ties with Lebanon, says PM


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Jordan will work to strengthen ties with Lebanon, the kingdom's prime minister told his Lebanese counterpart in Amman on Thursday, despite delays plaguing a major electricity deal involving the two countries

Lebanese caretaker Prime Minister Najib Mikati thanked Jordan's Bisher Al Khasawneh for Amman's support to help Beirut "confront the challenges and deepen its stability," the kingdom's state news agency reported.

Jordan has been trying to improve relations with Lebanon in an attempt to secure more influence in the region since US President Joe Biden took office in January last year.

The US is Jordan's main donor and has thousands of troops in the kingdom as part of a military agreement. The current American administration is regarded in Amman as being friendlier than its predecessor, which focused on normalisation between Arab states and Israel.

Washington supported a deal this year under which 250 megawatts of Jordanian electricity were supposed to flow to Lebanon by March through Syria. The deal was widely regarded as a delivering political and financial gains for Syrian President Bashar Al Assad.

But Lebanon's Energy Minister Walid Fayad said on Wednesday that “politics and bureaucracy” were behind the delay and that the World Bank, which was supposed to finance the deal, had named new conditions.

Mr Fayad and did not rule out that US support for the deal may have waned since the Russian invasion of Ukraine three months ago.

The Lebanese government oversaw general elections in the country last month and is due to be replaced once a new administration is formed, a process that could take months.

Historically, Jordan has stayed away from involvement in Lebanon, particularly during the 1975 to 1990 civil war there.

Relations cooled after the 2005 assassination of Lebanese statesman Rafik Hariri, who had sought good relations with Jordan and other Arab countries as part of his drive to restore Lebanon's position as the business and tourism centre of the Middle East.

The Hariri assassination set the stage for the dominance of Hezbollah, the Shiite guerrilla group and political party supported by Iran, over Lebanese politics.

Jordan has refrained from criticising the group but does note welcome its rising influence in Lebanon and the rest of the region.

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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Updated: June 09, 2022, 2:02 PM