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Lebanon's caretaker Prime Minister Najib Mikati on Thursday said his country was facing “total destruction” as he called for international support at a conference in Paris.
“I come to you with a heavy heart to shed light on the ongoing aggression by Israel on Lebanon,” Mr Mikati told representatives of more than 50 countries invited to the conference.
“This storm is not like the others because it carries the seed of the total destruction not only of my country but also of the values of all humanity,” Mr Mikati added, speaking shortly after another wave of Israeli bombs had pummelled Beirut.
Lebanon wants the international community to send emergency support, help bring about an immediate ceasefire and back the posting of 8,000 Lebanese soldiers south of the Litani river, Mr Mikati said.
Reiterating his calls for a ceasefire, meanwhile, French President Emmanuel Macron pledged €100 million ($108 million) for Lebanon. Conference organisers hope to at least match a UN appeal for $426 million in aid. Germany has announced €96 million in aid, the UK £15 million ($19.5 million), while Ireland on Wednesday said it would give €5 million.
Hopes for a diplomatic breakthrough are low, as neither Israel nor Iran have been invited. Israel has reportedly recently hardened its demands, requesting continued access to Lebanese airspace and the creation of a buffer zone in the south of the country, in addition to the withdrawal of Hezbollah.
Further pledges are expected from countries attending the conference, where representatives include Noura Al Kaabi, UAE Minister of State, and Waleed El Khereiji, Saudi Arabia's Deputy Minister of Foreign Affairs.
Israel launched a bombing campaign and land incursion in southern Lebanon in late September, nearly one year after Iran-backed Hezbollah increased its cross-border attacks in solidarity with Hamas. More than 2,500 people have been killed in Lebanon, while 1.3 million have been displaced.
The war comes at a difficult time for Lebanon, which has had no president for two years due to disagreements among political parties, which has only exacerbated a protracted financial crisis.
Speaking to The National on the sidelines of the conference, Ms Al Kaabi said it was important Lebanese politicians agreed on appointing a new president. She told delegates that random bombings are raising the threat of war spreading further across the region.
"The UAE is very committed in making sure there is a de-escalation and a commitment to UN Resolution 1701," she said, referring to the resolution that ended the last war between Israel and Hezbollah in Lebanon, in 2006. It required the full withdrawal of Hezbollah from southern Lebanon and for Israel to stop entering Lebanese airspace – neither was carried out.
Lebanese politicians must agree on a new president while the international community should support the country's army, Ms Al Kaabi added. "There has to be a political resolution that all parties should adhere to."
The UAE pledged $130 million at the beginning of the crisis and has recently shipped the equivalent of more than 50 plane loads of aid that will arrive in Lebanon on Friday.
Special focus was given at the conference to the Lebanese Armed Forces, which was represented by Brig Gen Youssef Haddad. Foreign Minister Abdallah Bou Habib, Industry Minister George Bouchikian and Environment Minister Nasser Yassin were also present.
“The full implementation of 1701 from both Lebanon and Israel will safeguard Lebanon’s sovereignty and territorial integrity, and provide security on our southern borders that can allow displaced communities to return to their regions,” said Mr Mikati.
Recruitment of soldiers
Hope remains that the Lebanese army can strengthen its presence in southern Lebanon after a ceasefire and a withdrawal of Hezbollah fighters. In addition to accelerating the army's posting, Lebanon and France have called for the recruitment of at least 6,000 new soldiers. The Lebanese cabinet has already approved the hiring of 1,500 troops.
“The decision to recruit more soldiers is a significant step towards enhancing capacity of the Lebanese Armed Forces to obtain security and stability in the region,” said Mr Mikati.
The border between Israel and Lebanon is patrolled by the UN, whose staff have come under attack from Israel, leading to widespread condemnation.
Yet transforming young recruits into professional soldiers necessitates long-term financial and human investments, said Brig Gen Haddad. The army will also have to clear rubble caused by Israeli bombing and create a secure environment to bring humanitarian aid to civilians.
A strong army would protect Lebanon from a civil war, added Brig Gen Haddad, the danger of which has been highlighted by French officials several times this week. “Lebanon is in mortal danger,” France's envoy Jean-Yves Le Drian warned in the run-up to the conference.
Israeli strikes have largely targeted and displaced the country's Shiite population, which overwhelmingly supports Hezbollah. A number of Shiite villages near the border have been emptied and destroyed by Israel's offensive.
Lebanon also houses a significant Sunni and Christian population, some of which are hostile to Hezbollah. The group was the only militia to keep its weapons at the end of the 1975-1990 civil war.
“We have two challenges,” said Brig Gen Haddad. “While having an eye on the south, we have an eye on the interior of the country, on social and intercommunity cohesion, which is the main pillar of the Lebanese army,” he said.
Mr Macron also criticised both Hezbollah and Israel.
“I bitterly regret that Iran has engaged Hezbollah against Israel, while Lebanon's higher interest required it to stay away from the war in Gaza,” Mr Macron said. “I bitterly regret that Israel continues its military operations in Lebanon, in the south in Beirut and elsewhere, and that the number of civilian victims continues to increase.”
Mr Macron hinted at Israel's past military experiences in Lebanon and at Hezbollah's increase in popularity after the 2006 war, though the group currently appears weak after Israel killed off much of its leadership.
“Israel knows from experience that its military successes are not necessarily a victory in Lebanon,” he said.
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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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Should late investors consider cryptocurrencies?
Wealth managers recommend late investors to have a balanced portfolio that typically includes traditional assets such as cash, government and corporate bonds, equities, commodities and commercial property.
They do not usually recommend investing in Bitcoin or other cryptocurrencies due to the risk and volatility associated with them.
“It has produced eye-watering returns for some, whereas others have lost substantially as this has all depended purely on timing and when the buy-in was. If someone still has about 20 to 25 years until retirement, there isn’t any need to take such risks,” Rupert Connor of Abacus Financial Consultant says.
He adds that if a person is interested in owning a business or growing a property portfolio to increase their retirement income, this can be encouraged provided they keep in mind the overall risk profile of these assets.
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The specs
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