The fate of Unifil, the UN interim force in Lebanon, whose renewal is scheduled in August, may be hanging by a thread. According to the Hebrew version of the Israeli daily Israel Hayom on June 8, the US and Israel have agreed to end the force’s operations, with Washington having a major say in the matter as it funds around a quarter of its budget.
The final outcome remains unclear, however, and the Lebanese authorities remain optimistic that Unifil’s mandate will be renewed. More relevant today, however, is that the context has substantially changed in the past six months, encompassing the uncertainties surrounding the conflict involving the US, Israel and Iran.
When Lebanon and Israel reached a ceasefire agreement last November, one aspect of the deal was the strengthening and expansion of a committee whose role would be to “monitor, verify, and assist in ensuring enforcement of [the agreement]”. The parties agreed it would be headed by a US general and include a French representative, in addition to Lebanese, Israeli and Unifil representatives.
In parallel, the administration of former US president Joe Biden had sent Israel a letter on the side in which it gave the Israeli government the right to strike militarily against any violation of the agreement – immediately in south Lebanon and only after giving the Lebanese army time to do so first in other parts of the country. The Donald Trump administration has maintained the same approach, and Israel continues to attack Hezbollah targets to this day.
Israel can achieve its objectives more forcefully and directly through a hegemonic military approach that doesn’t require it to navigate through international institutions, for which it has contempt
Not surprisingly, this situation has encouraged Israel to go along with any American decision to terminate Unifil. There is nothing more the Israeli government would like than to exploit the free rein that Washington has accorded them in Lebanon, without the burden of international oversight through the UN force.
At a time when Israel has significantly expanded its regional ambitions and is operating freely in Lebanon, Syria, Yemen, and now Iran – in preparation for what Israeli Prime Minister Benjamin Netanyahu has called a “new Middle East" – Unifil represents a hindrance. Today, the Israelis can achieve their objectives more forcefully and directly through a hegemonic military approach that doesn’t require them to navigate through international institutions, for which they have contempt.
One would assume that unconditional US backing for Israel, coupled with US President Donald Trump’s antipathy towards spending his country’s money on UN endeavours, means that Unifil may be doomed. While that may be the case, the regional situation simply cannot be ignored in assessing the force’s future.
Mr Trump, whatever his commitment to Israel, is not someone who relishes being dragged into conflicts not of his choosing. Southern Lebanon creates such a risk. While there are indications he knew of the recent Israeli attack on Iran, the fact that Israel did not deliver a knockout blow and that the US intervened last weekend has created political problems for Mr Trump. It not only divided his base, there were never any guarantees Washington had a silver bullet guaranteeing victory against Iran.
If this invites more caution from the US President, he may have an interest in ensuring that Unifil remains in place, as it may bring an added level of stability to southern Lebanon. In other words, while the US may cut its spending for the UN force, it may also be more amenable to compromises that keep Unifil alive.
Among the potential ideas circulating is that Unifil be retooled and made to adapt to the new political environment in Lebanon – what Assaf Orion, an Israeli general at the Washington Institute for Near East Policy, has called “forging Unifil 3.0”. This would involve cutting the force’s numbers to make it leaner, satisfying the cost-cutting preferences of the Americans, while allowing it to more effectively support the Lebanese army in asserting its authority in the country's south.
Mr Trump’s recent statements in Saudi Arabia implied that he would like to calm the situation in the region. This doesn’t square with Israel’s plans to impose its will by force on surrounding countries. What kind of tranquillity can be achieved if Israel continues to bomb Lebanon, Syria and Iran, while threatening Turkey because of its expanding influence in Syria? In other words, a peaceful Middle East cannot follow from Israel’s desire to sustain its regional military supremacy.
Whether any of the people close to the President who are of Lebanese origin will have a say on Unifil is an interesting, speculative question. It can’t be ruled out that Thomas Barrack, Mr Trump’s envoy to Turkey and Syria, Michel Issa, the new ambassador to Lebanon, and Massad Boulos, whose son is married to one of Mr Trump’s daughters, may be asked privately to weigh in on Lebanese affairs.
It would be in character for Mr Trump to consult with those around him if Unifil renewal were brought to his attention. While nothing indicates that the ethnic origins of these individuals would shape their advice if they were asked for their views, Mr Barrack and Mr Issa might seek outcomes that benefit them in their respective roles. Anything that avoids rocking the Lebanese boat may be such a thing.
It is too early to say what will happen to Unifil. However, one thing seems increasingly evident: the force cannot go on as it is. The situation in Lebanon and the region has changed too much, so that it makes sense to assimilate these changes into Unifil’s role, which has to be reinforced. Killing Unifil, on the other hand, would merely create an uneasy vacuum that only makes matters worse.
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.”
What is blockchain?
Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.
The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.
Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.
However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.
Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.
LAST-16 EUROPA LEAGUE FIXTURES
Wednesday (Kick-offs UAE)
FC Copenhagen (0) v Istanbul Basaksehir (1) 8.55pm
Shakhtar Donetsk (2) v Wolfsburg (1) 8.55pm
Inter Milan v Getafe (one leg only) 11pm
Manchester United (5) v LASK (0) 11pm
Thursday
Bayer Leverkusen (3) v Rangers (1) 8.55pm
Sevilla v Roma (one leg only) 8.55pm
FC Basel (3) v Eintracht Frankfurt (0) 11pm
Wolves (1) Olympiakos (1) 11pm
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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