South Lebanon blast raises tensions along the border



BEIRUT // Lebanese authorities yesterday blamed an explosion in south Lebanon this month on an abandoned Israeli stockpile of munitions left after the 2006 summer war, disputing the Israeli and United Nations contention that the explosion resulted from an accident at a Hizbollah storage facility.

Israeli and United Nations Interim Force in Lebanon (Unifil) officials last week alleged that a massive explosion July 14 in the village of Khirbet Selm in southern Lebanon was caused by mishandled rockets at a Hizbollah storage facility. Under the terms of the UN-brokered ceasefire in 2006, Hizbollah was mandated to remove all of its weapons and personnel from an area south of the Litani River adjacent to Israel. Israeli and UN officials quickly accused the group of violating the terms of that agreement and a subsequent attempt to investigate the blast by UN peacekeepers turned into a violent scuffle with local villagers led by Hizbollah officials determined to keep the Unifil troops away from the scene.

A UN official said in an interview that the peacekeeping contingent suspects that the blast might have resulted from an Israeli commando raid on a Hizbollah stockpile with the intent to reveal a violation of the ceasefire arrangement but that no conclusive proof had been determined. The official, who is not authorised to speak to the media, called the allegations against both sides "very unsettling" and said the border situation was at its highest level of tension since the end of the 2006 war.

But after almost two weeks of silence, the Lebanese foreign ministry sent a letter yesterday to the UN arguing that the explosion resulted from abandoned Israeli munitions, an argument that appears to have done little to reassure either the Israeli government or the UN peacekeepers along the border region. An emergency meeting was scheduled for last night between top UN representatives, Hizbollah military and political officials and the Lebanese government in an effort to diffuse tensions.

The explosion and its aftermath is only the latest in a series of incidents this summer that have raised concerns along the border. The Lebanese military has accused the Israeli Defence Forces of breaching the border on several occasions with small commando units to help Lebanese citizens accused of spying for Israel to escape arrest, while IDF officials continue to warn that Hizbollah activity along the border is rapidly increasing and that the militant Shiite group had reconstituted its bunker defences south of the Litani River - a grave accusation seen as a possible precursor to another war.

Hassan Nasrallah, Hizbollah's leader, was reported to have noted the tensions in a meeting with expatriate Lebanese supporters and donors in a private meeting last week, according to local media accounts. According to New TV, Mr Nasrallah told the supporters that he did not mean to scare the Lebanese people but that he expected an Israeli attack sometime after the new year. He also was reported to have said that any assault on the southern suburbs of Beirut - Hizbollah's key political power base - would be responded to with assaults by the militant group on Tel Aviv, but did not specify how the group might strike from such a distance. Hizbollah was able to effectively target much of northern Israel with its rocket arsenal in 2006 but has claimed that it has since added new weaponry.

Hizbollah's media relations office refused to confirm or deny the comments. mprothero@thenational.ae

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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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The number of Chinese people living in Dubai: An estimated 200,000

Number of Chinese people in International City: Almost 50,000

Daily visitors to Dragon Mart in 2018/19: 120,000

Daily visitors to Dragon Mart in 2010: 20,000

Percentage increase in visitors in eight years: 500 per cent