Political point-scoring takes precedence over real action in Lebanon



In 2010, Lebanon’s youthful interior minister Ziyad Baroud tried to make his mark by introducing radar-controlled speed traps to clamp down on the lunatic driving that claims more than 500 lives each year on Lebanese roads.

Back then, Lebanon was enjoying something of a boom. Economic growth was 7 per cent and rising as fast as the shiny new apartment blocks built for Gulf nationals and expat Lebanese; the world’s media loved Beirut and the tourists were taking all the good tables at the best restaurants. Bloodshed on the roads was clearly bad for business.

Mr Baroud, a lawyer in private life, even made a point of going on patrol with Lebanon’s finest to show the public that he was a man who “walked the talk”. Signs warning motorists that they were liable to be “zapped” and fined sprang up on the nation’s highways and, as odd as it might sound, rough speed limits were established – 100kph on highways and 50kph on other roads. A hotline was established for drivers to check if they had been caught speeding, and those with unpaid penalties would not be able to renew their roadworthiness certificate until their account had been settled. Not only would lives be saved, but the extra money would also come in handy

And for a while it worked, but within a year we forgot about the radars. I was never caught and I never knew of anyone who was.

The signs are still there, but the vigilant cops in their Dodge police cars (a gift from the American government) have given up the ghost. There was a rumour that the devices malfunctioned or that spare parts were hard to come by, but I would also wager that there simply wasn’t the institutional “grip” for the initiative to gain any traction.

I was reminded of the radar story this week when the health minister Wael Abou Faour, another eager young technocrat, closed several abattoirs, including Lebanon’s biggest in the Beirut district of Karantina, where, for years, and even under veterinary supervision, the most basic hygiene standards have apparently been ignored.

The move was the latest chapter in Lebanon’s contaminated food scandal, which began two weeks ago, when Mr Abou Faour very publicly named and shamed dozens of restaurants and shops for selling tainted produce. By the time the ministry got to the slaughterhouses, the saga had developed into a full-blown epidemic of fear and anger.

At this point, I must concede that Mr Abou Faour’s bid to save us from botulism and salmonella is, it appears, more than just political point-scoring and I admit I may have been too quick to cast doubt on the seriousness of his crusade in last week’s column. But while this sudden burst of righteousness should be applauded, the ministry does appear to be selective in who it goes after (restaurants and bars who flout the smoking law do not appear to be in Mr Abou Faour’s crosshairs), the biggest concern must surely be that, in the absence of a public sector with the “teeth” to enforce new standards, old habits will return.

Let’s face it, things didn’t get this bad overnight and questions must be asked about the performance of health officials who for years clearly turned a blind eye to the lack of hygiene protocols and the unnecessary suffering endured by the livestock at slaughterhouses across the country. Mr Abou Faour took office in February, a time when the day-to-day running of the state was, and still is, hampered by the double whammy of a presidential vacuum and the small matter of 1.5 million Syrians turning up on our doorstep. In this environment, we can forgive him for taking eight months to train his ministerial guns onfood standards.

But what of those senior civil servants who have ignored the goings-on in the country’s abattoirs. Will their professional conduct be reviewed? In any country in which the notion of public service is seen as a solemn undertaking, the resignations would be piling up; but not in Lebanon, where only fools admit their mistakes.

Michael Karam is a freelance writer who lives between Beirut and Brighton.

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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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