British PM calls for wartime spirit to fight weak economy
British PM calls for wartime spirit to fight weak economy
The premier told the annual meeting of the Confederation of British Industry (CBI) that he has instructed all departments in the civil service to make economic growth a central aim.
Cameron's Conservative-led coalition government has already made big steps toward cutting costs and eliminating waste to slash the deficit and provide a stable business environment, he added.
"I want every department in Whitehall to be a growth department. I've insisted that every permanent secretary has growth as a key objective," Cameron told CBI delegates yesterday.
"And I want every minister and every official to understand that the dangers are not just in what you do, but what you don't do -- that the costs of delay are dealt in businesses going bust, jobs being lost, livelihoods being destroyed."
Britain escaped from recession in the third quarter but its outlook remains clouded by the impact of the ongoing euro zone debt crisis, harsh state austerity measures and inflationary pressures.
The Bank of England warned last week that the economy would shrink again in the fourth quarter in the absence of temporary factors like the London Olympic Games.
Cameron also outlined plans to cut through red tape and change the risk-averse culture of many civil servants.
"When this country was at war in the 1940s, Whitehall (Britain's civil service) underwent a revolution.
"Normal rules were circumvented. Convention was thrown out. As one historian put it, everything was thrown at the overriding purpose of beating Hitler.
"Well, this country is in the economic equivalent of war today — and we need the same spirit."
The economy grew by an impressive 1.0 percent in the three months to September, escaping from the longest double dip recession since the 1950s — and answering the prayers of many business leaders, according to the CBI.
"Reduced inflation and stable unemployment ... and most importantly, the first signs of growth that quite frankly we prayed for, (are) just starting to inch through," added CBI president Roger Carr in his opening address.
"So it's no surprise that the mood from our members is: It's tough, but could be worse."
The CBI — the country's biggest employers' organization — is a powerful business lobby in Britain and represents more than 240,000 companies or about one third of the private sector.
This year, the group is calling for the government to target education as its number one priority as part of Britain's long-term growth strategy.
And it appealed to finance minister George Osborne to continue his austerity policies.
"The CBI's message to the Chancellor — keep prescribing the medicine, but resist increasing the dosage," added Carr.
"The patient is fragile — accept a longer convalescence — it is infinitely preferable to the risk of sudden relapse from a heavy overdose. However well intentioned, the doctor must be patient."
Britain's Conservative-Liberal Democrat coalition government, which inherited a record deficit from the previous Labour administration, has since slashed public expenditure and ramped up taxation in a bid to balance the books.
Cameron added yesterday that the coalition has sought to target certain cutbacks and taxes to avoid hurting the economy.
"You need a government that is tough; that can take the big, difficult decisions where they really matter. And nowhere does that matter more than on sorting out the deficit.
"Never forget — we inherited a deficit bigger than Spain's. Bigger even than Greece. This has meant taking decisions no other government dreamt of taking before."
The CBI meanwhile vowed to argue against a vote for Britain to leave the EU, in any potential referendum on European Union membership, amid dwindling public support for the country's place in the bloc.
Carr described EU membership as a "launchpad" for international trade involving non-euro zone member Britain, adding that half of the nation's exports went to Europe.
Saudi insurance stocks soar as female drivers take to the road
LONDON: Saudi insurance stocks surged on Sunday, with investors expecting the sector to reap significant dividends following the lifting of the ban on female drivers.
Insurance stocks — one of the worst performing sectors on the Saudi bourse for the year to date — outperformed other classifications on Sunday, ending 2.4 percent higher, compared with a 1.8 percent rise for the Kingdom’s headline index.
Amana Insurance and AlRajhi Takaful were the best performers of the day, gaining 9.9 percent each. Tawuniya, the Kingdom’s largest insurer, ended Sunday 1.1 percent higher, with only one of the country’s 33 listed insurance providers closing lower for the day.
The lifting of restrictions on female drivers — which came into effect on Sunday after first being announced in September — is part of a series of wide-ranging reforms introduced as part of Saudi Arabia’s Vision 2030 economic transformation program, designed to diversify the economy away from a reliance on oil revenues.
The advent of women drivers is forecast to benefit the economy by significantly increase female participation in the workforce, and stimulating financial, insurance and retail sectors among others.
The insurance sector is set to draw particular benefit from the move, but may remain under pressure, according to rating agency S&P.
“We anticipate that efforts of the local authorities to tackle the large number of uninsured drivers, combined with the arrival of women drivers … and the introduction of additional benefits under the unified medical policy from July 1, will support further premium growth in the industry in the medium term,” said S&P in a research note in April.
“However, these factors may be offset by the large number of foreign workers that have already left or will be leaving the Kingdom in 2018.”
In spite of yesterday’s price surge, insurance stocks are 8.4 percent lower for the year to date. Tadawul as a whole is up 15.6 percent so far this year, making the bourse one of the world’s best performers for 2018.
Investor sentiment on Sunday was also boosted by investor optimism after index provider MSCI announced last week that it would upgrade Saudi stocks to its Emerging Markets Index from next year.
The widely anticipated upgrade — which puts Saudi equities on an index tracked by around $2 trillion worth of global assets — is expected to attract up to $40 billion of international funds, Tadawul CEO Khalid Al-Hussan told Arab News last week.
MSCI’s upgrade came after a similar move by fellow index provider FTSE Russell in February, which is also scheduled to come into effect from next year.
Banks were among the other bright performers on Tadawul on Sunday. Arab National Bank led gains, closing up 4.2 percent, while blue-chip names NCB and AlRajhi rose 1.6 percent and 2.3 percent respectively.
Some petrochemical companies also added value, Reuters reported, following a rise in oil prices after OPEC decided on only modest increases in crude production last week.
Outside Saudi Arabia, Gulf markets posted minor gains. In Dubai, where the index was flat, Air Arabia was unchanged. Shares in the airline have declined by more than 10 percent since early last week, when the company said it had hired experts to protect its business interests in private equity firm Abraaj, which has filed for provisional liquidation. The airline said its exposure was around $336 million.
Last week, the UAE’s securities regulator asked listed companies to declare their exposure to Abraaj.