SR 2.49 trillion: SAMA windfall

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Updated 01 March 2013

SR 2.49 trillion: SAMA windfall

Saudi Arabian Monetary Agency (SAMA) announced yesterday its total assets reached SR 2.49 trillion in January 2013, SR 13 billion more than that of December 2012, reflecting the strength and growth of Saudi economy.
According to the central bank’s monthly bulletin, there was a 19 percent growth in SAMA’s assets in January this year and an increase of SR 406 billion compared to its financial position in January 2012.
Commenting on the SAMA’s report, Fahad Alturki, senior economist at Jadwa Investment, said: “The accumulation of foreign assets, which is supported by oil production and oil prices, represent an important cushion for the government’s expansionary fiscal policy.”
Alturki added: “This will give the government the ability to smooth spending in the face of volatile oil market.”
SAMA’s investment in shares and bonds outside the Kingdom accounted for 70 percent of its total assets and valued at SR 1.7 trillion by December 2012, registering a growth of 21 percent compared to 2011.
However, Said Al-Shaikh, senior vice president and group chief economist of the National Commercial Bank, said: “This is largely influenced by government deposits with SAMA.” He said the increase in deposits was because of “large export earnings due to high oil prices and production.”
Basil Al-Ghalayini, CEO OF BMG Financial Group, said: “In addition to its main mandate to regulate banks, insurance companies and mortgage finance firms, SAMA also manages its liquid assets applying international guidelines for its optimum assets allocation model. This positive performance over the previous period is a reflection of SAMA’s sound investment strategies for its international portfolio. The Saudi economy is big enough to absorb more than one Sovereign Wealth Fund other than Sanabil Al Saudia. Hence, SAMA may play a catalyst role in creating another fund.”
Fawaz Alfawaz, a Riyadh-based economic consultant, told Arab News: “As Saudi Arabia manages to accumulate reserves the confidence in its ability to continue the vast programs to modernize its infrastructure increases.”
However, he said it is important to draw distinction between the financial and capital account positions and the economic activities .These are more than sufficiently financed by the current budget outlays.
“The reserves would serve the country well in case of significant shortfall as happened in the 1980s. The reserves also help Saudi Arabia to maintain a comfortable ratings which help boost confidence and make easier for others to do business with the Kingdom.”
Referring to the performance of the Saudi banking sector, the SAMA bulletin said there was a six percent fall in its total profits valued at SR 3.26 billion in January 2013, compared to the same month in 2012 when the profit had reached SR 3.46 billion.
The balance sheet of SAMA continued to show expansion primarily on account of significant oil revenues and public spending in recent years. According to SAMA’s 48th annual report released on Monday, total assets and liabilities increased by 20.7 percent (SR 352.5 billion) to SR 2.0 trillion in 2011 compared to an increase of 8.6 percent (SR 134.7 billion) in 2010. Government deposits rose by 19.4 percent (SR 195.2 billion) to SR 1.2 trillion in 2011 compared to a rise of 8 percent (SR 74.3 billion) in 2010. Commercial banks’ deposits with SAMA climbed up by 15.5 percent to SR 63.5 billion in 2011 from SR 55.0 billion in 2010.
SAMA ‘s foreign asset base underwent a significant expansion owing to oil-related foreign exchange inflows accrued to the Saudi government in recent years. Therefore, SAMA’s deposits with banks operating outside the Saudi territory increased by 20.4 percent in 2011 to SR 414.0 billion from SR 343.9 billion in 2010. SAMA’s investment in foreign securities also increased considerably by 20.8 percent to SR 1.4 trillion in 2011 compared with a rise of 10.3 percent in 2010. Currency cover rose by 24.3 percent to SR 169.0 billion in 2011 compared to a rise of 10.5 percent in 2010.
The Saudi economy continued its strong growth in 2011 driven by several positive developments at the domestic and global levels.
At the domestic level, the government continued its efforts to make structural and regulatory reforms aimed at achieving sustainable economic growth through diversifying the economic base, promoting the contribution of the nonoil sector to GDP, increasing job opportunities for Saudis and reducing unemployment and inflation rates.
According to the Ministry of Petroleum and Mineral Resources, the average price of Arabian Light increased by 38.7 percent to $ 107.8 per barrel from $ 77.75 per barrel in 2010. In addition, the Kingdom’s daily average oil production rose by 14 percent to 9.3 million barrels in 2011 compared to 8.2 million barrels in 2010. These positive developments were reflected on the Saudi economy’s major indicators. Saudi Arabia’s GDP at current prices recorded a rise of 31.0 percent to SR 2.24 trillion in 2011 from SR 1.7 trillion in 2010. GDP at constant prices (base year 1999) grew by 7.0 percent to SR 941.8 billion from SR 879.8 billion in 2010.
Monetary survey continued to show sustained expansion in the assets and liabilities of the entire Saudi banking system since 2009. They rose by 17.1 percent (SR 468.3 billion) to SR 3.2 trillion in 2011 compared to a rise of 7.5 percent (SR 192.2 billion) in 2010.
The net foreign assets of the banking system shot up by 22.3 percent (SR 390.4 billion) to SR 2.1 trillion in 2011 against a rise of 7.3 percent (SR 118.7 billion) in 2010. SAMA held up a major chunk of foreign assets as it accounted for 93.8 percent of the net foreign assets of the entire banking system in 2011 against 94.4 percent in 2010.

Telegram Russia ban spurs privacy debate

Updated 21 April 2018

Telegram Russia ban spurs privacy debate

  • Telegram has always attracted a mix of criticism and respect for its use of encryption to ensure its messages between users remain confidential.
  • A Moscow court decided last week to block the app in Russia because it refused to hand over encryption keys to authorities.

LONDON: Telegram, the messaging app that re-located from Russia to Dubai, has again fallen foul of the authorities in its mother country. So what is it about the social media platform that simultaneously has governments worldwide so concerned and freedom of speech advocates so agitated?
Telegram has always attracted a mix of criticism and respect for its use of encryption to ensure its messages between users remain confidential.
A Moscow court decided last week to block the app in Russia because it refused to hand over encryption keys to authorities — sparking fresh controversy around the app, which has previously been banned in countries such as Iran, Afghanistan and Indonesia.
Telegram has been under close scrutiny in Russia since legislation was passed in mid-2016 that required communication companies to hand over encryption keys to the Federal Security Service (FSB), if requested.
There was also a move to place companies on a “register of information distributors,” which requires firms to store user online communications for a set period of time and hand over data to the authorities when needed.


Some of Russia’s large social networks are reportedly on the register and Telegram was pressurized to register in mid-2017. Other Western social media companies such as WhatsApp are not listed. WhatsApp did not immediately respond to a request for comment.
Weeks after joining the register, Telegram refused to agree to FSB requests for encryption keys, resulting in the Russian media watchdog Roskomnadzor seeking court approval this month to block the app.
On the day of the court decision, Telegram’s founder Pavel Durov tweeted: “Privacy is not for sale, and human rights should not be compromised out of fear or greed.” The company has also said it is technically impossible to transfer encryption keys.
It was not the Russian entrepreneur Durov’s first run-in with Russian authorities. Telegram — which was launched in 2013 — originally had its development team based in St. Petersburg, but had to leave the country due to local IT regulations. It is currently based in Dubai.
The messaging app prides itself in being the most secure and independent form of instant messaging that respects the need for privacy. Its “secret chats” option makes use of end-to-end encryption that ensures only users can read them. Messages cannot be forwarded and you can order messages to “self-destruct” within a set amount of time. It can also alert users if the recipient of the message takes a screenshot of the correspondence. So-called Telegram “Channels” can be used to broadcast public messages to a large audiences.
While WhatsApp — which is owned by Facebook — also provides end-to-end encryption, Telegram differentiates itself with claims it is faster and more secure.
Damir Gainutdinov is a legal analyst at Russian human rights group Agora, which represented Telegram in court. He has headed up its project on the defense of online freedom in Russia since 2010.
He told Arab News that the block placed on Russia was more of a power-play by the authorities.
“I think that Russian authorities believe that Telegram is a threat because they cannot control it.
“But I wouldn’t say that it is really the biggest threat. The attack on Telegram is more about showing that they can block any global service if they want,” he said.
Russia’s government has argued that the app helps to enable terrorist attacks in the country, saying that access to encrypted messages is a national security issue.
The FSB said a suicide bomber who killed 15 people on a St. Petersburg subway in April last year had used Telegram to plan the attack.
Voices from outside Russia have also criticized Telegram for not doing enough to clamp down on terrorists using the app. “Terrorists and extremist groups such as ISIS (Daesh) use encrypted applications like Telegram because it allows them to recruit new members, fundraise, incite to violence, and even coordinate terrorist activity without the threat of being discovered,” said executive director David Ibsen at the US-based non-government organization Counter-Extremism Project.
“ISIS also created public channels on Telegram to broadcast pro-ISIS news updates and disseminate other propaganda materials,” he told Arab News. Durov has been quoted as saying at a conference in 2015 that the right to privacy is more important to the company than “our fear of bad things happening, like terrorism.” Following the Paris attacks in 2015, Telegram did revise its policy on its public channels, but it has refused to take down private Daesh chats, according to Ibsen.
Social media sites are coming under increasing pressure from authorities worldwide to do more to limit the promotion of extremism online.
In a statement to Arab News, Twitter said it had permanently suspended 274,460 sites in the second half of last year — down more than 8 percent on the previous reporting period.
While Telegram is far from the only social media app to be criticized for its counter-terrorism policies, it is seen by some as the more reluctant player in the battle against online extremism. “Social media companies remove content regularly that violates their stated terms of service, and some of this includes extremist and terrorist videos, images and other propaganda,” said Ibsen. “However, despite the availability of technology that can identify and permanently prevent prohibited materials from being re-uploaded, the biggest social media platforms are not taking this vitally important step,” he said.
“Telegram has become a refuge app from the moment the preferred apps (Twitter in particular) started to clamp down on extremist content,” said Rik Coolsaet, a professor of international relations at Ghent University in Belgium who has written extensively on counter-terrorism efforts. “Its encryption offered a secure environment for terrorist recruiters and groomers, but at the same time limited their propaganda outreach, since it is more difficult to access. For that reason, Twitter remains their preferred app,” he added.
Russia is not the only country clamping down on Telegram. Iran restricted certain channels in December last year during the protests and there have been recent threats that restrictions could be reimposed. A estimated 40 million Iranians use Telegram’s channels and messaging services.
“In the case of Russia and Iran, the Telegram crackdown has much more to do with controlling the lives of its citizens than it does with preventing terrorist activity,” said Ibsen.
Telegram did not respond to Arab News’ request for comment.


We talk to leading world cyber terrorism expert Chris Sampson, co-author of “Hacking ISIS: How to Destroy the Cyber Jihad” and an analyst with the Terror Asymmetrics Project

Why are governments so worried about Telegram?
Telegram was launched as an encrypted messaging app. This meant that government agencies were less likely to be able to intercept messages passing across the Internet and read private conversations. However, in September 2015, Telegram also created an option for channels, which act like chat groups. This allowed like-minded individuals to essentially host a chat room. Unless the channel was set to public you couldn’t read what was discussed without being given an invitation link. Groups like ISIS began using these channels to share propaganda and information. Other groups use Telegram in much the same manner. Non-violent resistance groups around the world would also use the messaging app and channels to communicate so authorities in the countries they fear would be less likely to intercept their discussions.

Will clamping down on social media apps be effective?
As governments crack down and ban apps, others will rise and replace them with new features and focus on security from outside eyes. They will operate either within the legal construct or outside of it depending on the countries they seek to circumvent. Since laws around the world differ dramatically, what is legal in one country could be illegal in another. We’ve seen this already happen as countries sought to ban use of Telegram, WhatsApp or even Twitter. Inevitably the access to the technology remains the same and users find a way to use both encrypted messaging and social media platforms.

Does Russia’s action set a precedent?
Countries such as Indonesia, Iran, Afghanistan and others have banned Telegram. Brazil banned WhatsApp around the timing of the World Cup only to lift the ban. Such bans are largely ineffective because the majority of users are engaged in lawful communications yet want their privacy, those engaged in illegal and potentially violent activities make up a fraction of the userbase. The better solution is to know where nefarious users are lurking on the web and keep track of them in observable spaces. Banning the public’s access to messaging apps will always fail. Telegram and similar companies should deny government agencies the keys to encryption unless there is a reason given that would justify unlocking communications. If the governments are able to seize a phone and unlock it, they’ll already have access to a suspect’s communication if they haven’t erased the data.



Telegram, founded by Russian entrepreneur Pavel Durov in 2013, is an app that enables encrypted messaging, together with “self-destruct” messages. It is used by 200 million people worldwide. Authorities in a number of countries criticized it for providing secure communications channels for terrorists and criminals.