Gold will always shine!

Updated 28 December 2013
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Gold will always shine!

A recent visit to the gold market at Al-Batha souk in downtown old Riyadh convinced me that the female appetite for the ultimate yellow metal remains extraordinarily high.
Shops were packed with lustrous gold Bedouin jewelry, necklaces, sparkling rings, and bracelets in different designs, offering an impossible choice between the 22K and 21K jewelry and the 24K (99.99 percent purest gold) ingots.
Let’s face it: women have always loved to wear gold jewelry for its natural beauty and the glow it gives to a woman’s face and the glamor it adds to her appearance.
But it isn’t just women who crave gold — from ancient time gold has been of central importance to mankind.
Its allure lies in its uniqueness; only gold combines beauty and rarity with the properties of durability (gold does not rust, tarnish or corrode) and workability (an ounce of gold can be stretched into a wire 80 km long).
Gold also has a multitude of uses in industry. For example, its excellent conductivity makes it useful in circuit boards.
Considered beneficial for health for centuries, gold has many uses in medicine today. It is even incorporated in luxury face creams. And gold has great symbolic value, not only as a symbol of status and power but also as a symbol of excellence.
The shiny yellow metal has always been central to the lives of women (and men) not only in Arabia but in the whole Middle East and Asia, in particular India and China, where it is highly treasured as a safe haven for investment and a means of asset protection and payment rather than as just a luxury.
More than three billion people in those areas prefer to accumulate wealth in gold jewelry or ingots rather than in bank deposits.
Gold jewelry also holds traditional and cultural connotations for those regions playing an essential role in weddings, dowries and gift-giving.
For centuries gold was the basis for monetary exchange value. In the 20th century, the gold standard was replaced by fiat currency (money backed by government decree only).
Current gold prices continue to fluctuate as a result of global inflation, interest rates and currencies, consumer spending, market risks, short-term investment flows and supply-related drivers.
The US monetary stimulus pushed gold to a record $1,920.30/troy ounce in September 2011, but the price has been falling since and the Economist Intelligence Unit (EIU) predicts a fall to an average of $1,483 for 2013, and a further decline to $1,403 in 2014.
They estimate that by mid-2015, the gold price will be under $1,350.
As most economies are recovering, many investors now prefer to invest in riskier assets like stocks.
Other projections, however, suggest that gold will increase in price because of factors such as the possibility of a gold mining crisis, the Chinese government’s persistence in amassing gold over the last few years, India’s excessive demand for gold to manufacture jewelry and the demand for gold as a store of value against inflation especially as the Federal Bank, the Bank of Japan and the European Central Bank continue buying more debt and printing more money.
Demand is still high for the precious metal in emerging markets.
EIU data explains that while global gold consumption declined in 2013 by 8.9 percent to 3,487 tons, it foresees a rebound in demand to 3,965 tons in 2014.
The latest dive in gold prices of around 10 percent on April 15, 2013, has stimulated greater gold jewelry consumption.
EIU data indicates an increase of global gold jewelry consumption from 1,895 tons in 2012 to 2,108 tons in 2013 and projected to reach 2,183 tons in 2014.
India and China lead the market as the biggest consumers of gold, clinging to it as the safest long-term investment.
They also account for almost 60 percent of demand for gold jewelry in 2013. India is expected to show demand of 651 tons in 2013 and a growth in gold jewelry consumption of 15 percent, with consumption of gold reaching almost 700 tons in 2014.
However, a slowing to 7 percent growth is expected in 2014 as result of the Indian government suppressing gold imports and imposing a tax of 10 percent import duty as a way to stop the rupee falling against the dollar.
As for China, its gold consumption was 609 tons during 2013 and will reach 646 tons in 2014.
According to the World Gold Council (WGC), the Middle East recorded an increase in total consumer demand from 49 tons during Q2 of 2012 to 67.4 tons in Q2 of 2013, worth $3.065 billion.
The demand for gold jewelry increased from 42 tons in Q2 2012 to 55.7 tons in Q2 2013, worth $2.535 billion.
Turkey is one of the biggest gold consumers in the Middle East, with demand increasing from 70 tons in 2012 to 73 tons in 2013 and due to reach 75 tons in 2014 (EIU data).
Saudi Arabia also has one of largest gold markets (EIU data): 43 tons in 2012, 48 tons in 2013 and an anticipated 50 tons in 2014.
The demand for gold jewelry also increased from 15.3 tons in Q2 2012 to 18.8 tons in Q2 2013, valued at $855million (WGC data).
The UAE is another important market in the Middle East where gold consumption rose from 42 tons in 2012, to 45 tons in 2013 and will be hitting 47 tons in 2014 (EIU).
Gold jewelry consumption increased from 14.2 tons in Q2 2012 to18.8tons in Q2 2013 worth also a value of $855million (WGC).
The Kaloti Jewelry Group, one of the largest gold and precious metals refiners and trading houses will complete building a refinery in Dubai by late 2014 that will have the capacity to produce 1,400 tons of gold and 600 tons of silver.
In Europe, gold consumption has greatly decreased because of austerity measures adopted in reply to the debt and currency crisis as Europeans experience high unemployment, increasing poverty gap and social unrest. Demand, which is mainly for bars and coins rather than jewelry, is now much lower than in Asia and the Middle East.
Although private consumers in Asia and the Middle East have a huge appetite for gold, their central banks hold only small quantities in relation to their total currency reserves as most currencies are pegged to the dollar and they prefer to diversify their reserve holdings.
While the highest government gold holdings are in the US (8,133.5 tons — 70 percent of reserve), Germany (3,390.6 tons – 66 percent), Italy (2,451.8 tons — 65 percent) and France (2,435.4 tons — 65 percent), China with 1,054.1 tons has only 1 percent in gold reserve, India with 557.7 tons has only 7 percent. In the Middle East, Turkey with 441.5 tons has 14 percent; Saudi Arabia (322.9 tons — 2 percent); Lebanon (286.8 tons — 22 percent); Kuwait (79.0 tons — 9 percent); Qatar (12.4 tons — 1.4 percent); and Bahrain (4.7 tons — 3.7 percent) (WGC June 2013).
Increasing demand for gold jewelry in Asian countries should continue as a result of their positive economic development, but perhaps women who love gold everywhere should welcome recent news that Australian scientists have discovered that gold particles found in eucalyptus leaves could help miners identify where deeply buried deposits might be, saving time, money and resources hunting for the precious yellow metal.
— Mona AlMunajjed is an author and adviser on socio-economic issues. ([email protected])


‘Naked Diplomat’ author Tom Fletcher bares all on life as UK ambassador to Lebanon

Updated 26 May 2018
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‘Naked Diplomat’ author Tom Fletcher bares all on life as UK ambassador to Lebanon

Tom Fletcher might be best described as “the anti-diplomat.” Not in the sense that he sees no value in diplomacy, but in his steadfast refusal to live up to the stereotype expected of the ambassadorial profession.
While British ambassador in Beirut, he tweeted his way to acceptance by his hosts with an informal style and social accessibility that was in distinct contrast to the stuffy image of the traditional diplomatic circuit.
He told the BBC that there was not a single Ferrero Rocher in the embassy building — referring to the chocolates jokingly associated with the job after a 1990s TV commercial — and his “Dear Lebanon” farewell blog in 2015 after four years in the job boosted his broad international online appeal.
Now, Fletcher is running a portfolio of careers in the space where business, technology and public policy intersect. He is a visiting professor at New York University in Abu Dhabi, specializing in international relations, and is also involved with the Emirates Diplomatic Academy, the “ambassadors’ finishing school” in the UAE capital.
The former envoy is also chairman of the international board of the UK’s Creative Industries Federation and a member of the United Nations’ Global Tech Panel, as well as continuing a career as a successful author. His book “The Naked Diplomat” explored the interactions between governments, technology and big business, and became an international bestseller.
His experience and Internet renown make him a star attraction on the international forums circuit. He was on a panel in Dubai recently to discuss the findings of the 10th Arab Youth Survey, and afterwards went into some detail on the findings of the poll, which showed — alarmingly for some — that the US was waning in popularity in the region under President Trump and that Russia was increasingly regarded as a friend for young people in the Middle East.
Fletcher told Arab News that there was some reason to be worried about those findings, but also cause for optimism. “We have seen a striking fall in reputation among young people in the region since the US elections. But it was also worth noting the wider admiration for the American people as a whole, which looks quite resilient.
“The Russia results were interesting, because Russia has not always been a stabilizing force in the region. On Trump, they are further confirmation that the election of the leader of the free world created a vacuum. But the lights will eventually come back on in the shining city on a hill,” he said.
The survey seemed also to reveal a generational split in the Arab world, with many youngsters demonstrably not sharing their elders’ view of the US president. “I think that the region has access to the same information as the rest of us, and can take from it a pretty clear assessment of Donald Trump’s reliability. There are clearly some areas of alignment with some countries, such as the rejection of the Iran deal. But the survey shows that people across the region also hear the Trump administration’s wider messaging on the Middle East,” Fletcher said.
The Iranian situation was clearly on his mind, but he said there were alternatives to an escalating confrontation between the US and the Gulf states on the one hand, and the regime in Tehran on the other. “Wherever you stand on the Iran deal, its violation is a concern for regional security. The issue we have to ask ourselves is ‘what is the alternative for restraining Iran’s nuclear potential?’ Personally, I haven’t seen a better answer to that than the existing Iran agreement.
“Of course, the Iran deal in itself isn’t sufficient in reacting to Iran’s wider regional role, not least in Syria. But I worry that it is the hard-liners in Tel Aviv and Tehran who seem keenest to end the agreement,” he said.
A lot of his time in Beirut was spent dealing with the regional fallout from the Syrian crisis, which started just as he began the ambassador’s job. Surely, seven years on and with no solution in sight, that represents a failure of traditional diplomacy?
Fletcher’s response was, well, diplomatic. “Not all has failed. Huge effort has gone into keeping Lebanon relatively stable, despite the scale of the Syria crisis just across the border. Diplomacy has failed on Syria and on Palestine/Israel. But George Mitchell (the American politician credited with helping bring about an end to the Northern Ireland conflict in the 1990s) said that making peace was 700 days of failure and one of success. We have no choice but to keep trying, and to work harder than those who want to see diplomacy continue to stumble,” he said.
Fletcher’s work in the Gulf has enabled him to take a broad overview of developments in the region, and there is no more intriguing situation than in Saudi Arabia, which is going through a rapid transformation of the economy and society under the Vision 2030 strategy. “I think there has been a shift in international opinion on Vision 2030 over the last year. Initially many were curious, and conscious of the obstacles.
“But there is now a growing realization of how important a reform agenda is, especially if it succeeds in creating more opportunity for young people, including women. We all should hope it succeeds — I think it can, but will need maximum involvement of citizens themselves in shaping an open approach,” he said.
Fletcher also has a clear view of the kind of socioeconomic order that will emerge from the transformational policies of regional leaders.
“The Gulf has clearly realized that there is a need to move away from oil dependency well before the oil runs out. The answer has to lie in a knowledge economy. I’m heartened by the kinds of issues that my students at NYU AD want to work on and pioneer. And by the government focus on themes like wellbeing and education reform.
“Twenty-first century skills will need to be at the heart of the school curriculum, with learners encouraged to be curious, to seek out sources of knowledge and wonder, and to learn teamworking and innovation. This is happening increasingly in the larger cities, but there is still work to be done to mainstream knowledge, skills and character in education systems,” he said.
With the power of Big Data coming under scrutiny as never before in cases such as the controversy over Facebook’s role in the political process in the US and elsewhere, Fletcher’s work for the UN is more relevant than ever, and he believes there is a big role for the Gulf states to play in that debate.
“The Middle East needs to ensure it is better represented in the international architecture. It needs to be a key part of the debate about security and liberty online — the UAE Artificial Intelligence Minister (Omar Bin Sultan Al-Olama) is a great example of this. And it needs to help get everyone on to a free Internet,” he said.
Before entering the diplomatic service, Fletcher was an adviser on foreign policy to three British prime ministers, which gives him a unique perspective on the big current issue in the UK — the increasingly bitter process of leaving the EU, or Brexit.
The search for new trading partners has seen a succession of British ministers visiting the Gulf region in a bid to clinch new business. Fletcher does not share the view of some that the UK is destined for insularity and isolation in the post-Brexit world.
“The UK is going through a complex process, but it is always at its best when it has a worldview formed from having actually viewed the world. When it is open minded, outward looking. When it stands for more liberty — rights, trade, thought.
“The creative industries are already showing the way. And the royal wedding was a brilliant reminder of what the UK can be — diverse, modern, self-aware, creative. We all badly needed that reminder,” he said.
Fletcher was the youngest person ever to get a major ambassadorial post, and seems well set to pursue a handsomely paid career in virtually any sector, from international policy-making, to domestic UK politics or the private sector.
But he still regards himself as a diplomat with a creative twist. “I still write diplomat on the landing cards in planes.” And there is a second book in the works, he revealed: “I’ve just finished a murder novel, featuring an ambassador detective,” he said.
It is doubtful there will be a Ferrero Rocher mentioned in the book.