SoftBank tipped for $25bn KSA investment in ‘unique’ deal

SoftBank plans to deploy up to $15 billion in the new high-tech city of NEOM. (Reuters)
Updated 16 November 2017
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SoftBank tipped for $25bn KSA investment in ‘unique’ deal

LONDON: SoftBank’s reported plan to invest $25 billion in Saudi Arabia would be a “unique” move, a Riyadh-based economist has said.
The Japanese group, which is headed by Masayoshi Son, plans to invest the funds in Saudi Arabia over the next three to four years, Bloomberg reported on Wednesday, citing people familiar with the matter.
SoftBank plans to deploy up to $15 billion in the new high-tech city of Neom, with its $100 billion Vision Fund planning an investment of as much as $10 billion in Saudi Electricity, Bloomberg reported.
John Sfakianakis, director of economic research at the Gulf Research Center in Riyadh, said the reported investment would be “unique” as KSA is a co-investor in the Vision Fund.
“Here we have some of the money that Saudi Arabia invested in Vision finding its way back to the donor country, helping the Kingdom to invest in key evolving technologies, and boosting the economy overall,” said Sfakianakis.
The move would be part and parcel of what SoftBank indicated at last month’s Future Investment Initiative in Riyadh, added Sfakianakis.
SoftBank representatives made it clear then that they wanted to reinvest money from the Vision Fund into KSA, as the country looks to diversify its economy and reduce its dependence on oil, he said.
At the same time, the Vision Fund’s investment philosophy underlines Son’s belief in a future that he believes will be dominated by robotics and artificial intelligence.
Its investments so far have spanned robotics software start-ups like Brain Corp. and business software maker Slack. SoftBank has also been involved in a plan to buy a fifth of the existing stock of Uber — the company that has disrupted the transportation industry. With plans for Neom to be at the forefront of robotics and AI, the planned $500 billion megacity is an an obvious target for Son and SoftBank, said Sfakianakis.
Besides SoftBank and the Saudi wealth fund, investors in the Vision Fund include the sovereign wealth fund of Abu Dhabi, Apple and Foxconn. The Vision Fund announced in May it had raised over $93 billion from investors to fund ventures in areas such as AI and robotics.
Saudi Arabia previously announced plans to sell a large minority stake in Saudi Electricity to the Vision Fund but the figures have not been made public.
SoftBank did not respond to a request for comment on the Bloomberg report. Representatives of Saudi Arabia’s Public Investment Fund (PIF), the investor in the Vision Fund, did not provide a comment.


Infectious diseases are set to become as great a risk for global business as climate change

Updated 19 January 2019
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Infectious diseases are set to become as great a risk for global business as climate change

LONDON: The Global Risks Report 2019 jointly compiled by the World Economic Forum (WEF) and the Harvard Global Heath Institute describes a world that is woefully ill-prepared to detect and respond to disease outbreaks.
In fact, the world is becoming more vulnerable to pandemics, despite advances in medicine and public health.
Global GDP will fall by an average of 0.7 percent or $570 billion because of pandemics — a threat that is “in the same order of magnitude” to the losses estimated to be caused by climate change in the coming decades.
“Outbreaks are a top global economic risk and — like the case for climate change — large companies can no longer afford to stay on the sidelines,” said Vanessa Candeias, who heads the committee on future health and health care at the WEF.
Potential catastrophic outbreaks of disease occur only every few decades but regional and local epidemics are becoming more common. There have been nearly 200 a year in recent times and outbreaks of diseases such as influenza, Ebola, zika, yellow fever, SARS, and MERS have become more frequent over the last 30 years.
At the same time antibiotics have become less effective against bacteria.
The impact of influenza pandemics is estimated at $60 billion, according to a report by the Commission on a Global Health Risk Framework for the Future — more than double previous estimates.
The trend is expected to get worse as populations increase and become more mobile due to travel, trade or displacement. Deforestation and climate change are also factors.
Businesses need to bone up on the risk of infectious diseases and how to manage them if the overall economy is to remain resilient.
Peter Sands, research fellow at the Harvard Global Health Institute and executive director of the Global Fund to Fight Aids, Tuberculosis and Malaria, said, “When business leaders are more aware of what’s at stake, maybe there will be a different dialogue about global health, from being a topic that rarely touches the radar screen of business leaders to being a subject worthy of attention, investment and advocacy.”
Predicting where and when the next outbreak will come is an evolving science but it is possible to identify certain factors that would leave companies vulnerable to financial losses, such as the nature of the business, geographical location of the workforce, the customer base and supply chain.
Disease is not the only threat. There is also fear uninformed panic. Past epidemics have shown that misinformation spreads as fast as the infection itself and can undermine and disrupt medical response.
The report advises planning for such emergencies by “trusted public-private partnerships” so that “businesses can help mitigate the potentially devastating human and economic impacts of epidemics while protecting the interests of their employees and commercial operations.”
It is estimated that the outbreak of Ebola in West Africa in 2014-2016 cost $53 billion in lost commercial income and the 2015 MERS outbreak in South Korea cost $8.5 billion. According to the World Bank, disease accounts for only 30 percent of economic losses. The rest is largely down to healthy people changing their behavior as they seek to avoid becoming infected themselves.
The authors of the report will make recommendations next week at the World Economic Forum annual meeting in Davos.