IMF reverses Iran growth, lifts Saudi forecast

Iranian MP's display their disagreement over the a bill to counter terrorist financing in parliament in Tehran on October 7, 2018. The International Monetary Fund on Tuesday predicted Iran’s economy will sink deep in the red due to renewed US sanctions. (AFP)
Updated 09 October 2018
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IMF reverses Iran growth, lifts Saudi forecast

  • Iran's oil-dependent economy is expected to shrink by 1.5 percent this year and by 3.6 percent in 2019
  • Saudi economy is expected to grow by 2.2 percent in 2018 and 2.4 percent next year

DUBAI: The International Monetary Fund on Tuesday predicted Iran’s economy will sink deep in the red due to renewed US sanctions but forecast increased Saudi growth on the back of higher oil production.
In its World Economic Outlook, the IMF said the oil-dependent economy of the Islamic republic is expected to shrink by 1.5 percent this year and by 3.6 percent in 2019.
In May, before US President Donald Trump announced reinstating sanctions against Tehran, the IMF had projected Iran’s economy would grow by 4.0 percent in 2018 and again next year.
The IMF said the Iranian economy was now expected to contract over the next two years “on account of reduced oil production, before returning to modest positive growth in 2020-23.”
Trump withdrew the United States from the 2015 nuclear deal between Iran and world powers in May, and his administration reimposed a round of sanctions on the Islamic republic in August.
Iranian crude exports, which reach some 2.5 million barrels per day normally, have plunged by over half a million bpd and are expected to dive further when expanded sanctions on oil take effect next month, depriving Tehran of its main source of income.
The IMF also sharply slashed growth forecasts for the whole Middle East and North Africa region due to the slump in the Iranian economy and increased energy costs.
It now projects the MENA region to grow by 2.0 percent this year and 2.5 percent in 2019, 1.2 percent and 1.1 percent lower, respectively, than it forecast in April.
“The downward revisions reflect to an important extent the worsening of growth prospects for Iran, following the reimposition of US sanctions,” it said.
The IMF, however, lifted its projections for economic growth in Saudi Arabia, the region’s biggest economy, and its oil-rich neighbors in the Gulf.
It said the Saudi economy, which contracted by 0.9 percent last year, is expected to grow by 2.2 percent in 2018 and 2.4 percent next year, raising previous projections by 0.5 percent.
The growth is being “driven by a pickup in non-oil economic activity and a projected increase in crude oil production in line” agreed by the Organization of the Petroleum Exporting Countries and independent producers, the IMF said.
Oil prices, which account for about 80 percent of Saudi public income, have increased by more than 70 percent since June last year to over $80 a barrel.
The London-based Capital Economics think-tank said last week that revenues of Saudi Arabia and the five other Gulf states are expected to rise by $200 billion this year compared to 2017 due to high oil prices and output.


Can a hungry Mali turn rice technology into ‘white gold’?

Updated 20 October 2018
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Can a hungry Mali turn rice technology into ‘white gold’?

  • Malians are cautiously turning to a controversial farming technique to adapt to the effects of climate change
  • Dubbed the System of Rice Intensification (SRI), the new method was pioneered in Madagascar in 1983

BAGUINEDA: When rice farmers started producing yields nine times larger than normal in the Malian desert near the famed town of Timbuktu a decade ago, a passerby could have mistaken the crop for another desert mirage.
Rather, it was the result of an engineering feat that has left experts in this impoverished nation in awe — but one that has yet to spread widely through Mali’s farming community.
“We must redouble efforts to get political leaders on board,” said Djiguiba Kouyaté, a coordinator in Mali for German development agency GIZ.
With hunger a constant menace, Malians are cautiously turning to a controversial farming technique to adapt to the effects of climate change.

 

Dubbed the System of Rice Intensification (SRI), the new method was pioneered in Madagascar in 1983. It involves planting fewer seeds of traditional rice varieties and taking care of them following a strict regime.
Seedlings are transplanted at a very young age and spaced widely. Soil is enriched with organic matter, and must be kept moist, though the system uses less water than traditional rice farming.
Up to 20 million farmers now use SRI in 61 countries, including in nearby Sierra Leone, Senegal and Ivory Coast, said Norman Uphoff, of the SRI International Network and Resources Center at Cornell University in the US.
But, despite its success, the technique has been embraced with varying degrees of enthusiasm. Uphoff said that is because it competes with the improved hybrid and inbred rice varieties that agricultural corporations sell.
For Faliry Boly, who heads a rice-growing association, the prospect of rice becoming a “white gold” for Mali should spur on authorities and farmers to adopt rice intensification.
The method could increase yields while also offering a more environmentally-friendly alternative, including by replacing chemical fertilizers with organic ones, he said.
He also pointed out that rice intensification naturally lends itself to Mali’s largely arid climate.

FACTOID

Up to 20 million farmers now use rice intensification in 61 countries, including in nearby Sierra Leone, Senegal and Ivory Coast.