Smarter budgets to suit current trends urged

Smarter budgets to suit current trends urged
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Smarter budgets to suit current trends urged
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Updated 26 January 2016

Smarter budgets to suit current trends urged

Smarter budgets to suit current trends urged

RIYADH: The world should become smarter in financing and preserving budgets of governments and companies budgets amid the lowering trend of oil prices, says a top corporate head.

What also needs to focus on is in developing of skills to control energy assets through immediate solutions that consider future costs, diagnosing and forecasting the assets and correcting future dealing with them, John Rice, vice chairman at General Electric Co., said during a panel session on the final day of the 9th Global Competitiveness Forum (GCF) in Riyadh on Tuesday.
The session on the "Revolutions of energy: New opportunities toward a sustainable future" had panelists, including David Welch, president, Europe, Africa, Middle East Region and senior vice president for Bechtel; Frederic Abbal, executive vice president, energy business the Middle East and Africa operation of Schneider Electric; and Omar Al-Madhi, senior managing director for investments in Abdul Latif Jameel Ventures.
He pointed out that four new points are essential to achieve energy sustainability and noted that a lot remains to be done to secure development and energy sustainability, which he described as an objective of every country that looks for the prosperity of its people.
Besides financing and preserving budgets of governments and companies, Rice underscored the importance of creating an organizational and legal environment, availing smart legislations to match with the market, facilitating the attraction of investment and finance, assisting investors for long periods through clearness and transparency, and drawing a legal framework to facilitate economic growth and privatization.
Rice stressed the importance of human resources, citing that his company has partnerships with giant Saudi companies like Saudi Aramco and Saudi Electricity Company to provide training and modern education for the youngsters, particularly in the personnel area.
He also underscored the importance of flowing economic data between the private sector and government in its capacity as one way of energy sustainability for the sake of merger of companies and support of privatization of some sectors and government services.
Speaking at another session on "Entrepreneurship: Fostering an ecosystem for digital startups," Mark Crowell, deputy head of innovation and economic development at King Abdullah University for Science and Technology (KAUST), called for the support of research centers of Saudi universities specialized in promoting new business ideas, and poised to upgrade their skills and assist them to reach their goals through scientific ways.
He stressed the importance of increasing aspects of cooperation to solve the processes oriented to augment research in promising fields, noting that the Kingdom is offering its youths and business pioneers to take part in government projects infrastructure and development.
Director of Competitiveness and Projects Development at Parson Global Foundation Shankar Singham said the basic concept of index change focuses on raising the free trade edge and further organizing it to liberate many products. He noted that the Kingdom has made great strides in this regard and that ways of reaching highly competitiveness-associated capital were discussed.
He drew the attention to the importance of lowering of energy and communication products prices, particularly in view of the current fierce competitiveness witnessed by these sectors, adding that encouraging the youths to adopt pioneering ideas in the high-and-profit-taking service sectors is critically required in the current time.
Singham said contribution rather than privatization is important to give the competitiveness a chance as is the situation everywhere in the world. On the other hand, he added: “We should be able to practice free investment.” The environmental system should work in a good way and it is possible that we could find youths who practice their innovative ideas outside the traditional boundaries amid the challenges the Kingdom is facing in view of oil falling prices.
Head of MAT Forum for the Arab World projects Hala Fadhel said that the competitiveness forum has adopted as priority the pioneering mentality and openness freedom to think in a different way to innovate in the field of new smart projects, underscoring the importance of building bridges between business pioneers and government bodies to allow them contact with each other and overcome difficulties.


More than 6,000 Saudi companies operating in Egypt

More than 6,000 Saudi companies operating in Egypt
Updated 7 min 7 sec ago

More than 6,000 Saudi companies operating in Egypt

More than 6,000 Saudi companies operating in Egypt
  • Saudi companies have investments of SR122 billion in Egypt

RIYADH: There are 6,017 Saudi companies in Egypt, with investments of SR122 billion ($32.5 billion), according to data from the Egyptian General Authority for Investments.

The total paid-up capital of these companies is SR82 billion, said Dr. Saleh Bakr Al Tayyar, legal counsel for the Saudi-Egyptian Business Council, citing data from the Authority.

The Kingdom ranks second in the Arab world in terms of participation in foreign projects in Egypt, and in terms of the number of foreign companies invested, he said.

Abdel Wahab, CEO of the Authority, said that obstacles to further investment in Egypt from Saudi companies, will be removed, Al Watan newspaper reported.

Trade between the two countries reached SR26 billion in 2019, Wahab said.


Jordan public debt reached 85% of GDP in 2020

Jordan public debt reached 85% of GDP in 2020
Updated 25 min 56 sec ago

Jordan public debt reached 85% of GDP in 2020

Jordan public debt reached 85% of GDP in 2020
  • External debt reached 13.7 billion dinars in 2020

RIYADH: Jordanian public debt surged by 10.6 percent in 2020 to 26.50 billion dinars ($37.4 billion) as the government spent heavily to support its economy during the COVID-19 pandemic.

Jordan’s public debt ended 2020 at 85.4 percent of GDP, up from 75.8% a year earlier, according to Ministry of Finance data. The ministry recently changed its methodology for calculating public debt, excluding obligations from the Social Security Investment Fund, which amounted to 6.67 billion dinars.

The Hashemite Kingdom’s internal debt was 12.78 billion dinars last year, while external debt stood at 13.72 billion dinars, Ministry of Finance data show.

Unemployment rose to 25 percent in the fourth quarter of 2020, with youth unemployment reaching 55 percent, according to International Monetary Fund data.

Jordan responded “quickly and decisively” in its support of the economy during the COVID-19 pandemic and is making progress on its program of economic reforms, IMF Managing Director Kristalina Georgieva said on Monday in a statement to mark the kingdom’s 100th year.

“Timely and targeted fiscal measures have helped protect jobs and the vulnerable, while equitable tax reforms – aimed at tackling evasion, closing loopholes, and broadening the tax base – have helped maintain debt sustainability,” Georgieva said.

However, the country must address high unemployment to deliver durable, jobs-rich and inclusive growth, she said.


Saudi Re aims to boost capital to fund domestic, overseas expansion plans

Fahad Al-Hesni, managing director and CEO of Saudi Re. (Supplied)
Fahad Al-Hesni, managing director and CEO of Saudi Re. (Supplied)
Updated 53 min 46 sec ago

Saudi Re aims to boost capital to fund domestic, overseas expansion plans

Fahad Al-Hesni, managing director and CEO of Saudi Re. (Supplied)
  • Despite a difficult year in 2020, Saudi Re recorded SR 60.7 million in net profit before zakat, an increase of 2 percent year-on-year

RIYADH: The Saudi Reinsurance Company (Saudi Re) on Thursday announced plans to increase its capital in order to fund its expansion plans.

Saudi Re’s board recommended increasing the company’s capital from SR 810 million ($216 million) to SR 891 million and converting SR 81 million of retained earnings into capital, giving the company an extra SR 162 million to finance its expansion plans.

Fahad Al-Hesni, managing director and CEO of Saudi Re, said in a statement: “The capital increase will strengthen Saudi Re’s capital base and support the expansion plans in the domestic and international markets. The board’s recommendation comes in line with Saudi Re’s effort to generate better returns and create a greater shareholder value.”

Despite a difficult year in 2020, Saudi Re recorded SR 60.7 million in net profit before zakat, an increase of 2 percent year-on-year.

At the same time, total assets increased 7 percent to SR 2.8 billion and total gross written premiums (GWPs) increased 18 percent to SR 935 million. International business made up the bulk of the GWP growth — up 25 percent year-on-year — while domestic business increased 8 percent.


Turkish central bank holds rates, drops policy pledge under new chief

Turkish central bank holds rates, drops policy pledge under new chief
Updated 15 April 2021

Turkish central bank holds rates, drops policy pledge under new chief

Turkish central bank holds rates, drops policy pledge under new chief
  • Lira slips 0.7% on announcement
  • Inflation could reach 19% before mid-year

ISTANBUL: Turkey’s central bank held rates steady at 19 percent as expected on Thursday and dropped a pledge to tighten policy further if needed, in its first decision since President Tayyip Erdogan fired the hawkish former governor and sparked a market selloff.
In a statement, the bank also ditched last month’s pledge to “decisively” maintain a tight monetary policy “for an extended period” to address inflation, which has risen above 16 percent and been in double-digits for most of the last four years.
The lira slipped as much as 0.7 percent to 8.125 versus the dollar after the bank under new governor Sahap Kavcioglu replaced the hawkish guidance with a softer assessment of risks to inflation that analysts said signaled interest rate cuts were on the way.
Erdogan’s shock removal last month of Kavcioglu’s predecessor Naci Agbal, a respected policy hawk, sent foreign investors fleeing from Turkish assets on concerns that rates would be quickly slashed.
But Kavcioglu — who had previously criticized Agbal’s rate hikes — has since promised no abrupt changes. Those assurances as well as the more-than 10 percent lira selloff had convinced analysts that policy would remain steady for now.
The central bank said it maintained a tight stance in the face of lofty inflation expectations, adding rates would remain above inflation until it is clear that price pressure is easing.
John Hardy, FX strategy head at Saxo Bank, said the currency had weakened on Thursday because Agbal’s pledges were scrapped.
“Any daylight they see, they are going to want to cut rates. Holding them here (today) is just an acknowledgment they can’t get away with it for now,” he said.
In a Reuters poll, most economists had predicted no change to the one-week policy rate this week, but saw easing from around mid-year, to settle at 15 percent by year-end.
Last month, the central bank under Agbal had raised rates by a more-than-expected 200 basis points to levels last touched in mid-2019 to dampen inflation and support the currency.
Before taking the job, Kavcioglu had said such a policy was wrong for Turkey and also espoused Erdogan’s unorthodox view that high rates cause inflation.
Erdogan has repeatedly called for monetary stimulus to help the economic rebound. He has fired three bank chiefs in two years, eroding monetary credibility.
The lira plunged 15 percent immediately after Agbal’s dismissal before a rebound, and foreign investors dumped the most bonds and stocks in 15 years over the following week.
Depreciation boosts inflation via imports, delaying any rate cut plans, analysts say.
Inflation is expected to reach as much as 19 percent before mid-year. Yet few analysts see another rate hike given Erdogan’s repeated calls for stimulus — including one this month for single-digit rates.
The change in tone under Kavcioglu reflects “preparation being made to cut the policy rate,” said Haluk Burumcekci of Istanbul-based Burumcekci Consulting.
Ratings agencies say premature easing could again hammer the lira and raise risks of a balance-of-payments crisis given Turkey’s depleted FX reserves and its $160 billion in short-term foreign debt.
Citing sources, Reuters reported Erdogan ousted Agbal in part because he was uncomfortable with the bank’s investigation into some $128 billion in FX sales undertaken during his son-in-law Berat Albayrak’s stint as finance minister.


Emirates begins trials of IATA’s digital travel pass

Emirates begins trials of IATA’s digital travel pass
Updated 15 April 2021

Emirates begins trials of IATA’s digital travel pass

Emirates begins trials of IATA’s digital travel pass
  • Passengers from Dubai to Barcelona on flight EK 185 on Thursday trialed the travel pass

DUBAI: Dubai carrier Emirates airline has started testing the COVID-19 digital travel pass, a mobile application that will help passengers manage their necessary travel requirements amid heightened security due to the pandemic.

Passengers from Dubai to Barcelona on flight EK 185 on Thursday trialed the travel pass, according to a company statement.

“The ability to process passengers’ COVID-19 relevant data for travel digitally will be the way forward,” Adel Al-Redha, chief operating officer of Emirates, said, as the global aviation industry slowly gets back up from the pandemic slump.

The airlines partnered with the maker of the travel pass, the International Air Transport Association (IATA), to integrate the standardized process of verifying documents such as COVID-19 rest results and vaccination certificates into the airline’s operations.

The trial is ongoing on selected Emirates flights from the Dubai to Barcelona and London Heathrow to Dubai, and will be expanded soon to include other routes, the company said.

Other airlines in the region have teamed up with IATA to conduct trial runs of the application, including Saudi Arabia’s Saudia and Abu Dhabi’s Etihad Airways.