China pushes for bigger role in Iraqi reconstruction

China pushes for bigger role in Iraqi reconstruction
China will directly invest in infrastructure assets associated with Iraq’s oil industry as the partnership between the two countries evolves. Above, an oil field in Basra. (Reuters)
Updated 02 March 2018

China pushes for bigger role in Iraqi reconstruction

China pushes for bigger role in Iraqi reconstruction

LONDON: China is ramping up its role in Iraqi reconstruction, reflecting its growing reliance on oil from the war-ravaged country, but geopolitical factors are also at play, according to a new report.
A paper compiled by consultancy BMI Research, and released first to Arab News, said: “On the one hand, China will look to direct investment into infrastructure assets associated with Iraq’s oil industry, which has emerged as an increasingly important export partner over the past decade. On the other, China will aim to garner geopolitical influence by participating in broader reconstruction efforts in a country lying along a key artery of its Belt and Road initiative.”
The burgeoning Iraq-China partnership was said to be anchored by a dramatic increase in oil trade. Iraqi oil exports to China rose from zero in 2007 to 270 million barrels annually by 2017, second behind only Saudi Arabia in the Middle East and accounting for roughly 8.8 percent of total Chinese oil imports.
China’s growing investment role in Iraq’s oil sector was highlighted in January when Iraq disclosed that it intended to construct an oil refinery at the port of Fao on the Gulf with two Chinese companies. Iraq’s ministry of oil named the firms as Power China and Nerco Chinese. The ministry said that the refinery would have a capacity of 300,000 barrels per day. Similarly, Baghdad has awarded a contract to China-based Zhenhua Oil to further develop the East Baghdad oilfield.
“Given the growing importance of China as an oil export market vis-a-vis traditional export destinations like the United States, Baghdad will remain keen on deepening partnerships with Chinese companies as bilateral interests align,” BMI said.
The geopolitical research consultancy added that China would also gain indirect exposure to Iraq’s infrastructure sector by extending bilateral loans aimed at rebuilding Iraq’s economy.
In February, international donors pledged $30 billion to reconstruction efforts in Iraq, and while individual country contributions have not been divulged, reports indicated that China had been a key donor with billions committed by Chinese state-controlled enterprises over recent years.
BMI said China’s motives were also driven by its wider geopolitical ambitions. “Iraq lies along a key route of the China-backed Belt and Road initiative, which seeks to foster growing East-West overland trade by promoting greater logistical connectivity.”
BMI also highlighted the planned Basra-Aqaba oil pipeline, where the China Petroleum Pipeline Bureau is slated to play a construction role.
Yu Jie, head of China Foresight at the London School of Economics, told Arab News that “China is the world’s biggest importer of oil and the Middle East is a region for market access.” She flagged media reports that Chinese state-owned oil company Sinopec could acquire a shareholding in Saudi Aramco following the planned IPO later this year.
A recent report by the International Energy Agency said that the Middle East, which accounts for about $200 billion worth of trade, makes the region China’s fourth largest trading partner after the US, Japan and South Korea.
That said, getting the funds needed to rebuild Iraq is no easy task. At the close of an international donor conference in Kuwait last month, Iraq secured only about a third of the $100 billion that Iraq said the country needed, and much of the money pledged was in the form of investment loans (not direct aid).
Last month, the Iraqi Ministry of Defense released a video depicting Chinese-made CH-4B armed drones for use against terrorist targets. That appeared to make good on a statement following a visit by the Iraqi prime minister to Beijing two years ago when the Chinese pledged to expand its military and defense cooperation with Iraq. “We are ready to respond to support Iraq in these areas, as well as economic cooperation,” said Chinese President Xi Jinping at the time.
In an article last month on the website of China Global Television Network, professor Zhou Rong from the Chongyang Institute for Financial Studies at Renmin University of China, wrote that Chinese state-owned enterprises are the biggest oil investors in Iraq, “especially the modernization and development of Iraq’s oil infrastructure.”
About 60 percent of the electricity in the Iraqi capital Baghdad is produced by Chinese companies, he said.
“Sino-Iraqi relations benefit from the backdrop of the Belt and Road Initiative. Iraq thinks that the initiative is important for Iraq because it is historically located on the Al-Hareer Road,” Rong said.
Al-Hareer was a 12,000 kilometer land and sea road linking Asia, the Middle East and Europe hundreds of years ago that facilitated the exchange of goods and products such as silk, perfumes, incense, and spices, he said.


Dubai repays $500m bond certificates

Dubai repays $500m bond certificates
Updated 25 min 1 sec ago

Dubai repays $500m bond certificates

Dubai repays $500m bond certificates
  • Notes matured on June 22

RIYADH: The Government of Dubai, acting through the Department of Finance (DOF), announced that the $500 million Fixed Rate Note issued on 22 June 2011 under its Euro Medium Term Note Programme, reached maturity on 22 June 2021.

Upon maturity, all the notes have been redeemed in full, according to the Dubai Media office statement on Tuesday.

“The Government of Dubai’s ability to fulfill its financial obligations reflects its deep fiscal stability amidst the circumstances imposed by the current global crisis,” said Director General of DOF Abdulrahman Saleh Al Saleh. “The government’s solvency has allowed it to fulfill its past and current obligations and will continue to enable it to meet all future obligations on time.”

“We have been successful in overcoming the most challenging repercussions of the global pandemic, and have now entered a solid phase of recovery, thanks to the measures taken by the government to ensure rational prioritized spending, under the directives of our leadership,” Al Saleh added.


Saudi $48m culture fund may take stakes in private companies

Saudi $48m culture fund may take stakes in private companies
Updated 46 min 51 sec ago

Saudi $48m culture fund may take stakes in private companies

Saudi $48m culture fund may take stakes in private companies
  • Fund will begin receiving requests for beneficiaries in August
  • Financing, including crowdfunding, also being explored

RIYADH: The Saudi Cultural Development Fund may take direct stakes in private companies as it seeks to stimulate investment in the sector, said CEO Mohammed Bindayel.

Cultural projects in Saudi Arabia will receive SR180 million ($47.9 million) from the fund in 2021 and requests for beneficiaries will start to be received in August, he told Asharq.

Financing options being explored include crowdfunding, said Bindayel, who was appointed as the CEO of the fund last week.

The Cultural Development Fund, which was created to support projects of private-sector enterprises, NGOs and associations working in the cultural sectors and their supporting fields, is working within the Kingdom’s Vision 2030, said Bindayel.


Cruises set to return to Abu Dhabi in September 2021

Cruises set to return to Abu Dhabi in September 2021
Updated 23 June 2021

Cruises set to return to Abu Dhabi in September 2021

Cruises set to return to Abu Dhabi in September 2021
  • About 500,000 cruise visitors arrived in the UAE capital in 2019, a 46 percent year-on-year increase

DUBAI: Abu Dhabi said it will resume receiving cruise liners in the emirate from Sept. 1, after the industry faced a global shutdown because of the COVID-19 pandemic.

The Department of Culture and Tourism (DCT Abu Dhabi) said it would work with Abu Dhabi Ports to regain the momentum it achieved before the pandemic – about 500,000 cruise visitors arrived in the UAE capital in 2019, a 46 percent year-on-year increase.

“This comes as part of the efforts to enliven the emirate’s tourism sector after the impressive results we have achieved in combating the spread of the pandemic, and yet another step towards strengthening the UAE capital’s position as a world-class hub for maritime tourism,” Ali Al-Shaiba, the executive director of DCT Abu Dhabi.

A series of initiatives throughout the year will be implemented to ensure a smooth return of the business, the department said, including joining international events to promote Abu Dhabi to global cruisers.


Italy’s Lamborghini eyes big opportunities in Saudi market

Italy’s Lamborghini eyes big opportunities in Saudi market
Lamborghini CEO Stephan Winkelmann says the region is a very important market for the manufacturer and has maintained its importance despite economic challenges. (Supplied)
Updated 23 June 2021

Italy’s Lamborghini eyes big opportunities in Saudi market

Italy’s Lamborghini eyes big opportunities in Saudi market
  • Super-car manufacturer said its Urus SUV has been a ‘game-changer’ for growth in the Kingdom

DUBAI: Lamborghini, the Italian super car manufacturer, sees Saudi Arabia as potentially its strongest market in the Middle East, its CEO Stephan Winkelmann told Arab News.

“The UAE is currently the biggest one, but we think that Saudi Arabia could become the biggest — it’s currently No. 2. We have the right partner today, so there is a big opportunity. We see growth and more potential,” he said.
Lamborghini has partnered with Saudi elite car dealership Samaco and now has outlets in Jeddah, Riyadh and Alkhobar. Winkelmann said that he saw the Urus, the Lamborghini SUV that has been a big success in the region and accounts for half of new sales, as a “game-changer” in Saudi Arabia.
He said that the region was a very important market for the manufacturer and had maintained its importance despite economic and geopolitical challenges.
He was in the Middle East to discuss with dealers and customers the recent $1.8 billion move by the Italian company to turn away from petrol engine cars later this decade, first with hybrid engines, then with an all-electric car.
Winkelmann said the company is also exploring the possibility of a new generation of synthetic fuels in its super-fast models.

HIGHLIGHT

Lamborghini has partnered with Saudi elite car dealership Samaco and now has outlets in Jeddah, Riyadh and Alkhobar.

Although Lamborghini is not the first super car manufacturer to consider going electric, its move away from the internal combustion engine is still a big challenge.
“For us, it’s even tougher because we not only have to reduce emissions but also maintain performance and make it even better than it was before,” Winkelmann said.
Hybrid plug-in versions of the Aventador and Huracan sports cars will be developed in the next couple of years, alongside the Urus. The first all-electric car — a brand new design — will be introduced in the second half of the decade.
Another challenge for Lamborghini will be how to replicate the famous exhaust “crackle” enthusiasts like in the petrol engine cars.
“We have time to think about this. I don’t think we should try to repeat the sound of the engine and exhaust in an electric car. Maybe we will find a new sound or have no sound at all,” Winkelmann said.
Despite the pandemic recession, Lamborghini had one of its most profitable years ever in 2020, as enthusiasts rewarded themselves for the deprivations of lockdown by splashing out on a new super car. The price of a new Urus, for example, starts at around SR1 million ($270,000), but can be much higher with customization and extras.
“People had time to think about their lives in lockdown and what was coming next,” Winkelmann said.


Saudi Cabinet authorizes finance ministry to issue licenses to STC Bank and Saudi Digital Bank

Saudi Cabinet authorizes finance ministry to issue licenses to STC Bank and Saudi Digital Bank
Updated 23 June 2021

Saudi Cabinet authorizes finance ministry to issue licenses to STC Bank and Saudi Digital Bank

Saudi Cabinet authorizes finance ministry to issue licenses to STC Bank and Saudi Digital Bank
  • Both banks are currently being established, according to the ministry

RIYADH: Saudi Arabia’s Cabinet on Tuesday gave its nod to the Kingdom’s finance minister to issue licenses for the country’s first digital banks, the Saudi Press Agency (SPA) reported.

“The finance minister will issue the necessary licenses for STC Bank and Saudi Digital Bank, both under establishment,” the report said, quoting a Cabinet statement.

The Cabinet approved the proposal during a virtual meeting chaired by King Salman, it said.

Finance Minister Mohammed Al-Jadaan said on Twitter that the cabinet’s approval is in line with the Saudi Financial Development Program, which is part of the Kingdom's massive economic reform plan known as Saudi Vision 2030.

These objectives seek to develop a more efficient digital infrastructure, while encouraging entrepreneurship and creating job opportunities in the financial sector, he said.

Saudi Arabia’s Vision 2030 goals include developing the digital economy and enabling financial companies to support the growth of the private sector.

Last year, the Saudi Central Bank (SAMA) licensed 16 financial technology companies to provide payment services, consumer microfinance, and electronic insurance brokerage.

Similar digital banks had earlier been launched in the United Arab Emirates and Bahrain.

(With Reuters)