Global donors pledge $1.8bn as Jordan goes through economic transition

Global donors pledge $1.8bn as Jordan goes through economic transition
Britain's Queen Elizabeth II poses for a photograph with Crown Prince Hussein of Jordan (L), Queen Rania of Jordan (2nd L) and King Abdullah II of Jordan (2nd R) and Britain's Princess Anne, Princess Royal (R), during a private audience at Buckingham Palace in central London, on February 28, 2019. (AFP)
Updated 09 March 2019

Global donors pledge $1.8bn as Jordan goes through economic transition

Global donors pledge $1.8bn as Jordan goes through economic transition
  • Jordan is at a transition point and it’s economy has been growing steadily for the past couple of years
  • But now there is a huge growth potential, according to the UN

LONDON: Jordan will introduce a slew of economic reforms to help its subsidy-supported economy escape the crippling burden of taking in more than a million refugees.
But planners must ensure that well-meaning policies do not punish the people they aim to protect, warn analysts. 
International donors last week pledged over $1.8 billion as part of the London Initiative at the Jordan: Growth and Opportunity conference, hosted by the UK government. Britain also announced it was underwriting a $250 million World Bank loan to make it easier for Jordan to borrow at lower interest rates. 
“We at the UN would like to be part of this journey and partner with the private sector to generate even more investments for the Jordanian economy,” said Nikolaj Gilbert, director of Partnerships Practice Group at the UN Office for Project Services (UNOPS).
“Jordan is at a transition point and it’s economy has been growing steadily for the past couple of years but now there is a huge growth potential,” Gilbert said.
Gilbert said that the UN and UNOPS will help bring in investments into Jordan by introducing de-risking projects and help convince institutional investors that Jordan is the place to go because the workforce is extremely capable and qualified.

“We are here to support education and equip schools with technology and teaching materials so that the Jordanian and the Syrian population and the refugees in Jordan can attend schools and have quality education.




Young Syrian refugees carry their chairs into a classroom at a UNICEF-run school in the al-Zaatari refugee camp in the Jordanian city of Mafraq. (AFP)

“Beyond that we are also doing ICT projects and empowering women through training programs for start-ups, where the women in Jordan can also help to create a positive change in the Jordanian economy,” he said.
UNOPS helps Jordan’s government and its international partners to respond to the impact of the Syrian crisis.
“Beyond that we are also doing ICT projects and empowering women through training programs for start-ups, where the women in Jordan can also help to create a positive change in the Jordanian economy,” he said.
Jordan’s economy has been battered by the fallout from conflicts in neighboring Syria and Iraq. The country has taken in hundreds of thousands of Syrian refugees and has the second-highest share of refugees compared to population in the world.
At the same time, tax hikes introduced to meet International Monetary Fund (IMF) targets to reduce Jordan’s debt burden have triggered widespread protests.




Jordanian police face off demonstrators during a protest near the prime minister’s office in Amman, Jordan, on June 6, 2018. (AFP)

Now the country is picking up the pace of reform, according to information minister Jumana Ghuneimat.
“We have a program with the World Bank for the next five years to implement many reforms and steps to remove the challenges that are facing investment in Jordan and provide a friendly investment environment to have growth in the future and to build a real opportunity for Jordan,” she said.
Over the past decade, Jordan has pursued a number of sometimes painful structural reforms in education and health, as well as privatization and liberalization. The kingdom has also introduced social protection systems and reformed subsidies, creating the conditions for public-private partnerships in infrastructure and making tax reforms. 
However, further progress is needed so that such reforms lead to concrete outcomes.
The Jordan-World Bank program aims to raise economic participation for women, reduce the cost of fuel and make the Jordanian economy more competitive in the region. 
“We want to tell the international community that Jordan has the capacity and skills to work in the civil sectors and especially in the services sector,” the information minister said.
The World Bank is optimistic about Jordan’s economic future and is committed to the five-year IMF-backed economic consolidation program that includes implementing tough reforms.
“Our engagement with Jordan is a far-reaching, long-haul type of commitment. It aims to frame a new set of reforms that would create jobs,” said Ferid BelHajj, vice president of the Middle East and North Africa at the World Bank.




Syrian refugees attend a sewing class as part of a UN project at the Azraq camp for Syrian refugees in northern Jordan. (AFP)

However, economic analyst Mostafa Al-Bazerghan said Jordan’s economy suffers from many problems and faces challenges associated with the conditions set by the IMF.
“There is the problem of government subsidies for basic goods and fuel, there are also proposals for support from the IMF or loans, but the social situation cannot tolerate the implementation of the IMF’s conditions,” said Al-Bazerghan.
Jordan has youth unemployment of almost 40 percent, possesses few natural resources and is burdened with 1.3 million Syrian refugees on top of the longstanding Palestinian influx.
The World Bank’s BelHajj said that the Jordanian government, under the leadership of Prime Minister Omar Al-Razzaz, had been courageous in pushing reforms that are not popular, but will transform the Jordanian economy.
“This reform must be carried out because Jordan is an important part of the Middle East economy. It is necessary to reduce the economy’s dependence on government subsidies,” Al-Bazerghan said.
The analyst cited three main priorities — reduction of subsidies, supporting those who are vulnerable to the loss of subsidies and encouraging the private sector to invest.

However, he also said that Jordan has a great responsibility that developed with the Syrian and Iraqi crises.

“There is regional support today. Iraq started supplying Jordan with crude oil at reduced prices.”

The Jordanian government revealed preferential tariffs offered by Iraq for supplying oil to Jordan as part of economic partnerships signed by the two countries.


LNG shipments from Qatar to UAE to resume, signaling improving ties

LNG shipments from Qatar to UAE to resume, signaling improving ties
Updated 30 min 22 sec ago

LNG shipments from Qatar to UAE to resume, signaling improving ties

LNG shipments from Qatar to UAE to resume, signaling improving ties
  • Qatar has also resumed monthly exports of condensate to the UAE

DUBAI: A liquefied natural gas (LNG) tanker that loaded cargo from Qatar is signaling the UAE as its destination, the first such shipment since mid-2017, reflecting improving ties between the countries.
LNG tankers sometimes change destination, but if the shipment is completed, this would be the first time a Qatari LNG cargo has been shipped to the UAE since May 2017, ship-tracking data from Refinitiv Eikon and data intelligence firm Kpler showed.
The UAE and other countries in the region severed relations with Qatar in mid-2017 over accusations that Doha supports terrorism, a charge that it denies.
But the UAE re-opened all its land, sea and air entry points with Qatar this year after Saudi Arabia announced a breakthrough in ending a dispute between Gulf Arab states and Qatar at a summit. Before the dispute, Qatar was a regular exporter of LNG to the UAE during the summer, when demand for power generation increases. read more
The tanker, Al Ghariya, loaded a cargo from Ras Laffan on May 10 and is at anchor but is showing that it is due to discharge the cargo in Jebel Ali, in the UAE, on May 13, data showed on Wednesday.
Another LNG tanker, Al Gattara, which had loaded from Ras Laffan on May 5 had also initially signaled Jebel Ali as its destination but diverted to Asia, Kpler analyst Rebecca Chia said.
Both tankers are on long-term charter to Qatargas, she added.
Qatar has also resumed monthly exports of condensate to the UAE since February, shipping data on Refinitiv Eikon showed.
Qatari condensate exports to the UAE jumped to 1.7 million barrels in April, up from 287,000 barrels in February, the data showed.


Oil climbs on drop in US oil stockpiles, solid demand outlook

Oil climbs on drop in US oil stockpiles, solid demand outlook
Updated 56 min 24 sec ago

Oil climbs on drop in US oil stockpiles, solid demand outlook

Oil climbs on drop in US oil stockpiles, solid demand outlook
  • US crude oil stocks fell by 2.5 million barrels in the week to May 7

MELBOURNE: Oil prices rose on Wednesday, extending overnight gains, after industry data showed a drop in US crude inventories, which reinforced OPEC’s robust demand outlook, and as the shutdown of the biggest US fuel pipeline headed into a sixth day.
US West Texas Intermediate (WTI) crude futures rose 21 cents, or 0.3 percent, to $65.49 a barrel at 0013 GMT, adding to a 36 cent rise on Tuesday.
Brent crude futures climbed 15 cents, or 0.2 percent, to $68.70 a barrel, adding to a 23 cent gain on Tuesday.
“Crude oil gained as investors continue to bet on a bright outlook for demand. A weak US dollar also lent support,” ANZ Research said in a note.
Data from the American Petroleum Institute industry group showed US crude oil stocks fell by 2.5 million barrels in the week to May 7, according to two market sources.
The drop was slightly less than expected. Eight analysts polled by Reuters had estimated, on average, that crude stocks fell by 2.8 million barrels.
The drawdown came before the Colonial Pipeline was hit by a cyberattack last Friday which forced the pipeline, which transports more than 2.5 million barrels a day of fuel, to shut down. The operator said it hopes to restart a large portion of the network by the end of the week.
In the meantime, the market remained on edge, as gasoline stations from Florida to Virginia began running out of fuel on Tuesday as drivers rushed to top up their tanks and pump prices rocketed.
US unleaded gasoline prices hit an average $2.99 a gallon, the highest since November 2014, the American Automobile Association said.
Oil prices were also supported by the latest outlook from the Organization of the Petroleum Exporting Countries (OPEC), which stuck to a forecast for a strong recovery in world oil demand in 2021 with growth in China and the United States outweighing the impact of the coronavirus crisis in India.
OPEC said it expects demand to rise by 5.95 million bpd this year, unchanged from its forecast last month. However, it cut its demand outlook for the second quarter by 300,000 bpd due to soaring COVID-19 infections in India.
“India is currently facing severe COVID-19-related challenges and will therefore face a negative impact on its recovery in the second quarter, but it is expected to continue improving its momentum again in the second half of 2021,” OPEC said in its monthly report.


American business group warns China boycotts spooking investors

American business group warns China boycotts spooking investors
Updated 12 May 2021

American business group warns China boycotts spooking investors

American business group warns China boycotts spooking investors
  • Brands including Swedish retailer H&M, Adidas and Nike have been targeted by demands online for consumer boycotts

BEIJING: An American business group warned Tuesday that government-instigated consumer boycotts of foreign shoe, clothing and other brands in China are making companies less willing to invest.

That is adding to anxiety over Beijing’s plan for a list of “unreliable entities” that might be punished for actions deemed to run counter to Chinese interests, the American Chamber of Commerce in China said in an annual report on business conditions.

The report reflects growing unease among American and other foreign companies about the impact of economic and strategic tensions between Beijing and their home countries.

Brands including Swedish retailer H&M, Adidas and Nike have been targeted by demands online for consumer boycotts. That came after state media criticized them for expressing concern about reports of possible forced labor by ethnic minorities in the Xinjiang region of China’s northwest.

FASTFACT

The report reflects growing unease among American and other foreign companies about the impact of economic and strategic tensions between Beijing and their home countries.

The American Chamber said 78 percent of companies that responded to its survey cited “rising tensions” between Beijing and Washington as their top concern.

Beijing announced plans for its “unreliable entities” list in 2019 after then-President Donald Trump blocked access to US components and technology for Chinese tech giant Huawei Technologies Ltd. Officials have yet to say which companies might be on the list or disclose the criteria for being included.

Concern about the list is “aggravated by consumer boycotts instigated by official organizations and through Chinese media,” the Chamber said. It said one in five companies expressed concern, while 7 percent said it was decreasing their willingness to invest.

Despite that, half the companies surveyed said China’s investment environment is improving, while 38 percent said it stayed the same. The Chamber said only 12 percent reported conditions had deteriorated, the lowest level since 2015.

The Chamber noted that 27 percent of information and computer technology companies said investment conditions were deteriorating, the highest level of any industry. That finding comes at a time when the ruling Communist Party is using subsidies, market barriers and informal pressure on companies to try to develop its own high-tech industries.

 


Rising consumer appetite for digital payments in Saudi Arabia

Rising consumer appetite for digital payments in Saudi Arabia
Updated 12 May 2021

Rising consumer appetite for digital payments in Saudi Arabia

Rising consumer appetite for digital payments in Saudi Arabia
  • The survey found that 94 percent of respondents are comfortable with digital payment systems such as biometrics, digital wallets and QR codes

RIYADH: Statistics released this week have highlighted the massive surge in the uptake of digital payments in the Kingdom, especially in light of pandemic restrictions on shopping and travel.

According to monthly data issued by the Saudi Central Bank, there were 25.84 million online sales transactions through the Mada system in March. The total value of sales during the month was SR 5.31 billion ($1.4 billion), a year-on-year increase of 196 percent.

The Small and Medium Enterprises General Authority (Monshaat) also reported that the e-commerce sector received an investment of around SR 250 million during the first quarter of 2021, according to an article by the Al-Eqtisadiah newspaper.

With shoppers having few alternatives when it comes to getting basic necessities, it is no surprise that the first-ever Mastercard New Payments Index for the Kingdom found widespread acceptance of digital payments among Saudi consumers.

The survey found that 94 percent of respondents are comfortable with digital payment systems such as biometrics, digital wallets and QR codes.

A year into the pandemic, research from Mastercard showed that the adoption of new payment technologies is rising and consumer appetite for it growing fast.

According to the index, 68 percent of respondents tried a new payment method they would not have tried under normal circumstances.

In addition, 92 percent of Saudi consumers said they have access to more ways to pay compared to this time last year.

Three-quarters of respondents said digital payment methods help them save money, while the same amount also said they are more loyal to retailers who offer multiple payment options. Sixty-nine percent of Saudi consumers said using biometrics to verify purchases made them feel safer.

“More than ever, consumers in Saudi Arabia are adapting and embracing payment innovations. Businesses, both big and small, must respond to this evolving trend. We are closely working with our partners and retailers to deliver secure and diverse payment technologies for the omnichannel generation,” J.K Khalil, country manager, Saudi Arabia, Bahrain and the Levant at Mastercard, said in a press statement.


Latest reforms will boost KSA real estate, says analyst

Latest reforms will boost KSA real estate, says analyst
Updated 12 May 2021

Latest reforms will boost KSA real estate, says analyst

Latest reforms will boost KSA real estate, says analyst
  • The support for the housing sector will help the government achieve one of its core Vision 2030 goals to reach 70 percent homeownership by the end of the decade

RIYADH: The Saudi government’s recent announcements in the real estate sector, including providing more than 53,000 new homes in Riyadh and relaxing the ban on ownership by non-Saudis in Makkah and Madinah, will help to overhaul the sector and reach the Kingdom’s Vision 2030 home ownerships goals, according to an industry figure.

“The announcement of the allocation of 20 million square meters of land in the northern Riyadh suburb of Al-Jawan, effectively trebling the size of this neighborhood, to housing developments will certainly aid the government’s home ownership targets,” Faisal Durrani, head of Middle East research at real estate consultancy firm Knight Frank, told Arab News.

He added that the announcement by Crown Prince Mohammed bin Salman “follows the December announcement by Roshn to develop 30,000 residential units in Riyadh — 4,000 in the first phase — as part of a national program to deliver 1 million new homes by 2030.”

The move is also in line with the city’s aim to become one of the 10 largest economic cities in the world and to increase its population from 15 to 20 million by 2030.

The support for the housing sector will also help the government achieve one of its core Vision 2030 goals to reach 70 percent homeownership by the end of the decade, up from 47 percent four years ago and around 60 percent at present.

The decision late last week to allow companies listed on the Saudi Stock Exchange to own properties in Makkah and Madinah was also seen as a major move by the government to encourage foreign investment and to permit non-Saudi investor ownership in the prime markets.

“Opening ownership in Makkah and Madinah to international companies is a clear indication of the direction of travel of the Saudi economy and is perfectly aligned with Vision 2030,” Durrani said, adding: “The landmark change is likely to pave the way for a boost in demand for commercial real estate over the medium to long-term, as businesses are drawn to the emerging economic opportunities.”

Such moves by the government are likely to be a catalyst for a post-pandemic rebound in the Kingdom’s real estate sector, which are already up 25 percent year-on-year (Y-o-Y) in Riyadh during the first quarter of this year, and 34 percent Y-o-Y in Jeddah and 11 percent Y-o-Y in the Dammam Metropolitan Area.