Saudi Arabia’s 6-point plan to jumpstart global economy

The plane sets out a series of policy recommendations to counter the effects of the disease which threaten to spark the deepest economic recession in nearly a century. (Shutterstock)
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Updated 07 July 2020

Saudi Arabia’s 6-point plan to jumpstart global economy

  • Policy recommendations to G20 aim to counter effects of pandemic

DUBAI: Saudi Arabia, in its capacity as president of the G20 group of nations, has unveiled a six-point business plan to jump start the global economy out of the recession brought on by the COVID-19 pandemic.

Yousef Al-Benyan, the chairman of the B20 business group within the G20, told a webinar from Riyadh that the response to the pandemic -— including the injection of $5 trillion into the global economy — had been “reassuring.”

But he warned that the leading economies of the world had to continue to work together to mitigate the effects of global lockdowns and to address the possibility of a “second wave” of the disease.

“Cooperation and collaboration between governments, global governance institutions and businesses is vital for an effective and timely resolution of this multi-dimensional contagion transcending borders,” Al-Benyan said.

“The B20 is strongly of the view there is no alternative to global cooperation, collaboration and consensus to tide over a multi-dimensional and systemic crisis,” he added.

The six-point plan, contained in a special report to the G20 leadership with input from 750 global business leaders, sets out a series of policy recommendations to counter the effects of the disease which threaten to spark the deepest economic recession in nearly a century.

The document advocates policies to build health resilience, safeguard human capital, and prevent financial instability.

It also promotes measures to free up global supply chains, revive productive economic sectors, and digitize the world economy “responsibly and inclusively.”

In a media question-and-answer session to launch the report, Al-Benyan said that among the top priorities for business leaders were the search for a vaccine against the virus that has killed more than half-a-million people around the world, and the need to reopen global trade routes slammed shut by economic lockdowns.

He said that the G20 response had been speedy and proactive, especially in comparison with the global financial crisis of 2009, but he said that more needed to be done, especially to face the possibility that the disease might surge again. “Now is not the time to celebrate,” he warned.

“Multilateral institutions and mechanisms must be positively leveraged by governments to serve their societies and must be enhanced wherever necessary during and after the pandemic,” he said, highlighting the role of the World Health Organization, the UN and the International Monetary Fund, which have come under attack from some world leaders during the pandemic.

Al-Benyan said that policy responses to the pandemic had been “designed according to each country’s requirements.”

Separately, the governor of the Saudi Arabian Monetary Authority said that it was “too early” to say if the Kingdom’s economy would experience a sharp “V-shape” recovery from pandemic recession.

Japan’s NTT to spend $38 billion to buy out, take DoCoMo private

Updated 29 September 2020

Japan’s NTT to spend $38 billion to buy out, take DoCoMo private

  • Move is intended to enhance the competitiveness of the NTT group as it consolidates its services

MITO, Japan: Japanese telecoms giant Nippon Telegraph & Telephone, or NTT, announced Tuesday it will spend $38 billion to buy out and take private its mobile unit NTT DoCoMo in one of the largest ever deals of its kind.
NTT and NTT DoCoMo executives released details of the plan Tuesday.
The move is intended to enhance the competitiveness of the NTT group as it consolidates its services, said NTT’s CEO Jun Sawada.
“We want to be a game changer,” Sawada said.
He said that between Sept. 30-Nov. 16 the company would buy DoCoMo’s shares at a price of $34.46. DoCoMo’s shares were last trading at $28.39. NTT held about 66 percent of DoCoMo’s shares as of March 31.
The acquisition will be financed by bridge loans, not a share offering, the company said.
The restructuring dovetails with newly installed Prime Minister Yoshihide Suga’s push for lower telecoms rates and more consumer and business-friendly services. It is expected to enable DoCoMo to offer cheaper rates in competition with rivals such as SoftBank and KDDI.
Suga has made expanding digital services a main part of his policy agenda and has called for reforms of the industry’s complex pricing policies and relatively inflexible contract arrangements. Pressures to improve such services have intensified with the push for remote work during the coronavirus pandemic.
NTT’s shares fell 2.7 percent ahead of the announcement, which was made after markets closed. DoCoMo’s shares were suspended from trading. Share prices for other NTT subsidiaries surged ahead of the announcement.
NTT DoCoMo is Japan’s largest mobile carrier, with more than 70 million subscribers. It was founded in 1992. According to its website, it holds a 44.2 percent market share compared with the 32 percent share held by KDDI’s au brand. SoftBank is third ranked, with a nearly 24 percent share.
Although DoCoMo is the market leader, its profits have been eroding, a factor that helped drive the decision to consolidate.
Sawada said there was no direct link between the buyout and cutting mobile subscription prices.
“However, by doing this, DoCoMo will get stronger. That’s why we are doing this. As the result of this, we could build a stable foundation which apparently could give us power to decrease the price,” he said.
The NTT buy out is the biggest ever in Japan and one of the largest worldwide. The biggest so far was the $48 billion acquisition of Dallas, Texas-based energy utility TXU Corp., now known as Energy Future Holdings, by Kohlberg Kravis Roberts, the Texas Pacific Group and Goldman Sachs Capital Partners in 2007.
A trend toward such deals appears to be gathering pace, as Japanese companies sitting on big cash piles adjust their business strategies in a time of growing uncertainty.
NTT traces its roots to 1869, the early days of the telegraph in Japan. Founded in 1952 as the government phone utility, it was privatized in 1987. The company has expanded its network services as its fixed line business has been largely supplanted by mobile phones, at least for individual users.
Japan’s mobile phone rates are on average about half the costs charged in the US and much lower than in Canada and South Korea, according to a study by telecoms services research firm
At about $3.90 for 1 gigabyte (1G) of mobile data, however, costs in Japan are far higher than in many European and Asian countries, such as China, where 1G cost 61 cents and India, where the cost was only 9 cents.