Afghanistan may seek more business with China, CEBR says

Afghanistan may seek more business with China, CEBR says
The UN appealed for almost $200 million in extra funding for lifesaving aid in Afghanistan following the Taliban takeover. (AFP)
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Updated 10 September 2021

Afghanistan may seek more business with China, CEBR says

Afghanistan may seek more business with China, CEBR says
  • Taliban will be forced to seek cooperation with China to resuscitate the economy nocountry’s war-torn economy following US withdrawal

LONDON: A leading London-based think tank has warned the Taliban will be forced to seek cooperation with China to resuscitate the country’s war-torn economy following US withdrawal and the freezing of Western aid.
A report by the Centre for Economics and Business Research said China was best placed to fill the vacuum left by the West’s hurried exit because it has a record of “aggressive mineral exploitation” and “constructing infrastructure where none exists.”
The warning comes as the UN appealed for almost $200 million in extra funding for lifesaving aid in Afghanistan following the Taliban takeover.
The UN humanitarian agency OCHA said the extra sum meant a total of $606 million in aid was now needed for Afghanistan until the end of the year.
The suspension of foreign aid has raised concerns the country will face severe social unrest.
Afghanistan is home to many of the world’s most sought after rare earth minerals, including lithium which is used for electric car and other batteries.
Estimates suggest the Taliban could be sitting on $3 trillion worth of rare earth minerals.
However, the country’s poor infrastructure means exploiting these resources and bringing them to markets has been all but impossible.
The CEBR report points to China’s Belt and Road Initiative which has a track record of improving infrastructure in developing countries and the fact that China, unlike Western democracies, “pays less attention to human rights,” a key condition for financial aid from the West to continue.
While the power vacuum left by the US and its Western allies could also be filled by Russia, which has a long history of intervention in the country, the CEBR insists only China can fulfill Afghanistan’s current needs.
Prof. Douglas McWilliams, founder and deputy executive chairman of CEBR, told Arab News: “There are essentially three reasons why it will be China. Firstly, it has the demand for the minerals. Secondly, China has the cash to invest on a much larger scale, and lastly, it has the expertise at building the infrastructure as part of the Belt and Road Initiative. Neighboring Pakistan is already one of the biggest recipients of Belt and Road funds. By contrast Russia doesn’t have the need for the minerals, so while it might back the Chinese efforts, the driving force will be China.”

HIGHLIGHT

The CEBR report points to China’s Belt and Road Initiative which has a track record of improving infrastructure in developing countries and the fact that China, unlike Western democracies, ‘pays less attention to human rights,’ a key condition for financial aid from the West to continue.

Since China’s BRI, also known as the New Silk Road, was launched in 2013, Beijing has invested more than $60 billion in the China-Pakistan Economic Corridor project.
China also spends an average of around $12 billion annually on infrastructure in Africa, which has transformed the continent’s transport and energy sectors.
McWilliams added: “The Taliban have few friends amongst the Western powers since they have been fighting against NATO for so long. China is the obvious place to turn, especially since they share a 91 km border. The pattern of Chinese engagement is different from that of the West. There is less focus on human rights and attempts at nation building. And much more focus on mineral exploitation. The Afghans support Uighur dissidents in China, but it is likely that the Chinese will insist that this ends as the price of cooperation.”
Chinese Foreign Minister Wang Ji suggested Beijing would seek the extradition of Uighurs in Afghanistan earlier this year. The Taliban have so far rejected this.
China already controls the bulk of world supplies of lithium and rare earths. The prospect of Beijing further tightening its control of lithium deposits would be a major setback for the US and Europe.
The CEBR said since the US-led invasion of Afghanistan in 2001 inflows of capital, mainly military spending, and aid, resulted in Afghan GDP in real terms rising from $8 billion in 2005 to $18 billion in 2019.
However, against a backdrop of corruption and civil war, Afghanistan’s ranking in the World Bank’s ease of doing business survey plunged to 173rd position (out of 190 countries) last year.
The country ranks even worse for international trade, enforcing contracts, property rights and paying taxes ,which the report said are “fundamental to building up a modern economy.”
The CEBR added that Taliban policies, particularly about women, will hold back overall growth, and that the “trickle-down” effect from mineral exploitation is weak compared with other economic sectors like manufacturing or tech, “so many of the benefits will be concentrated in few hands”.
The report comes as the Taliban claimed it had taken “complete control” of Panjshir province, the last holdout of Afghanistan’s opposition to the group led by Ahmad Masoud and Amrullah Saleh, the former vice president of the country.


China closes loophole used by tech firms for offshore IPOs

China closes loophole used by tech firms for offshore IPOs
Updated 01 December 2021

China closes loophole used by tech firms for offshore IPOs

China closes loophole used by tech firms for offshore IPOs

RIYADH: China plans to ban companies from going public on foreign stock markets through entities with different interests.

It will close a loophole that the country’s technology industry has long used to raise capital from foreign investors, according to Bloomberg.

People familiar with the matter, who asked not to be identified while discussing private information, said the ban, aimed in part at addressing concerns about data security, is among the changes included in a new draft of China’s overseas listing rules that may be finalized as soon as this month. 

Companies using what is called the VIE (variable interest entity) structure would still be allowed to pursue initial public offerings in Hong Kong, subject to regulatory approval, the sources said.

VIE refers to a business structure in which an investor has a controlling interest despite not having a majority of voting rights. A business that is the primary beneficiary of a VIE must disclose the holdings of that entity as part of its consolidated balance sheet.

China Securities Regulatory Commission said on its website on Wednesday that a media report about banning offshore listings of companies using the VIE structure was incorrect, without giving further details.

Companies currently listed in the US and Hong Kong that use VIEs will need to make adjustments so that their ownership structures are more transparent in regulatory reviews, especially in sectors where foreign investment is prohibited, the sources added.

The reform would mark one of Beijing’s biggest moves to crack down on offshore listings. 

Authorities have since moved quickly to halt the flow of companies seeking to go public in the US, shutting down a path that has generated billions of dollars for tech companies and their Wall Street backers.

While a global ban on the VIE structure is not being contemplated, a halt to foreign listings and a further review of Hong Kong's initial public offerings will mean the model will not be a viable way for many startups to tap into the capital markets. 

A person familiar with the matter said that some investment banks had already been advised by regulators to stop working on new deals involving VIEs.

The demise of VIE would also threaten the lucrative business streak of Wall Street banks, which has helped nearly 300 Chinese companies raise around $82 billion through first-time share sales in the US over the past ten years.

VIEs have been a constant source of concern for global investors due to their unstable legal position. Sina Corp. and its investment bankers led the way during an initial public offering in 2000, and the VIE framework has not been formally adopted by Beijing.


Rayyan Nagadi replaces Hasan Aljabri as CEO of SEDCO

Rayyan Nagadi replaces Hasan Aljabri as CEO of SEDCO
Updated 01 December 2021

Rayyan Nagadi replaces Hasan Aljabri as CEO of SEDCO

Rayyan Nagadi replaces Hasan Aljabri as CEO of SEDCO

RIYADH: Saudi’s investment group SEDCO Holding has appointed Rayyan Mohammed Nagadi as its new chief executive officer, replacing Hasan Aljabri.

The appointment, announced on Wednesday, comes as the group is expanding its investment and economic growth contribution in the Kingdom. 

Before joining SEDCO Holding, Nagadi was the CEO of the National Center for Privatization & PPP, with over 20 years of experience in management and structured financing in both the public and private sectors. 

“With his expertise and extensive network, he is well positioned to accelerate our ambitions as a partner of choice supporting the government in achieving the goals of Vision 2030,” chairman of SEDCO, Saleh Salem Bin Mahfouz, said.

Through its subsidiaries, SEDCO Holding provides investment and construction services.


Soudah Development joins United Nations World Tourism Organization

Soudah Development joins United Nations World Tourism Organization
Updated 01 December 2021

Soudah Development joins United Nations World Tourism Organization

Soudah Development joins United Nations World Tourism Organization

RIYADH: Soudah Development, a closed joint-stock real estate development company owned by the Public Investment Fund of Saudi Arabia, became an affiliate member of the World Tourism Organization – the United Nations agency responsible for promoting tourism as a key driver of economic growth and environmental sustainability, it said in a statement.

As an affiliate member of the UNWTO, Soudah Development will be able to work with more than 500 global companies, educational and research institutions, destinations, and NGOs. It will provide a platform to establish dialogue, share information and take further action to promote tourism and contribute to the United Nations Sustainable Development Goals.

It becomes only the 25th company in the Middle East to join an alliance of more than 500 global members and joins some of Saudi Arabia’s leading tourism destination developers including NEOM, Qiddiya, the Red Sea Development Company, and the Royal Commission for Alula.

Husameddin Almadani, CEO of Soudah Development (Right)

Soudah Development is developing a luxury mountain destination in a unique and authentic setting among the clouds at 3015 meters above sea level.  Its sensitive sustainable quality development strategy is fully aligned with its goals of protecting natural environments and wildlife, empowering local communities and showcasing the extraordinary centuries old culture and heritage in Soudah and parts of Rijal Almaa.

Husameddin Almadani, CEO of Soudah Development, said: “Building powerful and effective partnerships with like-minded organizations is an important part of our ongoing efforts to create a luxury mountain tourism destination high above the clouds.”

“We are delighted and enormously proud to have already achieved this exciting and prestigious affiliate membership of the UNWTO.  It is the latest in a series of strategic ties we have established with local, regional and global stakeholders to further our goals. It demonstrates our commitment to operate according to the highest global standards and working with the best in the business in Saudi Arabia and internationally and position Soudah and Rijal Almaa as a year-round destination that will attract more than two million visitors throughout the year by 2030.”

 


Renewables will provide 95% of power capacity growth in next five years: IEA

Renewables will provide 95% of power capacity growth in next five years: IEA
Updated 01 December 2021

Renewables will provide 95% of power capacity growth in next five years: IEA

Renewables will provide 95% of power capacity growth in next five years: IEA

Jeddah: Renewable energy will make up 95 percent of total global power capacity growth in the next five years, according to the International Energy Agency.

The IEA’s executive director Fatih Birol said when it comes to renewables, solar power plays the most significant role.

“Solar is the new king of the global power markets,” he said.

About 55 percent of all power plants installed in the world will be solar, and while all countries will increase their renewable facilities, the lion’s share will be in China and India, he highlighted.

“These two giants account for about half of the entire renewable capacity installations,” he said, adding: “China, especially driven by solar power, alone provides about 40 percent of the global growth.”

One of IEA’s concerns is the high commodity prices, which will also result in an increase in renewable energy prices.

Birol added that India is well in line with the 500 gigawatt target, as mentioned at the COP26. 

He also said the southern Asian country is witnessing a huge growth in biofuels, and in the next five years the IEA expects India to become the third largest market in the world after the US and Brazil.

“Even though we are breaking a record in renewables transition, we still need to double that pace in order to be in line with our renewable targets as well as our net zero targets,” he said.

Electric cars are estimated today to amount to 10 percent of all the cars sold this year, compared to 2 percent in 2019.

Pointing to the two-year jump regarding renewable energy and electric cars, the executive director said: “We can clearly say that a new global energy system is emerging.”


Saudi tourism minister urges global coordination to tackle omicron

Saudi tourism minister urges global coordination to tackle omicron
Updated 01 December 2021

Saudi tourism minister urges global coordination to tackle omicron

Saudi tourism minister urges global coordination to tackle omicron

CAIRO: Saudi Arabia’s tourism minister on Wednesday called for a coordinated international response to omicron, a new variant of the coronavirus.

“The lesson of the pandemic is that we need more international coordination and a greater recognition of the critical role of tourism in our economies,” Ahmed Al-Khateeb wrote on his official Twitter account. 

The minister called on the UN’s World Tourism Organization to address the latest strain. He also warned against the new variant’s impact on the Kingdom’s tourism sector. 

“Over the last few months, I have met with more than 100 tourism ministers (from around the world), and we share a consensus that the sector needs stronger support and international coordination,” he added. 

Saudi Arabia confirmed its first case of omicron on Wednesday. A passenger coming from a North African country was tested positive for the new strain.