Tourism to contribute 15% to Saudi $1.86tn economy by 2030

Tourism to contribute 15% to Saudi $1.86tn economy by 2030
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Updated 13 March 2022

Tourism to contribute 15% to Saudi $1.86tn economy by 2030

Tourism to contribute 15% to Saudi $1.86tn economy by 2030

RIYADH: Saudi Arabia sees tourism leading to contribute more to its GDP by 2030, which is predicted to hit $1.86 trillion, as it plans to move away from oil.

The Kingdom, which plans to generate income streams from non-oil sectors, will invest in tourism in order to attract 100 million visitors a year and see the sector contributing up to 15 percent of the GDP.

“By 2030 the aim is to have 500,000 hotel keys, most of it will be new, and 100 million visits per year,” investment minister Khalid Al-Falih said, adding that this will cover “religious tourism which is quite substantial as well as domestic tourism and international tourism.”

Speaking at an investment forum in Riyadh with Greek ministers, Al-Falih added that the Kingdom's National Investment Strategy will launch direct investment opportunities worth $3.27 trillion until 2030.
 


Saudi FDI to touch 2011 peak of $16.3bn this year: Lumina Capital

Saudi FDI to touch 2011 peak of $16.3bn this year: Lumina Capital
Updated 07 October 2022

Saudi FDI to touch 2011 peak of $16.3bn this year: Lumina Capital

Saudi FDI to touch 2011 peak of $16.3bn this year: Lumina Capital
  • Country’s outlook is robust as the Kingdom is estimated to be the fastest-growing economy in 2022

RIYADH: Saudi Arabia has seen a rapid increase in foreign direct investments this year, recording the highest inflow since the $16.3 billion gains of 2011, according to Andrew Nichol, partner of Dubai-based Lumina Capital Advisers.

“That’s the second highest amount of foreign direct investment into the Kingdom in the last decade; the last time it exceeded this was in 2011,” Nichol said in an exclusive interview with Arab News.

According to Nichol, the FDI outlook is robust as the Kingdom is estimated to be the fastest-growing economy in 2022.

“I think this is going to be a record year. We’ve seen confidence. If we look at the global tailwinds and the challenges the markets face, you’ll find that investors are looking very practically at this region, and I do expect this year to be a fantastic year for FDI,” he added.

According to a report issued by the International Monetary Fund, the Kingdom is likely to be one of the world’s fastest-growing economies this year, thanks to its sweeping pro-business reforms, a sharp rise in oil prices, and a recovery from a pandemic-induced recession in 2020.

The IMF reported that gross domestic product is expected to expand by 7.6 percent, the fastest growth in almost a decade.

Growing venture capital investments

Bullish on the Kingdom, Lumina has advised several series A, B and C funding rounds for regional and international startups.

The region’s venture capital scale has been multiplying in the past three years. For example, those who invested $5 million in the initial rounds are today investing $20 million to $30 million in the same round levels.

“Those rounds have been getting larger and larger. So, what used to be a $5 million to $10 million series A have become $20 million to $30 million,” Nichol said.

According to Nama Ventures, a pre-seed venture capital fund focused on fueling innovation in the Middle East and North African region, in 2021 alone, venture capital provided more than SR630 million ($168 million) to new firms in the country.

Nichol believes that the region will see many more startups reaching the billion-dollar market valuation or becoming unicorns in the near future.

“The region has been very successful in importing skills and technologies. There have been a few big unicorns, and we’re going to continue to see that as the Middle East becomes a real hub for innovation,” he said.

Metaverse in spotlight

Lumina considers the Gulf Cooperation Council a highly innovative region with a lot of liquidity, where investors are more selective in allocating their capital.

To Nichol, any opportunity that combines digital and links people together is a potential success, including investing in the metaverse.

The financing advisory firm is currently advising on the region’s first deal involving a leading global metaverse creator.

“We are working on our first metaverse transaction, and this is a multi-trillion-dollar opportunity,” he said.

Founded in 2013, Lumina Capital Advisers provides services in mergers and acquisitions, capital restructuring, equity capital, debt advisory and infrastructure project financing.

The firm closes between 15-20 transactions yearly, with an average deal size between $20 million and $100 million.

“We’re not an asset manager. We’re not directly investing our capital, but we advise our clients on either making direct investments or selling assets within their portfolios,” Nichol added.


Gross insurance premium in second quarter rises 28.8% to $3.3bn: SAMA

Gross insurance premium in second quarter rises 28.8% to $3.3bn: SAMA
Updated 07 October 2022

Gross insurance premium in second quarter rises 28.8% to $3.3bn: SAMA

Gross insurance premium in second quarter rises 28.8% to $3.3bn: SAMA
  • Motor insurance GWP, which constitutes 18.6 percent of total GWP, saw a 23.7 percent growth

RIYADH: Total gross written premiums of the insurance sector increased 28.8 percent to SR12.2 billion ($3.3 billion) in the second quarter from SR9.5 billion in the same period last year, reported Saudi Central Bank, also known as SAMA.

“GWPs are a good indicator of the overall development of the sector,” Jarmo Kotilaine, an economist and strategist focusing on the Gulf region, told Arab News.

The health sector’s GWP, which makes up 54.6 percent of the Kingdom’s total GWPs, rose by 31.8 percent, amounting to SR6.8 billion in the second quarter.

Other general insurance GWP rose by 24.3 percent, reaching SR2.6 billion in the second quarter compared to the corresponding period of 2021. It makes up 22.2 percent of the country’s GWPs.

Motor insurance GWP, which constitutes 18.6 percent of total GWP, saw a 23.7 percent growth totaling SR2.2 billion, showed the SAMA report.

Protection and savings insurance GWP amounted to 4.6 percent of the aggregate and saw a 35.1 percent rise reaching SR589 million last quarter.

Kotilaine clarified that the increase in the Kingdom’s GWPs “is not necessarily linked to the financial performance of individual companies.”

He pointed out that it faces the challenge of sector fragmentation.

“Especially after health insurance became mandatory, many businesses entered the sector. As a result, there has been margin erosion, slowing down the sector,” said Kotilaine.

FASTFACT

Protection and savings insurance GWP amounted to 4.6 percent of the aggregate and saw a 35.1 percent rise reaching SR589 million last quarter.

Moreover, the report highlighted that three major key insurance indicators saw a year-on-year drop in the second quarter of 2022: operating income, net income and net investment income.

Insurance operating income, the revenue of an insurance company after the expenses of operation and depreciation are deducted, dropped by a staggering 118.1 percent in the second quarter, reaching a loss of SR10 million.

The sector’s net income fell by 29.7 percent year on year to SR262 million in the second quarter, showed the SAMA data.

Moreover, the net investment income between April and May dropped 13.8 percent to SR273 million from SR317 million in the corresponding period last year.

When asked about the future of Saudi Arabia’s insurance sector, Kotilaine projected a positive outlook.

“The population is growing, the economy is becoming increasingly diverse, and gross domestic product growth dynamics look solid.”

“A key challenge for the sector,” he continued, “is to develop its product offering and insurance awareness to drive growth beyond the mandatory policies.”


Data, technology help make construction industry more environmentally friendly

Data, technology help make construction industry more environmentally friendly
Updated 07 October 2022

Data, technology help make construction industry more environmentally friendly

Data, technology help make construction industry more environmentally friendly

The building and construction industry is one of the largest in the world’s economy with approximately $10 trillion spent on construction-related goods and services every year.

But it is also disproportionately destructive as one of the world’s most energy-intensive polluting industries on the planet.

According to figures published on the website USCAD.com in July this year, the world’s construction industry is still responsible for 38 percent of CO2 emissions, 23 percent of air pollution, 40 percent of water pollution, 50 percent of landfill waste, 21 percent of the depletion of natural resources and 40 percent of energy usage.

These are not new figures. It’s not as if the construction industry has suddenly tumbled down a path of self-destruction.

In Las Vegas in 2019, a conference held by the software company Autodesk was told that the construction and manufacturing industries were hugely wasteful and among the world’s biggest polluters.

And in 2021, the general picture for the world’s future was dealt another blow when delegates at COP 26 admitted they were nowhere near to reaching the targets set previously to slow global warming.

“Our theory for how we transform the AEC industry (Architectural Engineering and Construction) is unchanged. We very much want to bring (new) industrial methods and processes to it,” said Andrew Anagnost, CEO of Autodesk on the sidelines of the 2022 Autodesk University conference in New Orleans.

Anagnost said the data and technology was available to help make the industry more environmentally efficient and less wasteful.

There are companies already in existence that provide digital information that can predict potential flaws in plans before they become a reality, and even how much material is needed – and yet Anagnost said there were still companies that were not using the information.

“The biggest waste that you see in the AEC ecosystem, is people making it up along the way.”

In contrast, he said the manufacturing industry generally stuck to its plans so that the end product was what was intended from the outset.

“That kind of precision needs to evolve into the AEC industry. And that's why you see us building these things that are coming together from both sides. And when that when that work is done, we believe we will have made an impact on how these industries work. Until then, they still redo and undo at a pace that's, you know, unparalleled in other industries,” he added.

But it’s not all bad news, there are efforts to reduce the amount of waste using cloud-based technology, and it is the Middle East that seems to be embracing this technology.

TURNING BUILDINGS INTO DATA FARMS

The good news is that the Middle East has largely cleaned up its act, according to Naji Atallah, head of construction and manufacturing at Autodesk Middle East.

Speaking to Arab News, he said the reason for the improvement was a factor that had always been present.

He said construction in the region was usually based on undeveloped land, thus removing the need to take into consideration existing structures, that might introduce additional costs.

“There’s no major legacy of buildings and bridges and roads that need to be maintained,” he explained, adding that the construction industry in the region was effectively working on a “blank canvas,” which enabled developers to place sustainability at the forefront of their projects.

“If I look at probably all of the mega projects in the region, sustainability has been one of the big goals that they see.”

“We have seen a shift (in the Gulf region) from we want everything delivered tomorrow, to we want things delivered in a better way.”

Pointing to Saudi Arabia’s Red Sea project and Dubai’s Museum of the future, he said there was now greater effort to ensure a sustainable approach to these projects.

And by using software technology developers have been able to create structures that use less energy and materials in their construction by using information gathered from predictive modeling that shows designers how a structure will behave before it is even built.

The digitization of the building industry – if embraced – could potentially revolutionize the way it works – from lowering waste, reducing pollution and to cutting costs.

“Sensors are so cheap now,” Atallah said, “that they could be placed into every new structure – we don’t even need to know what – or if they-re going to be used – and collect all sorts of information.”

That data, he said, could then be used to predict any structural issues, how to improve fuel economies – to name two – but not just for that structure, but also for future projects.

This data, he said could become a commodity that could be sold to help improve future projects.

BRIDGING THE GAP

Imagine a building – in fact any structure – that from the moment it is complete, starts to collect data that can be used to address problems before they are noticed by the human eye and aid in future new builds.

Sounds futuristic – but the truth is the technology is already here – it’s just a question of people in the industry using it.

The Dubai-headquartered company Dar Al-Handasah, which heralds from Lebanon, and is the 10th leading design firm in the world – third in the Middle East has created a cantilever bridge that was built using recycled plastic – mixed with fiberglass to create a poxy – and a 3D printer.

Using algorithms, the designers were able to come up with a design that created a bridge using minimal materials that, when fixed with the sensors, was able to teach them how to better improve the product in later designs.

The bridge is made up in a modular system from 70 percent recycled materials.

It is a step away from traditional construction methods, with the bridge being built as one piece in a factory environment before being transported to its place of use once complete.

Cloud-based technology provided by Autodesk was used to create virtual modules of the bridge to calculate the best design in terms of material use, look and its structural durability.

Ghassan Zein, the Lebanese digital practice manager at Dar Al-Handasah said the bridge was a first of its kind, he said as such they needed to see how it behaved when put into use was essential for future developments, so it was fitted with sensors.

“We have the monitoring of the intelligence of the bridge that would monitor how it’s doing because it’s new,” Zein told Arab News on the sidelines of the Autodesk University 2022 conference in New Orleans.

The bridge is a new shape, a new design, Zein explained, “So we have to know if it's doing well.”

The company has a team whose role is to monitor the data gathered from the bridge.

“They analyze the data and keep changing the design of future projects,” he said.

Zein said the structural engineers addressed the design, what was safe, what was not, what performed well, what did not, using live data gathered from sensors in the structure of the bridge.

FROM PREFAB TO MODULAR

The modular approach to building the bridge is not a new concept. In Britain in the 1950s low-cost social housing was created.

These usually low-leveled, single-storied buildings were made up of walls and roofs that were created off-site and then put together once ready.

But they were usually of a low standard with materials that were not long lasting, leaving properties structurally unsound and some of the materials even being harmful to people’s health – including asbestos cladding.

Move forward 70 – 80 years and the concept of building parts, or entire structures such as the 3D printed bridge off-site and then moving them to their final location is now proving to be a leading method of construction – both economically and also environmentally.

Beach villas on the Red Sea project off the coast of Saudi Arabia and Dubai’s Museum of the Future were all built in a factory environment, before they were shipped to their final destination.

The methods being offered at functions such as Autodesk University are an eye opener for the industry.

Invest in the technology and the construction industry could change from being one of the environment’s biggest enemies, to a major green player.

It just needs those in the industry to embrace the future.

The key take away being, collect the data, learn what the potholes are before the building work starts and then embark on the real deal – ultimately the outcome is more efficient.


Suez Canal revenues hit $2.1bn in Q3, highest quarter in history: Egypt Cabinet

Suez Canal revenues hit $2.1bn in Q3, highest quarter in history: Egypt Cabinet
Updated 07 October 2022

Suez Canal revenues hit $2.1bn in Q3, highest quarter in history: Egypt Cabinet

Suez Canal revenues hit $2.1bn in Q3, highest quarter in history: Egypt Cabinet

RIYADH: Suez Canal revenues increased in the third quarter of this year by 23.5 percent year-on-year to hit $2.1 billion — the highest figure ever recorded, official data has revealed.

This increase is supported by the unprecedented jump in revenues during the month of August that hit a historical record at $744.8 million, according to a release from the Egyptian Prime Minister's Information Center on Friday.

As many as 6,252 ships crossed the canal from July to September, with a total net payload of 372.7 million tons.

Revenues during September rose by about 22 percent to $683.2 million. 

Over 2,000 vessels crossed the canal during that period from both directions compared to 1,856 vessels during the same period of last year — an increase of 9.1 percent.

The total net payload reached 120 million tons, compared to 112 million tons during September of last year, reflecting a 7.1 percent increase.

 


Binance-linked blockchain hit by $570m crypto hack, Binance says

Binance-linked blockchain hit by $570m crypto hack, Binance says
Updated 07 October 2022

Binance-linked blockchain hit by $570m crypto hack, Binance says

Binance-linked blockchain hit by $570m crypto hack, Binance says

LONDON: A blockchain linked to Binance, the world’s largest crypto exchange, has been hit by a $570 million hack, a Binance spokesperson said on Friday, the latest in a series of hacks to hit the crypto sector this year, according to Reuters.

Binance CEO Changpeng Zhao said in a tweet that tokens were stolen from a blockchain “bridge” used in the BNB Chain, which was known as Binance Smart Chain until February. Blockchain bridges are tools used to transfer cryptocurrencies between different applications.

Zhao said the hackers stole around $100 million worth of crypto. BNB Chain later said in a blog post that a total of 2 million of the cryptocurrency BNB — worth around $570 million — was withdrawn by the hacker.

The Binance spokesperson said in emailed comments that “the majority” of the BNB remained in the hacker’s digital wallet address, while about $100 million worth was “unrecovered.”

Blockchain bridges have increasingly become the target of thefts, which have long plagued the crypto sector.

BNB Chain supports the BNB cryptocurrency, formerly known as Binance Coin, which is the world’s fifth-largest token with a market value of some $46 billion, according to CoinGecko data.

Some $2 billion worth of cryptocurrency has been stolen in 13 different bridge hacks, mostly this year, crypto analytics firm Chainalysis said in August.

In March, hackers stole around $615 million from Ronin Bridge, used to transfer crypto in and out of the game Axie Infinity, in one of the largest crypto heists on record. The United States linked North Korean hackers to the theft.

BNB Chain suspended its blockchain for several hours before resuming at around 0630 GMT, it said in a tweet.

It said in its blog post that BNB Chain was “able to stop the incident from spreading” by contacting the blockchain’s “validators,” — entities or individuals who verify blockchain transactions. BNB Chain said there are 44 validators across several different time zones, without giving further details.

BNB Chain said it would introduce a new “governance mechanism” to counter future hacks, as well as to expand the number of validators.

On the Binance website, BNB Chain is described as a “community-driven, open-sourced and decentralized ecosystem.”