Saudis, Emiratis stress Kingdom’s rise creates more opportunities for region  

Saudis, Emiratis stress Kingdom’s rise creates more opportunities for region  
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Saudi Minister of Economy Faisal Al Ibrahim with his UAE counterpart Abdullah bin Touq at the Saudi MiSK Foundation Pavilion in Davos World Economic Forum Annual Meeting. (Supplied)
Saudis, Emiratis stress Kingdom’s rise creates more opportunities for region  
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Saudi ministers participate in a panel discussion at the World Economic Forum 2022. (WEF)
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Updated 28 May 2022

Saudis, Emiratis stress Kingdom’s rise creates more opportunities for region  

Saudis, Emiratis stress Kingdom’s rise creates more opportunities for region  
  • Participating in WEF panel on ‘Saudi outlook,’ Kingdom’s Investment Minister Khalid Al-Falih said ‘a rising tide lifts all boats’
  • Chairman of Dubai-based Damac Hussain Sajwani says KSA, UAE ‘completing each other in terms of growth, not competing with each other’

DAVOS: Over the past decade, Saudi Arabia and other Gulf countries have been steadily diversifying their economies away from oil, offering incentives to attract capital and talent, encouraging small businesses and start-ups, and trying to give their young citizens exciting new career paths in the private sector.

As the largest economy in the Middle East, with ties to both China and the US, Saudi Arabia is well-positioned to use its strategic relationships and hydrocarbon resources to stabilize volatile energy markets and advance economic recovery. Predictably, the Kingdom’s priorities and its response to today’s turbulent geopolitical context are in the limelight as it continues with its reform agenda.

The pace of economic diversification by the Kingdom has quickened greatly since the unveiling of Saudi Vision 2030 in 2016 by (then Deputy) Crown Prince Mohammed bin Salman. The accent is now on business growth, tourism, education, manufacturing, entertainment, health care and other sectors.

This has given rise to speculation among economic analysts as to whether the development can be a win-win for Saudi Arabia and the other Gulf countries, particularly the UAE. The question was put to the speakers in a panel discussion entitled “Saudi outlook” on Wednesday at the World Economic Forum’s annual meeting in Davos.



Offering to answer the question first, Saudi Minister of Finance Mohammed Al-Jadaan said: “When a country like Saudi Arabia moves, others up their game. We are seeing that in action today. So, it is in the interest of the whole region and not only Saudi Arabia.”

Al-Jadaan’s view was echoed by the other speakers, starting with Khalid Al-Falih, the Saudi minister of investment, who said: “A rising tide lifts all boats. Regional integration is more important to the smaller but very important economies next to us than it is to Saudi Arabia.

“So, I believe the Kingdom’s rise in its economic and competitive performance actually helps their competitiveness. It allows companies and enterprises and the governments of those countries to integrate with the larger global economy in Saudi Arabia.”

Speaking from the perspective of the Saudi Ministry of Tourism, Haifa bint Mohammed Al-Saud, assistant minister for strategy and executive affairs, said: “Competition is critical. We create competition within Saudi Arabia for different destinations because what it does is increase quality. And it’s very healthy because they start complementing each other.”

Saudi Arabia will continue to diversify its economy, ministers from the Kingdom told a WEF panel discussion on Wednesday. (AN photo)

More broadly, she said: “The region in its entirety is a hub, so once you arrive in the region, it becomes more appealing to visit different destinations. So, (competition is) absolutely to our benefit.”

Faisal Al-Ibrahim, Saudi minister of economy and planning, said: “For me, competition and competitiveness are essential for us to raise the bar higher. But collaboration is also necessary.

“There is a lot of coordination and collaboration that happens behind the scenes. There is a lot of camaraderie between policymakers within the region that gives us these assurances.”

Last year, Saudi Arabia set certain rules for companies seeking to take advantage of the $3 trillion investment opportunities identified for international investors under the Vision 2030 strategy. The government said it would no longer sign contracts with foreign companies without a regional headquarters inside the Kingdom starting from 2024.

The new arrangement is thought to have aroused a sense of competition between Saudi Arabia and the UAE. Talk of unspoken economic rivalry has continued to make global headlines as both announce aggressive initiatives to attract or deploy investment.

However, Hussain Sajwani, chairman of Damac, the Dubai-based Emirati property development company, thinks Saudi Arabia and Dubai are completing each other in terms of growth, rather than competing with each other.

“I think they completing each other in two different economies, two different outlooks,” he told Arab News on the sidelines of the Davos summit on Tuesday.

Damac Chairman Hussain Sajwani. (Supplied)

“Dubai is a connecting point for businesses for travelers, tourism, Saudi Arabia is very different. So Dubai companies help and complete the growth of Saudi Arabia,” he said.

Similar sentiments have been expressed by other Emirati businessmen and government ministers over the past year, with the general consensus being that the two GCC members are independently adjusting their social and economic policies as part of their economic diversification strategies.

In comments to Arab News last November, Badr Al-Olama, an executive director at Abu Dhabi sovereign fund Mubadala, dismissed the idea that Saudi Arabia and UAE’s economic progress is a zero-sum game.

“What many people try to interpret as competition is completely wrong because the market is so large,” he said. “The fact that we are close neighbors means we are able to complement each other with certain capabilities to compete on a global scale.”



In an interview with Arab News in December, Khalifa Shaheen Al-Marar, UAE minister of state, said that the two countries have adopted policies that benefit the entire Arab region and contribute to better outcomes for global peace and human welfare.

“The UAE and Saudi Arabia maintain a close and complementary relationship that benefits the two countries and the wider region, which includes economic and developmental integration,” he said.

“We believe that healthy economic competition in the region is important, and the UAE always views it as an opportunity to generate new prospects and adopt policies that benefit the region as a whole.

“Our two countries’ economic partnership is one based on open exchange and cooperation. The Saudi-Emirati Coordination Council, a high-level bilateral mechanism established to harmonize Saudi Vision 2030 and UAE Vision 2021, continues to play an important role in inking additional economic agreements and streamlining trade between our two countries.” 


Oil prices up 2 percent on supply outages

Oil prices up 2 percent on supply outages
Updated 01 July 2022

Oil prices up 2 percent on supply outages

Oil prices up 2 percent on supply outages

LONDON: Oil prices rose about 2 percent on Friday, recouping most of the previous session’s declines, as supply outages in Libya and expected shutdowns in Norway outweighed expectations that an economic slowdown could dent demand, according to Reuters.

Brent crude futures were up $2.20, or 2 percent, at $111.23 a barrel by 1348 GMT, having dropped to $108.03 a barrel earlier in the session.

WTI crude futures gained $2.25, or 2.1 percent, to $108.01 a barrel, after retreating to $104.56 a barrel earlier.

Both contracts fell around 3 percent on Thursday, ending the month lower for the first time since November.

We “still see risks to prices as skewed to the upside on tight inventories, limited spare capacity and muted non-OPEC+ supply response,” Barclays said in a note.

Libya’s National Oil Corporation declared force majeure on Thursday at the Es Sider and Ras Lanuf ports as well as the El Feel oilfield. Force majeure is still in effect at the ports of Brega and Zueitina, NOC said.

Production has seen a sharp decline, with daily exports ranging between 365,000 and 409,000 bpd, a decrease of 865,000 bpd compared to production in “normal circumstances,” NOC said.

Elsewhere, 74 Norwegian offshore oil workers at Equinor’s Gudrun, Oseberg South and Oseberg East platforms will go on strike from July 5, the Lederne trade union said on Thursday, likely halting about 4 percent of Norway’s oil production.

Ecuador’s government and indigenous groups’ leaders on Thursday reached an agreement to end more than two weeks of protests which had led to the shut-in of more than half of the country’s pre-crisis 500,000 bpd oil output.

On Thursday, the OPEC+ group of producers, including Russia, agreed to stick to its output strategy after two days of meetings. However, the producer club avoided discussing policy from September onwards.

Previously, OPEC+ decided to increase output each month by 648,000 barrels per day in July and August, up from a previous plan to add 432,000 bpd per month.

US President Joe Biden will make a three-stop trip to the Middle East in mid-July that includes a visit to Saudi Arabia, pushing energy policy into the spotlight as the United States and other countries face soaring fuel prices that are driving up inflation.

Biden said on Thursday he would not directly press Saudi Arabia to increase oil output to curb soaring prices when he sees the Saudi king and crown prince during a visit this month.

A Reuters survey found that OPEC pumped 28.52 million bpd in June, down 100,000 bpd from May’s revised total.

Oil prices are expected to stay above $100 a barrel this year as Europe and other regions struggle to wean themselves off Russian supply, a Reuters poll showed on Thursday, though economic risks could slow the climb.

India introduced export duties on gasoil, gasoline and jet fuel on Friday to help maintain domestic supplies, while also imposing a windfall tax on oil producers who have benefited from higher global crude oil prices. 

Russia seizes control of partly foreign-owned energy project

Russia seizes control of partly foreign-owned energy project
Updated 01 July 2022

Russia seizes control of partly foreign-owned energy project

Russia seizes control of partly foreign-owned energy project

MOSCOW: Russian President Vladimir Putin has handed full control over a major oil and natural gas project partly owned by Shell and two Japanese companies to a newly created Russian firm, a bold move amid spiraling tensions with the West over Moscow’s military action in Ukraine, according to Associated Press.

Putin’s decree late Thursday orders the creation of a new company that would take over ownership of Sakhalin Energy Investment Co., which is nearly 50 percent controlled by British energy giant Shell and Japan-based Mitsui and Mitsubishi.

Putin’s order named “threats to Russia’s national interests and its economic security” as the reason for the move at Sakhalin-2, one of the world’s largest export-oriented oil and natural gas projects.

The presidential order gives the foreign firms a month to decide if they want to retain the same shares in the new company.

Russian state-controlled natural gas giant Gazprom had a controlling stake in Sakhalin-2, the country’s first offshore gas project that accounts for about 4 percent of the world’s market for liquefied natural gas, or LNG. Japan, South Korea and China are the main customers for the project’s oil and LNG exports.

Kremlin spokesman Dmitry Peskov said Friday that there is no reason to expect a shutdown of supplies following Putin’s order.

Shell held a 27.5 percent stake in the project. After the start of the Russian military action in Ukraine, Shell announced its decision to pull out of all of its Russian investments, a move that it said has cost at least $5 billion. The company also holds 50 percent stakes in two other joint ventures with Gazprom to develop oil fields.

Shell said Friday that it’s studying Putin’s order, which has thrown its investment in the joint venture into doubt.

“As a shareholder, Shell has always acted in the best interests of Sakhalin-2 and in accordance with all applicable legal requirements,” the company said in a statement. “We are aware of the decree and are assessing its implications.”

Seiji Kihara, deputy chief secretary of the Japanese cabinet, said the government was aware of Putin’s decree and was reviewing its impact. Japan-based Mitsui owns 12.5 percent of the project, and Mitsubishi holds 10 percent.

Kihara emphasized that the project should not be undermined because it “is pertinent to Japan’s energy security,” adding that “anything that harms our resource rights is unacceptable.”

“We are scrutinizing Russia’s intentions and the background behind this,” he told reporters Friday at a twice-daily news briefing. “We are looking into the details, and for future steps, I don’t have any prediction for you at this point.”

Asked during a conference call with reporters if Putin’s move with Sakhalin-2 could herald a similar action against other joint ventures involving foreign shareholders, Peskov said, “There can’t be any general rule here.”

He added that “each case will be considered separately.”

Sakhalin-2 includes three offshore platforms, an onshore processing facility, 300 kilometers of offshore pipelines, 1,600 kilometers of onshore pipelines, an oil export terminal and an LNG plant.


Riyadh no longer one of the 100 most expensive cities for expats: Mercer

Riyadh no longer one of the 100 most expensive cities for expats: Mercer
Updated 01 July 2022

Riyadh no longer one of the 100 most expensive cities for expats: Mercer

Riyadh no longer one of the 100 most expensive cities for expats: Mercer

RIYADH: Saudi Arabia’s capital, Riyadh, has dropped 72 places in a ranking of the world’s most expensive cities for expats as it tumbled out of the top 100, according to a report issued by Mercer.

Riyadh was positioned at 103 in Mercer's Cost of Living Index 2022, falling from 29 in the previous year’s list. 

Commenting on Riyadh’s fall, Khaled Al-Mobayed, CEO of Menassat Reality Co., a Riyadh-based real estate developer, said: “The results came in contrary to the expectations, due to the pandemic’s ongoing consequences and the rising cost of logistics and supply chain.”

“Being out of the 100 top expensive cities is a good sign despite the challenges that the economy has gone through,” he added.

UAE's Dubai took over Lebanon's capital, Beirut, as the most expensive city among Arab countries in the region, ranking 31.

Despite being placed third in 2021, Beirut was not even on this year’s list of 227 cities due to the country’s economic turmoil.

The city’s fall reflects the severe drop in value of the Lebanese pound, according to Lebanese economic analyst Bassel Al-Khatib, who pointed out the minimum wage is now worth $20, while it was $450 before the economic crisis gripping the country. 

“Lebanon is extremely expensive to those who get paid in Lebanese pounds yet very cheap for those who get pain in US dollars,” he told Arab News, adding: “Lebanon was expensive for both citizens and foreigners, and with the currency dropping 95 percent and the dollar reaching record levels, the situation changed.”

“Everything has become expensive but not for foreigners who have dollars. All services by the government such as water, electricity fees, or internet are still the same but food prices skyrocketed,” he added.

Abu Dhabi was the second highest Arab city from the region, ranked at 61, while Jeddah came in at 111 this year compared to 94 in 2021.

Jordan's capital Amman ranked 115, followed by Bahrain's Manama at 117, Oman's Muscat at 119 and Kuwait city at 131.

Egypt's capital, Cairo, was placed at 154 while Rabat, Algiers and Tunis came as the least expensive in the region, ranking 162, 218 and 220 respectively.

Hong Kong topped the list as the most expensive city in the world in 2022, moving from second rank last year and taking the top spot from Turkmenistan’s capital, Ashgabat.

Switzerland’s Zurikh and Geneva followed as second and third most expensive cities, replacing Hong Kong and Beirut respectively.

Turkey’s capital, Ankara, came in as the least expensive city, ranking 227, taking the spot from Kyrgyzstan’s capital Bishkek.

France eyes ‘good investment opportunities’ in Saudi Arabia: Official

France eyes ‘good investment opportunities’ in Saudi Arabia: Official
Updated 01 July 2022

France eyes ‘good investment opportunities’ in Saudi Arabia: Official

France eyes ‘good investment opportunities’ in Saudi Arabia: Official

RIYADH: France is intensifying efforts to take advantage of Saudi investment opportunities in all sectors, mostly energy, technology, water and other industrial services, the country's Ambassador in Saudi Arabia said.

Saudi Arabia is an attractive region and a suitable environment for investments in all its vital sectors, Ludovic Pouille told a press conference.

The French government and the private sector are working to expand the number of companies operating in the Kingdom, which currently stands at about 135, Aleqtisadiah reported citing Pouille.

The aim is to gain large investment spaces, and to benefit from the reforms and economic developments undertaken by Saudi Arabia, which constitute a good opportunity for French companies, he said. 

The French ambassador said France will take the model of agreements between the Al-Ula Authority and his country’s institutions in the fields of infrastructure and culture, as a starting point for expanding the map of investments in the future.

New Saudi smart city AlNama to be zero-carbon

New Saudi smart city AlNama to be zero-carbon
Updated 01 July 2022

New Saudi smart city AlNama to be zero-carbon

New Saudi smart city AlNama to be zero-carbon

RIYADH: Saudi Arabia’s new AlNama smart city will be a zero-carbon community, according to the company charged with designing the development.

The hospitality hub, located on a 10 sq. km area in Riyadh, will create 10,000 jobs in various sectors, including green-tech industries to create a ‘green circular economy’, Construction Week reported. 

The project is planned to provide 11,000 residential units and an eventual population of 44,000 people.

ALNAMA will be designed by Dubai's URB, and the firm’s CEO Baharash Bagherian said: “AlNama aims to be the next generation of self-sufficient city, producing all the city’s renewable energy needs, as well as the resident’s caloric food intake on site.

“Biosaline agriculture, productive gardens, wadis, and carbon-rich habitats are key features of the development’s innovative and resilient landscape design.

“The city was planned through the design of its landscape, rather than its buildings. This creates an urbanism that is more socially inclusive, more economically valuable, and more sensitive to the environment.”

AlNama will consist of eco-friendly glamping lodges, eco resorts and a nature conservation center to promote ecotourism, while an autism village, wellness center and clinics within the medical hub will help promote medical tourism.

The green-tech hub will provide an innovative ecosystem for urban-tech companies related to food, energy, water, waste, mobility, and building materials