Mawani announces shipping service to connect Jubail with 6 global ports

The new shipping service line, India Gulf Service 1, has been added by Hapag-Lloyd, a German international shipping firm.
The new shipping service line, India Gulf Service 1, has been added by Hapag-Lloyd, a German international shipping firm.
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Updated 23 January 2023

Mawani announces shipping service to connect Jubail with 6 global ports

Mawani announces shipping service to connect Jubail with 6 global ports

CAIRO: The Saudi Ports Authority, also known as Mawani, has added another trade link from a leading shipping line, with the Kingdom’s Jubail Commercial Port connecting it with six international ports.

The new shipping service line, India Gulf Service 1, has been added by Hapag-Lloyd, a German international shipping firm.

It will connect the Saudi port to Jebel Ali in the UAE, Karachi in Pakistan, Mundra in India, Sohar in Oman, Shuaiba in Kuwait, and Um Qasr in Iraq. 

The new service will be launched weekly starting from Feb. 12 through voyages that include three ships with a total capacity of 2,400 twenty-foot equivalent units each. 

The step is in line with Mawani’s goal to

This is in line with Mawani’s goal to boost the Kingdom’s ranking on the Maritime Navigation Network Connectivity Index. Saudi Arabia currently stands at 71.33 on the index.

The latest route will position Jubail Port as a competitive hub and uncover a host of value-added opportunities for importers and exporters aligned with the objectives of the Kingdom’s National Transport and Logistics Strategy.

Jubail Commercial Port operates as a gateway for local industries to export their products to global markets bolstering Saudi foreign trade and economic growth. 


Italy, Libya sign $8-billion gas deal as PM Meloni visits Tripoli

Italy, Libya sign $8-billion gas deal as PM Meloni visits Tripoli
Updated 29 January 2023

Italy, Libya sign $8-billion gas deal as PM Meloni visits Tripoli

Italy, Libya sign $8-billion gas deal as PM Meloni visits Tripoli
  • Meloni is the highest European official to visit oil-rich Libya since the country failed to hold presidential and parliamentary elections in December 2021.

CAIRO: Italy’s prime minister held talks in Libya on Saturday with officials from the country’s west-based government focusing on energy and migration, top issues for Italy and the European Union. During the visit, the two countries’ oil companies signed a gas deal worth $8 billion — the largest single investment in Libya’s energy sector in more than two decades.
Libya is the second North African country that Premier Giorgia Meloni, three months in office, visited this week. She is seeking to secure new supplies of natural gas to replace Russian energy amid Moscow’s war on Ukraine. She previously visited Algeria, Italy’s main supplier of natural gas, where she signed several memorandums.
Meloni landed at the Mitiga airport, the only functioning airport in Libya’s capital, Tripoli, amid tight security, accompanied by Italian Foreign Minister Antonio Tajani and Interior Minister Matteo Piantedosi, her office said. She met with Abdel Hamid Dbeibah, who heads one of Libya’s rival administrations, and held talks with Mohamed Younis Menfi, who chairs Libya’s ceremonial presidential council.
At a round-table with Dbeibah, Meloni repeated her remarks from Algeria, saying that while Italy wants to increase its profile in the region, it doesn’t seek a “predatory” role but wants to help African nations “grow and become richer.”
During the visit, Claudio Descalzi, the CEO of Italy’s state-run energy company, ENI, signed an $8 billion deal with Libya’s National Oil Corporation to develop two Libyan offshore gas fields. NOC’s chairman Farhat Bengdara also signed.
The agreement involves developing two offshore fields in Block NC-41, north of Libya and ENI said they would start pumping gas in 2026, and estimated to reach 750 million cubic feet per day, the Italian firm said in a statement.
Meloni, who attended the signing ceremony, called the deal “significant and historic” and said it will help Europe securing energy sources.
“Libya is clearly for us a strategic economic partner,″ Meloni said.
Saturday’s deal is likely to deepen the rift between the rival Libyan administrations in the east and west, similar to previous oil and military deals between Tripoli and Ankara. It has already exposed fractions within the Dbeibah’s government.
Oil Minister Mohamed Aoun, who did not attend the signing, criticized the deal on a local TV, saying it was “illegal” and claiming that NOC did not consult with his ministry.
Bengdara did not address Aoun’s criticism during his conference but said those who reject the deal could challenge it in court.
ENI has continued to operate in Libya despite ongoing security issues, producing gas mostly for the domestic market. Last year, Libya delivered just 2.63 billion cubic meters to Italy through the Greenstream pipeline — well below the annual levels of 8 billion cubic meters before Libya’s decline in 2011.
Instability, increased domestic demand and underinvestment has hampered Libya’s gas deliveries abroad, according to Matteo Villa of the Milan-based ISPI think tank. New deals “are important in terms of image,” Villa said.
Also, because of Moscow’s war on Ukraine, Italy has moved to reduce dependence on Russian natural gas. Last year, Italy reduced imports by two-thirds, to 11 billion cubic meters.
Meloni is the top European official to visit oil-rich Libya since the country failed to hold presidential and parliamentary elections in December 2021. That prompted Libya’s east-based parliament to appoint a rival government after Dbeibah refused to step down.
Libya has for most of the past decade been ruled by rival governments — one based in the country’s east, and the other in Tripoli, in the west. The country descended into chaos following the 2011 NATO-backed uprising turned civil war that toppled and later killed longtime autocratic ruler Muammar Qaddafi.
Piantedosi’s presence during the visit signaled that migration is a top concern in Meloni’s trip. The interior minister has been spearheading the government’s crackdown on charity rescue boats operating off Libya, initially denying access to ports and more recently, assigning ports in northern Italy, requiring days of navigation.
At a joint news conference with Meloni later Saturday, Dbeibah said that Italy would provide five “fully equipped” boats to Libya’s coast guard to help stem the flow of migrants to the European shores.
Alarm Phone, an activist network that helps bring rescuers to distressed migrants at sea, criticized Italy’s move to provide the patrol boats.
“While this is nothing new, it is worrying,” the group said in an email to The Associated Press. “This will inevitably lead to more people being abducted at sea and forced to return to places they had sought to escape from.”
Jalel Harchaoui, a Libya expert and an associate fellow at the Royal United Services Institute, said that Meloni needs to show “some kind of a step-up, compared to her predecessor in terms of migration and energy policy in Libya.”
But “it will be difficult to improve upon Rome’s existing western Libya tactics, which have been chugging along,” he said.
The North African nation has also become a hub for African and Middle Eastern migrants seeking to travel to Europe, with Italy receiving tens of thousands every year.
Successive Italian governments and the European Union have supported the Libyan coast guard and militias loyal to Tripoli in hopes of curbing such perilous sea crossings.
The United Nations and rights groups, however, say those European policies leave migrants at the mercy of armed groups or confined in squalid detention centers rife with abuse.


One-stop shop helping revolutionize Mideast’s healthcare sector

One-stop shop helping revolutionize Mideast’s healthcare sector
Updated 28 January 2023

One-stop shop helping revolutionize Mideast’s healthcare sector

One-stop shop helping revolutionize Mideast’s healthcare sector
  • Abdul Latif Jameel Health to offer underserved populations transformative products, says CEO

RIYADH: In a short span of two years, Abdul Latif Jameel Health has successfully accelerated modern innovation to provide cutting-edge healthcare solutions to people who would otherwise not have access to it.

According to its CEO, the digitally enabled company is now focused on building a commercial platform to offer underserved populations products that are both impactful and transformative.

“Since most of the innovations happen far away in the US, Japan, or in Europe, which are the hubs of medical innovation, small companies would not initially come to our parts of the world,” Akram Bouchenaki told Arab News in an exclusive interview.

“However we, at Abdul Latif Jameel Health, are giving them a chance to very quickly broaden their footprint and immediately become a global organization with the benefit of having us as that one-stop shop organization that takes care of everything for them.”

He added: “We take the product, we register it with the local regulatory authorities, we do all the promotion, medical education to physicians and we also take care of pharmacovigilance and all the regulatory requirements. That’s really the model where we’re building with several companies.”

Innovative products

Illustrating his point of bringing innovative healthcare products to the market, Bouchenaki cites the example of a new handheld, ultrasound device from a company called Butterfly that they have introduced to the market.

It is the world’s only single probe, whole-body handheld ultrasound solution that connects to a cellphone, iPhone or Android, and then gives access to ultrasound imaging to users anytime, anywhere, and at a very affordable cost.

Healthcare providers can collect advanced imaging, perform rapid assessments, and guide critical procedures no matter where they are, and share those images seamlessly with doctors across the globe to help with reading and interpreting scans.

Fusing semiconductors, artificial intelligence, and cloud technology, the product is designed to dramatically expand the capabilities of practitioners working within and outside of hospitals in developed, underdeveloped, and remote areas. 

The company has plans to steadily grow its presence in the Kingdom, the region’s largest healthcare market. (Shutterstock)

“This is a revolutionary type of device that we introduced in India and in several markets in the Middle East including Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Turkiye and now we are expanding to Egypt, Morocco, and other markets. It will transform the way people are diagnosed,” he said.

Bouchenaki added: “It is our mission to collaborate with sector disruptors, who question how healthcare services have always been delivered, and how billions of people in underserved communities can be served better.”

He then went on to give another example of a product that his company is getting ready to introduce with EQRx, a new type of pharmaceutical company based in Boston. “EQRx has developed innovative technologies and treatments at a fraction of the cost of what current cancer therapies cost,” Bouchenaki revealed. “Their approach is really to make innovation in oncology highly affordable.”

Abdul Latif Jameel Health has entered into a strategic collaboration with EQRx for the commercialization of two affordable novel lung cancer therapeutics to people across the Middle East, Africa and Turkiye.

These therapies will offer treatment to patients with advanced non-small cell lung cancer at a fraction of the cost of existing and traditional approaches.

“This agreement comes as we forge ahead in our mission to source, collaborate with, and fund innovators within the medical world that are re-examining how to improve the current healthcare landscape by disrupting existing methods,” said Bouchenaki.

Care medicine

Abdul Latif Jameel Health is keen on the development of care medicine, whereby the company is taking care to the patient as opposed to having a patient come to the hospital or the clinic.

“These interventions can have a high impact in large countries where there are remote locations,” Bouchenaki said.

He went on to cite the example of a device from a Japanese company called Melody International that will help in the maternal-fetal area to illustrate his point. 

We’re looking at growth in terms of technology because we are really building this company as a digitally enabled company from the beginning.

Akram Bouchenaki, Abdul Latif Jameel Health CEO

“We are going to introduce this device that would be able to monitor fetus health in utero while they are in the mother’s belly and the mother’s uterine health remotely,” he said. The cloud-based mobile wireless fetal monitor platform will soon be introduced across selected markets in Asia, the Middle East, and Africa.

It is a convenient, smart, and highly portable remote mobile fetal monitoring device to assist in problematic or high-risk situations, enabling safer and more secure births for mothers.

Their integrated platform comprises a fetal heart monitor; a uterine contraction monitor; and a smart tablet device to see data in real time and connect to the internet.

Its effectiveness has been proven in a variety of clinical cases, including as a partial alternative to periodic medical checkups for pregnant women living in remote or isolated areas.

Key markets

Talking about Saudi Arabia, Bouchenaki said that it was critical for Abdul Latif Jameel Health to have a strong presence in the Kingdom as it is the largest healthcare market in the region by far.

“We have a team that is established in Saudi Arabia and we have an initial portfolio of products that we have brought to the Kingdom that we have registered and we’re getting ready to launch,” he explained.

He added: “We also have Japanese innovations that are already in the market like one for heart valve repair and another for post-stroke or post-trauma rehabilitation.”

Since Saudi Arabia is a key market for Abdul Latif Jameel Health, the company has plans to steadily grow its presence in the Kingdom.

Egypt, Bouchenaki said, is another very important market. “Like Saudi Arabia and Turkiye, we are also focusing on Egypt as we are looking at expanding in countries that have taken a very deliberate and proactive approach to the handling of public health issues,” he said.

“I’ve had a really good experience working in Egypt on their hepatitis C elimination program,” Bouchenaki continued. “It’s probably one of the first countries with such a high impact of hepatitis C and we’ll be able to eliminate the disease thanks to a very strong political commitment to fight this viral infection.”

With regard to the company’s outlook for the future, Bouchenaki said he saw Abdul Latif Jameel Health’s growth along three dimensions. “We see our growth in opening new territories and new markets,” he informed.

“We also see our growth in the expansion of our portfolio in terms of new disease areas — we’re looking at a number of spaces like rehab diseases, innovative surgical technologies, etc.”

“Lastly, we’re looking at growth in terms of technology because we are really building this company as a digitally enabled company from the beginning,” he added.

“The good news,” Bouchenaki concluded, “is that we don’t have a long history, so it allows us to leverage all the technology that is at our disposal today to have the fastest and most positive impact on the market.”


Saudi Arabia’s real estate plans leading the world in innovation

Saudi Arabia’s real estate plans leading the world in innovation
Updated 28 January 2023

Saudi Arabia’s real estate plans leading the world in innovation

Saudi Arabia’s real estate plans leading the world in innovation
  • In line with the Vision 2030 agenda, the real estate sector is booming in Saudi Arabia

RIYADH: Setting the tone for the shape of things to come, 2023 began on a high note for the real estate industry with deals worth more than SR10 billion ($2.66 billion) signed on the opening day of the Real Estate Future Forum, which was held in Riyadh from Jan. 23-25.

The strong start to the year comes in the wake of a report published by PwC Middle East in December which noted the Kingdom has made remarkable progress in transforming its housing sector in the past decade.

The government’s robust policies and initiatives, including the activation of numerous finance products, is propelling the sector forward, addressing the key challenges faced by the housing market, and making home ownership a possibility for new generations of Saudis, it said.

The positivity was echoed by Faisal Durrani, head of Middle East research, at global real estate consultancy Knight Frank.

“We are tracking nearly 555,000 residential units that are due to be delivered around the Kingdom by 2030, with Riyadh alone set to see an additional 200,000 homes as the Saudi capital gears up for a 127 percent rise in its population to 17 million by the end of the decade,” he told Arab News.

He did, however, add a note of caution, saying: “Despite the volume of new homes planned, we forecast a national deficit of almost 1.5 million units. The caveat, of course, is around building suitable stock to satisfy the exceptional levels of current and future demand.”

With such expansion on the horizon, It is hardly surprising then that there is keen interest from investors, who are looking to capitalize on the strong outlook for the real estate sector in the Kingdom.

Bahrain-based Investcorp, for instance, announced earlier in January that it would invest as much as $1 billion in Saudi real estate over the next five years.

“Saudi Arabia’s real estate market has been undergoing a rapid transformation as the Kingdom’s appetite for megaprojects and economic prosperity grow under the Vision 2030 agenda,” Yusef Al Yusef, head of private wealth in the GCC for Investcorp, told Arab News.

Changing face of Saudi Arabia

A report from S&P Global published in December last year set out Saudi Arabia’s real estate ambitions as part of its Vision 2030 program for economic diversification.

According to the report, the Kingdom has $1 trillion slated for real estate and infrastructure projects, with at least eight new cities planned predominantly along the coast of the Red Sea, with more than 1.3 million new homes by end-2030.

Predictably, Saudi Arabia has remained the largest construction market in the Middle East region, with a share of $31 billion out total $87 billion worth of awarded projects during the first 10 months of 2022, according to Rani Majzoub, head of real estate advisory at KPMG Professional Services.

“While having undisputed leadership in the region in terms of market size, Saudi Arabia is also becoming one of the leading countries in terms of real estate innovation at a global scale,” he told Arab News.

“The Kingdom is set to shape its construction and development at an unprecedented pace – with the share of construction targeted to reach 8.8 percent of nominal gross domestic product as per Vision 2030. Currently, the share of construction is estimated at 6.4 percent of GDP which equates to an annual spend of SR197 billion,” Majzoub added. 

According to KPMG’s estimates, the share of construction is expected to reach SR382 billion by 2030, owing both to GDP growth and increase in GDP contribution by the construction sector.

What differentiates Saudi Arabia, according to Majzoub, is the large number of megaprojects that are set to be developed in the next decade, which will contribute to the digital transformation of the cities with heritage and culture at their core.

A few examples include Jeddah Central Development, Makkah Heritage District, Diriyah Gate Development, Qiddiya, King Salman Park, Riyadh Sport Boulevard, NEOM, Red Sea Project and Soudah Development.

Most of the megaprojects, which are set to come to fruition in the next decade, will change not only the Kingdom’s landscape but, in many cases, the day-to-day lives of residents, too.

“The Iskan program, which aims to increase home ownership for Saudi families to 70 percent by 2030, is tasked with providing the necessary infrastructure for housing and encouraging landlords to develop real estate projects throughout Makkah, Jeddah and Dammam,” said Sapna Jagtiani, director, S&P Global Rating.

“Although the white land tax (on undeveloped land) has been in effect for a few years with some success, the government has launched the second phase of its Idle Land Program to ensure fair competition and a balance between supply and demand for modern estates,” added Ilya Tafintsev, associate, S&P Global Ratings.

“The Kingdom is currently undergoing a major transformation, with Vision 2030 as an ambitious yet achievable mission,” Mohammed Al-Otaibi, CEO of Ajdan Real Estate Development, told Arab News.  

“We believe that the development projects will be instrumental in positioning Saudi Arabia as a leading tourism, entertainment, and real estate destination to rival the likes of Dubai. At Ajdan, we are partnering with some of the world’s leading designers, architects, brands and operators to really elevate the offering in Saudi Arabia.”

“As Saudi Arabia continues its ongoing economic growth, the demand for residential properties will also increase,” Imad Shahouri, PwC’s Middle East consulting real estate cluster leader, told Arab News. 

Saudi Arabia has remained the largest construction market in the Middle East region, with a share of $31 billion out of a total $87 billion worth of awarded projects during the first 10 months of 2022.

Rani Majzoub, head of real estate advisory at KPMG Professional Services

“The Kingdom has put forward large-scale national programs as part of the Saudi Vision 2030, including The Housing Program, which aims to provide housing solutions enabling Saudi nationals to own and benefit from suitable houses. The expanding project has set a mission to improve housing conditions and quantity for current and future generations.”

“In alignment with Vision 2030, the Housing Program will provide housing units for Saudi families, with an expected 70 percent homeownership among Saudis by the end of 2030,” Shahouri added.

“The residential sector’s demand is driven by Vision 2030’s target of increasing home ownership to 70 percent by end of the decade and, as of mid-2022, the Saudi Real Estate Refinance Co. estimates home ownership to have reached 60 percent,” Junaid Ansari, head of investment strategy and research at Kamco Invest, informed Arab News.

“On a broader level, we feel that there is a wait-and-see approach being adopted in some cases, where many potential buyers are waiting the delivery of new major developments,” Pedro Ribeiro, general manager of CBRE Saudi Arabia, told Arab News.

“Many of these developments will help provide much-needed supply to market but also, more importantly, the required quality and property configuration at affordable price points. This trend is not limited just to Riyadh but also to the likes of Jeddah, where we have seen a number of notable masterplans being launched.”

All eyes on Riyadh

While numerous projects are slated for existing main cities the big question is whether the government can meet its ambitious target to make Riyadh one of the 10th largest economies in the world by 2030, with its population projected to exceed 15 million by 2030.

“We are optimistic that Riyadh will continue to grow at an impressive rate – the demand is there and there is no shortage of industry professionals well equipped to meet the demand,” said Al-Otaibi.

“At Ajdan alone, we are involved in a number of new residential projects in Riyadh that will contribute significantly to the city’s economy, not to mention many other developers both in the private and public sector that will be delivering mega-scale projects in and around Riyadh, so we are confident that the government will reach its goal.”  

“As ambitious as it sounds, this aim requires significant effort on the economic, regulatory and development fronts. So far, the government has not only shown determination but has also made the required effort and implemented innovative ideas to accomplish the challenge,” Majzoub said.

He added: “The government is focused on increasing the participation of the private sector from 40 percent to 65 percent and raising the contribution of small and medium enterprises to the gross domestic product.

“Regulatory steps such as reducing the requirements of bank guarantees for developers, the relocation of international company regional headquarters to Riyadh, and expansion of the industrial areas are some of the key measures taken by the government to drive the requisite growth.”

“Megaprojects like the Metro will enhance mobility and allow the city to expand and create more developments on the outskirts like Diriyah,” Majzoub explained. “On the other hand, lifestyle projects like Diriyah, King Salman Park, Qiddiyah, etc. are set to become a reflection of futuristic living which will attract expats and locals from other parts of the country.”

“The current growth trajectory, announced mega projects, government plans and regulations, and the response of the private sector all show positive signs and increase the likelihood of achieving the ambitions for Riyadh,” he concluded.

“This transformational change in infrastructure and cross-cultural engagement, while focused in Riyadh, is not exclusive to it,” summed up Shahouri. “Other major cities like Jeddah are also getting a makeover in a large-scale redevelopment effort. For instance, the Kingdom will invest $20 billion to revamp and revitalize about 5.7 million sq. m. of picturesque waterfront in the Jeddah Central Project. Similar initiatives are underway in Madinah as well.”


Lebanese banks ‘could recover within 5 or 10 years with astute planning’

Lebanese banks ‘could recover within 5 or 10 years with astute planning’
Updated 28 January 2023

Lebanese banks ‘could recover within 5 or 10 years with astute planning’

Lebanese banks ‘could recover within 5 or 10 years with astute planning’
  • CEO says main cause of economic collapse was incompetence of top bankers

LONDON: The financial crisis in Lebanon could be resolved within five to 10 years if a “well thought out program” is implemented that takes care of small depositors, addresses the needs of medium-sized ones and brings big depositors on board as partners in new banks, according to a finance industry expert in London.

The Lebanese economy has “continued to deteriorate to untenable levels,” according to the International Monetary Fund. Per capita gross domestic product fell by 36.5 percent between 2019 and 2021, and is expected to contract even further this year.

“They could have had a quicker recovery had they started earlier,” said George Kanaan, CEO of the Arab Bankers Association, a nonprofit professional organization in London whose members work in banking and related industries in the Arab world and the UK. “But three years have passed and nothing has happened.”

Kanaan, head of the ABA since 2009, has worked for prominent banks in New York, London and Saudi Arabia since 1975. He said it is not unusual that one or two banks might fail in a country, or perhaps a segment of the industry or a specialty sector, “but for a system to fail entirely is almost unique in history.”

The Lebanese pound has lost approximately 90 percent of its value during the economic crisis in the country and continues to tumble to record lows, reaching above 60,000 pounds to the dollar on Friday.

“We would like to see joint action by the (big) depositors to work with the banks, the government and the IMF, if they can be brought in, to restructure a system that has failed — and the failure of the system was comprehensive,” Kanaan told Arab News during an exclusive interview.

He said that corruption and a waste of revenues and resources actually played only a small part in the failure, and that the financial system collapsed mainly as a result of the incompetence of its management, particularly at the nation’s central bank, Banque du Liban.

European investigators are investigating alleged state fraud and the actions of Riad Salameh, who has been central bank governor for three decades. He and his brother Raja have been accused of illegally taking more than $300 million from the bank between 2002 and 2015.

“The central bank governor was brought in a long, long time ago and he obviously overstayed any reasonable period of governance (and) mismanaged events, possibly because of ignorance, possibly because it seemed to work so let it happen, or pressures from the political establishment,” Kanaan said.

The “black hole in the Lebanese banking system is about $100 billion,” he added. “About a third of it is loans made to a very bad client called the Lebanese state … and about two-thirds of it went to supporting the pound and a fixed exchange rate of 1,500 Lebanese pounds to the dollar.”

This strategy, implemented after the 15-year civil war in the country ended in 1990, initially worked because it helped “stabilize the economy and put it on a sound footing,” Kanaan said. 

You are going to have to address the top tier of depositors with a bail-in, similar to (what happened in) Cyprus, when all big depositors become shareholders in new banks.

George Kanaan, Arab Bankers Association CEO

But it should have ended after about three to five years, with the exchange rate subsequently left to the market to decide, he added. This did not happen, however.

Fast forward to the global financial crisis in 2008 and money was “pouring” into the country, Kanaan said. Lebanese banks were seen as safe havens because had not suffered the way banks in other countries had, and they were not involved in the “risky” and “sophisticated instruments” used by Western banks. Therefore it was considered “counterintuitive” at that point to abandon the fixed rate against the dollar.

“Once that honeymoon period had passed, the country started going through vacant periods, meaning with no council of ministers (and) no president, the state was suspended from doing anything and the economy began to retreat,” he said.

“Had you allowed the pound to move the market, it would have dropped (in value). And by dropping, it would have sent a signal to the market, to politicians, everybody: Guys things aren’t good, fix them. They didn’t. They kept on blindly supporting the pound and the effect of that was to give the Lebanese an exceptionally false sense of security and wealth.”

Small depositors were not greatly affected at first and got some of their money back. Very big depositors “also had to stay silent,” Kanaan said, as most of them were banking in Lebanon because they were not able to take their business elsewhere. Either they had been sanctioned directly, feared being sanctioned, came from dubious jurisdictions, were involved in disreputable dealings or tax evasion, or had plenty of other investments to tide them over, he explained. But eventually the entire system collapsed.

“It’s very sad,” said Kanaan. “You find people now, at the age of 70, going back to work because they need to live; they can’t retire anymore. This, in a way, brings home the horror of the crime.”

He places the blame first and foremost with the bankers, as it was their job to make sure depositors would get their money back. They should have defied Banque du Liban’s order to lock depositors out of their dollar accounts and block transfers to other countries, he added.

“That’s where the fault lies,” Kanaan said. “The central bank literally forced people to do what it wanted and the people acquiesced and, in a way, created an unusual system.

“It wasn’t really a system; we had a bank called the Central Bank of Lebanon, and branches. Every single branch was an exact replica of the one next to it; you cannot distinguish between them because they were all forced to take the same risk assets.”

According to the IMF, food prices in Lebanon have increased almost tenfold since the crisis began in May 2019, unemployment is exceptionally high, and three quarters of the population have been plunged into poverty.

Such a brutal contraction is usually associated with conflict or war, the World Bank noted. The situation has been exacerbated by an influx of refugees, the COVID-19 pandemic and the devastating explosion at Beirut’s port in August 2020.

Denied access to their savings, a growing number of people, in addition to taking part in mass protests, are taking the law into their own hands and resorting to extreme measures to get their money, such as bank sieges and sit-ins, some of them involving weapons and hostages.

“In between five and 10 years, you could have a new system, fully recovered, and people, for the most part, with their money back,” Kanaan said, adding that any system could be reformed every five years.

“(But) you are going to have to address the top tier of the depositors with a bail-in, similar to (what happened in) Cyprus, when all the big depositors become shareholders in new banks, and the middle depositors will have to be addressed through some sort of securitization or bonds program.”

A bail-in provides relief to a failing financial institution by requiring the cancellation of debts owed to creditors and depositors. In effect, it is the opposite of a bailout, which involves a rescue by external parties, typically governments, using an influx of cash.

The recovery will happen more quickly if significant revenues, or “unforeseen revenues” flow in, Kanaan said.

To this end, “the interesting thing on the horizon are the gas and oil discoveries offshore,” which Lebanon is due to begin exploiting, he added.


India’s Gautam Adani: Asia’s richest man in the eye of a storm

Gautam Adani. (REUTERS)
Gautam Adani. (REUTERS)
Updated 28 January 2023

India’s Gautam Adani: Asia’s richest man in the eye of a storm

Gautam Adani. (REUTERS)
  • India’s Prime Minister Narendra Modi hails from the same state and their relationship has come under intense scrutiny by Modi’s opponents for years

NEW DELHI: India’s Gautam Adani, the school drop-out turned billionaire who rose to become Asia’s richest man, faces possibly the biggest challenge of his career after a US short seller cast doubts on his business practices, hammering shares in his companies and his reputation.
Adani, whose home state is Gujarat in western India, built his business empire from scratch after starting as a commodities trader. India’s Prime Minister Narendra Modi hails from the same state and their relationship has come under intense scrutiny by Modi’s opponents for years.
Adani’s business empire grew rapidly and his wealth ballooned. His interests span ports, power generation, airports, mining, edible oils, renewable power and more recently media and cement.
He rose to become the world’s third-richest person according to Forbes, with a net worth of $127 billion, trailing only Bernard Arnault and Elon Musk. Married to dentist Priti Adani, he has two sons, Karan and Jeet, both of whom are involved in the company businesses.
Despite his riches the 60-year-old, who comes from a middle-class textile family, was far lesser known than other billionaires in a country where many inherit their wealth.
His business style was described as “very hands on,” according to one person with direct knowledge of his dealings.
As Adani’s empire swelled, stocks of his seven listed companies surged — in some cases more than 1,500 percent in the last three years amid aggressive expansion. He denied allegations by Modi’s opponents that he had benefited from their close ties.
In a 2014 interview with Reuters, when asked if he was friends with Modi, Adani said he had friends across the political spectrum, but avoids politics.
He has said no one political leader is behind his success and when asked about Modi’s use of Adani corporate planes during the interview, Adani said Modi “pays fully.”
In recent years, the $220 billion Adani Group empire has attracted foreign investment — France’s TotalEnergies, for example, partnered with Adani last year to develop the world’s biggest green hydrogen ecosystem.
More recently, Adani has taken a pro-active approach to building his public image, giving interviews to local and foreign media.
Appearing in a popular Hindi TV show this month called the ‘People’s Court’, Adani sat in a mock witness box inside a courtroom setup and answered questions about his conglomerate — offering an unusual level of scrutiny. He described himself as “a shy person” and credited the rise of his popularity in part to the political attacks he has faced.
Modi’s government has denied allegations of favoring Adani.
“People got to know who Adani (was) because of constant targeting by Rahul ji during the 2014 elections and after that,” Adani said, during the show, referring to opposition Congress party leader Rahul Gandhi.
Three weeks later, shares of his group’s listed companies plunged on Friday, taking their cumulative losses to $48 billion this week. Short seller Hindenburg Research on Wednesday accused Adani’s businesses of improper use of offshore tax havens and flagged concerns about high debt. Adani has called the report baseless, and said he was considering taking action.
REPUTATION CHALLENGE
Adani Group’s website says its vision is to balance “growth with goodness” as it aims to build assets of national relevance and transform lives through self-reliance and sustainability.
Adani is no stranger to controversies. The most recent was months of protest by fishermen against construction of a $900-million port in southern India’s Kerala, in which he sued the state government and fishermen leaders. And in Australia, environmental activists for years protested against Adani’s Carmichael coal mine project in Queensland on concerns of carbon emissions and damage to the Great Barrier Reef.
His latest challenge is how to deal with an unprecedented share price rout as the group’s flagship firm Adani Enterprises launched the country’s biggest public secondary share offering this week, aiming to raise $2.5 billion.
The stock’s price on Friday fell well below the offer price, casting doubts on its success.
Image guru Dilip Cherian told Reuters the Hindenburg Report — and its fallout — could carry reputational risk for Adani but he could take action to limit that damage and reassure investors of the group’s financial and assets strength and ensure the share sale is a success.
“In terms of the kind of stellar rise he has had this is a hazard,” Cherian said.
Adani told India Today TV in December that people who were raising questions about the group’s debt had not done a deep dive into its financials, without saying who he was referring to.
As the market rout played out on Mumbai exchanges, Adani was seen heading to a meeting at the federal power minister’s office in New Delhi. It is not known what was discussed and Adani Group did not respond to a request for comment on Friday.
Adani Group’s consolidated gross debt stands at $23.34 billion, Jefferies says. While Hindenburg alleged key listed Adani companies had “substantial debt” which has put the entire group on a “precarious financial footing,” the Adani Group has repeatedly said its borrowings are manageable and no investor has raised any concern.