MENA faces $994bn infrastructure funding gap between 2016 and 2040: report  

MENA faces $994bn infrastructure funding gap between 2016 and 2040: report  
The most significant funding gap across the OIC was in roads, making up 53 percent of the total funding gap. (Shutterstock)
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Updated 30 May 2023
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MENA faces $994bn infrastructure funding gap between 2016 and 2040: report  

MENA faces $994bn infrastructure funding gap between 2016 and 2040: report  

RIYADH: The Middle East and North Africa region is confronting the largest infrastructure funding gap in the Organisation of Islamic Cooperation, estimated to be about $993.9 billion between 2016 and 2040, according to the ICD-Refinitiv OIC Infrastructure Outlook 2023 report.  

The infrastructure funding gap is the difference between the funds required to develop and maintain infrastructure projects and the available financial resources to meet those needs. 

The study noted that the region faced a funding gap of $684.9 billion in the infrastructure development of roads, $110.8 billion in water, $47.3 billion in rail, $33.6 billion in ports and $24.7 million in airports during the 25 years.  

Electricity infrastructure is the only sector where MENA holds a surplus of $27.4 billion.  

Sub-Saharan Africa, on the other hand, faced an infrastructure funding gap of $665 billion between 2016 and 2040, with telecommunication accounting for $178.6 billion, electricity for $126.3 billion and rail for $42.5 billion.  

Similarly, Europe and Central Asia were better placed with a gap of $547 billion, lagging by $414 billion in road development.  

“As Islamic markets grow in global importance … and their potential expands as markets for consumption and investment, it is becoming increasingly vital that the gaps are filled,” said Mustafa Adil, head of Islamic finance, Refinitiv, in the report.  

The report further revealed that the overall funding gap for the 57-member OIC countries is estimated at $2.7 trillion during the 25 years.    

The top five countries in terms of infrastructure funding gaps included Turkiye with $405 billion, Egypt with $230 billion, Nigeria with $221 billion, Bangladesh with $192 billion and Iran with $153 billion.  

Moreover, the most significant funding gap across the OIC was in roads, making up 53 percent of the total.  

Telecommunications, electricity and water contributed 38 percent of the overall gap, followed by rail, ports and airports with a combined 9 percent.  

The report further said key challenges facing OIC countries in developing the infrastructure are lack of funding, limited institutional capacity, vulnerability to political risk, weak legal and regulatory frameworks, and the environmental and social implications of any infrastructure projects.  

There are, however, significant opportunities to support economic growth and boost prosperity, increase trade, enhance social welfare, improve energy security and climate resilience, and improve regional integration, the report said.  


Saudi businesses expect low levels of security threats in 2024: report 

Saudi businesses expect low levels of security threats in 2024: report 
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Saudi businesses expect low levels of security threats in 2024: report 

Saudi businesses expect low levels of security threats in 2024: report 

RIYADH: Driven by the increased use of advanced technologies, most large companies in Saudi Arabia expect low levels of security threats in 2024, a threat assessment investigation has revealed.  

According to the World Security Report released by London-based global security firm G4S, the Kingdom is consolidating its position as one of the best countries in the region to do business, thanks to its widespread adoption of advanced technology.  

“The government’s measures to stamp down on cybercrime, along with its substantial investments in advanced technologies and digital upskilling in the context of Saudi Vision 2030, make the country an attractive hub for businesses,” said Mahmoud Mudhaffar, managing director of G4S in Saudi Arabia,  in a statement.  

The study found that the Kingdom had the lowest intrusion and competitor sabotage rates at 11 percent and 13 percent, respectively.  

Last year, Saudi Arabia experienced lower levels of external threats related to vandalism, trespass and distributed denial of service attacks compared with the global average, the report added. 

A DDoS attack is a cybercrime that involves multiple machines working together to overwhelm a target with internet traffic. 

The report surveyed 1,775 chief security officers of large organizations across 30 countries, including 235 CSOs in the Middle East from the UAE, Saudi Arabia, Egypt and Jordan. 

The research revealed that companies in the Middle East faced the least security threats involving violent criminals at 19 percent.  

CSOs who participated in the survey opined that Saudi Arabia plans to increase its use of technologies like artificial intelligence, facial recognition and machine learning.  

“In particular, it appears to be embracing the use of AI. Saudi Arabia is the second highest country in the region behind Jordan to say it will adopt AI-powered surveillance and monitoring systems at 46 percent,” said G4S in the report.  

The Kingdom is also the second-highest country in the region to expect to use biometrics and facial recognition technology behind the UAE at 49 percent over the next five years.  

Similarly, at 44 percent, more companies in the Kingdom plan to use internet-connected technologies and connected devices compared to any other country in the region. 


Oil Updates – crude set for 2% weekly gain on China holiday demand, tight US supply

Oil Updates – crude set for 2% weekly gain on China holiday demand, tight US supply
Updated 29 September 2023
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Oil Updates – crude set for 2% weekly gain on China holiday demand, tight US supply

Oil Updates – crude set for 2% weekly gain on China holiday demand, tight US supply

LONDON: Oil prices were set for a weekly gain of around 2 percent after regaining ground on Friday amid strong holiday demand from China and persistently tight US fundamentals.

Brent November futures which expire on Friday rose 5 cents to $95.43 per barrel. Brent December futures gained 13 cents to trade at $93.23 per barrel at 6:35 a.m. GMT.

US West Texas Intermediate crude climbed 16 cents to $91.87 per barrel.

The market eased about 1 percent in the previous session, as traders took profits after prices soared to 10-month highs, and some worried that high interest rates may weigh on oil demand.

Improving macroeconomic data from China, the world’s largest oil importer, coupled with strong fuel demand as the country as it embarked on its week-long Golden Week holiday on Friday, supported prices.

“(An) increase in international travel during the Golden Week holiday is boosting Chinese oil demand,” ANZ analysts said in a client note.

Domestic travel is also expected to boost demand, with data from flight app Umetrip showing the average number of daily flights booked is a fifth higher than for Golden Week in 2019, before the COVID-19 outbreak.

China’s factory activity likely steadied in September, a Reuters poll showed, adding to a run of indicators suggesting the world’s second-largest economy has begun to stabilize which could bolster demand further. Official data is due on Saturday.

The US economy maintained a fairly solid pace of growth in the second quarter and activity appears to have accelerated this quarter, data showed on Thursday, indicating that strong fuel demand could remain.

A backdrop of tight supplies in the US provided further price support, with storage at Cushing, Oklahoma, the delivery point for the country’s crude futures, already at their lowest since July 2022.

Traders are awaiting next week’s meeting of the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, scheduled for Oct. 4.

“Next week’s OPEC meeting will be a key update for the market with increasing probability the voluntary supply cuts by Aramco are reduced,” said National Australia Bank analysts in a client note. 


‘Place the burden’ on wealthy segments of society, IMF tells Pakistan

‘Place the burden’ on wealthy segments of society, IMF tells Pakistan
Updated 29 September 2023
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‘Place the burden’ on wealthy segments of society, IMF tells Pakistan

‘Place the burden’ on wealthy segments of society, IMF tells Pakistan
  • Pakistan and IMF struck $3 billion bailout deal earlier this year
  • Reforms linked to bailout have already fueled annual inflation

KARACHI: Pakistan needs to “place the burden” on wealthy segments of society and ensure that the rich pay taxes and the poor are protected, an IMF spokeswoman said in a press briefing on Thursday.

The International Monetary Fund and Pakistan struck a staff-level agreement for the provision on $3 billion in bailout funds under a stand-by arrangement (SBA) earlier this year, giving the South Asian economy a much-awaited respite as it teetered on the brink of default.

Reforms linked to the bailout, including an easing of import restrictions and a demand that subsidies be removed, have already fueled annual inflation, which rose to a record 38.0 percent in May. Interest rates have also risen, and the rupee hit all-time lows. Last month the currency fell 6.2 percent though it has sharply recovered in September amid a crackdown on illegal foreign exchange trade in grey and black markets by security agencies.

The August data from Pakistan’s statistics bureau showed a slight easing from July’s 28.3 percent inflation rate, but food inflation remained elevated at 38.5 percent.

“Place the burden on the wealthy segments of society. It’s important … that the rich pay their taxes, tax to GDP ratio in Pakistan is very, very low and that the poor are protected in society. The poor and the vulnerable members of society are protected,” IMF spokeswoman Julie Kozack told reporters in Washington, when asked about IMF reforms linked to the bailout.

She said the objectives of the program were to “provide a policy anchor” to Pakistan to address domestic and external imbalances and a framework for financial support from other donors, multilateral and bilateral partners, including fresh financing and rollovers of debt coming due.

“Policy efforts center on the implementation of the fiscal year 2024 budget, appropriate monetary policy aimed at bringing inflation down, and continued reforms to improve the viability of the energy sector,” Kozack said.

“All of these reforms are ultimately aimed at paving the way for higher, more inclusive and more resilient growth. To support social development and climate resilience, the program envisages plans to strengthen public financial management, tax administration efforts, and to better prioritize public investment. And all of this is being done with support from partners including not only the IMF but also the World Bank and the Asian Development Bank.”


FX clampdown boosts Pakistani rupee 6.1 percent to become September’s top currency

FX clampdown boosts Pakistani rupee 6.1 percent to become September’s top currency
Updated 29 September 2023
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FX clampdown boosts Pakistani rupee 6.1 percent to become September’s top currency

FX clampdown boosts Pakistani rupee 6.1 percent to become September’s top currency
  • September’s gains have almost made up for all of the rupee’s losses in August
  • Gains technically make rupee the best-performing currency in the world this month

KARACHI: Pakistan’s rupee has gained 6.1 percent against the dollar so far in September, following an official clampdown on illegal foreign exchange trade in grey and black markets by security agencies.

September’s gains have almost made up for all of the rupee’s losses in August and technically make it the best-performing currency in the world this month. The rupee hit a record low of 307.1 against the dollar on Sept. 5 but has made a sharp recovery since the country’s financial regulator and security agencies began taking action the next day to curb black market operations.

The Pakistani rupee closed 0.3 percent up in the interbank market at 287.8 per dollar on Thursday.

The crackdown on black market operators against the informal market resulted in tens of millions of dollars pouring back into Pakistan’s interbank and open markets, dealers said.

“The government’s stern administrative action against the unlawful foreign exchange dealers and hoarders in commodity markets is stabilizing the exchange rate, providing a respite to the imported inflation and easing out commodity prices,” the Finance Ministry said in its monthly report.

“The rupee has indeed performed well but this data does not reflect the sharp depreciation preceding this performance. Pakistan’s currency has been one of the worst-performing in recent years,” said Fahad Rauf, Head of Research at Ismail Iqbal Securities.

A market-determined exchange rate is a key condition for Pakistan receiving a $3 billion bailout loan from the International Monetary Fund (IMF) that was agreed in July to help avert a sovereign default.

Rauf added that the recent performance of the rupee is more of a recovery than an actual out-performance. He said the reserves situation is still far from comfortable.

On Thursday, Pakistan’s reserves clocked in at $7.637 billion, enough for less than two months’ worth of imports.

The report added that inflation is anticipated to remain high in the coming month, hovering around 29-31 percent due to an upward adjustment in energy tariffs and a major increase in fuel prices.


Lucid marks green milestone as it opens first global facility in Jeddah

Lucid marks green milestone as it opens first global facility in Jeddah
Updated 28 September 2023
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Lucid marks green milestone as it opens first global facility in Jeddah

Lucid marks green milestone as it opens first global facility in Jeddah

JEDDAH: Lucid Group celebrated the official opening of its first international car manufacturing facility in Saudi Arabia on Wednesday. Situated in King Abdullah Economic City, the new facility is not only poised to serve the local market but also has its sights set on future exports. 

In an interview with Arab News, Faisal Sultan, vice president and managing director for Middle East at Lucid Group, noted that the facility’s opening marks the start of their production operations and positions them to fulfill their recently signed agreement with the Saudi government.

The agreement involves purchasing up to 100,000 vehicles over a decade, with an initial commitment of 50,000 vehicles and an option for an additional 50,000 over the same period. 

Speaking about why Lucid ventured into electric car manufacturing in a country with a strong oil-based economy, Sultan said that Saudi Arabia was chosen for its strategic location and the ongoing transformative changes taking place within the country. 

“With Vision 2030, Saudi Arabia is transforming from only oil dependency and going into industries, tourism, healthcare, IT, and AI. So, those things all resonate with our policy. We are also in the business of transforming the mode of transportation, the luxury aspects, and trying to get customers to contribute to our sustainability,” he said.   

Sultan added that sustainability is the core policy of Vision 2030. “That was the main reason, but the other reason is the strategic location of KAEC, being on the Red Sea, giving us the opportunity to manufacture cars here, not just for local markets, but in the future to export them out through the Red Sea,” he explained.   

Held at KAEC, the inauguration event had some high-profile participants including Minister of Investment Khalid Al-Falih, Minister of Industry and Mineral Resources Bandar Alkhorayef, and Governor of the Kingdom’s Public Investment Fund Yasir Al-Rumayyan, along with the US Ambassador to the Kingdom, Michael Alan Ratney, and Lucid Group leadership. 

Aligning with green initiative 

Al-Falih highlighted that Lucid Motors’ establishment aligns with Saudi Arabia’s Vision 2030, the Saudi Green Initiative, and the country’s commitment to sustainability and net-zero emissions.  

He noted the global shift towards electric vehicles, emphasizing the importance of preserving the environment. 

“Off all cars sold globally last year, EVs saw a 65 percent increase year on year, compared to a 7 percent decline for internal combustion engine cars. This rapid growth in EV sales is a testament to humanity’s dedication to preserving our planet and ensuring a safer, healthier future for generations to come,” Al-Falih said.   

Furthermore, he added, through the inauguration of this facility, Saudi Arabia sends a message to the world, affirming its commitment to fostering innovation, investing in groundbreaking technologies, and spearheading environmentally sustainable advancements. 

This commitment extends beyond KAEC to NEOM, home to the world’s largest green hydrogen project, and Red Sea Global, where the first off-grid, all-renewable energy system will power operations. 

“We are laying the foundation for a future that prioritizes environmental consciousness right here in our own land,” the minister further added.   

Meanwhile, Sultan recalled Saudi Arabia’s announcement of the SGI, aimed at ensuring that 30 percent of cars sold in the country are EVs, underlining the nation’s belief in the global necessity for such a shift. 

He observed that there is a significant global shift as consumers increasingly embrace electric vehicles.  

“I think for Saudi Arabia to take that bold step and to also start putting the infrastructure and the companies like Lucid being present within the country producing cars will definitely help achieve those goals for the country and also help us create the demand that is really needed to get the electric vehicles on the road,” he said.  

Sultan added that a greater presence of electric vehicles on the road would unquestionably lead to reduced emissions, cleaner air, and a healthier environment for future generations. 

Manufacturing hub 

Al-Falih affirmed that this step would position the Kingdom as a regional manufacturing hub for the broader green economy. He added that Lucid’s presence would serve as a nucleus, unlocking the value chain of the EV industry and giving rise to spin-off effects and additional investment opportunities.   

Lucid’s presence in Saudi Arabia is expected to generate over 4,000 direct jobs, potential exports exceeding $117 billion, and a gross domestic product impact of nearly $50 billion.  

The facility aims to promote homegrown Saudi talent and provide expert skill development training. The company also highlighted that, through an agreement with the Human Resources Development Fund, it anticipates employing hundreds of Saudi nationals in the initial years and ultimately expanding the workforce into the thousands. 

For his part, Alkhorayef said in his speech: “We are quite determined to a complete cluster that will help different downstream and upstream industries, downstream chemical, and metals. We are also resolved to allow Saudi Arabia to become a global player in EVs, batteries, and so on.”   

He added that they are working very closely with Lucid, Ceer, and PIF to ensure Saudi Arabia becomes a hub of innovation.   

The industry minister also underscored that the occasion signifies not only the establishment of the facility but also a demonstration of the genuinely favorable investment environment in Saudi Arabia. 

In his speech, Ratney stated: “This partnership will deliver the world’s most advanced electric vehicles to a global market. It will inspire increased adoption of electric vehicle technologies globally and contribute to the development of the Kingdom’s own human capital.” 

He also emphasized that the timing is perfect for such a partnership, noting, “In fact, Lucid estimates that the first manufacturing plant in Saudi Arabia could generate $3.4 billion in value over the next 15 years, aligning Saudi investment and talent with US engineering, R&D, and manufacturing.” 

Charging stations  

Saudi Arabia is also investing in building a robust charging infrastructure for electric vehicles, with Lucid providing technical knowledge and support for smart charging infrastructure. 

Sultan said that Lucid itself provides its customers with a charger for their home that can actually charge the vehicle within a few hours.   

“But it is only when you are traveling from one city, like Riyadh to Jeddah, you will need to have the public infrastructure charging. So, we want to make sure that our customers have that through the discussions that we have with the government entities and the private sector,” he explained.   

The Lucid executive revealed that they have plans to export outside Saudi Arabia once their facility is fully operational.   

He stated that their strategy had been to export vehicles from Saudi Arabia upon reaching full capacity at manufacturing plant AMP-2, aiming to assemble 150,000 mid-sized platform vehicles.

Sultan mentioned technological partnerships, such as the one with Aston Martin, as part of Lucid’s long-term vision for electric mobility in Saudi Arabia.   

“We will continue to look for deals like that. I think Lucid technology is something that is very far advanced than some of our competitors. And we want to make sure that this technology is used for the greater humankind’s betterment,” he said.  

Sultan added that their goal is to increase the production of EVs and contribute wherever possible, be it through their own vehicles or technology partnerships, to get more electric cars on the road. 

He concluded by stating that they have already assembled about 51 cars in the new facility and are “ready" for further production. Sultan noted that their current annual production capacity at the assembly plant is 5,000 vehicles, but this capacity will significantly increase once the full complex in Jeddah is completed, reaching a total of 155,000 vehicles.