Sudan’s ongoing crisis spells economic trouble for its neighbors

Chadian cart owners transport belongings of Sudanese people who fled the conflict in Sudan’s Darfur region, while crossing the border between Sudan and Chad in Adre. Reuters/File
Chadian cart owners transport belongings of Sudanese people who fled the conflict in Sudan’s Darfur region, while crossing the border between Sudan and Chad in Adre. Reuters/File
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Updated 30 October 2023
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Sudan’s ongoing crisis spells economic trouble for its neighbors

Sudan’s ongoing crisis spells economic trouble for its neighbors
  • Call for ‘conflict-sensitive human security approach to humanitarian response’

TUNIS: Sudan, currently mired in a protracted war and economic turmoil, stands at the center of a multifaceted humanitarian crisis that ripples across its neighboring nations.

With Sudan’s economy in decline, the adjoining countries, deeply intertwined with its economic prospects, grapple with the fallout — disrupted trade and skyrocketing inflation. These challenges pose the risk of social upheaval and political instability that extends beyond Sudan’s borders, impacting millions throughout the region.

Armed groups operating in Sudan have also shown a propensity to seize opportunities presented by the chaos. They engage in criminal activities such as arms smuggling, human trafficking, and illicit trade, further destabilizing the region. The unrestricted flow of arms and fighters across borders poses a direct threat to the security of neighboring nations, creating challenges for humanitarian organizations striving to uphold the sacred “do no harm” principle.

Additionally, the aid sector grapples with a glaring gap between the pressing need for assistance and its actual delivery. According to the UN, a staggering 18 million people in Sudan require humanitarian aid, but only 3.5 million have received any assistance thus far. This stark disparity underscores the dire circumstances faced by millions of Sudanese citizens and raises critical questions about the effectiveness of humanitarian efforts in this complex environment.

The destruction of infrastructure in the most heavily affected regions, namely Khartoum, Darfur, and Kordofan, is estimated at $60 billion, equivalent to 10 percent of its total worth, according to Ibrahim El-Badawi, Sudan’s former finance minister and an economics researcher. He predicts a potential 20 percent drop in the gross domestic product for this year.

The former minister emphasizes that if the conflict were to cease, Sudan would require emergency economic support ranging from $5 billion to $10 billion to resuscitate the economy. He warns that the continuation of the war would lead to the further deterioration of the Sudanese economy and the state itself.

Experts highlight that beyond the physical insecurity plaguing the nation, the financial underpinnings of the aid sector are entangled in a web of challenges.

Grace Ndungu, a communications manager at Mercy Corps, a global nongovernmental humanitarian aid organization, underscores this point, stating: “Armed groups operating in the region often seize opportunities presented by Sudan’s chaos.”

These groups’ involvement in criminal activities, coupled with their ability to exploit international and regional financing meant for humanitarian assistance, further complicates the situation. At the same time, disputes over vital resources like water and arable land escalate tensions along the country’s borders.

Historically, Sudan’s violent conflicts have often been rooted in contestation over revenue. The ongoing conflict that erupted in April 2023 follows similar patterns, partially fueled by warring parties’ strategies for self-enrichment, including looting, manipulation of international and regional financing, and smuggling of resources such as gold.

The heart of Sudan’s current conflict lies in its historic domination by Khartoum, where revenue sources were frequently concentrated, leaving economic peripheries, including Darfur and Red Sea State, in dependent relations. This inequitable political economy has fueled grievances against the Khartoum-led rule, leading to violent conflicts.

The country is now compelled to utilize its limited remaining resources to assist an internally displaced population that, when considering those previously displaced by past conflicts, totals nearly 7.1 million people, surpassing any other nation globally. According to UN data, more than 5.25 million out of Sudan’s 49 million citizens have been displaced since the conflict began. Over 1 million have sought refuge in neighboring countries, while more than 4.1 million remain within Sudan, facing mounting financial hardships.

Against this background, Sudan’s cash crisis, coupled with soaring inflation rates, has exacerbated economic challenges for its citizens, limiting access to much-needed cash. Also, Sudanese state and non-state armed groups rely on the established network of profitable business interests to sustain their war chests, as they continue to control key aspects of the country’s financial landscape. The Military Industry Corp., responsible for concealing state control of businesses within a broader web of military-controlled companies, penetrates crucial sectors like manufacturing, gold, agriculture, and livestock production, contributing to Sudan’s complex war economy.

Over time, “the humanitarian aid has also become a resource leveraged by various armed groups and state institutions in Sudan,” Dallia Abdelmoniem, a Sudanese political analyst, told Arab News, as the groups occasionally co-opt humanitarian aid not only for financial benefits but also for legitimacy in the eyes of host populations.

She stresses that these challenges necessitate a conflict-sensitive human security approach to humanitarian response, rooted in cooperation with civic actors to mitigate risks. “Customized cash programming modalities can be a viable solution to navigate the intricacies of Sudan’s financial challenges,” Abdelmoniem said.

Experts say that in this tumultuous landscape of Sudan’s conflict and humanitarian crisis, proactive and sensitive approaches can mitigate risks and ensure that humanitarian assistance reaches those who need it most.

Ndungu advocates for collaboration and due diligence procedures to protect aid from being captured by Sudan’s security arena, thereby ensuring that it remains a lifeline for those in desperate need. “The struggle to ensure the safe transport of aid becomes a Herculean task in the face of political complexities.”

Abdelmoniem added that “as the aid theft has re-emerged as a distressing phenomenon in Sudan, perpetrated by both sides of the conflict and opportunistic looters, in order to navigate the intricacies of Sudan’s financial challenges and uphold humanitarian principles, international humanitarian actors must adopt a conflict-sensitive approach.”

She emphasizes that by focusing on collaboration, accountability, and civic engagement, the humanitarian sector can strive to alleviate suffering and support Sudanese civilians as they navigate the complex aftermath of conflict.

Ndungu echoes her views, proposing establishing forums for collaboration and due diligence procedures to vet financial modalities that can help protect aid from being captured by Sudan’s security arena.

“This approach should involve close collaboration with in-country civic groups and transparency initiatives to ensure that aid does not become a financial or political resource for combatants,” she added, stressing the importance of the role that regional and international actors play in shaping the dynamics of the crisis.


Wizz Air launches cheap flights between London, Jeddah

Wizz Air launches cheap flights between London, Jeddah
Updated 9 sec ago
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Wizz Air launches cheap flights between London, Jeddah

Wizz Air launches cheap flights between London, Jeddah
  • Overnight route will run daily using new Airbus long-haul A321XLR planes
  • The route will launch in March, with tickets already on sale for £135

LONDON: People in the UK will be able to reach Saudi Arabia for significantly reduced prices after budget carrier Wizz Air launched new flights from London.

The seven-hour overnight route will run from March 2025, connecting Gatwick Airport to Jeddah on new Airbus A321XLR aircraft. The carrier will also run a route to Abu Dhabi from the Italian city of Milan from June.

Tickets to Jeddah have gone on sale at £135 ($176.5), with each flight to carry up to 239 passengers.

The airline said some flights will be cheaper at $116.99 and run daily all year round, adding that they will connect “two vibrant cities.”

At a press conference in Jeddah, Andras Rado, Wizz Air’s head of communications and government affairs, said: “The Airbus A321XLR is the most cost-efficient aircraft of its class and, given the enhanced range capability, it enables Wizz Air to connect the furthest destinations in its network and further expand it, connecting cultures and continents.

“We’re excited to unlock unbeatable fares for our customers on the newly announced route to London, while offering the most sustainable option for flying … This new aircraft type marks a new era of ultra-low-fare travel on long-haul routes.”

Wizz Air will become one of the first operators of the new Airbus model, alongside Aer Lingus and Iberia, and has ordered 47 of the planes.

It is the furthest ranged of Airbus’s A320 aircraft, with a range of 8,700 km, and emits 30 percent fewer carbon emissions than its Boeing 757 and 767 competitors.

Stewart Wingate, CEO of Gatwick Airport, said the new model should help open more long-haul routes for the travel hub.

Wizz Air hopes that the new route to Jeddah will undercut British Airways. In a press release, Wizz Air said it “remains committed to expanding its presence in Saudi Arabia and beyond.”

The airline added that it is “contributing to the country’s connectivity in line with Vision 2030 and following a partnership agreement with the Saudi Tourism Authority to increase connectivity to Europe and boost inbound visitors.”


Apple committed to user privacy, says director at Global AI Summit

Apple committed to user privacy, says director at Global AI Summit
Updated 5 min 1 sec ago
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Apple committed to user privacy, says director at Global AI Summit

Apple committed to user privacy, says director at Global AI Summit
  • Device owners at center of Apple policy, says Gary Davis
  • Firm supports Saudi Arabia’s personal data protection law

RIYADH: Apple remains committed to protecting the data and privacy of its users, according to a senior executive speaking at the third Global AI Summit in Riyadh on Wednesday.

Gary Davis, global senior director of privacy and regulatory matters, said: “Apple’s privacy commitments are built into our products and features by design because at Apple, we believe that privacy is a human right.”

“That’s why Apple has, for many years, supported the introduction of data privacy laws globally. And that is why we support the introduction of your personal data protection law here in Saudi Arabia.”

Davis said the company’s approach will remain the same even as it integrates artificial intelligence into its products.

“Apple's approach to emerging technologies, like AI, is no different,” he said. “As we deeply integrate Apple Intelligence into iOS, iPadOS and macOS, we will not veer from our whole commitment to user privacy.”

Davis said the use of AI must encompass respect for human values. “It’s not only a possibility, it’s a responsibility,” he said. “We’ve been guided by our belief that great artificial intelligence and great privacy standards are not mutually exclusive, but rather mutually reinforcing.”

He added that Apple operates from four basic principles: collecting as little data as possible; device owners have the rights to their data; users will have the final say in data collection; and there is no privacy without security.

“Time and again, we’ve introduced many exciting cutting-edge features that are built from the bottom up to protect user privacy,” he said, citing the firm’s browser, Safari, its cloud storage and Apple Intelligence as examples.

“Safari blocks third-party cookies by default and has undertaken many new innovations to continue to ensure that, as you use it, you remain completely in control of your data,” he said.

“Apple Intelligence is built from your experiences across your device. That includes your photos, your messages, your files, and calendar events. So that it can provide you, and only you, with information and assistance based on what matters to you.”

He said that even if some companies say they will not misuse people’s data, the users have no way of checking or verifying if this is true.

“Our basic principle is that no one, not even Apple, perhaps even especially Apple, should have visibility into your requests, even if your data is leaving your device and going to a cloud.

“To mitigate entire classes of privacy risk, we omitted persistent data storage, we replaced the tools normally used to manage servers, and we took steps to prevent privileged access.

“The result is an unprecedented cloud security foundation based on Apple Silicon. With Private Cloud Compute, user data is never available to Apple. It’s never stored,” he said.

This article originally appeared on Arab News Japan


Saudi Arabia increasingly attractive to investors: BlackRock official

Saudi Arabia increasingly attractive to investors: BlackRock official
Updated 11 September 2024
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Saudi Arabia increasingly attractive to investors: BlackRock official

Saudi Arabia increasingly attractive to investors: BlackRock official

JEDDAH: Saudi Arabia is drawing attention from local and international investors as the Kingdom continues to prosper, according to a top global asset management company official.

In an interview with Arab News, BlackRock’s Managing Director, Head of Middle East Client Business and CEO Saudi Arabia Yazeed Al-Mubarak, said that the global client base has shown a growing interest in gaining exposure to Middle Eastern assets. 

He also underlined that regional investors are increasingly seeking more appealing opportunities within the local market.

“As Vision 2030 and its accompanying capital investment comes to life, Saudi Arabia has become an increasingly attractive destination for local and international investment,” Al-Mubarak said.

In August, BlackRock signed a memorandum of understanding in New York with the Saudi Real Estate Refinance Co., fully owned by the Kingdom’s sovereign wealth fund. 

The signing occurred during an official visit to the US by Saudi Arabia’s Minister of Municipalities and Housing Majid Al-Hogail.

The deal seeks to develop the real estate finance sector in the Kingdom and increase the share of businesses in the industry’s capital markets.

The agreement was signed by SRC CEO Majid Al-Abduljabbar and Al-Mubarak in the presence of BlackRock President Robert Kapito.

Al-Mubarak said that SRC is leading the way in developing mortgage refinancing solutions for Saudi banks and housing finance companies, enabling global institutional investors to engage with this expanding and high-quality fixed-income asset class.

Commenting on his company’s memorandum with SRC, the CEO said the announcement is an agreement to develop a high-quality fixed-income asset class of mortgage-related securities.

Providing insight on how BlackRock foresees this partnership impacting the real estate finance market in the Kingdom, he said that the Saudi housing sector is experiencing rapid growth due to population expansion, urbanization, and proactive government initiatives.

“Central to this growth is the Housing Program under Vision 2030 that aims to increase homeownership to 70 percent by 2030,” he said.

He added: “The mortgage market has quadrupled in size over the last five years, exceeding $150 billion and expected to further grow to nearly $200 billion. Prior year’s momentum slowed in 2022-2023 due to house price appreciation, rising mortgage rates, and a significant reduction in historical subsidy programs.”

Al-Mubarak further said that to support this growth and bank lending, SRC is looking to issue securitizations locally and internationally to provide additional funding capacity and contribute to the development of the Saudi debt capital markets.

Larry Fink, chairman and CEO of BlackRock, with Yazeed Al-Humied, deputy governor and head of MENA investments at PIF, in April at the launch of BlackRock Riyadh Investment Management. PIF

Commenting on how this collaboration aligns with the Kingdom’s Vision 2030 and what role his firm sees itself playing in achieving these goals, the managing director pointed to BlackRock Riyadh Investment Management, or BRIM – launched in April with an initial investment mandate of up to $5 billion from PIF.

The company – dubbed the first-of-its-kind in the Kingdom by BlackRock’s CEO Larry Fink when it was announced –  will further develop Saudi Arabia’s asset management sector, including the housing capital markets, and provide a broad range of attractive backing strategies for Middle Eastern and global clients. 

“BRIM will encompass investment strategies across a range of asset classes for the Saudi market, including both public and private markets, managed by a Riyadh-based investment team,” Al-Mubarak told Arab News.

He added that the guarantee offering provided by the Saudi Mortgage Guarantee Services Co., or Damanat, fully owned by the Saudi Real Estate Development Fund, will now act as an enabler for BRIM’s mortgage-focused fixed income strategies.

Speaking of the long-term goals of this partnership, Al-Mubarak said that these include the development of the Kingdom’s mortgage securitization framework, as well as related investment strategies to enable investors to access this market.

Al-Mubarak discussed his company’s initial partnership with SRC and the Ministry of Municipalities and Housing, stating that while there are no firm plans at this stage, his company is enthusiastic about working with both entities on future projects.


Aramco enhances cooperation with China’s Rongsheng, Hengli in new deals

Aramco enhances cooperation with China’s Rongsheng, Hengli in new deals
Updated 11 September 2024
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Aramco enhances cooperation with China’s Rongsheng, Hengli in new deals

Aramco enhances cooperation with China’s Rongsheng, Hengli in new deals

RIYADH: Saudi oil giant Aramco has unveiled new agreements with its Chinese partners, Rongsheng Petrochemical Co. and Hengli Group Co., during Chinese Premier Li Qiang’s visit to the Kingdom.

According to a press release, these agreements underscore Aramco’s ongoing dedication to bolstering China’s long-term energy security and development while enhancing its strategic relationship with key regional partners.

The agreements include preliminary documentation for a development framework agreement with Rongsheng and a strategic cooperation agreement with Hengli Group. These collaborations occur as Saudi Arabia and China deepen their engagement in the energy and petrochemical sectors, reinforcing Aramco’s role in advancing mutual objectives in these critical industries.

The development framework agreement with Rongsheng involves the potential joint expansion of the Saudi Aramco Jubail Refinery Co. facilities. This follows an announcement in April 2024, when Aramco and Rongsheng signed a cooperation framework agreement that set the stage for a joint venture in SASREF and significant investments in the Saudi and Chinese petrochemical sectors.

The joint venture contemplates Rongsheng acquiring a 50 percent stake in SASREF, while Aramco would potentially acquire a 50 percent stake in Rongsheng’s affiliate, Ningbo Zhongjin Petrochemical Co. Additionally, the agreement includes participation in the expansion of ZJPC’s facilities and the development of a liquids-to-chemicals project at SASREF, representing a substantial enhancement in the petrochemical capabilities of both companies.

The strategic cooperation agreement advances discussions related to Aramco’s potential acquisition of a 10 percent stake in Hengli Petrochemical Co., contingent on due diligence and regulatory approvals.

This agreement follows a memorandum of understanding signed in April this year, which outlined the proposed transaction and set the foundation for further collaboration between Aramco and Hengli in the petrochemical sector.

Aramco’s Downstream President Mohammed Y. Al-Qahtani, emphasized the importance of these agreements, stating that they affirm the company’s belief in the long-term mutual benefits of close collaboration with Chinese partners.

“China is an important country in our global downstream growth strategy, and we look forward to building on a relationship that spans more than three decades to unlock new opportunities in this crucial market,” he said.

Al-Qahtani further said that these agreements reflect a shared intention to strengthen relationships in key sectors, advance Aramco’s downstream goals, and contribute to the vibrant energy and petrochemicals sectors in both China and Saudi Arabia.

These agreements are part of Aramco’s broader strategy to cement its position as a key player in the energy landscape while contributing to Saudi Arabia’s economic development. By fostering closer collaboration with Chinese partners and exploring innovative technological solutions, Aramco is positioning itself to meet the evolving energy needs of both nations.

The company’s relationship with China spans over three decades, and these latest agreements mark a continuation of this longstanding partnership, with a focus on future growth and innovation.


Saudi Arabia issues over 37k certificates of origin reinforcing export growth

Saudi Arabia issues over 37k certificates of origin reinforcing export growth
Updated 11 September 2024
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Saudi Arabia issues over 37k certificates of origin reinforcing export growth

Saudi Arabia issues over 37k certificates of origin reinforcing export growth

RIYADH: Saudi Arabia’s Ministry of Industry and Mineral Resources issued 37,730 certificates of origin in August, maintaining its strong focus on enhancing the country’s export sector.

This achievement marks the 16th consecutive month with certificate issuances exceeding 30,000, following July’s total of 40,588 and June’s 31,887.

These certificates play a vital role in confirming that exported goods are either of Saudi origin or have attained national origin status, thereby facilitating smoother international trade.

By streamlining the issuance process, the ministry seeks to boost the competitiveness of the Kingdom’s exports in international markets, strengthen trade relationships, and promote broader economic growth.

To accommodate the diverse needs of exporters, the certificates are offered in four distinct formats. One format is specifically designed for national products traded within Gulf Cooperation Council countries, facilitating regional commerce.

Another format caters to exports to Arab nations. Additionally, a preferential certificate is available for trade with countries that have free trade agreements with the GCC.

For exports to countries without preferential treatment, a general certificate is provided in both Arabic and English to ensure accessibility.

The enhanced ease of exporting goods bolsters the diversification of Saudi Arabia’s economy and reduces its reliance on oil revenues. This effort aligns with the Kingdom’s broader economic objectives outlined in Vision 2030, which focus on fostering sustainable, long-term growth through the expansion of non-oil sectors. Recently, Saudi Arabia has introduced several key initiatives designed to strengthen its export capabilities, particularly for non-oil products, as part of its broader diversification strategy.

A key initiative in this effort is the “Made in Saudi” program, spearheaded by the Saudi Export Development Authority. This initiative promotes locally manufactured goods on the international stage by helping companies secure the “Saudi Made” brand.

This branding not only increases the visibility of Saudi products in global markets but also emphasizes quality and credibility, thereby enhancing their competitiveness abroad.

SEDA has also launched several trade missions to bolster international trade relationships. In 2024, Saudi delegations took part in prominent global exhibitions, including the Big 5 Construct Egypt and events in India, where they highlighted Saudi non-oil exports.

These missions facilitate connections between Saudi exporters and international buyers, expanding market access for national products. Such efforts underscore the Kingdom’s strategic goal of increasing non-oil exports to 50 percent of gross domestic product, diversifying its economy, and diminishing its reliance on oil revenues.