US should participate in carbon pricing rather than oppose it: IMF director

US should participate in carbon pricing rather than oppose it: IMF director
According to IMF Director Kristalina Georgieva revenues generated from carbon pricing can be strategically directed to compensate the most vulnerable parts of the global population. AN Photo
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Updated 02 December 2023

US should participate in carbon pricing rather than oppose it: IMF director

US should participate in carbon pricing rather than oppose it: IMF director

DUBAI: The US should participate, rather than being a “loud opponent,” in carbon pricing, urged the director of the International Monetary Fund.
Addressing the Business and Philanthropy Climate Forum alongside the UN Climate Conference, Kristalina Georgieva affirmed that the US must not hinder the world from “moving in the right direction.” Instead, the country should explore the standards and regulatory fees it needs to implement carbon pricing into its economic model. 

The director deemed carbon pricing a “wonderful instrument” due to its dual role in revenue generation and addressing inequality. The principle is straightforward: the more emissions one creates, the more one consumes, resulting in a proportional payment.
According to Georgieva, revenues generated from carbon pricing can be strategically directed to compensate the most vulnerable parts of the global population. Assessments by the IMF indicate that allocating 20 percent of these revenues significantly support the 30 percent most vulnerable areas, providing them with the “much-needed” backing. 

The IMF chief emphasized that “carbon price is a very strong incentive, much stronger than anything else we can invent.”  

Addressing concerns about the political feasibility of carbon prices in various places, she expressed disagreement, asserting that carbon pricing can be implemented in diverse ways.
She added: “It can be a tax, and when it is a tax, it is the most efficient and impactful way.”  

Georgieva pointed out that in countries where carbon tax was gradually introduced, emissions saw a significant reduction of 30 to 40 percent. Furthermore, she highlighted European trading mechanisms that have successfully generated $190 billion in revenue.
Despite the current average carbon price standing at $20 per ton in areas covered by carbon pricing, when amalgamating this figure with 75 percent of the world without carbon pricing, the average carbon price would fall to $5, she noted. 
According to the IMF, a package of measures, including carbon pricing, the elimination of harmful subsidies, and policy support, would significantly accelerate decarbonization. The director instilled the idea that adopting such measures could empower the global population to “make this decade one that we take pride in.” 

Fossil fuel direct subsidies soared to a record $1.3 trillion in the last year, driven by support measures in response to the cost-of-living crisis, as stated by Georgieva. When factoring in indirect subsidies, such as those arising from the absence of carbon pricing addressing environmental and health damage, the total surges to $7.1 trillion. 

“We need to go from $900 million where we are now to $5 trillion to make decarbonization a reality. The question is, is $5 trillion, a lot of money? Well, it’s obviously not a little but put $5 trillion next to $7.1 trillion in direct and indirect subsidies, or next to the size of the world economy, which is over $100 trillion,” the director outlined. 

She added: “I think we should be brave and say yes, it can be done, except it will be only done if we get the private sector to move faster and especially move faster in the developing world where emissions are growing. I’m an optimist; I have seen gradually moving on blended finance in a meaningful way.”

Emphasizing the significance of climate finance, the IMF chief affirmed that when considering all nationally determined contributions for this decade, they would result in only an 11 percent reduction in emissions. 

To uphold the commitment to limiting the temperature increase to 1.5 degrees Celsius, it would instead require contributions ranging between 25 and 50 percent, as highlighted by Georgieva.
Meanwhile, private funds currently contribute 40 percent to climate finance. To meet emission targets, this figure must escalate to 80 or 90 percent.
Despite climate risks being “macro-critical” and impacting economies, communities, and households, ultimately leading to financial instability, the director highlighted that transitioning to the new climate economy presents  “unique opportunities” for green growth and job creation. 

While the world economy has demonstrated resilience during challenges such as the pandemic and global conflicts, Georgieva, however, acknowledged that the IMF recognizes the current growth rate as “slow.” 

The organization is forecasting a modest 3 percent year-on-year growth rate for the next five years, nearly a full percentage point below the average of 3.8 percent observed in the preceding decade. 

The director expressed concerns that geopolitical tensions might exacerbate economic fragmentation amid a global climate crisis. This situation has left the entity “very concerned” about the growing inequality both within and across countries.

There exists a striking contrast between economies with a robust capacity to cope and low-income countries, where many have become “way more vulnerable” to climate devastation while grappling with adaptation challenges.  

In response to this disparity, the director emphasized the urgent need for cooperation. She called on companies and global bodies to emulate the proactive approach of the IMF, recognizing the importance of collective efforts in addressing the vulnerabilities and challenges posed by climate change. 

The director said, “There is nothing we can do each one of us alone, but we can make a difference working together.”  

She highlighted the IMF’s transformative shift in its approach over the last few years, integrating climate considerations into policy engagement. The focus involves mitigation strategies for countries facing high water levels, adaptation support for vulnerable nations, and transition plans for those heavily reliant on hydrocarbon sectors. 

“As a financial institution, the IMF has to put our money where our mouth is,” asserted Georgieva. This commitment materialized in the establishment of the $40 billion Resilience and Sustainability Trust.

Concluding her statement, the director expressed gratitude to the UAE for its recent contribution, with 11 countries having already accessed the fund. The UAE, as the newest contributor, provided 200 million dirhams ($54.46 million) as of Dec. 1.

Al Akaria inks deal with Marriott to introduce Autograph hotel brand in Riyadh 

Al Akaria inks deal with Marriott to introduce Autograph hotel brand in Riyadh 
Updated 13 min ago

Al Akaria inks deal with Marriott to introduce Autograph hotel brand in Riyadh 

Al Akaria inks deal with Marriott to introduce Autograph hotel brand in Riyadh 

RIYADH: Riyadh is set to welcome a new 280-key luxury hotel following an agreement signed by Saudi Real Estate Co., also known as Al Akaria.      

The deal with Marriott International will introduce the Autograph Collection brand to the Saudi capital, paving the way for the opening of the new hotel, according to a statement.   

Scheduled to commence construction in 2025, the hotel is anticipated to welcome visitors by 2028 upon its completion, the release added.   

Ibrahim Al-Alwan, CEO of Al-Akaria Real Estate Co., said: “We are confident that this collaboration will set new standards in luxury hotel hospitality in the region.”    

This step reflects Al Akaria’s commitment to promoting tourism and hospitality in Riyadh, aligning with the goals of the Kingdom’s Vision 2030 to create appealing destinations for residents and visitors.   

It also contributes to Saudi Arabia’s aspiration to strengthen its position as a recognized international tourist destination.  

Moreover, the new hotel will contribute to the development of a mixed-use destination, featuring commercial facilities, restaurants, and entertainment areas. 

According to Chadi Hauch, regional vice president of lodging development in the Middle East at Marriott International, the tourism industry in the Kingdom is currently undergoing a rapid and visually striking transformation, providing them with various opportunities to expand their presence accordingly.  

In December, Marriott International announced the commencement of construction for a Ritz-Carlton in the historic town of Diriyah.  

Preceding this, in November, the hotel operator inked an agreement with Saudi's Sela Sport to develop two new luxury hotels in the country. 

In September, the hospitality firm revealed plans for hotels from two of its brands in NEOM’s mountain destination, Trojena. The development includes a W Hotel and a JW Marriott facility, solidifying the partnership between the hospitality giant and the giga-project, according to a statement released at the time.

WTO’s Ministerial Conference in Abu Dhabi to address decentralization of global supply chains

WTO’s Ministerial Conference in Abu Dhabi to address decentralization of global supply chains
Updated 22 February 2024

WTO’s Ministerial Conference in Abu Dhabi to address decentralization of global supply chains

WTO’s Ministerial Conference in Abu Dhabi to address decentralization of global supply chains

RIYADH: Abu Dhabi is set to host the World Trade Organization’s Ministerial Conference focused on reshaping global trade dynamics, according to the intergovernmental body’s director general.

Ngozi Okonjo-Iweala highlighted in an interview with the Emirates News Agency from Geneva the importance of this discussion slated to take place from Feb. 26 to 29.

She said that this gathering will see talks on various topics, such as decentralizing global supply chains, fostering a more inclusive international trade landscape, and ensuring the participation of marginalized communities in multinational development efforts.

Okonjo-Iweala stressed that many private-sector investors currently adopt the “China+1” model, where they diversify supply chains beyond the Asian economic giant to countries like Vietnam, Indonesia, or India.

“We have no problems with that. But we are saying there is also China plus Morocco, China plus Brazil, China plus Senegal, China plus Bangladesh. So, there are many countries that are ripe for investment,” Okonjo-Iweala said.

The focus on decentralization aims to encourage investors to reshape global supply chains and drive employment opportunities. Okonjo-Iweala underlined that for the world to enhance resilience, the private sector must invest in developing countries with conducive investment environments.

She highlighted the multifaceted benefits of such investments, stating: “You can help deal with the resilience of supply chains. You can help deal with inequality by investing in developing countries. You can help create jobs.”

Reflecting on the significance of the WTO’s 13th Ministerial Conference being hosted in Abu Dhabi, Okonjo-Iweala expressed gratitude to the UAE for its commitment to multilateralism and global solidarity. 

She added that collaboration with the Emirati authorities in organizing a meeting that will bring together more than 7,000 people in Abu Dhabi has been highly positive.

MC13’s agenda includes pioneering discussions on various contemporary issues ranging from trade and environment to climate change, sustainability, and inclusion. 

Okonjo-Iweala stressed the importance of addressing the challenges faced by marginalized populations and integrating developing countries, especially women and small enterprises, into the global supply chain.

Additionally, MC13 will celebrate the accession of new WTO members – Timor-Leste and Comoros – for the first time in eight years. Discussions will also revolve around reforms in the dispute settlement system and negotiations on digital trade, fisheries subsidies, and more.

As the world navigates complex economic and environmental challenges, MC13 stands as a platform for fostering dialogue, cooperation, and inclusive trade policies to drive sustainable global development.

Saudi Fund for Development set to enhance Tunisia’s railway network with loan

Saudi Fund for Development set to enhance Tunisia’s railway network with loan
Updated 2 min 31 sec ago

Saudi Fund for Development set to enhance Tunisia’s railway network with loan

Saudi Fund for Development set to enhance Tunisia’s railway network with loan

RIYADH: Tunisia’s railway network is set to improve as the Saudi Fund for Development is expected to finalize a loan agreement during its visit to the African country’s capital.

The development came as Sultan Al-Marshad, CEO of SFD, and Saudi delegates initiated their Tunisia visit on Feb. 21, focusing on discussions to enhance development collaboration between the two sides. 

SFD’s visit to the country aims to finalize a development loan agreement for the renovation and development of the phosphate transport railway, the Saudi Press Agency reported. 

Welcomed by Tunisian Prime Minister Ahmed Al-Hachani, Al-Marshad engaged in talks to strengthen cooperation, and support social and economic growth in various Tunisian regions.  

During his visit, the CEO also participated in a housing unit handover ceremony in Zaghouan governorate. 

SFD has been extending financial aid and development loans to Tunisia since 1975. 

In July 2023, Saudi Arabia granted $400 million as a soft loan and $100 million as a grant to bolster Tunisia’s economy.  

Established in 1974, SFD has funded over 800 development projects valued at $20 billion across more than 100 countries globally. 

In December 2023, during the Tunisian-Saudi Joint Commission held in Tunis, Finance Minister Sihem Boughdiri Nemsia said that her country is ready to consolidate constructive cooperation with the Kingdom to achieve the development goals of both nations.  

During the same event, Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef noted that the Kingdom wishes to become an active partner in Tunisia’s economic activities.  

“Given that Tunisia enjoys important mineral resources such as iron, copper, lead, and a significant phosphate reserve, we hope to explore more investment opportunities in these areas and obtain operational concessions in Tunisia,” said Alkhorayef, as reported by the Tunisian News Agency, Tunis Afrique Presse. 

During the December visit, Alkhorayef engaged in meetings with Tunisian officials, including Minister of Trade and Export Development Kalthoum ben Rejeb. The discussions focused on exploring avenues to boost Saudi non-oil exports to Tunisia. 

He also met with Tunisia’s Minister of Agriculture, Water Resources, and Fisheries, Abdelmonem Belati, to discuss plans for formalizing a memorandum of understanding in the field of water resources. 

PIF to acquire stake in Saudi construction giant Binladin Group – reports

PIF to acquire stake in Saudi construction giant Binladin Group – reports
Updated 22 February 2024

PIF to acquire stake in Saudi construction giant Binladin Group – reports

PIF to acquire stake in Saudi construction giant Binladin Group – reports

RIYADH: Saudi Arabia’s Public Investment Fund is set to take a 36 percent stake in the Kingdom’s construction giant Binladin Group, according to Bloomberg. 

While PIF did not offer an official response to the report, Bloomberg said the fund is “working with Morgan Stanley on a potential deal to buy into Saudi Binladin Group,” citing people with knowledge of the matter. 

“The PIF, as the $700 billion wealth fund is known, is considering acquiring part or all of the 36 percent stake owned by the ministry of finance, the people said, asking not to be identified because the discussions are private,” reported Bloomberg. 

It added that the sovereign wealth fund is looking to local firms to build the infrastructure needed to host showcase events such as the World Expo. Spokespeople for Morgan Stanley and PIF declined to comment. 

Representatives for Binladin couldn’t be reached for comment, according to the outlet. The Kingdom’s fund is helping Saudi Arabia boost its transition from oil and overseeing several giga-projects such as NEOM. 

Bloomberg said PIF spent $1.3 billion last year to acquire stakes in four local construction companies to bolster the Kingdom’s domestic construction industry.

Saudi Binladin Group operates in three categories, including construction, power, and industrial.

On the construction side, SBG has worked on more than 15 building projects in Saudi Arabia, including the expansion of the Holy Mosque in Makkah and Al-Faisaliah Tower in Riyadh.

Internationally, the group’s projects include Kuala Lumpur Airport, Sharm El-Sheikh Airport in Egypt as well as Sharjah International Airport and Fujairah International Airport in the UAE.

In the power generation sector, SBG worked on Al-Shoaiba Power Plant and Power Plant No.9, also known as PP9, which generates a capacity of 5,980 megawatts and was built on an area of 3.2 million sq. m.

Also, Binladin Group’s industrial project encompassed the BCS Ready Mix Factory and the Bahra Industrial Complex.

In a press statement earlier this month, PIF revealed it had acquired a 40 percent stake in the Zamil Offshore Co., one of the largest Saudi-based offshore support vessel operators. 

According to the wealth fund, this transaction is a part of the fund’s wider strategy to contribute to the development of the Kingdom’s energy base. 

In January, PIF increased its stake in Japan-based video game firm Koei Tecmo to 6.60 percent from 5.56 percent. Similarly, in February 2023, PIF raised its stake in Nintendo Co. to 8.26 percent from 7.08 percent, making it the largest outside investor in the Japanese gaming company. 

Last month, the fund also acquired a 23.8 percent stake in Middle East Paper Co., one of the leading manufacturers specializing in producing and recycling paper products in the region.

Pakistan aiming to increase trade with Saudi Arabia to $20bn: minister

Pakistan aiming to increase trade with Saudi Arabia to $20bn: minister
Updated 51 min 33 sec ago

Pakistan aiming to increase trade with Saudi Arabia to $20bn: minister

Pakistan aiming to increase trade with Saudi Arabia to $20bn: minister

RIYADH: Pakistan wants to increase its trade with Saudi Arabia to $20 billion, up from the current $5.7 billion, through enhancing business conditions, according to a top official.

The Saudi-Pakistani Business Forum kicked off in Riyadh on Feb. 22 under the patronage of Minister of Commerce Majid bin Abdullah Al-Qasabi, organized by the Federation of Saudi Chambers, according to the Kingdom’s official press agency. 

During the event, Pakistan’s Minister of Commerce Gohar Ejaz highlighted the role of the Free Trade Agreement between the Gulf Corporation Council countries and his nation in opening up opportunities for investors from both regions. 

He expressed his ambition to increase trade volume to $20 billion by improving the business environment between the two countries and encouraging the private sector, especially since Pakistan represents a significant market and opportunity for Saudi investors. 

Chairman of the Federation of Saudi Chambers Hassan Al-Huwaizi noted the leaps in trade exchange between the Kingdom and Pakistan, which reached $5.7 billion, adding that Pakistan now ranks 20th in the list of Saudi trading partners, with broader prospects for partnership and Pakistani investors in Vision 2030 projects. 

The Kingdom is home to over 2.7 million Pakistani expatriates, serving as the top source of remittances for the cash-strapped South Asian country. 

“Remittance inflows during Jan. 24 were mainly sourced from Saudi Arabia ($587.3 million), United Arab Emirates ($407.6 million), United Kingdom ($362.1 million) and United States of America ($283.4 million),” the State Bank of Pakistan said in a press release.

Ejaz pointed out that the agreement provides protection and guarantees for Saudi and Gulf investments, explaining that the forum comes within Pakistan’s interest in developing its relations with the Kingdom and benefiting from Vision 2030 projects.

The minister of commerce emphasized in a speech, conveyed by Acting Deputy Governor of the Foreign Trade Authority’s Deputyship of Private Sector Affairs and Global Presence Fawaz bin Rafaah, the significant role played by the private sectors of Saudi Arabia and Pakistan in developing the volume of trade exchange, as reported by the Saudi Press Agency. 

Fahd Al-Bash, president of the Saudi-Pakistani Business Council, revealed several initiatives and projects the council is working on in cooperation with investors from both countries. 

These include launching a portal for rice importers from Pakistan, establishing a technology center in Riyadh, a halal meat center in Makkah, as well as a market for Pakistani products in the Kingdom and joint petrochemical industries to meet the needs of the market. 

Forum participants discussed the opportunities and initiatives provided by Vision 2030 for Pakistani investors, as well as the investment options available to Saudi businessmen in Pakistan across various targeted economic sectors. 

During the forum, the ministry of investment screened a presentation titled “Invest in Saudi Arabia,” covering the financial environment and opportunities in the Kingdom.

The Agricultural Development Fund also presented its services and efforts in agricultural sector development. 

Additionally, the Saudi Export-Import Bank showcased its efforts and services in developing Saudi exports and serving exporters, while the Pakistani Investment Council reviewed the investment opportunities available in Pakistan.

Saudi Arabia’s Crown Prince Mohammed bin Salman has directed a study to increase the Kingdom’s investments in Pakistan to $10 billion. 

He also advised the Saudi Fund for Development to explore opportunities for enhancing the Saudi deposit to the Central Bank of Pakistan, aiming to reach $5 billion.