Arab countries urged to adopt decisive policies amid economic challenges

The Arab economies are expected to grow by 2.8 percent this year, with a forecasted rise to 4.5 percent in 2024, compared to a modest 0.3 percent growth last year. SPA
The Arab economies are expected to grow by 2.8 percent this year, with a forecasted rise to 4.5 percent in 2024, compared to a modest 0.3 percent growth last year. SPA
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Arab countries urged to adopt decisive policies amid economic challenges

Arab countries urged to adopt decisive policies amid economic challenges

RIYADH: The global economy presents promising growth opportunities, but emerging challenges could disrupt predictability, complicating the landscape for investors and policymakers, according to the Saudi Central Bank governor. 

Addressing the opening session of the 48th Council of Governors of Arab Central Banks and Monetary Authorities in Cairo, Ayman Al-Sayari emphasized the need for collaborative efforts to navigate ongoing economic turbulence. 

He acknowledged the crucial role central banks play in managing monetary policies amid shifting global dynamics, particularly regarding inflation, debt management, and evolving financial technologies.  

“The recent interest rate cuts by several central banks signal the start of a monetary easing cycle. This is expected to gradually reduce borrowing costs and public debt risks, while also stimulating investment and enhancing economic activity,” he said in his address. 

He noted that recent years have seen the Saudi economy experience accelerating growth, driven by significant transformation and economic diversification efforts. 

“In this context, Saudi Arabia continues to uphold a balanced and robust economy that can absorb external shocks, even as many economies worldwide are affected by external factors and geopolitical tensions,” added Al-Sayari. 

These issues were further emphasized by Fahad Al-Turki, director general and chairman of the board of directors of the Arab Monetary Fund, who noted that the region’s unemployment rate was alarmingly high at 10.9 percent by the end of last year — double the global average, according to World Bank figures. 

He underscored the importance of adopting policies that would address this issue and meet the economic aspirations of the region’s populations. 

He also pointed out that rising debt levels remain a significant concern for Arab economies in light of current global conditions, emphasizing the need for effective debt management to ensure sustainable financial health. 

Despite these challenges, Al-Turki expressed optimism for the future, citing AMF projections that predict an improvement in the region's economic growth rate. 

The Arab economies are expected to grow by 2.8 percent this year, with a forecasted rise to 4.5 percent in 2024, compared to a modest 0.3 percent growth last year. 

Inflation, which remains a concern, is also expected to decrease over the next two years. The AMF anticipates inflation across Arab countries to drop from 13.2 percent last year to around 11 percent in 2023, and further to 7.8 percent in 2024. 

However, these projections exclude certain Arab nations experiencing extraordinary inflation due to internal challenges. 

Al-Turki noted that financial safety indicators in the Arab region show an average capital adequacy ratio of 17.4 percent by the end of last year — well above the Basel III requirements. 

Additionally, liquid assets made up 34 percent of total assets in the sector, while loan provisions covered over 90 percent of non-performing loans in Arab banks. 

On the technology front, he pointed out that opportunities presented by artificial intelligence offer significant potential for Arab countries but stressed the need for robust regulations and risk management frameworks to fully harness its benefits. 

He called for enhanced economic resilience across Arab nations to better withstand potential global shocks.


Karl Lagerfeld label eyes branded residence expansion in UAE, globally

Karl Lagerfeld label eyes branded residence expansion in UAE, globally
Updated 12 sec ago
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Karl Lagerfeld label eyes branded residence expansion in UAE, globally

Karl Lagerfeld label eyes branded residence expansion in UAE, globally

DUBAI: German fashion brand Karl Lagerfeld is eyeing branded residence expansion in the UAE and globally, according to the firm’s CEO and president.

Speaking to Arab News on the sidelines of the second day of the Future Hospitality Summit taking place in Madinat Jumeirah from Sept. 30 to Oct. 2, Pier Paolo Righi explained that the firm is currently developing 51 villas in Dubai and is planning to expand further from there.

A branded residence is a luxury property that is affiliated with a well-known label, often in the hospitality, lifestyle, or luxury sectors. These properties typically offer high-end living spaces combined with the services and amenities associated with the brand, such as concierge services, fitness centers, or spa facilities.

This falls in line with Karl Lagerfeld’s goal of expanding the brand into the hospitality sector, thereby reflecting the firm’s greater vision to broaden the label’s comprehensive lifestyle experience.

It also aligns well with the UAE Tourism Strategy to boost the sector’s contribution to gross domestic product by 450 billion dirhams ($122 billion), attract investments worth 100 billion dirhams, and welcome 40 million hotel guests annually by 2031.

“We’re currently together with Taraf developing about 51 beautiful villas here in Dubai, and I think the next logical move is Ras Al-Khaimah or Abu Dhabi,” Righi said.

“So, we’re looking into opportunities in these areas as well. It’s not concrete yet, but we very much believe in the region and will develop that further,” he added.

The CEO said that the firm is also eyeing expansion of its branded residence beyond the UAE.

“We have different plans. We have plans in Malaysia. We have plans in Asia particularly. Also in Europe — plans are concrete in Lisbon in Portugal and we’re looking into other areas as well in Southeast Asia,” Righi said.

Regarding expanding a physical presence in Saudi Arabia in particular, the CEO said: “We already have a good partnership there with the Chalhoub Group; we’ve been working with them for many years. Also, we have a store in Riyadh, which we just recently refurbished. But, I see, of course, much more potential going forward and also see more store openings.”

Recognizing the brand’s history while discussing its current direction, the president emphasized that Saudi Arabia has an impressive vibrancy that the company aims to engage with, growing beyond fashion to include residential and hospitality sectors.

Righi said: “The developments in Saudi with the NEOM project and The Line are, of course, very much forward-thinking. They are visionary and also very much intriguing for us as a brand that’s always looking at what’s at the forefront, what’s out there, which was always the vision of Karl — to embrace the present and invent the future.”

The CEO highlighted that the entity does not consider itself exclusively a fashion house, underlining that designer Karl Lagerfeld was inspired by his diverse interests, including music, architecture, literature, and culture.

“For us, the most important is to bring all these areas of interest together into one, one world and that is what we’re trying to do. And, I think the most important thing here is that the dynamic works between the culture, what you find there, basically together with the brand DNA and the consumer that has always been Karl’s thinking is like: if it works for me as a designer only, it does not work,” Righi said.

“It has to work for the people that live there, that want to live there, and it has to relate back to the culture of the country and to the to the place, to the habitat – and that is what we’re bringing together,” he added. 

Righi further emphasized that luxury and fashion houses provide not only clothing but broader experiences of indulgence that can be in hospitality, entertainment, or the residential sector.

This year’s Future Hospitality Summit 2024 marked the largest edition to date, bringing together 1,500 industry leaders and featuring more than 110 distinguished speakers, facilitating engaging discussions and networking opportunities. 

The three-day event served as a platform for industry leaders to connect, share ideas, and shape the future of hospitality and tourism.


Wyndham targets midscale hotel segment to meet growing demand in Saudi Arabia 

Wyndham targets midscale hotel segment to meet growing demand in Saudi Arabia 
Updated 15 min 40 sec ago
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Wyndham targets midscale hotel segment to meet growing demand in Saudi Arabia 

Wyndham targets midscale hotel segment to meet growing demand in Saudi Arabia 

DUBAI: US hospitality giant Wyndham aims to extend beyond the luxury market as it eyes the midscale segment to fill a gap in Saudi Arabia’s booming hotel market. 

In an interview with Arab News on the sidelines of the Future Hospitality Summit in Dubai, Dimitris Manikis, president for Europe, Middle East, Eurasia, and Africa at Wyndham Hotels & Resorts, emphasized that while there is a significant focus on high-end hospitality in Saudi Arabia, tapping into the economy and midscale sectors is essential to reaching the Kingdom’s target of 150 million tourists by 2030. 

He highlighted the success of Wyndham’s Ramada brand in the region and discussed plans to introduce more midscale offerings like Wyndham and Wyndham Garden into the Saudi market.

“For us, there’s a lot of talk about luxury in Saudi. It’s all about luxury. But in order to get the 150 million tourists that the Kingdom is actually looking for, you have to start looking at the economy and budget sectors,” Manikis said.

The company is already invested in Saudi Arabia, with 14 operational hotels and more on the way, highlighting its commitment to the Kingdom. 

He further elaborated on the importance of catering to a broader spectrum of travelers, saying: “It’s not just about the luxury in the high end. It’s about a broader spectrum of travelers, and that’s exactly what Wyndham is actually doing in Saudi.”

Wyndham’s regional headquarters are in Dubai, with a satellite office in Saudi Arabia. 

“We have a pipeline of about seven properties as we speak. Ramada is our most popular brand and is the brand that resonates a lot with the Middle East. We’ve opened up Wyndham Garden already in the Kingdom, and obviously there are a couple of other brands that we believe have a great future,” the top official told Arab News. 

Formula One of hospitality 
 
Manikis compared Saudi Arabia’s progress in the hospitality sector to Formula One, drawing a parallel between innovations in the sport and how they later influence the broader automotive industry. 

“In Formula One, whatever you do in cars, five years later, you find the same technology in the mass production. Things that are happening in Saudi Arabia today on technology, on sustainability, on infrastructure or new concepts and ideas, you will find them in five years to be mainstream across so many different places in the world, in hospitality,” he said. 

For Manikis, the Kingdom’s advances are not just about expansion or visitor numbers, but about pioneering new methods that will reshape the future of hospitality. 

“What is happening in the Kingdom is not just about growth, and so many hotels and so many visitors or so many tourists, it’s actually about the new things that they’ve been tested in the market, that will change the future of hospitality in the next five to ten years,” he said. 

Manikis pointed to projects like NEOM as prime examples of innovation, where innovative advancements in energy, food sustainability, and infrastructure are being rolled out. 

“These are amazing things that are happening in Saudi. They get deployed in Saudi and you will find them in the next five to ten years in so many different countries in the world.” 

Middle Eastern Perspective 

Shifting his focus to the wider Middle East, Manikis highlighted the diverse approaches to hospitality in the region. “Everybody, every single country has hospitality at its core,” he said. 

He went on to explain: “The last five to seven years, we have seen what happens in hospitality in Qatar, in Abu Dhabi, we see what is going on near us in Ras Al-Khaimah, in Ajman, in Saudi Arabia, in Bahrain, everybody. The good news about the GCC and the Middle East in general, they have their own needs, their own focus.” 

Manikis showed excitement about how the hospitality industry in the Gulf Cooperation Council is transforming societies. “The good news about the GCC is that each country has its own needs, but they all recognize hospitality as a key contributor to gross domestic product,” he said. 

Manikis highlighted the enthusiasm of the region’s younger generation for hospitality, contrasting it with Europe, and said the passion energizes him during visits. 

Human Element

Despite the rising influence of technology and artificial intelligence in the sector, Manikis emphasized the irreplaceable role of human interaction. 

He acknowledged that AI will play a supportive role, such as chatbots providing customer service, but he warned against overstating its importance. “Technology helps, but we have to be careful. If we want to bring the younger generation into hospitality, we cannot tell them their jobs will be taken over by robots in five years.” 

Manikis offered a glimpse into his Wyndham’s immediate future, saying: “We are signing a couple of deals in India with the developer who is actually doing a deal here in Dubai, and then we’ve got another three deals with that particular owner in India. And then we are looking on a three deal, three sides deal, two in Abu Dhabi and one in Dubai as well.” 


Saudi Arabia and Azerbaijan explore joint sovereign investment fund to boost bilateral economic ties

Saudi Arabia and Azerbaijan explore joint sovereign investment fund to boost bilateral economic ties
Updated 45 min 18 sec ago
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Saudi Arabia and Azerbaijan explore joint sovereign investment fund to boost bilateral economic ties

Saudi Arabia and Azerbaijan explore joint sovereign investment fund to boost bilateral economic ties

RIYADH: Azerbaijan has proposed the creation of a joint sovereign investment fund with Saudi Arabia, aiming to enhance investments in key sectors and potential third-party markets. 

The initiative was discussed during a meeting in Azerbaijan between the country’s Minister of Economy, Mikayil Jabbarov, and Hassan Al-Huwaizi, chairman of the Federation of Saudi Chambers, who led a business delegation from the Kingdom to explore investment opportunities in the nation.

The minister highlighted that the proposed fund could drive investments in priority sectors such as energy, tourism, and infrastructure, crucial for both economies’ diversification agendas, the Saudi Press Agency reported.

Saudi companies are already significantly involved in Azerbaijan, reflecting strong economic ties between the two countries. 

Jabbarov emphasized the presence of major corporations such as Aramco, SABIC, and ACWA Power in Azerbaijan, highlighting the country’s appeal as an investment destination, according to the report.

In addition to the establishment of the fund, discussions focused on the broader spectrum of Saudi investments in Azerbaijan, with key areas identified, including petroleum, renewable energy, and industry, as well as tourism, agriculture, and mining.

Both sides acknowledged the necessity of signing an investment protection agreement to ensure a secure environment for investors, safeguarding the flow of capital between the nations.

Al-Huwaizi stressed the importance of this document, highlighting that legal and financial security is pivotal for attracting more Saudi investments into Azerbaijan. 

He also discussed the potential for Azerbaijani companies to engage in infrastructure projects within the Kingdom, as well as opportunities to export food products to Saudi Arabia. 

The Federation of Saudi Chambers further expressed support for a proposal to hold a regional exhibition showcasing regional products in Azerbaijan, further solidifying trade relations between the two regions.

The visit coincided with the second edition of the Gulf Cooperation Council-Azerbaijan Economic Forum, held in Baku, which focused on fostering sustainability, investments, and partnerships between nations. 

Organized by the Federation of GCC Chambers in collaboration with Azerbaijan’s Export and Investment Promotion Agency, the forum provided a platform for businesses to explore new investment opportunities and strengthen ties. 

A memorandum of understanding was signed during the event, facilitating cooperation on investment projects and trade promotion between the GCC and Azerbaijan.

Azerbaijan’s Minister of Finance, Samir Sharifov, also met with the Kingdom’s delegation, offering attractive incentives to Saudi investors. 

Sharifov outlined key benefits, such as the allocation of free land for manufacturing projects and assurances of smooth capital flows, backed by the stability of the Azerbaijani currency. These incentives aim to make Azerbaijan’s free economic zones more appealing to Saudi investors.

The recent developments underscore the growing economic cooperation between the Kingdom and Azerbaijan, driven by mutual interests in expanding sectors such as energy, infrastructure, and tourism. 

Both nations view this collaboration as a strategic step toward diversifying their economies and boosting bilateral trade.


Closing Bell: Saudi main index closes in green at 12,254

Closing Bell: Saudi main index closes in green at 12,254
Updated 3 min 20 sec ago
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Closing Bell: Saudi main index closes in green at 12,254

Closing Bell: Saudi main index closes in green at 12,254

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Tuesday, gaining 27.44 points or 0.22 percent to close at 12,253.54. 

The total trading turnover of the benchmark index was SR6.43 billion ($1.71 billion), with 116 of the stocks climbing and 104 retreating. 

The Kingdom’s parallel market, Nomu, declined by 0.53 percent to 25,309.05.

The MSCI Tadawul Index edged up by 0.38 percent to close at 1,533.79. 

The best-performing stock on the main market was Al-Baha Investment and Development Co. The firm’s share price surged by 9.09 percent to SR0.24. 

Other top performers were Middle East Specialized Cables Co. and CHUBB Arabia Cooperative Insurance Co., whose share prices soared by 7.79 percent and 7.69 percent, respectively. 

The worst performing stock of the day was Salama Cooperative Insurance Co., as its share price declined by 3.55 percent to SR27.15. 

Al Mohafaza Co. for Education and Ghida Alsultan for Fast Food Co. were the top performers in Nomu, with their share prices climbing by 11.16 percent and 10 percent, respectively. 

On the announcements front, the Capital Market Authority said it has approved Lamasat Co.’s application for the registration and offering of 6 million shares representing 7.41 percent of the firm’s capital in the parallel market. 

In another statement, CMA added that it approved Hedab Alkhaleej Trading Co.’s request to float 800,000 shares representing 10.67 percent of the company’s capital on Nomu. 

The authority also added that it green lighted the request of Arabian Company for Agriculture and Industrial Investments to register and float nine million shares, representing 30 percent of the company’s share capital on the main market. 

Almoosa Health also received a positive nod from the CMA to float 13.29 million shares on the Kingdom’s main index, which represents 30 percent of its share capital. 

“The CMA’s approval on the application shall be valid for six months from the CMA Board resolution date. The approval shall be deemed canceled if the offering and listing of the company’s shares are not completed within this period,” said the authority on all the approvals it made. 


Saudi fertilizer exports to US climb 2% as trade ties flourish

Saudi fertilizer exports to US climb 2% as trade ties flourish
Updated 01 October 2024
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Saudi fertilizer exports to US climb 2% as trade ties flourish

Saudi fertilizer exports to US climb 2% as trade ties flourish

RIYADH: Fertilizer exports to the US from Saudi Arabia saw an annual increase of 2 percent in 2023 as total bilateral trade reached SR112 billion ($29.7 billion), according to new figures.

A report by the US-Saudi Business Council showed that strong oil exports and growing non-oil sectors have fueled and bolstered this economic relationship, with the Kingdom’s exports to the US standing at SR60 billion over the 12-month period.

Of that, $13.7 billion was derived from crude oil, reaffirming the Kingdom’s position as a key oil supplier to the North American country.

In the non-oil sector, exports to the US amounted to SR8.5 billion, according to the Saudi Press Agency.

This came as Saudi Vision 2030 aims to position the nation as a global investment hub, focusing on diversifying the economy beyond oil.

“Trade relations between the US and Saudi Arabia remain a cornerstone of economic engagement between the two countries, reflecting shared strategic interests and evolving global dynamics,” Albara’a Al-Wazir, director of economic research at the US-Saudi Business Council, said.

He added: “As both countries progress, the growth of trade and foreign direct investment will be key to deepening this partnership. FDI serves as a vital channel for the exchange of capital, technology, and expertise, which is particularly important as Saudi Arabia works to diversify its economy beyond oil.”

Fertilizers led the non-oil exports, valued at SR3 billion, making up 35 percent of the Kingdom’s non-oil exports to the US, while organic chemicals ranked second – valued at SR2.6 billion, representing 31 percent of the total.

In 2023, inorganic chemicals, precious and rare metals, and radioactive materials experienced a significant surge of 7.686 percent, reaching $12 million.

US exports to Saudi Arabia also gained strong momentum, totaling $13.8 billion, marking a 20 percent increase from the previous year.

These exports encompassed several key industries, including electrical and mechanical equipment, industrial products, agricultural goods, and pharmaceuticals.

Automobiles continued to be the leading US export to the Kingdom, valued at $2.8 billion which reflects a 32 percent year-on-year increase.

The second-largest export category was nuclear reactors, boilers, machinery, and parts, accounting for 18 percent of total US exports to the country, with a value of $2.5 billion and a growth rate of 38 percent year-on-year.

Aircraft and parts ranked as the third-largest US export category to Saudi Arabia, contributing $1.7 billion.

Texas maintained its lead as the top US state in trade with the Kingdom, with exports totaling $2.9 billion.

California came in second, exporting $886 million, marking a 12 percent increase from the previous year.

 

North Carolina rose to third place with $846 million in exports, experiencing a 17 percent year-on-year growth.

 

“The US is well-positioned to support this transformation through investment in non-oil sectors such as manufacturing, technology, and renewable energy—crucial areas for Saudi Arabia’s Vision 2030 goals,” Al-Wazir said.