Saudi Central Bank Chief Warns of Soaring Sovereign Debt Levels

The Spring Meetings of the IMF and World Bank held in Washington (IMF website)
The Spring Meetings of the IMF and World Bank held in Washington (IMF website)
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Saudi Central Bank Chief Warns of Soaring Sovereign Debt Levels

The Spring Meetings of the IMF and World Bank held in Washington (IMF website)
The Spring Meetings of the IMF and World Bank held in Washington (IMF website)

Ayman Al-Sayari, Governor of the Saudi Central Bank (SAMA), has warned about the growing gap in economic growth between countries. He pointed out the risks of food shortages and increased vulnerability to debts.

Speaking at a meeting of finance ministers and central bank governors from the G20, Al-Sayari stressed the importance of countries working together and having a fair global trade system.

This, he said, would help make the global economy stronger and fairer, especially for poorer countries.

The world economy is uncertain due to various reasons, including political changes in the Middle East, rising prices in many countries, and big economies keeping interest rates high. This affects how much money goes into developing countries and increases their debts.

Al-Sayari also said that countries with strong economies can attract more stable investments. Many countries are trying hard to control rising prices, which means people spend less and slow down the economy. This leads to more borrowing and higher debts worldwide.

Global debt is a big problem, reaching record levels and causing problems for countries and people.

With global public debt rising slightly to 93% of GDP in 2023, up by about 9 percentage points from its pre-COVID-19 level, the IMF places addressing global debt as one of its top priorities, with significant attention given to this issue during the ongoing Spring Meetings in Washington.

In this context, the IMF, World Bank, and Brazil, the current president of the G20, stated on Wednesday that there has been significant progress on global debt issues in recent months, pointing to new agreements on required timelines and fair treatment of stakeholders.

IMF Managing Director Kristalina Georgieva, World Bank President Ajay Banga, and Brazilian Finance Minister Fernando Haddad issued a joint statement on the matter after a ministerial-level meeting for the Global Sovereign Debt Roundtable (GSDR).

The meeting brought together debtor and creditor nations, international financial institutions, and the private sector to reinvigorate debt restructuring efforts that have been stalled for a long time, and to build a better understanding of addressing challenges.

The statement emphasized the need for improving clarity, coordination, and transparency among creditor groups, and providing debtor countries with metrics for evaluating their own debts.

Creditors from the private sector and debtor governments must ensure, before finalizing and announcing a deal, that the deal has been reviewed by IMF staff for consistency with debt objectives and program standards, and by official bilateral creditors regarding fair treatment of stakeholders.

Al-Sayari emphasized the need for policies that focus on making finances stable, saving money, and dealing with inflation. He also talked about how the world economy is coping with these challenges, facing risks that could affect its future.



Fire, Smoke Upend Western Canada’s Summer Tourism Season

 A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
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Fire, Smoke Upend Western Canada’s Summer Tourism Season

 A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)

Severe wildfire seasons are increasingly hurting western Canada's lucrative tourism industry, with some visitors beginning to avoid the busy late-summer months due to concerns about uncontrolled blazes, smoke-filled skies and road closures.

After a scorching start to July, nearly 600 wildfires are now ablaze across British Columbia and Alberta, including a huge fire that this week devastated the picturesque tourist town of Jasper in the Canadian Rockies.

Dozens of communities, including popular holiday spots in British Columbia's Kootenay region, are under evacuation orders and several highways are closed.

This year's surge in wildfire activity comes after Canada endured its worst-ever year for wildfires in 2023, when more than 15 million hectares (37 million acres) burned, including parts of the city of West Kelowna in the heart of British Columbia's wine region.

Ellen Walker-Matthews, head of the Thompson Okanagan Tourism Association, said the industry was seeing a lot more last-minute travel decisions instead of booking in advance.

"It's a huge blow. July and August are traditionally the busiest months in the region," said Walker-Matthews, adding that while her region has been relatively unscathed by wildfires this summer, some visitors are choosing to avoid interior British Columbia altogether.

The members of the British Columbia Lodging and Campgrounds Association are reporting a 5-15% drop in bookings from a year ago, with the biggest declines coming from the hotter Okanagan and Cariboo regions, said Joss Penny, who heads the association.

"The concern is that this is something we have to live with and we have it every year now," said Penny.

Although wildfires in Canada's forests are natural and common, scientists say drier, hotter conditions fueled by climate change are leading to more volatile and frequent blazes.

'SMOKEY SKIES'

Some events, like the Salmon Arm Roots and Blues Festival, usually held in August, have now been rescheduled to earlier in the summer to avoid what is now seen as peak smoke season. The festival, which was cancelled last year due to nearby wildfires, was this year moved to July to benefit from "less smokey skies."

Wildfires and extreme climatic events are prompting tourists to "change their plans not just temporarily, but permanently," said Elizabeth Halpenny, a tourism researcher and professor at the University of Alberta, noting that seasonal workers in the sector are often the hardest hit as they have few protections during a bad season or amid a cataclysmic fire.

Tourism contributed C$7.2 billion to the British Columbia economy in 2022, and C$9.9 billion to Alberta in 2023, according to the latest government data.

Jasper National Park is one of Canada's premier tourist destinations, with more than 2 million visitors a year flocking to see its pristine mountain landscapes and abundant wildlife, including grizzly bears, moose and elk.

Kelly Torrens, vice-president of product at international tour company Kensington Tours, described western Canada as a bucket-list destination. But the company now has 49 trips that were supposed to pass through Jasper this season in limbo. Six others were forced to evacuate the park when the fire hit.

Parks Canada has cancelled all camping reservations within Jasper National Park until Aug. 6 and with potentially 50% of the town's structures destroyed by fire, the cleanup and rebuild could take years.

Halpenny is among those hedging their bets.

"I've booked a campsite stay in the mountain parks but at the same time, I booked a campsite out on the prairie somewhere and that's my backup plan because I don't want to miss out on my vacation with my family."