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Emirati MAF to Enter Saudi Cinema Market

Emirati MAF to Enter Saudi Cinema Market
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Emirati MAF to Enter Saudi Cinema Market

Emirati MAF to Enter Saudi Cinema Market

Ahmed Galal Ismail, CEO at Majid Al Futtaim Ventures, stated that MAF is willing to play a role in the Saudi cinema market, following the kingdom’s permission of establishing cinemas in the country. MAF CEO noted that VOX Cinemas have 300 screens out of 600/ 700 screens placed in Gulf countries.

Opening cinemas in Saudi Arabia would have a huge impact on the economic and cultural sectors, said Ismael. He added: “The decision to start up a cinema in Saudi Arabia is a historic moment that was anticipated by investors, given that entertainment is a basic component of the Saudi Vision 2030 announced by Crown Prince Mohammed bin Salman."

“Saudi Arabia enjoys the biggest market in the Gulf, with a population of 30 million,” he continued.

MAF CEO said there is a huge Saudi turnover on entertainment, which is indicated by the number of users of YouTube and digital entertainment. “This is also shown through the malls of Bahrain, UAE and Oman. Many Saudi families and youths are looking for new entertainment aspects, something that would positively affect the economy and add to the cultural life,” he added.

Ismael hopes that MAF wins the first cinema-operating license in Saudi Arabia, affirming that MAF exists in the market for more than ten years, and has more than 4,000 employees in the fashion and retail sectors. “We are currently planning to inaugurate the biggest entertainment center. We have an investment program that exceeds SAR14 billion (USD3.7 billion) and is to be implemented over a short period of time, which would create direct and indirect opportunities,” revealed Ismael.

Speaking about challenges facing the cinema sector such as Netflix, he said that the competition in the meantime is not over the market share but over getting the consumer’s time.

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Business

Riyadh to Host Chinese-Arab Economic Gathering at Business and Investment Conference

Riyadh will host in June the largest Arab-Chinese economic gathering. (SPA)
Riyadh will host in June the largest Arab-Chinese economic gathering. (SPA)
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Riyadh to Host Chinese-Arab Economic Gathering at Business and Investment Conference

Riyadh will host in June the largest Arab-Chinese economic gathering. (SPA)
Riyadh will host in June the largest Arab-Chinese economic gathering. (SPA)

The Saudi capital is preparing to launch the 10th session of the Arab-Chinese Business Conference and the eighth investment symposium under the slogan, “Cooperation for Prosperity”, which is expected to enhance integration efforts between Beijing and the Arab countries.

The conference will be held on June 11-12 in Riyadh, with the participation of 23 countries, and more than 2,000 high-level government representatives, senior officials, CEOs, investors and entrepreneurs, who are looking forward for opportunities of cooperation and agreements between Arab countries and China, in a way that strengthens the existing Arab-Chinese strategic partnership.

The conference is organized by the ministries of Investment and Foreign Affairs, in partnership with the General Secretariat of the League of Arab States, the Chinese Council for the Promotion of International Trade, the Union of Arab Chambers and a number of government agencies.

The major event aims to boost cooperation in the areas of the economy, trade and investment to achieve the mutual interests of Arab nations and China through strategic collaboration.

Saudi Investment Minister Khaled Al-Falih said that trade and cultural ties between Arab countries and China extended over 2,000 years, adding that the conference would further highlight this historic relationship.

“Trade and cultural ties between Arab countries and the People’s Republic of China extend over 2,000 years, but have deepened significantly given the complementary nature of our economies in sectors critical to the global economy. The Arab-China Business Conference will enable public and private sector participants to discuss the future of these collaborations,” the minister stated.

He also stressed that Saudi-Chinese relations had greatly developed, especially following King Salman bin Abdulaziz’ visit to China in 2017 and the two historic visits by Crown Prince Mohammed bin Salman to Beijing in 2016 and 2019.

Al-Falih said that the Saudi crown prince has underlined at the time that China’s Belt and Road initiative and strategic directions converged to a large extent with Saudi Arabia’s Vision 2030. He underlined in this context the importance of achieving all the gains and confronting all the challenges facing the two countries.

“China’s strategic direction aligns with the Kingdom’s Vision 2030. In recognition of the importance of leveraging each region’s strengths, we look forward to the conference providing a forum to explore mutually beneficial opportunities,” he said.

Trade in 2022 between the Arab countries and China reached SR1.6 trillion ($430 billion), a 31 percent increase on the previous year.

The minister also indicated that China was the Kingdom’s first trading partner, with a volume of trade exchange that reached about 400 billion riyals ($106 billion) in 2022, with a growth of about 30 percent from 2021.

Al-Falih added that the conference comes as a culmination of the unprecedented development in cooperation and partnership between the Arab countries and the People’s Republic of China.

He noted that the Saudi Crown Prince has affirmed that Arab-Chinese relations were based on cooperation and mutual respect and called for the need to strengthen partnership between the two sides.

The conference agenda features many dialogue sessions and bilateral meetings on the development of Arab-Chinese relations and prospects for investment within China’s Belt and Road Initiative.

Participants will also review investment opportunities in a variety of economic sectors, and the means to mobilize efforts to achieve sustainable development in Arab countries and China.

The Arab countries aspire to benefit from the strategic partnership with China, the second largest economy in the world.

The conference will also witness the signing of many agreements and memorandums of understanding, and a review of investment opportunities in various fields.

Discussion topics will focus on promising economic sectors, most notably manufacturing industries, digital economy and artificial intelligence, renewable energy, agriculture and food security, construction and real estate activities, mining, tourism and entertainment, infrastructure, logistics, and entrepreneurship and innovation.

 

Business

Saudi Arabia Launches Innovation Award for Military Industries

Saudi Arabia launched an award to encourage innovation in the military industries. (Asharq Al-Awsat)
Saudi Arabia launched an award to encourage innovation in the military industries. (Asharq Al-Awsat)
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Saudi Arabia Launches Innovation Award for Military Industries

Saudi Arabia launched an award to encourage innovation in the military industries. (Asharq Al-Awsat)
Saudi Arabia launched an award to encourage innovation in the military industries. (Asharq Al-Awsat)

Saudi Arabia has launched an award to encourage innovation in the military industries, support a promising national industrial stage, create innovative solutions to address the sector's challenges, increase spending efficiency, and improve the level of services and infrastructure.

The General Authority for Military Industries (GAMI) launched the Innovation Award in the Military Industries to inspire and encourage innovators to present innovative solutions and address the technical challenges faced by the sector.

GAMI Governor Ahmed al-Ohali said the award allows innovators to deliver qualitative and innovative solutions.

Knowledge impact

GAMI said the award holds a significant knowledge impact through raising awareness about the importance of innovation in the military industries sector and holds economic impact by reducing costs in addressing technical issues with innovative ideas and solutions.

The award also positively affects services and infrastructure, improving the services provided and enhancing infrastructure capabilities with innovative ideas and solutions.

Power of innovation

Several awards for innovation and superior solutions have been launched in various sectors, the most recent of which was an award for innovation in e-learning and training.

The award for military industries will be fundamental in promoting a culture of innovation and supporting talented people to contribute to the development of military industries.

Saudi Arabia aims to increase the level of employing innovative trends in several sectors to promote the efficiency of services and reduce unnecessary spending.

President of the Global Innovation Institute, KSA Chapter Abdulwahed al-Ghanem said Saudi Arabia will continue relying on research, development and innovation.

Ghanem noted that Riyadh will increase the momentum with the launch of the Supreme Committee for Research, Development, and Innovation, chaired by Prince Mohammed bin Salman, Crown Prince and Prime Minister.

Saudi Arabia jumped 15 ranks in the Global Innovation Index for 2022, issued by the World Intellectual Property Organization (WIPO), less than a year after announcing the national aspirations and priorities for research, development, and innovation (RDI).

The Kingdom has also become one of the fastest transforming countries in the world, thanks to its drive to diversify its economy and enter new and promising sectors, according to a report published by Forbes.

The report indicated that Saudi Arabia boosted its efforts with research and innovation in 2022 by raising the number of patents to 963.

Ghanem said Saudi Arabia is in its golden stage of innovation, predicting a prosperous future for the Kingdom that will lead the next wave in research and innovation in the Arab world and Middle East.

SR500 Mn to Support Military Innovation

The Innovation Award in the Military Industries allows innovators to provide qualitative solutions that address some military technical challenges in partnership between the Saudi authorities concerned with supporting the innovation and the army industrialization sectors.

The Saudi partners included the King Abdulaziz City for Science and Technology, the General Authority for Small and Medium Enterprises (Monsha'at), the Research Development and Innovation Authority, the General Authority for Defense Development (GADD), and the Saudi Arabian Military Industries (SAMI).

Worth SR500 million, the award will be handed out yearly to support the innovations of talented citizens and residents in developing military industries. Submissions be assessed by a committee of specialists in the public and private sectors in several scientific fields.

The submission extends for two and a half months, and the committee will then begin receiving innovative contributions before announcing the winners during Saudi Arabia's World Defense Show in February.

The integration of innovation within military industries, the involvement of Saudi minds in the future of the precision industry, and the provision of diversified solutions will provide a unique opportunity for local and international manufacturers to meet Saudi talents.

Business

Gold Prices Dip as US Debt Deal, Rate-hike Bets Weigh

Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. REUTERS/Alexander Manzyuk
Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. REUTERS/Alexander Manzyuk
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Gold Prices Dip as US Debt Deal, Rate-hike Bets Weigh

Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. REUTERS/Alexander Manzyuk
Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. REUTERS/Alexander Manzyuk

Gold prices held close to a two-month low on Tuesday as optimism over a US debt ceiling deal and reduced bets for a pause in the Federal Reserve's rate hike policy in June dented the metal's appeal.

Spot gold was down 0.2% at $1,938.57 per ounce by 0448 GMT. US gold futures dipped 0.3% to $1,938.30, Reuters reported.

US President Joe Biden said on Monday he feels good about prospects for passage by Congress of the debt ceiling deal that he reached with House of Representatives Speaker Kevin McCarthy.

The high volatility events such as the US regional banking crisis, and whether or not an agreement would be reached on raising the US debt ceiling are now passing, "reducing the markets interest in gold as investors seek alpha," Michael Langford, director at corporate advisory AirGuide said.

Fed officials on the other hand have in recent days turned up the heat with a hawkish outlook on interest rates, and that has to some extent also offset safe-haven flows around the US debt ceiling situation as higher interest rates dull the appeal for zero-yield bullion.

Having navigated the financial crisis of 2008, Minneapolis Fed President Neel Kashkari worries about systemic risks. But now, as a US monetary policymaker, he worries even more about inflation.

"If later in the year a more dovish approach is taken, this then implies some level of easing of interest rates may occur, which will be seen as bullish for equities and also reduce the desire for investors to hold gold versus other more risk on asset classes," Langford noted.

Markets are now pricing in a 39.9% chance of the Fed keeping rates on hold in June.

Spot silver eased 0.7% to $23.03 per ounce, while platinum rose 0.3% to $1,027.27.

Palladium gained 1.1% to $1,430.74.

Business

Dubai Plans for Net-Zero Emissions Transport by 2050   

A bus is charged at a station in Dubai. (Asharq Al-Awsat)
A bus is charged at a station in Dubai. (Asharq Al-Awsat)
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Dubai Plans for Net-Zero Emissions Transport by 2050   

A bus is charged at a station in Dubai. (Asharq Al-Awsat)
A bus is charged at a station in Dubai. (Asharq Al-Awsat)

Dubai's Roads and Transport Authority (RTA) has rolled out its "Zero-Emissions Public Transportation in Dubai 2050" strategy.

With this strategy, RTA aims to contribute to mitigating climate change and minimizing its carbon footprint across three areas: public transportation, buildings and related facilities, and waste management.

The new strategy is aligned with UAE's preparations for COP28 and the UAE Net Zero by 2050 Strategic Initiative.

RTA noted that the strategy is consistent with the goals of the Dubai Economic Agenda D33 to consolidate the emirate’s status as one of the world’s top urban economies.

The primary objectives include the decarbonization of all taxis, limousines, and public buses, designing buildings with near-zero energy consumption, sourcing energy from renewable sources, and eliminating municipal waste by sending zero waste to landfills.

The strategy will result in reducing carbon dioxide emissions by 10 million tons and realizing financial savings worth 3.3 billion dirhams ($898 million) in comparison to current operations.

"The new strategy outlines a comprehensive approach to sustainability within RTA. Its primary objective is to enhance sustainability and reduce carbon dioxide emissions. At the same time, it contributes to realizing RTA’s mission of achieving global leadership in smooth and sustainable mobility through innovative roads and transport services that elevate the customer experience to world-class standards," said RTA Director-General and Chairman of the Board of Executive Directors Mattar Al Tayer.

"The new strategy encompasses ten initiatives, covering various RTA sectors and agencies, in addition to partnerships with the private sector that contribute to implementing the strategy over five years. The strategy will review, adjust and align future goals with changing circumstances."

RTA's Board of Executive Directors reflected on various aspects, opportunities, and challenges associated with the new strategy and its implementation.

These include the costs of novel green technologies, the distribution of targets and their review over time, the importance of the availability of energy technology providers, particularly for electric buses and hydrogen fuel production stations, and other factors that contribute to the execution of the new strategy.

RTA has recorded significant accomplishments in sustainability. From 2014 to 2022, its energy and green economy initiatives have contributed to saving electricity by approximately 360 gigawatt-hours, and water savings of 300 million gallons, as well as saving around 88 million liters of gasoline, and 10 million liters of diesel. This is equivalent to avoiding 416,000 tons of equivalent emissions, yielding savings of approximately 420 million dirhams.

Business

Saudi Arabia, China Partnership for Geological Mapping Project in Arabian Shield Area

Minister of Industry and Mineral Resources Bandar al-Khorayef inspects a site during the tour (Asharq Al-Awsat)
Minister of Industry and Mineral Resources Bandar al-Khorayef inspects a site during the tour (Asharq Al-Awsat)
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Saudi Arabia, China Partnership for Geological Mapping Project in Arabian Shield Area

Minister of Industry and Mineral Resources Bandar al-Khorayef inspects a site during the tour (Asharq Al-Awsat)
Minister of Industry and Mineral Resources Bandar al-Khorayef inspects a site during the tour (Asharq Al-Awsat)

Saudi Arabia has launched a $207 million project of detailed geological maps of the Arabian Shield, one of the Saudi Geological Survey (SGS) projects, in partnership with the Chinese Geological Survey.

Minister of Industry and Mineral Resources Bandar al-Khorayef inaugurated the project, describing it as one of the most significant comprehensive strategic initiatives for the mining sector regarding the nature of the business, the volume of output, and the coverage area.

He added that the maps constitute the core of the general program of the geological survey, which is an essential element in achieving the goals of Vision 2030, and a first step towards endeavors, to be the third pillar of the Saudi industry.

Khorayef confirmed that the project aims to generate detailed digital geological data of the Arabian Shield, understand the origin of mineral deposits in the area, and strengthen the national geological database and the national library of drilling samples.

The data will provide domestic and international investors with a comprehensive understanding of Saudi Arabia's mining sector investment opportunities.

Geology

The Deputy Minister of Natural Resources for Geology and Chairman of the Chinese Geological Survey, Li Jianxing, said the project would become a new bridge between Saudi-Chinese relations, indicating that the maps will promote scientific progress in earth science and technology.

For his part, the Chinese Consul General in Jeddah, Wang Qimin, stated that the map project is an extension of the longstanding joint projects in the mining sector between the Kingdom and China.

He said it aligns with the Kingdom's Vision 2030 economic development plans and the Chinese Belt and Road Initiative.

Rock analyses

CEO of the Saudi Geological Survey, Abdullah al-Shamrani, explained that during the project, a detailed, high-tech digital geological mapping of all rocky outcroppings would be carried out, with an average of 700 examination sites per geological square.

He indicated that Saudi and Chinese geological experts would conduct several structural, mineral, and chemical analyses.

Shamrani divided the program into three main phases: initial settings, fieldwork and analysis, and final compilation of the map project.

The program is scheduled for 11 years and divided into two phases, the first extending to five years, including producing detailed geological maps of the promising mineral belt areas representing 40 percent of the project area.

The second phase spans over six years, during which 157 maps will be produced, representing the remaining area of the Arabian Shield.

Mineral deposits

The detailed geological maps project of the Arabian Shield aims to produce 271 detailed geological reports and maps of the Arabian Shield, in addition to providing the National Geological Database (NGD) with detailed digital geological data.

It will help enhance the understanding of the origin of mineral deposits and identify and explore new mineral deposits aiming to attract new investments in the mining sector.

The project is the hub for all information from the various historical and recent surveys in the form of two-dimensional maps showing the extent and types of mineralization in the Arabian Shield.

Business

Saudi Arabia Offers Freight Brokerage Services at Airports to Facilitate Trade

Cargo services at King Khalid International Airport in Riyadh (Asharq Al-Awsat)
Cargo services at King Khalid International Airport in Riyadh (Asharq Al-Awsat)
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Saudi Arabia Offers Freight Brokerage Services at Airports to Facilitate Trade

Cargo services at King Khalid International Airport in Riyadh (Asharq Al-Awsat)
Cargo services at King Khalid International Airport in Riyadh (Asharq Al-Awsat)

The Saudi government allowed freight brokers to provide services at airports to increase competitiveness and offer more options, which contributes to reducing import and export costs.

The Saudi Crown Prince Mohammed bin Salman launched the National Transport and Logistics Strategy in 2021, which aims to position the Kingdom as a global logistics hub connecting three continents. It also seeks to improve all transport services, promote sustainable economic development, and competitiveness adequate to the Vision 2030

Zakat, Tax and Customs Authority (ZATCA) called on shipping agents to benefit from the customs services provided at the airports, most notably the availability of data submission, the issuance of delivery permissions, and the ability to split incoming shipments.

The authority said that, based on the services provided, the freight broker would be responsible before the customers until the shipment arrives, allowing the customer to deal with only one party.

The agent is the link in the global supply chain process, said the authority, stressing that the services it shall provide customers with constitute an opportunity to compete with the prices offered by transport companies and other agents.

This process would present the customer with more options and contribute to reducing import and export costs.

- Increasing operations efficiency

Recently, the authority allowed freight brokerage companies to obtain a license to practice customs clearance and enable them to activate their role in facilitating trade. It would also raise the efficiency of operations and logistics.

Through this step, ZATCA aims to enable freight brokers to provide distinguished services that align with its objectives towards boosting Saudi position as a global logistics platform by facilitating and developing procedures.

It would help achieve flexibility in the customs clearance process in cooperation and coordination with all relevant authorities.

- National strategy

The Saudi strategy focuses on developing infrastructure, launching several platforms and logistical areas, implementing advanced operating systems, and strengthening effective partnerships between the public and private sectors.

One of the strategy’s main objectives is to increase the contribution of the transport and logistics sector to the gross domestic product from six to ten percent by leading the industry to support the national economy, enable business growth, expand investments, and increase the annual non-oil revenues to $13 billion in 2030.

Business

Saudi Tourism Revenues Jump 70% in 2021

The Al-Rudaf Park in Taif, western Saudi Arabia. (Asharq Al-Awsat)
The Al-Rudaf Park in Taif, western Saudi Arabia. (Asharq Al-Awsat)
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Saudi Tourism Revenues Jump 70% in 2021

The Al-Rudaf Park in Taif, western Saudi Arabia. (Asharq Al-Awsat)
The Al-Rudaf Park in Taif, western Saudi Arabia. (Asharq Al-Awsat)

Operational revenues of tourism-related activities in Saudi Arabia amounted to $56.8 million in 2021, a 70.8 percent increase compared with 2020, revealed the General Authority for Statistics (GAStat).

The Authority said the increase included all distinctive tourism activities. The revenues from accommodation for visitors accounted for 33.2 percent and food and drink made up 29.9 percent of the total figure.

Operational expenses

Total operating expenses of tourism-related activities reached $29.9 million, an increase of 92.2 percent from 2020.

Operational expenses related to accommodation represented 31.6 percent and food and beverage related operations accounted for 29.7 percent of total operational expenses.

Administrative data from the Ministry of Tourism showed that the annual occupancy rate in hotel rooms reached 42.1 percent in 2021.

During December, the Kingdom witnessed the highest monthly occupancy rate at 53.3 percent. The annual occupancy rate of furnished housing units stood at 49.3 percent in 2021. The highest monthly occupancy rate was 55 percent.

Number of employees

The General Authority revealed that the number of workers in tourism-related activities reached 767,819 during 2021, including 516,382 in the food and beverage sector and 101,861 in accommodation sector.

The sectors employed 81 percent of the workforce in tourism-related activities. Saudi workers accounted for 26.8 percent of the workforce, with males making up 58.1 percent of the total and females 41.9 percent.

During the first quarter of 2023, the Kingdom received about 7.8 million international tourists, the highest historical quarterly performance, and marking a growth of 64 percent compared to the same period in 2019.

Saudi Arabia occupied second place on the list of the most developed countries worldwide, according to the latest data from the UN World Tourism Organization (UNWTO).

The Kingdom advanced 16 places in the International Tourism Revenue Index, reaching 11th place in 2022, compared to 27th place in 2019, according to the World Tourism Barometer report issued by the UNWTO in May 2023.

Business

Saudi Arabia Expands Exploration of Mineral Resources

Mahd Ad Dahab gold mine, one of the oldest mines in Saudi Arabia (Asharq Al-Awsat)
Mahd Ad Dahab gold mine, one of the oldest mines in Saudi Arabia (Asharq Al-Awsat)
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Saudi Arabia Expands Exploration of Mineral Resources

Mahd Ad Dahab gold mine, one of the oldest mines in Saudi Arabia (Asharq Al-Awsat)
Mahd Ad Dahab gold mine, one of the oldest mines in Saudi Arabia (Asharq Al-Awsat)

The Saudi Ministry of Industry and Mineral Resources called on emerging individual explorers, small and medium-sized local companies, and investors to register in the "Nuthree" Mining Exploration Incubator initiative.

Nuthree aims to empower emerging individuals and local companies in the mineral exploration sector to create a sustainable local exploration environment to develop the Kingdom's resources and become an entry point for promising industries in cooperation with the General Authority for Small and Medium Enterprises (Monshaat).

The Ministry recently announced that until the end of March, the total number of valid mining licenses in the sector had reached 2,314.

The Ministry's official spokesman, Mohammed al-Jarrah, said that the incubator aims to develop the skills of emerging explorers and employ their capabilities and support them with enablers that ensure sustainability in the mining exploration sector.

It helps by promoting investment, transferring and exchanging knowledge and experience between leading mining companies, and building sustainable strategic partnerships.

Jarrah stressed the importance of enabling entrepreneurship in mineral exploration locally from a regulatory perspective and financing and supporting it with the appropriate infrastructure to enhance its business and drive economic growth in the sector.

He noted that the initiative is in line with the goals of Vision 2030 and the National Industrial Development and Logistics Program (NIDLP) to make the mining sector the third pillar of national industries.

Jarrah indicated that the initiative targets students and academics, small and medium-sized companies applying for an exploration license, emerging exploration companies, and investors interested in the mining sector.

The incubator will also provide services to support startups, including analyzing geological data, assisting them in obtaining exploration licenses, and offering intensive courses and training workshops in earth sciences.

It will conduct events and sessions with experts and specialists in mineral exploration, laboratory services, samples analytics, geophysical survey for metal detection, preserving diamond drilling samples, offering guidance throughout the initiative program, and providing office space.

The spokesman pointed out that the advanced companies will be evaluated according to essential criteria by examining the experiences of the work team and the previous work, assessing the financial efficiency, and their readiness to enter the incubator programs.

Business

Turkish Lira Teeters Near Record Low as Erdogan Secures Victory 

Turkish President Recep Tayyip Erdogan, accompanied by his wife Emine Erdogan, addresses his supporters at the Presidential Palace in Ankara, Türkiye, May 28, 2023. (Presidential Press Office/Handout via Reuters)
Turkish President Recep Tayyip Erdogan, accompanied by his wife Emine Erdogan, addresses his supporters at the Presidential Palace in Ankara, Türkiye, May 28, 2023. (Presidential Press Office/Handout via Reuters)
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Turkish Lira Teeters Near Record Low as Erdogan Secures Victory 

Turkish President Recep Tayyip Erdogan, accompanied by his wife Emine Erdogan, addresses his supporters at the Presidential Palace in Ankara, Türkiye, May 28, 2023. (Presidential Press Office/Handout via Reuters)
Turkish President Recep Tayyip Erdogan, accompanied by his wife Emine Erdogan, addresses his supporters at the Presidential Palace in Ankara, Türkiye, May 28, 2023. (Presidential Press Office/Handout via Reuters)

Türkiye's lira wobbled near record lows against the dollar as President Recep Tayyip Erdogan secured victory in the country's presidential election on Sunday, extending his increasingly authoritarian rule into a third decade.

 

The currency was at 20.05 to the dollar during Asian hours, just shy of the 20.06 record low hit on Friday.

 

The lira, prone to sharp swings before regular trading hours, has weakened more than 6% since the start of the year and lost more than 90% of its value over the past decade with the economy in the grip of boom and bust cycles, rampant bouts of inflation and a currency crisis.

 

Since a 2021 crisis, the authorities have taken an increasingly hands-on role in foreign exchange markets with daily moves having become unnaturally small and mostly recording a weakening while FX and gold reserves have dwindled.

 

"The current set up is just not sustainable," said Tim Ash at BlueBay Asset Management. "With limited FX reserves and massively negative real interest rates the pressure on the lira is heavy."

 

Erdogan prevailed despite years of economic turmoil which critics blame on unorthodox economic policies which the opposition had pledged to reverse.

 

"An Erdogan win offers no comfort for any foreign investor," said Hasnain Malik, head of equity research at Tellimer.

 

"Only the most optimistic would hope that Erdogan now feels sufficiently secure politically to revert to orthodox economic policy."

 

Erdogan's surprisingly strong showing in the first round of the election two weeks ago had triggered a selloff in Türkiye's international bonds and a spike in costs to insure exposure to its debt amid fading hopes of a change in economic policy.

 

The nation's dollar bonds slipped to their lowest in at least six months last week, while the cost of insuring exposure to Türkiye's debt via credit default swaps (CDS) rose to a seven-month high.

 

On Monday, the bond maturing in 2036 was stable, Tradeweb data showed. CDS too were steady after closing at 666 basis points on Friday. It was around 480 bps before the election.

 

In his victory speech, Erdogan acknowledged that inflation was the most urgent issue, but said it would also fall, following the central bank's policy rate that was cut to 8.5% from 19% two years ago.

 

Analysts were cautious in how much economic change Erdogan's new government would herald.

 

"Erdogan is unlikely to embrace an outright economic orthodox approach," Wolfango Piccoli, co-president at advisory firm Teneo said in emailed comments.

 

"However, some adjustments to the current heterodox approach could be adopted with the aim of gaining time ahead of the March 2024 local elections."

 

Trading is expected to be thin on Monday, with many markets in Europe, as well as the United States closed for holidays.

Business

US-Chinese Business Delegation Seeks Launching Int’l Alliance for Green Energy in Riyadh

Neil Bush (Asharq Al-Awsat)
Neil Bush (Asharq Al-Awsat)
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US-Chinese Business Delegation Seeks Launching Int’l Alliance for Green Energy in Riyadh

Neil Bush (Asharq Al-Awsat)
Neil Bush (Asharq Al-Awsat)

A delegation of US and Chinese businesses is scheduled to visit Saudi Arabia on Monday, in an effort to establish a multinational alliance or league headquartered in Riyadh.

The primary objective of this alliance is to channel investments into cutting-edge technologies that promote a sustainable green economy and facilitate the achievement of carbon neutrality.

Neil Bush, who is leading the delegation, has expressed dedication to establishing a worldwide alliance in Riyadh that will play a pivotal role in shaping the bright prospects of green energy.

The primary objective of this alliance is to emerge as a prominent driving force behind investments in advanced technologies, specifically aimed at fostering a sustainable green economy.

Bush added that the delegation’s visit to Saudi Arabia is exploratory in nature, and they have a proposal aimed at developing the “Skytower Zero Carbon Industrial Park.”

Moreover, the delegation is prepared to respond to specific projects related to renewable energy, hydrogen, and ammonia in Saudi Arabia.

Continuing his remarks, Bush said that the delegation’s strategy is fundamentally global, merging top-notch technologies and services from both the US and China. Additionally, it aims to draw capital investments of a magnitude like those made by Saudi funds to execute the proposed projects.

According to Bush, the delegation comprises organizations within the Zero Carbon alliance, whose objectives align with Saudi Vision 2030 and the 2060 Net Zero initiative.

He highlighted that the focus is currently directed towards investing in renewable energy sector infrastructure and manufacturing.

The alliance the delegation is seeking to form includes Atlas Renewable, a company led by Bush.

It also includes Energy Vault, a US-based renewable energy company specializing in the design, installation, and management of storage solutions.

Additionally, CNTY, a Chinese company active in renewable energy storage, and EIPC, a Chinese quasi-governmental organization, are set to be part of the alliance.

Bush stated that the Zero Carbon industrial park will rely on green energy sources, combining renewable energy generation with effective short- and long-term storage.

He elaborated that the consortium, known as the alliance, will attract renewable companies specializing in wind energy, solar energy, and storage technologies.

These companies will be encouraged to establish manufacturing facilities within the industrial park, thereby creating a substantial number of job openings in the region.

Bush added that global cooperation is essential in combating climate change, and it is exemplified by the approach of the alliance, which has been successfully implemented in China and Mongolia.

This approach involves bringing together the best expertise to design integrated systems that enhance the effectiveness of renewable solutions, with storage playing a crucial role in the mix.

Bush affirmed that the alliance holds the knowledge and expertise required to attain optimal operational efficiency for renewable systems

Bush also praised the current transformation taking place in Saudi Arabia, considering it a true and sustainable renaissance.

He explained that the significant changes occurring in the Kingdom, along with the growing number of diverse global corporate relationships being established, will undoubtedly operate according to global strategies, and connect nations worldwide, as Saudi Arabia emerges as a global hub.

Bush elaborated on the alliance’s perspective, emphasizing Saudi Arabia as the central hub for the entire Middle East.

He noted that a key objective of the alliance is to attract substantial investments and leverage cutting-edge technologies from the US and China to carry out crucial projects in Saudi Arabia, in line with its ambitious carbon-neutral objectives.

Furthermore, he highlighted that manufacturing companies will be attracted to establishing operations in the Kingdom to manufacture equipment that caters to domestic demands and could be exported to the broader region.