Jordan Cabinet Approves USD13 Billion Budget for 2019

Image used for illustrative purpose. A general view of Amman city shows the turrets of the "Jordan Gate" project. REUTERS/Muhammad Hamed
Image used for illustrative purpose. A general view of Amman city shows the turrets of the "Jordan Gate" project. REUTERS/Muhammad Hamed
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Jordan Cabinet Approves USD13 Billion Budget for 2019

Image used for illustrative purpose. A general view of Amman city shows the turrets of the "Jordan Gate" project. REUTERS/Muhammad Hamed
Image used for illustrative purpose. A general view of Amman city shows the turrets of the "Jordan Gate" project. REUTERS/Muhammad Hamed

Jordan’s cabinet approved a JOD9.25 billion (USD13 billion) budget for 2019 as part of a reform of public finances to ease the country’s record debt burden and spur economic growth hit by conflict in the region.

The budget, which will be sent to parliament for approval, envisaged a deficit equal to 2 percent of Jordan’s gross domestic product.

The main features of the draft law indicate that the general revenues were estimated at USD12.14 billion with USD11.29 billion as domestic revenues and USD850 million dinars as foreign grants.

Spending of 2019 was estimated at USD13.04 billion, a rise of USD616 million compared to the current year.

The current expenditure increase was 3.3 percent compared to 2018 in what was attributed to normal growth in expenditure related to the annual increase in the salaries of public employees, the increase in allocations of the National Aid Fund, and an upgrade in the share of the healthcare system.

The deficit in the 2019 budget amounted to USD910 million after grants, constituting 2 percent of GDP, down from USD1.15 billion in the re-estimated value for 2018 at 2.7 percent of GDP.

The draft law estimated an increase in financial solvency indicators for the coming year’s budget coverage for public expenditures from 80.1 percent re-estimated value in 2018 to 86.5 percent in 2019. The draft budget law saw a rise in domestic revenues to cover 100 percent of current expenditure, up from 90.8 percent re-estimated value this year.

Jordan's public finances are under strain and the government is struggling to curb a public debt of more than USD37 billion, equivalent to 96 percent of GDP.



Saudi Arabia's PIF to Acquire 30% of Tamimi Markets

PIF said it signed a share subscription agreement to invest in Tamimi Markets.
PIF said it signed a share subscription agreement to invest in Tamimi Markets.
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Saudi Arabia's PIF to Acquire 30% of Tamimi Markets

PIF said it signed a share subscription agreement to invest in Tamimi Markets.
PIF said it signed a share subscription agreement to invest in Tamimi Markets.

Saudi Arabia's Public Investment Fund (PIF) plans to acquire a 30% stake in local supermarket chain Tamimi Markets Company, the kingdom's sovereign wealth fund said on Thursday.

PIF said it signed a share subscription agreement to invest in Tamimi Markets.

It said the transaction, which will involve a capital increase and subscription for new shares, aligns with the fund's strategy to enable the private sector and create Saudi national champions.

"This investment aims to enable Tamimi Markets to realize its full potential, transforming it from one of the leading national grocery chains to a major regional chain," PIF said in a statement.

"It aims to support the company’s ambitious plans through expansion of its operations and commercial opportunities, including acceleration of regional growth and a potential initial public offering," it added.


Saudi Arabia Adopts Measures to Control Used Cars Market, Reduce Prices

A car showroom in Al-Shifa district, Riyadh (Asharq Al-Awsat)
A car showroom in Al-Shifa district, Riyadh (Asharq Al-Awsat)
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Saudi Arabia Adopts Measures to Control Used Cars Market, Reduce Prices

A car showroom in Al-Shifa district, Riyadh (Asharq Al-Awsat)
A car showroom in Al-Shifa district, Riyadh (Asharq Al-Awsat)

The Saudi Zakat, Tax and Customs Authority announced that it was possible to calculate the value-added tax (VAT) on the profit margin of the sale of certified used cars, without taking into account of the total sale value.

This regulation will be implemented conditionally, effective from July 1, 2023.

According to information obtained by Asharq Al-Awsat, the new steps came in response to the demands of the Federation of Saudi Chambers, in order to regulate and control the local market as well as reduce the prices of used vehicles.

The Federation of Saudi Chambers has held several meetings with the authority for the purpose of implementing Article 48 of the executive regulations of the value-added tax system, which defines the mechanisms for the supply of used goods.

Faisal Abu Shusheh, head of the National Committee for Car Dealers in the Federation of Saudi Chambers, told Asharq Al-Awsat that the decision would balance prices by calculating value-added tax on profit margins, and therefore the addition would be symbolic and contribute to lowering prices.

For his part, Muqrin Al-Mutairi, owner of a car showroom, said that the new measure would contribute to regulating the market and limiting manipulation in the sale of used cars. He also stressed that the decision would help reduce the prices of used vehicles in the local market.

The Saudi Ministry of Commerce has recently taken accelerated moves to protect the local car market from improper practices, after it witnessed a rise in prices and delays in delivering vehicles to customers.

The Ministry of Commerce requested car dealers to publish prices, policies, instructions and special procedures on their websites, and prevented rental companies from selling new vehicles.


Saudi Non-Oil Exports Achieve New Levels

Saudi Non-Oil Exports Achieve New Levels
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Saudi Non-Oil Exports Achieve New Levels

Saudi Non-Oil Exports Achieve New Levels

The General Authority for Statistics (GASTAT) announced on Wednesday that the Saudi trade balance in 2022 registered record results of SAR 830 billion ($222 billion), with exports exceeding SAR 1.5 trillion ($411 billion) against imports amounting to SAR 712 billion ($189.8 billion).

During the same period, non-oil exports reached their highest levels, amounting to SAR 315.7 billion ($84 billion).

Experts told Asharq Al-Awsat that the Saudi government has put forward a package of initiatives to empower the private sector and reduce clearance time, which contributed to accelerating trade between the Kingdom and other countries.

They added that programs and initiatives presented by the competent authorities contributed to the access of international companies and factories to the local market, in addition to the growth of the local business sector.

According to the International Trade Bulletin issued by GASTAT, merchandise exports increased 48.9 percent in the past year, after their value exceeded SAR 1.5 trillion ($411 billion), as a result of a rise in oil exports by SAR 468 billion ($124.8 billion).

The value of oil exports amounted to SAR 1.2 trillion ($327 billion), compared to SAR 758 billion ($202 billion) in the previous year, while the percentage of oil exports increased from 73.2 percent in 2021 to 79.5 percent in 2022.

The bulletin revealed that non-oil exports (including re-exports) increased by 13.7 percent in 2021, to record SAR 315.7 billion ($84 billion), compared to SAR 277.5 billion ($74 billion) last year.

Non-oil exports (including re-exports) rose to 14.8 percent, and the value of re-exports increased to 8.6 percent over the same period.

Imports witnessed a 24.2 percent increase last year, amounting to SAR 138.9 billion ($37 billion), as its value reached SAR 712 billion ($189.8 billion), compared to SAR 573.2 billion ($152.8 billion) in 2021.

GASTAT said that the products of chemical industries and related items were among the most important non-oil export commodities, and constituted 35.8 percent of the total exports, with an increase of 34.5 percent compared to 2021.

Beijing was Riyadh’s main partner in merchandise trade during 2022. The value of Saudi exports to China amounted to SAR 249.9 billion ($66.6 billion), accounting for 16.2 percent of total exports.

Economist Ahmed Al-Jubeir told Asharq Al-Awsat that the Saudi government’s initiatives and programs contributed to increasing the value of commodity exports, given the capabilities available to all national factories and the measures that facilitated the export process through air, sea and land ports.

For his part, Nashmi Al-Harbi, a logistics expert, pointed to a significant improvement in the Saudi supply chain system and logistics services.

Al-Harbi added that the initiatives launched by the competent authorities have increased the volume of exports and imports. He stressed that the rise of Saudi Arabia to the 18th place in the global logistics performance index was the culmination of efforts aimed at attracting foreign investments.

 


UAE's Industry Contributed $49.5 Bn to the GDP

UAE's Minister of Industry and Advanced Technology, Sultan bin Ahmed Al Jaber speaking at the Make it in the Emirates Forum (Asharq Al-Awsat)
UAE's Minister of Industry and Advanced Technology, Sultan bin Ahmed Al Jaber speaking at the Make it in the Emirates Forum (Asharq Al-Awsat)
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UAE's Industry Contributed $49.5 Bn to the GDP

UAE's Minister of Industry and Advanced Technology, Sultan bin Ahmed Al Jaber speaking at the Make it in the Emirates Forum (Asharq Al-Awsat)
UAE's Minister of Industry and Advanced Technology, Sultan bin Ahmed Al Jaber speaking at the Make it in the Emirates Forum (Asharq Al-Awsat)

The industrial sector's contribution to the UAE's GDP increased from $35.9 billion in 2020 to $49.5 billion in 2022, representing 38 percent growth.

Minister of Industry and Advanced Technology Sultan Al Jaber said that the national strategy for industry and advanced technology was launched in 2021, contributing to essential achievements in the industrial and technological sectors, especially in 2022.

UAE's industrial exports reached $47.6 billion in 2022, compared to $31.8 billion in 2020, representing 49 percent growth.

The Minister inaugurated the second edition of the Make It in the Emirates Forum.

Make It in the Emirates is held under the theme of "Investment. Sustainability. Growth." and organized by the Ministry of Industry and Advanced Technology (MoIAT) in partnership with the Abu Dhabi Department of Economic Development (ADDED) and ADNOC.

Jaber said that the ministry offered financing solutions worth $816 million to support and enable the Make it in the Emirates initiative in cooperation with the Emirates Development Bank.

It also launched the Technological Transformation Program to accelerate the adoption of Fourth Industrial Revolution technologies and contribute to lower emission goals.

Increase the value of purchase agreements

"One of the key achievements of last year's forum was several leading national companies announcing their intention to invest AED110 billion over the next decade to purchase 300 products from local manufacturers," Jaber said.

He stated that in the first year alone, 28 percent of these offtake agreements had been implemented, representing a total value of $8.4 billion.

Jaber announced an additional $2.7 billion of offtake agreements in the UAE's industrial sector, taking the total value of products targeted for localization to $32.6 billion.

He also announced over 30 innovative industrial projects worth over $1.6 billion.

"These projects include pioneering initiatives such as setting up the first hydrogen electrolyzer plant in the UAE," he said.

ADNOC will also allocate over $5.4 billion to purchase structures and metal products from national companies.

It was also announced that the MoIAT would adopt a new standard within the National In-Country Value Program called Green ICV to encourage sustainability practices and motivate companies to reduce emissions.

He added that during the forum, competitive financing solutions would be announced for the industrial sector, worth $1.6 billion from local banks.


Aphrodite Gas Field off Cyprus to Be Linked to Egypt

 Image-3-Aphrodite-Gas-Field
Image-3-Aphrodite-Gas-Field
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Aphrodite Gas Field off Cyprus to Be Linked to Egypt

 Image-3-Aphrodite-Gas-Field
Image-3-Aphrodite-Gas-Field

The offshore Aphrodite natural gas field being developed in Cypriot waters will be connected to an existing processing and production facility in Egypt via a subsea pipeline, one of the partners in the project said on Wednesday.

NewMed Energy said it had submitted with partners Chevron and Shell a development plan for Cypriot government approval. The group met the Cypriot energy minister on Monday to discuss progress, Reuters said.

"The updated plan is expected to accelerate and reduce the cost of development," NewMed said.

Aphrodite, discovered more than a decade ago about 170 km (105 miles) from Limassol, holds an estimated 124 billion cubic meters of gas. NewMed has a 30% stake in the field, while Chevron and Shell each hold a 35% share.

The group said earlier this month that it had begun drilling an exploration well meant to confirm the estimates. It would later be used for production.

Chevron said in a statement it was "currently working to progress the Aphrodite project."

"Beyond this, it is not our policy to comment on commercial matters," it said.


Oman Launches $5B Investment Fund to Diversify Economy

A general view of Muscat, Oman. (AP)
A general view of Muscat, Oman. (AP)
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Oman Launches $5B Investment Fund to Diversify Economy

A general view of Muscat, Oman. (AP)
A general view of Muscat, Oman. (AP)

Oman plans to launch a $5 billion public investment fund to support plans to overhaul the economy in the Gulf Arab nation over the next two decades, state media reported Wednesday.

The Oman Future Fund will aim to increase economic activity and support the private sector as the country looks to reduce its reliance on oil.

State media said Sultan Haitham bin Tariq Al Said approved the new fund, which would launch with 2 million riyals, or around $5.2 billion. It would support the country's Vision 2040 plans to grow and diversify the economy.

The Oman Investment Authority was established in 2020 and incorporated an earlier fund dating back to 1980.


Saudi Retail Market Expected to Reach $176 billion in 2026

A man walks in a shop in Jizan, southern Saudi Arabia (Asharq Al-Awsat)
A man walks in a shop in Jizan, southern Saudi Arabia (Asharq Al-Awsat)
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Saudi Retail Market Expected to Reach $176 billion in 2026

A man walks in a shop in Jizan, southern Saudi Arabia (Asharq Al-Awsat)
A man walks in a shop in Jizan, southern Saudi Arabia (Asharq Al-Awsat)

A newly released report predicted an increase in the size of the retail trade market in Saudi Arabia to reach SAR 661.1 billion ($176.5 billion) by 2026.

The report noted that the value of e-commerce in the country witnessed steady growth over the past years by 18.24 percent.

According to the report issued by the G World company, which is specialized in studies and sectors analysis, retail trade sales increased to SAR 16 billion ($4.2 billion) in 2017, while the value of sales in 2022 reached more than SAR 37 billion ($9.8 billion), as many merchants have turned to modern retail.

Per capita gross domestic product at current prices increased to SAR 29,000 ($7,700) during the second quarter of the previous year compared to SAR 20,000 ($5,300) in the same period in 2021, the report stated.

Purchases through e-commerce sites increased in the kingdom, the report underlined, noting that the total number of users reached 22 million, at an annual rate of 2.7 percent in 2022.

Meshaal Alshammari, Director of Marketing at Lean Node software development company, said: “The biggest challenge facing the modern retail sector is coordination between daily operations and data follow-up, for both the technical and traditional sides.”

He explained: “Every company must put in place the necessary and basic resources to cover the gaps and guarantee a healthy expansion.”

During a recent lecture organized by the Riyadh Chamber, Alshammari noted that some resources were yet to be exploited in the best possible ways, stressing that the current corporate structure was not ideal to reach sustainability.

“Entrepreneurs find it difficult to obtain capital and launch products quickly and efficiently,” he said, pointing to the presence of a large gap in the Saudi financial technology companies sector.

There are only 147 financial technology companies operating in Saudi Arabia, compared to 1,900 companies in Britain, he remarked.

Mohammad Abu Alsaud, general manager of Paytabs, told Asharq Al-Awsat that one of the means to help entrepreneurs was to resort to qualitative companies in the field of e-commerce.

He stressed that the biggest challenge facing emerging merchants is “their neglect of the feasibility study and its method of operation.”


Saudi Real Estate Refinancing Co. Issues $933 Million in Sukuk

Saudi Arabia’s housing project is part of government’s plans to raise the rate of citizens’ real estate ownership. (Asharq Al-Awsat)
Saudi Arabia’s housing project is part of government’s plans to raise the rate of citizens’ real estate ownership. (Asharq Al-Awsat)
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Saudi Real Estate Refinancing Co. Issues $933 Million in Sukuk

Saudi Arabia’s housing project is part of government’s plans to raise the rate of citizens’ real estate ownership. (Asharq Al-Awsat)
Saudi Arabia’s housing project is part of government’s plans to raise the rate of citizens’ real estate ownership. (Asharq Al-Awsat)

The Saudi Real Estate Refinance Co. announced the issuance of SR3.5 billion ($933 million) in sukuk, within the local sukuk program that amounts to SR20 billion ($5.3 billion).

CEO Fabrice Susini said the real estate finance company would keep boosting market liquidity and assisting lenders and investors, which would stabilize the Saudi mortgage market.

“The positive response from investors to SRC’s latest sukuk issuance is a clear testament to the strength of the Kingdom’s housing market and economy,” he remarked.

Susini continued: “As SRC continues to refinance existing financings for financiers, we are proud to contribute to developing a robust secondary home financing market that supports the efficiency and stability of the primary housing market.”

Majed Al-Hogail, Saudi Minister of Municipal and Rural Affairs and Housing, said real estate financing in the country exceeded $194 billion until the end of the first quarter of 2023.

Earlier this month, SRC received an “A-” classification at the level of global credit and “ksaAAA” at the level of local credit with a stable outlook from the credit rating agency S&P Global.

The Public Investment Fund (PIF) established the SRC in 2017 to be a major pillar and catalyst for the growth and sustainability of residential real estate financing in the country.

SRC’s primary role is to provide banks and real estate finance companies with liquidity, enabling growth in the home financing sector to increase homeownership rates among Saudi citizens.

The SRC stated that it contributed to raising the percentage of citizens’ home ownership from 47 to 60 percent. Since its establishment in 2017, the company has witnessed strong growth in its business and partnerships in the real estate financing sector, as part of the various initiatives and programs within the objectives of Vision 2030.


UAE Launches Global EV Market

An electric car displayed by Dubai Police during the Arabian Travel Market exhibition earlier in May (WAM)
An electric car displayed by Dubai Police during the Arabian Travel Market exhibition earlier in May (WAM)
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UAE Launches Global EV Market

An electric car displayed by Dubai Police during the Arabian Travel Market exhibition earlier in May (WAM)
An electric car displayed by Dubai Police during the Arabian Travel Market exhibition earlier in May (WAM)

The UAE launched the Global EV Market, a transformational project under the performance agreements signed by federal authorities, which enhances its competitiveness in a sector that is one of the future transformational projects.

Minister of Energy and Infrastructure, Suhail al-Mazrouei, said the new market comprises a comprehensive plan and an ambitious national program to integrate the energy and infrastructure sectors and align the work of federal and local government entities and private sector businesses.

- National roadmap

The minister explained that the Ministry of Energy and Infrastructure (MoEI) launched the UAE Roadmap for Electric Vehicles as a comprehensive action plan that involves developing guides and policies.

The roadmap offers government incentives and sets ambitious strategies to integrate the work of federal and local government entities and the private sector to promote the adoption of electric vehicles in the UAE.

MoEI also launched the National Platform for Electric Vehicles' Chargers, a mobile app to link users and a guide for installing electric vehicle charging stations to unify their specifications nationwide and align them with world-class standards.

"We seek to create a conducive environment for the growth of the EV market in the UAE through policy levers for investment and socio-economic and environmental incentive schemes. To support the shift to green mobility, we aim to increase the share of EVs to 50% of total vehicles on our roads by 2050."

- Agreements

The Ministry signed several cooperation agreements to support the Global EV Market transformational project, through which the partners would cooperate to create incentives for people to own EVs.

They also aim to facilitate investment in the UAE network of electric vehicle charging stations and install them across federal buildings and roads and MoEI's truck rest stops.

The private sector partners will play a key role in promoting EVs.

They will invest in establishing EV charging stations and operating them, and setting up EV service centers across the country to offer dedicated services to EV owners.

- 700 EV chargers

For his part, the Undersecretary for Infrastructure and Transport Affairs at MoEI, Hassan al-Mansouri, indicated that the project includes a national interactive platform that provides more than 700 EV chargers nationwide.

Furthermore, Undersecretary for Energy and Petroleum Affairs at MoEI, Sharif al-Olama, said the UAE has clear targets for the transport sector, including the green mobility program, which aims to increase the share of electric cars and electric buses and create a mix of options for trucks.

It aims to reduce energy consumption by 40 percent by 2050, per the objectives of the transport sector's National Demand Side Management Program.

According to unofficial data, the number of electric vehicles in the UAE has reached more than 5,100, and it aims to reach 42,000 EVs by 2030.


Bahrain Inaugurates $1 Bn Power Station, Generating 1,500 MW

Bahraini Crown Prince Salman bin Hamad Al Khalifa during the inauguration of the station (Asharq Al-Awsat)
Bahraini Crown Prince Salman bin Hamad Al Khalifa during the inauguration of the station (Asharq Al-Awsat)
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Bahrain Inaugurates $1 Bn Power Station, Generating 1,500 MW

Bahraini Crown Prince Salman bin Hamad Al Khalifa during the inauguration of the station (Asharq Al-Awsat)
Bahraini Crown Prince Salman bin Hamad Al Khalifa during the inauguration of the station (Asharq Al-Awsat)

Bahrain's Crown Prince Salman bin Hamad Al Khalifa stressed the importance of development projects that provide quality services to Bahraini citizens and create world-class electricity and water infrastructure.

The Crown Prince emphasized Bahrain's commitment to enhancing energy efficiency and expanding electricity and water production capacity with programs and priorities that consolidate development.

Prince Salman bin Hamad inaugurated the al-Dur 2 Phase 2 Independent Water and Power Project (IWPP), an extension of al-Dur Phase 1.

He stressed the Kingdom's commitment to adopting innovative programs that are high quality, meet efficiency standards, and contribute to the Kingdom's wide-ranging development goals and future energy-saving ambitions.

Prince Salman bin Hamad emphasized the keenness to enhance energy efficiency and raise the electricity and water production capacity in parallel with the program that aims to strengthen development and move it towards more developed areas.

He highlighted the significant role and efforts to bolster the electricity and water sector and ensure its sustainability to meet growing demand and achieve its far-reaching aspirations.

According to the Crown Prince, Bahrain is keen to keep pace with new development projects for all endeavors to face climate change, according to the highest international standards to achieve sustainable development goals.

For his part, the Electricity and Water Authority (EWA) Chairman, Kamal bin Ahmed Mohammed, affirmed that the authority is keen to achieve all broad development goals set by King Hamad bin Isa and supported by the Crown Prince.

The Chairman reiterated the EWA's commitment to its partnership with the private sector, ensuring the continuation of energy programs and plans that contribute to energy sustainability.

He highlighted the importance of meeting the growing electricity and water consumption demand considering the Kingdom's industrial, commercial, and urban expansion.

The official also reiterated EWA's commitment to providing improved services for citizens, residents, and investors to achieve the comprehensive development goals under Bahrain Economic Vision 2030.

During the inauguration, the Minister of Electricity and Water Affairs, Yasser Humaidan, said that the project is a qualitative leap in electricity and water production in Bahrain.

Humaidan declared that the project meets the highest international quality standards and will help to reduce carbon emissions and combat climate change to achieve sustainable development.

Furthermore, the Chairman of the Board of Directors of ACWA Power, Mohammed Abunayyan, explained that the project had achieved high efficiency in the construction and implementation stages according to the approved schedule and succeeded in applying sustainable energy concepts.

Al-Dur 2 Phase 2 Independent Water and Power Project (IWPP) is the first production station in the Kingdom connected to the high-voltage electricity transmission network of 400 KV.

The station cost over $1 billion and was established in partnership with companies from Bahrain, the Kingdom of Saudi Arabia, and Japan.

The IWPP generates 1,500 MW of electricity and processes 50 million gallons of desalinated water daily. It increases the Kingdom's production capacity to 5,044 MW of electricity and 204 million gallons of desalinated water daily.