Riyadh, Dushanbe Eye Joint Investments in Industrial, Mining Sectors

Tajikistan seeks to strengthen economic relations with Saudi Arabia. Akram Karimi, the ambassador of Tajikistan in Riyadh (AFP)
Tajikistan seeks to strengthen economic relations with Saudi Arabia. Akram Karimi, the ambassador of Tajikistan in Riyadh (AFP)
TT

Riyadh, Dushanbe Eye Joint Investments in Industrial, Mining Sectors

Tajikistan seeks to strengthen economic relations with Saudi Arabia. Akram Karimi, the ambassador of Tajikistan in Riyadh (AFP)
Tajikistan seeks to strengthen economic relations with Saudi Arabia. Akram Karimi, the ambassador of Tajikistan in Riyadh (AFP)

Coordination is underway between officials in the Saudi Investment Ministry and the State Committee on Investment in Tajikistan for arranging meetings of the Saudi-Tajik joint committee and a business forum during the coming period, a Tajik diplomat revealed.

Moreover, coordination is in full swing to hold the Saudi-Tajik Business Sector Forum in Riyadh in the second half of 2022, with the participation of representatives of the private sectors in the two countries.

“We are preparing to hold the third session in the coming months in Tajikistan, in the presence of Eng. Khalid Al-Falih, the Saudi Minister of Investment and co-chair of the joint committee,” Tajikistan’s Ambassador to Saudi Arabia Akram Karimi told Asharq Al-Awsat.

“We look forward to holding the businessmen forum on the sidelines of the next session of the joint committee to establish partnerships between the private sectors of the two countries,” added Karimi.

According to the diplomat, Saudi Industry and Mineral Resources Minister Bandar Alkhorayef had held a virtual meeting with his Tajikistani counterpart lately to discuss cooperation opportunities in the industry and minerals sectors.

The two ministers agreed to form a joint team and put in place a plan for the future of cooperation.

Karimi predicted that joint investments in the two sectors would be launched soon.

Tajikistan’s Economic Development and Trade Minister Zavqi Zavqizoda had also held a virtual meeting with the Islamic Development Bank Chairman Muhammed Al-Jasser.

In their meeting, the two officials discussed ways of cooperation between the bank and the Saudi Fund for Development in the development of hydropower projects in Tajikistan.

Tajikistan currently has five free economic zones in which there are favorable conditions for the establishment of investment projects and the conclusion of agreements between foreign investors and these zones.

Karimi announced the preparation of an agreement for the encouragement and mutual protection of investments. Sponsored by the Saudi Investment Ministry and the Tajikistani State Committee on Investment, the deal is expected to be signed soon during Al-Falih's visit to Tajikistan.

An agreement to avoid double taxation between the two countries was signed in 2014, along with a package of existing bilateral agreements covering various fields.

“For our part, we believe that it is time to establish the Saudi-Tajik Businessmen Council, especially since there is a memorandum of understanding between the Federation of Saudi Chambers and the Tajik Chamber of Commerce and Industry,” said Karimi, explaining that the MoU verifies the two countries’ desire to establish such a council.

“We are currently working to celebrate the thirtieth anniversary of the establishment of diplomatic relations between Saudi Arabia and Tajikistan,” he added.

Karimi pointed out that the Kingdom is an important development partner for Tajikistan.

He noted that the King Salman Humanitarian Aid and Relief Center has made remarkable efforts in developing social and humanitarian programs in Tajikistan, with a value exceeding $12 million.

Karimi acknowledged that economic, investment and trade cooperation between the Kingdom and Tajikistan is still at the beginning of the road.

The ambassador emphasized that there is a sincere desire on both sides to strengthen relations.

He indicated that the areas nominated for economic cooperation between the two countries in the future are in the sectors of energy, industry, mining, and agriculture.

Saudi Arabia and Tajikistan would also work on raising the balance of bilateral trade.

On the most pressing challenges facing the movement of trade and investments between the two countries, Karimi explained that his country is a landlocked country that does not have any seaports.

The diplomat pointed out that there are feasible attempts by some commercial companies to overcome this logistical challenge.



World Bank Downgrades Middle East Growth Forecast for 2024 to 2.8%

Palestinian boys play football surrounded by the rubble of buildings destroyed during previous Israeli bombardment, in Gaza City on June 10, 2024, amid the ongoing conflict between Israel and Hamas (AFP)
Palestinian boys play football surrounded by the rubble of buildings destroyed during previous Israeli bombardment, in Gaza City on June 10, 2024, amid the ongoing conflict between Israel and Hamas (AFP)
TT

World Bank Downgrades Middle East Growth Forecast for 2024 to 2.8%

Palestinian boys play football surrounded by the rubble of buildings destroyed during previous Israeli bombardment, in Gaza City on June 10, 2024, amid the ongoing conflict between Israel and Hamas (AFP)
Palestinian boys play football surrounded by the rubble of buildings destroyed during previous Israeli bombardment, in Gaza City on June 10, 2024, amid the ongoing conflict between Israel and Hamas (AFP)

The global economy is expected to stabilize for the first time in three years in 2024 but at a level that is weak by recent historical standards, according to the World Bank’s latest Global Economic Prospects report released on Tuesday.

Global growth is projected to hold steady at 2.6% in 2024 before edging up to an average of 2.7% in 2025-26, well below the 3.1% average in the decade before COVID-19, the report said.

The bank's latest outlook marks an increase from the 2.4% growth for 2024 it had predicted in January.

Concerning growth in the Middle East, the World Bank downgraded its forecast from 3.5% to 2.8% in 2024, reflecting the extensions of oil production cuts and the ongoing conflict in the region.

However, growth is expected to pick up to 4.2% in 2025, it said.

The forecast implies that over the course of 2024-26 countries that collectively account for more than 80% of the world’s population and global GDP would still be growing more slowly than they did in the decade before COVID-19.

Overall, developing economies are projected to grow 4% on average over 2024-25, slightly slower than in 2023.

Growth in low-income economies is expected to accelerate to 5% in 2024 from 3.8% in 2023.

However, the forecasts for 2024 growth reflect downgrades in three out of every four low-income economies since January.

In advanced economies, growth is set to remain steady at 1.5% in 2024 before rising to 1.7% in 2025.

The report also said that global inflation is expected to moderate to 3.5% in 2024 and 2.9% in 2025, but the pace of decline is slower than was projected just six months ago.

Many central banks, as a result, are expected to remain cautious in lowering policy interest rates.

The World Bank said global interest rates are likely to remain high by the standards of recent decades—averaging about 4% over 2025-26, roughly double the 2000-19 average.

Middle East Region

The World Bank said geo-political tensions and policy uncertainty are elevated in the Middle East and North Africa (MENA) region.

“Human suffering and the destruction of physical capital in West Bank and Gaza arising from the ongoing conflict are immense. Attacks on shipping in the Red Sea have reduced transit through the Suez Canal, disrupted international trade, and heightened policy uncertainty, particularly in neighboring countries,” its report stated.

Activity by both oil exporters and importers in the MENA region remained weakened in early to the middle of 2024.

In member countries of the Gulf Cooperation Council (GCC), oil activity has been stagnant, the World Bank said.

In June 2024, oil production cuts were extended by a year until the end of 2025, and additional voluntary production adjustments were agreed to be maintained until the end of September 2024 before gradually phasing out from October.

Activity picked up in non-GCC oil exporters that were exempt from production cut agreements.

Saudi Arabia

In Saudi Arabia, the World Bank said growth in 2024 is projected to be supported by non-oil activity, and a gradual resumption of oil activity is expected to raise growth in 2025.

“In Saudi Arabia, the economy contracted in the first quarter of 2024, relative to a year ago, the third consecutive quarter of output contraction. However, growth in non-oil activity has remained robust, driven by both private consumption and business investment, somewhat offsetting a contraction of oil activity,” the report said.

Also, it noted, activity is forecast to increase in 2024 despite a projected decline in oil output.

“This growth is attributed to robust non-oil activity, driven by strong private consumption and investment, supported by fiscal and monetary policies. In 2025, a gradual resumption of oil activity is expected to raise growth,” the report found.

Oil Importers

Among oil importers, growth in 2024 is expected to pick up to 2.9 percent and then increase to 4% annually in 2025-26, the World Bank report said.

In Egypt, growth is projected to increase, propelled by investment growth partly spurred by a large-scale deal with the United Arab Emirates.

Growth in Jordan is anticipated to remain steady, although tourism-related activities will suffer in the short term.

In Tunisia, growth is forecast to rebound, but activity in Djibouti and Morocco is projected to soften in 2024.

High uncertainty around the economic outlook in West Bank and Gaza this year reflects the severity of the conflict. The economy of West Bank and Gaza is assumed to shrink, at least, by a further 6.5% —with the possibility of contraction by up to 9.4%—in 2024.

In Syria and Yemen, the outlook is subdued and uncertain, given the ongoing conflict, domestic violence and unrest, and tensions in the Red Sea, it said.

Outlook

Growth in MENA is expected to pick up to 2.8% in 2024 and 4.2% in 2025, mainly because of a gradual increase in oil production and strengthened activity since the fourth quarter of 2024, the report showed.

It said growth in GCC countries is forecast to strengthen to 2.8% in 2024 and 4.7% in 2025.

Among non-GCC oil exporters, a projected recovery in the oil sector in 2025 will help strengthen growth in Algeria and Iraq.

Risks

A major downside risk is the possible escalation of armed conflicts in the region. For oil importers, a tightening of global financial conditions could lead to capital outflows and exchange rate depreciation.

The World Bank said countries with high government debt would see increased debt-service burdens due to higher borrowing costs and the elevated risk of financial instability.

Also, severe weather events induced by climate change, as well as other types of natural disasters, remain a significant risk in MENA. Negative spillovers from weaker-than-expected growth in China would likely affect oil exporters through lower demand and prices for oil.