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Arab Banks Maintain Capital Adequacy at Minimum Levels

The meeting of the governors of Arab central banks and monetary institutions kicked off in Jeddah on Sunday. (Photo: Ghazi Mahdi)
The meeting of the governors of Arab central banks and monetary institutions kicked off in Jeddah on Sunday. (Photo: Ghazi Mahdi)
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Arab Banks Maintain Capital Adequacy at Minimum Levels

The meeting of the governors of Arab central banks and monetary institutions kicked off in Jeddah on Sunday. (Photo: Ghazi Mahdi)
The meeting of the governors of Arab central banks and monetary institutions kicked off in Jeddah on Sunday. (Photo: Ghazi Mahdi)

Governors of Arab central banks and monetary institutions announced that central banks in the region have maintained capital and liquidity adequacy above the minimum limits established in the Basel Agreement, noting that the total debt in the sector exceeded $756 billion.

For his part, the Governor of the Saudi Central Bank, Dr. Fahd Al-Mubarak, said that inflation levels in his country were still within reasonable levels, pointing to the strength of the Saudi economy in light of the current challenges.

Saudi Central Bank (SAMA)

Al-Mubarak said that estimates for the second quarter of 2022 point to a real GDP growth of 11.8 percent on an annual basis, adding that inflation levels in the Kingdom were still within acceptable rates, registering an annual increase of 3 percent in July 2022.

Regarding the labor sector, Al-Mubarak said that the general unemployment rate continued to decline to 6.0 percent in the first quarter of 2022, while the unemployment rate for Saudis also decreased, reaching 10.1 percent in the same period.

An important phase

Addressing the 46th session of the Board of Governors of Central Banks and Arab Monetary Institutions, Al-Mubarak said that the latest expectations of the International Monetary Fund (IMF) indicated a slowdown in the pace of global economic growth in 2022 to reach 3.2 percent, compared to the Fund’s expectations last April of 3.6 percent.

This was mainly due to changes in interest rates, high inflation and fluctuations in the global economy, as well as the challenges faced by emerging economies, according to the governor of SAMA.

He underlined the need for Arab countries to study all possible measures to address these challenges, coordinate efforts, and implement economic plans and reforms to achieve economic sustainability.

Capital adequacy

In a related context, the central banks in the Arab region have maintained capital adequacy, above the minimum limits established by the Basel decisions, according to Dr. Abdulrahman Al-Hamidy, Director General and Chairman of the Board of Directors of the Arab Monetary Fund.

Al-Hamidy added that the average capital adequacy ratio for the banking sector in the Arab countries amounted to about 17.8 percent by the end of 2021, while the ratio of liquid assets to the total assets of this sector reached about 32.7 percent at during the same period.

Growth of economies

Al-Hamidy said that Arab economies were expected to register a 5.4 percent growth, compared to 3.5 percent recorded in 2021.

He also expected that the inflation rate in the Arab countries as a group would reach 7.6 and 7.1 in 2022 and 2023, respectively.

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FAO Aims for Key Outcomes at COP16 in Saudi Arabia

Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)
Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)
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FAO Aims for Key Outcomes at COP16 in Saudi Arabia

Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)
Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)

Dr. Abdul Hakim Elwaer, Assistant Director-General of the Food and Agriculture Organization (FAO), stated that the organization will take an active role at COP16, the UN conference on combating desertification, scheduled to take place in Saudi Arabia in early December.

In remarks to Asharq Al-Awsat, he expressed confidence that the conference—the first of its kind in the Middle East—would produce significant outcomes.

Elwaer’s comments came during a roundtable organized by FAO’s regional office in Cairo, attended by a select group of media representatives. The session focused on FAO’s participation in the upcoming conference and the importance of the Rio Trio —the integrated framework of the three major UN conventions addressing climate change, biodiversity conservation, and desertification.

Fida Haddad, FAO’s Program Officer for Land Rehabilitation and Climate Change, highlighted the interconnectedness of the three conventions and noted that COP16 would place a strong emphasis on land and water rehabilitation and their sustainable management.

Haddad pointed out that approximately 90% of the Middle East is affected by arid conditions. Despite this, local communities and Arab governments have made notable progress in addressing desertification and drought. She also announced that, for the first time, FAO has successfully placed food systems on the COP16 agenda, enabling discussions on how land rehabilitation can enhance food supply chains and systems.

Elwaer underscored FAO’s central role in achieving the second Sustainable Development Goal (SDG): eradicating hunger. He emphasized that FAO actively engages in the UN conventions on climate change, biodiversity, and desertification, which collectively contribute to this mission.

FAO’s focus, according to Elwaer, is on transforming food and agricultural systems to become more inclusive, efficient, and sustainable, aiming for better production, nutrition, and livelihoods. He highlighted the organization’s success in integrating these priorities into the agendas of the three conventions and collaborating with host countries on joint initiatives.

He further noted that Saudi Arabia’s hosting of COP16 is particularly significant for the region, which faces pressing challenges such as water scarcity, desertification, and food insecurity. The conference presents an opportunity for Middle Eastern nations to highlight these issues, explore solutions, and ensure their inclusion in global environmental discussions, not only at this event but in future COP sessions, he underlined.

Elwaer emphasized the growing global attention on desertification, as it is now impacting regions previously unaffected, such as southern Europe and parts of Latin America. These areas are witnessing alarming declines in arable land and forests, prompting them to seek lessons from the Arab world, which has developed resilience strategies to combat desertification over centuries.

FAO will have a strong presence at COP16, with two dedicated pavilions—one in the Blue Zone for official delegations and another in the Green Zone to engage civil society and conference participants, he said.

He added that in collaboration with Saudi Arabia and the UN, FAO will lead coordination on Food Day and Governance Day, scheduled for December 5 and 6, respectively. The organization will also participate in other specialized sessions throughout the conference.