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Saudi Arabia Advances in 36 Global Indices

Saudi Arabia recorded a progress in several global indices (Asharq Al-Awsat)
Saudi Arabia recorded a progress in several global indices (Asharq Al-Awsat)
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Saudi Arabia Advances in 36 Global Indices

Saudi Arabia recorded a progress in several global indices (Asharq Al-Awsat)
Saudi Arabia recorded a progress in several global indices (Asharq Al-Awsat)

Saudi Arabia has recently secured advanced positions in 36 international indices, reflecting its strengthened economic and investment environment.

The progress encompasses notable categories such as consumer confidence, the business environment, government trust, and the World Competitiveness Rating.

Investment licenses issued in the year's second quarter saw a whopping 93.9 percent growth, surging to approximately 1,800 licenses compared to the 938 permits during the same period last year.

Construction and manufacturing led the surge, accounting for nearly 834 licenses in the second quarter of 2023.

A recent report from the Ministry of Investment, reviewed by Asharq Al-Awsat, revealed that Saudi Arabia clinched the second position in five international benchmarks, including Consumer Confidence Index Consumer Confidence in Local Economic Directions among 22 countries in July.

Saudi Arabia stood out in the National Entrepreneurship Context Index among 51 countries and the Global Competitiveness Cybersecurity Rating from 64 countries in 2022.

- Global competitiveness

Saudi Arabia garnered third place out of 26 in the Trust in Government index, fifth in Business Trust, and fifth in the Edelman Trust Barometer, spanning 26 countries.

Furthermore, the Kingdom ranked sixth in the Global Competitiveness Economic Performance Index from 64 countries this year and seventh in the Venture Capital Reception Index among 132 countries in 2022.

Saudi Arabia secured the 17th position among 64 countries at the Global Competitiveness Rating issued by the International Institute for Management Development this year.

The Kingdom also received multiple international credit ratings: Moody's at A1, Standard & Poor's at AA-1, and Fitch at A+.

- Investment Deals

The total nominal fixed capital formation in the second quarter witnessed a six percent annual increase, amounting to around $74.4 billion. The surge is attributed to government and non-government fixed capital formation rate growth at 22 percent and 3.5 percent, respectively.

The contribution of fixed capital formation to the nominal GDP rose to 28.8 percent in the second quarter, up from around 24.2 percent during the same period last year.

Report data indicates the completion of seven investment deals in the second quarter, including agriculture, food manufacturing, healthcare, and medical services.

China led the way among countries investing in Saudi Arabia with three deals, Jordan with two deals, and the UAE with one. Another joint venture emerged between the UAE and Singapore.

- General Authority, Defense

In recent data, Saudi Arabia revealed a prominent surge in the issuance of investment licenses during the second quarter of this year.

The most increased sectors included construction, manufacturing, professional, educational, technical activities, information and communications, accommodation services, wholesale and retail trade, and vehicle repairs.

The sectors together accounted for a staggering 80.7 percent of the total licenses issued.

The general authority and defense sector saw remarkable growth, notably the highest increase in investment licenses, skyrocketing by 100 percent compared to last year.

The information and communications sector and other services registered growth at 91.7 percent and 90 percent, respectively.

Analyzing the legal status of companies that received investment licenses in the second quarter, Limited Liability Companies (LLC) acquired around 464 licenses, whereas Single Member Limited Liability Companies amassed approximately 1.1 thousand licenses.

Egypt took the lead with 458 licenses, India followed closely with 205 licenses, Yemen in third place with 173, Jordan in fourth with 127, and Pakistan secured fifth position with 122 permits.

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US Energy Secretary: Oil Flows Through Hormuz Reach 80-90% of Pre-Conflict Levels

US Energy Secretary Chris Wright participating via video call in the WPC Energy Congress. (Asharq Al-Awsat)
US Energy Secretary Chris Wright participating via video call in the WPC Energy Congress. (Asharq Al-Awsat)
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US Energy Secretary: Oil Flows Through Hormuz Reach 80-90% of Pre-Conflict Levels

US Energy Secretary Chris Wright participating via video call in the WPC Energy Congress. (Asharq Al-Awsat)
US Energy Secretary Chris Wright participating via video call in the WPC Energy Congress. (Asharq Al-Awsat)

US Energy Secretary Chris Wright said oil flows through the Strait of Hormuz had recovered to 80% to 90% of pre-conflict levels, averaging 13 million to 14 million barrels per day, while increased flows through alternative pipelines had helped support global supplies.

Speaking via video link at the WPC Energy Congress, Wright said spare production capacity and substantial inventories had helped keep crude oil supplies at manageable levels despite ongoing challenges. The crude oil supply problem was largely under control, but not fully resolved, he said.

The bigger challenge was refined petroleum product flows out of the Arabian Gulf, which remained at just 25% to 35% of pre-conflict levels, worsening shortages of diesel, jet fuel and gasoline.

Refined product shortages add to market pressures

Wright said the decline in Gulf refined product exports coincided with lower supplies from other sources. Russia, once a major diesel supplier, had become a net importer, albeit in limited volumes.

China had sharply cut refined product exports and announced it would not export such products in October, adding to pressure on global markets, he said.

Wright expressed hope that increased output from Chinese refineries, which have spare capacity and are benefiting from attractive profit margins, would help ease shortages. US refineries were also processing crude and producing refined products at record levels, he added.

He said the course of the Russia-Ukraine war and China's policy on refined product exports would affect supply in the coming period.

Shipping constraints hamper supply recovery

Wright said maritime shipping was another factor complicating the recovery in refined product flows from the Gulf, citing higher transport costs and longer shipping routes.

Houthi disruptions in the Bab al-Mandab Strait had forced oil tankers to take longer routes, while shifts in supply sources and Iranian attacks on vessels had added pressure on available shipping capacity, he said.

A decline in Iranian, Venezuelan and Russian oil flows through channels that had used the so-called “dark fleet” had freed up a significant number of tankers previously used to transport those supplies, Wright added.

Some of those vessels needed to be reintegrated into the mainstream shipping system, with sanctions lifted where possible, to increase capacity for transporting refined products from the Gulf and support continued oil and gas operations, he said.

Diesel and jet fuel prices rise

Wright warned that higher shipping costs were having a greater impact on markets farther from supply sources. Global diesel prices had reached very high levels, while jet fuel prices had also risen, alongside a more moderate increase in gasoline prices.

Spare production capacity and inventories had helped contain pressure on the crude oil market, he said, but shortages of refined products and constraints on maritime shipping continued to pose challenges.

Wright concluded that the response to the conflict had demonstrated the energy system's ability to adapt, but stressed that the crisis was not over and that continued efforts were needed to maintain stable supplies.

Business

IMF's Georgieva Urges Member Countries to Act Swiftly on Debt, Inflation

IMF Managing Director Kristalina Georgieva during the annual meetings of the Fund and the World Bank in Bangkok (Reuters)
IMF Managing Director Kristalina Georgieva during the annual meetings of the Fund and the World Bank in Bangkok (Reuters)
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IMF's Georgieva Urges Member Countries to Act Swiftly on Debt, Inflation

IMF Managing Director Kristalina Georgieva during the annual meetings of the Fund and the World Bank in Bangkok (Reuters)
IMF Managing Director Kristalina Georgieva during the annual meetings of the Fund and the World Bank in Bangkok (Reuters)

The International Monetary Fund is urging its member states to act swiftly if they see inflation rising and to work on reducing large deficits, IMF Managing Director Kristalina ‌Georgieva said ‌on Monday, ‌noting stubborn ⁠inflation fueled by ⁠AI investments.

Georgieva told a panel at the annual meetings of the IMF and World Bank ⁠in Bangkok that sharp ‌increases ‌in defense spending were also ‌pushing inflation higher ‌after the energy shock of the war in the Middle East, which ‌in turn was putting pressure on central banks ⁠to ⁠raise interest rates, reported Reuters.

But that had consequences for developing countries and emerging markets, which she said were now "becoming victims of the increase in yields in advanced economies," she said.

Business

Miras: Energy Security, Sustainability, or Affordability Cannot Be Sacrificed

Pedro Miras addresses attendees as the 25th WPC kicks off in Riyadh (Asharq Al-Awsat)
Pedro Miras addresses attendees as the 25th WPC kicks off in Riyadh (Asharq Al-Awsat)
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Miras: Energy Security, Sustainability, or Affordability Cannot Be Sacrificed

Pedro Miras addresses attendees as the 25th WPC kicks off in Riyadh (Asharq Al-Awsat)
Pedro Miras addresses attendees as the 25th WPC kicks off in Riyadh (Asharq Al-Awsat)

Pedro Miras, President of WPC Energy, affirmed that the world needs more energy from multiple sources to keep pace with population and economic growth, emphasizing the necessity of balancing supply security, affordability, sustainability, and economic development, without sacrificing any of these priorities.

In his speech at the opening of the 25th WPC in Riyadh, Miras stated that Riyadh is the most suitable place to host the conference, noting the pivotal role Saudi Arabia plays in the global energy system, and its continued leadership in investments, innovation, and technological advancement in the sector.

He added that the conference, which gathers government and industry leaders, academics, technology experts, financiers, and international institutions over four days, serves as a platform to discuss ways to meet the world's increasing energy needs, while supporting prosperity, sustainability, and security for future generations.

He pointed out that the world is undergoing a period of profound transformations, significant challenges, and exceptional opportunities, with the global population expected to approach 10 billion by mid-century, accompanied by increased energy demand resulting from population growth, urbanization, and improved living standards.

He explained that energy consumption and human development have gone hand-in-hand throughout modern history, as the availability of energy has contributed to improving health, education, and living standards, emphasizing that continued human progress requires more energy.

He noted that oil and gas still provide a significant share of the world's energy needs, despite decades of innovation and growth in new technologies, considering this an affirmation of the scale of the upcoming challenge and the need to utilize multiple energy sources.

Four Pillars for the Future of Energy
Miras stressed that the challenge is no longer about choosing between energy security, affordability, and sustainability, but rather about achieving progress in these areas in parallel with economic development.

He stated that billions of people around the world aspire to improve their living conditions, access better health and education services, and broader economic opportunities, all of which require reliable energy availability and continued investment in its system.

He added that countries differ in their circumstances, resources, priorities, and developmental stages, which necessitates adopting diverse paths to achieve the future of energy and utilizing a wide range of technologies and solutions, noting that this diversity represents a source of strength.

He affirmed that technological neutrality remains one of the fundamental principles of the WPC, allowing various energy sources and technologies to contribute to building a secure, affordable, and sustainable system.

Innovation Alone Is Not Enough Without Investment and Partnerships
Regarding technological developments, Miras said that artificial intelligence, digitalization, advanced materials, new fuels, hydrogen, and carbon capture, utilization, and storage technologies, along with other technologies, are reshaping the global energy landscape.

However, he stressed that technology alone is not enough to achieve the desired transformation, as it requires effective policies, stable and predictable regulatory frameworks, long-term investments, and enhanced international cooperation.

He explained that energy security remains essential for economic growth, social stability, and human well-being, and that a successful energy sector transformation cannot be achieved without ensuring supply security. Furthermore, the long-term sustainability of this security requires sufficient investments across various components of the energy system.

He added that no single country, company, or technology can address global energy challenges alone, emphasizing the importance of partnerships among governments, industry, academia, and international institutions.

Riyadh: A Platform for Global Dialogue
Miras expressed his appreciation to the Kingdom, the Minister of Energy, and the Saudi Minister of Industry and Mineral Resources, Prince Abdulaziz bin Salman, for their efforts in organizing and hosting the conference in Riyadh.

He stated that for over 90 years, the WPC has provided a platform bringing together governments, industry, academia, and international institutions to exchange ideas, deepen understanding, and explore practical solutions for sector challenges.

He noted that the importance of dialogue and cooperation is increasing amid the uncertainty and fragmentation the world is experiencing, expressing his hope that the conference discussions will contribute to developing partnerships and exploring innovations that will shape the future of energy.

He concluded by affirming that the goal is to build an energy future that leaves no one behind, achieving progress in supply security, affordability, sustainability, and economic development, based on innovation, cooperation, and mutual respect.