ORLANDO, Florida: More than 6,500 delegates from 73 countries, including over 1,300 international and domestic travel buyers and 500 media from the US and abroad, attended the US Travel Association’s 47th annual IPW, the travel industry’s premier international marketplace.
The event, the largest single generator of travel to the US, convened in Orlando, Florida earlier this month.
The Saudi delegation was more strongly represented than in recent years, with travel experts attending from around the Kingdom; while the US Consulate General in Jeddah sent their Travel and Tourism Specialist from the Commercial Service, Mai AbuDabat.
Travel from Saudi Arabia to the US has increased greatly since May 2015 when the US started facilitating visas for the Saudi market by issuing US business visitors five-year, multiple-entry visas, said Yasser Rafaat, events and groups manager for the Jeddah-based Attar Travels.
“Facilitating visa issues for the Saudi market has been a huge help for us,” Rifaat said. The US will see the positive impact of this in the next few years.
“Saudi nationals spend a lot of money when they travel, and are the biggest travelers to the US in the region.”
AbuDabat, commercial specialist, told Arab News: “Saudis’ attitudes to travel to the US are positive.”
AbuDabat added: “Many generations of Saudi nationals have a history here, especially with the King Abdullah Scholarship program, the KASP program, which is US-centric; 55 percent of Saudi students travel to US universities, and the rest go to the UK or Australia. We find that since so many Saudi students come to the US this results in generation after generation of Saudis who feel an affinity for the US.”
A first timer to IPW, Shehazad Ahmed, manager for Leisure and MICE (an acronym for Meetings, Incentives, Conferences and Exhibitions) for the Al Khobar-based ITL World, came “looking for new products, like Legoland, for our market.”
At IPW, he said that he found other “unique products” for his clients, such as Amtrak vacations “which is good, as we currently are handling Eurail trips in Europe.”
These fortuitous meetings are part of IPW’s success.
Over the course of three days, nearly 100,000 pre-scheduled business meetings took place between travel buyers and US travel organizations.
Aslam Pasha, general manager for the AlKhobar-based Almajdouie Travels, said he had a very positive experience, noting that “IPW is purely business, it is not a social gathering.”
To configure so many business meetings between so many people, IPW runs the 3-day convention like clockwork.
“I really admired the professionalism in managing the show,” said Pasha.
“Everything is well-run and tightly run. Here you learn how to manage time. Anyone who wants to succeed needs to learn how to value time. Here everything is perfectly organized: transportation, hotels, food, even the hotels selected to host the attendees.”
When asked how many of their meetings with American suppliers were positive in the sense that they felt it would lead to future business deals, they all said that they felt that between 50 percent to 70 percent of their meetings at IPW would lead to further business opportunities for them here.
The Saudi team did say there was some room for improvement.
“The negative we noticed here is that managers of IPW never talk about Middle East clients,” said Rafaat, who has been in the travel industry for over 23 years.
“They talk about Japan, Brazil, China and the UK but never mention us.”
This is unfortunate, as according to IPW President Roger Dow, Middle East tourists traveling to the US number 243,000 and spend $618 million annually.
Nonetheless, Ahmed appreciated what IPW did offer.
“The IPW show is very disciplined and the arrangements are good, and the meetings are serious and constructive.”
This is what IPW does best: bringing together travel professionals from every corner of the US, including representatives of hotels, destinations, attractions, museums, amusement parks and other travel businesses.
These professionals market themselves to the world’s top international tours operators and wholesalers that sell travel to the US.
Pasha praised the daily activities at IPW, including lunches, which he said “are fun and yet always focused on business outcomes.”
Pasha said: “A good example of how well-organized they are is that even the lunches are very energizing — which makes it easy to continue doing business after lunch, as opposed to Saudi Arabia.”
The lunch entertainment here is re-energizing, which is important, as we work so hard here, said Pasha.
“Business deals are easily made on the floor here.”
AbuDabat’s presence was useful working with the Saudi tourism authorities who attended IPW.
“Saudi companies can work through the US Dept of Commerce,” she explained.
“We link US suppliers with Saudi buyers, which creates more business for US companies. My role is to link Saudi buyers with US suppliers. We coordinate the introduction, and have offices all over the US.”
AbuDabat said: “So, if Yasser [Rafaat, Attar Travel] informs me that he wants to organize children’s trips to summer camps in the US, I send a mass e-mail to all our tourism teams in the US and explain the request. Then they reply with what they have to offer. We do this across many industries, not only travel.”
AbuDabat said: “We will try to increase Saudi delegates from 5 to 8 or 12. We’re the biggest market in the Middle East by demographics and income. Now that the visa entry process has improved, there’s very good working relationship between the two countries.”
IPW-initiated travel is expected to bring 8.8 million international visitors to the US, an independent firm, Rockport Analytics, recently published.
Overseas travelers will earn the $28 billion in total spending, and $4.7 billion in direct bookings to US destinations over the next three years.
Saudi travelers returning to America
Saudi travelers returning to America
ORLANDO, Florida: More than 6,500 delegates from 73 countries, including over 1,300 international and domestic travel buyers and 500 media from the US and abroad, attended the US Travel Association’s 47th annual IPW, the travel industry’s premier international marketplace.
Mixed fortunes for startups during the financial crisis in Lebanon
- Some fledgling businesses were unable to weather the storm but others found a lifeline by shifting operations to other countries and are determined to survive
BEIRUT: Lebanon’s financial woes began with the protests in October 2019, when a series of peaceful sit-ins escalated and became a national revolution against the ruling class.
Soon, there was a steep decline in the value of the Lebanese pound against the dollar. The official rate is still 1,500 pounds to the dollar but the currency has lost more than 90 percent of its value and now trades at about 30,000.
Meanwhile, Lebanese banks decided to withhold the savings of individuals and organizations, a decision that resulted in many residents losing their life savings and the closure of numerous organizations, family businesses and startups.
“I lost $350,000 of my money because of the crisis,” Rana Chmaitelly, the founder of The Little Engineer, an educational startup for children, told Arab News. “I lost the product of my sweat, blood and tears — they took it all away. But I didn’t give up.”
In a stroke of good fortune amid the despair, toward the end of 2019 Chmaitelly was expecting a large transfer of money from a business partner. Having been denied access to the cash in her own bank account in Lebanon, her only solution was to swiftly establish an offshore, and later a freezone, company in the UAE, to which the money her partner owed her could be safely transferred.
“That transfer to the UAE saved me and my team, or else we would now be owing a lot of money to our partners,” Chmaitelly said.
Her story is not unique among Lebanese startups. The founders of Cherpa, another educational startup, which offers technology training courses to teenagers, also relocated in part to the UAE at the onset of the financial crisis. They were able to open a freezone company there and obtain residency.
“Having our money withheld by banks was awful; there was a lot of frustration,” cofounder Bassel Jalaleddine, told Arab News. “I used to waste my time queuing up in banks all day just to get $300.”
Online platforms Mint Basel Market, Kamkalima and Ounousa are just some of the other startups that relocated operations, at least partly, to the UAE.
Tech giant Arabnet has studied the effects of the multiple crises in Lebanon on the startup ecosystem, surveying 60 startups and 15 stakeholders. Its report, which has yet to be published, reveals that about half of the startups have moved their headquarters or parts of their businesses outside of Lebanon, Omar Christidis, Arabnet’s founder and CEO, told Arab News.
As if having their capital withheld by banks was not bad enough, startups had to deal with another devastating blow at the end of 2019: the suspension of Circular 331 by Banque du Liban, the country’s central bank.
Announced by BDL in late 2013, Circular 331 was a mechanism that injected more than $400 million into the Lebanese enterprise and tech markets. The limit was raised in 2016 to $650 million to foster even more innovation and encourage banks to invest more in startups. It was hailed as a “holy grail” for businesses in the country.
The benefits were felt for six years, said Elias Boustani, the former chief operating officer with startup consultant Wamda, despite concerns that a bubble had formed that was leading to ridiculously high valuations of startups, and affecting salaries in the tech sector.
“The circular is a BDL issue and this allowed the banks to use their own equity and to be subsidized by BDL in order to invest in startups or in funds investing in startups,” said Walid Hanna, the founder and CEO of Middle East Venture Partners in Beirut.
“The money they allocated to the funds and to the startups was 100 percent used and depleted; it was all spent or invested. And now BDL and the (commercial) banks have no intention to reinvest in startups according to Circular 331 because, obviously, they have other priorities.”
These other priorities include attempts to address a crippling economic crisis and adjust to the hyperinflation of the currency.
MEVP told Arab News that the number of Lebanese operational startups before the crisis began in 2019 was 25. This number has fallen to 15, with seven of those struggling to remain afloat.
“The financial and economic crisis in Lebanon has impacted the ability of startups to invest in markets outside Lebanon,” according to MEVP. “The Lebanese (pound) has lost more than 90 percent of its value, making it impossible for Lebanese startups to generate substantial revenues.
“Previous funds raised are frozen in banks; these ‘Lebanese dollars,’ dubbed ‘lollars,’ stand at 19 percent of their US dollar value, making it impossible for Lebanese companies to invest in their growth.”
Some sources of funding, such as regional accelerator Flat6Labs, have put financial support to their Lebanese branches on hold.
“I remember we were among the last batch to receive funding in 2019 before the (suspension of Circular 331),” Adnan Ammache, the founder and CEO of gifting platform Presentail, told Arab news. “We received funding that was worth a little bit over $100,000.”
Six other startups received funding that ranged from $30,000 to $100,000, according to Ammache. No representative of Flat6Lab was available for comment.
With no end in sight to the crises, Lebanon is experiencing its most severe brain drain in more than a century. The minimum wage still stands at 675,000 pounds a month, which is now worth a meager $24.This has led to a severe loss of talent in several sectors, including technology, leaving startups at a disadvantage.
Startups that want to try to retain their human resources must pay employees in dollars, which places additional strain on already tenuous finances, said MEVP’s Hanna.
Avo Manjerian, the cofounder and CEO of shift-scheduling startup Schedex, told Arab News: “Finding and retaining talent is hard and costly but the goal is not the money; it’s creating the incomparable, flexible and broad-minded culture in our small startup.”
Schedex soft-launched in October 2019, just as the economic crisis was beginning.
“We pay our employees in fresh dollars from our investment because we want to be fair and we don’t want to take advantage of the situation,” Manjerian said.
Other startups such as Cherpa and Mint Basil Market said they also pay in dollars, in an effort to be “fair,” and having a bank account in another country, such as the UAE, helps with this.
Boustani said that some startups concerned about losing employees are also offering staff the chance to relocate to the UAE, Turkey or other countries and work remotely. Murex, for example, helped workers in Lebanon move to the company’s offices in France.
The devastating explosion at Beirut’s port on Aug. 4, 2020, delivered yet another blow to Lebanese startups. Buildings in the Beirut Digital District, the hub for Lebanese entrepreneurs, were badly damaged, including the offices of several startups including Schedex, Sympaticus and Moodfit.
Businesses in other parts of the city were also affected by the explosion, including Buildlink, FabricAID, Compost Baladi SAL and Basma, according to the Sharjah Entrepreneurship Center. The center launched an aid initiative that distributed $100,000 equally among 10 high-impact Lebanese startups affected by the blast.
Looking to the future, to say that the Lebanese are resilient is an understatement. They are a stubborn, determined people, and this is reflected in the determination startup founders to succeed at all costs.
“We have been operational since May 18,” said Hussein Sleiman, the founder of Find a Nurse, an award-winning online platform that supplies trusted caregivers.
“We have stopped at nothing. And while we of course aspire to expand to be a global startup, we plan to make our headquarters in Lebanon — where we can employ people residing in Lebanon and benefit our country.”
Souq founder Ronaldo Mouchawar remains MENA’s online guru at Amazon
- Souq now attracts more than 45 million customers per month and offers 9.5 million products on its platform
RIYADH: MENA’s first man of the internet Ronaldo Mouchawar may have sold the firm he set up for $580 million, but has the same drive he had when he joined his first startup 20 years ago.
The Syrian entrepreneur built the largest online marketplace in the region, Souq.com, in 2005 and 12 years later sold it to US tech giant Amazon.
But rather than sunning himself on the most exclusive beaches around the world, he stayed on to become vice president of Amazon MENA.
Souq now attracts more than 45 million customers per month and offers 9.5 million products on its platform, ranging from consumer electronics, household goods, fashion brands to baby products. It employs 4,500 staff.
Mouchawar’s career is closely linked with the development of the web in the region.
Born in Aleppo, Syria, to a family of traders and engineers, Mouchawar was a basketball star at local team Jalaa SC Aleppo, before heading to the US’ Northeastern University in Boston in the late 1980s to study a bachelor’s and later master’s degree in computer science.
He remained in the US, working at information technology firm EDS, founded by billionaire Ross Perot, who unsuccessfully ran for the US presidency in 1992. Mouchawar was kept busy at the business dealing in the emerging field of image processing and video scanning for car manufacturers, healthcare organizations and publishing companies.
As the web grew rapidly in the US in the early 2000s, Mouchawar returned to the Middle East, where digital firms were an emerging venture.
He joined Jordan-based Maktoob.com, whose founders Samih Toukan and Hussam Khoury pioneered online services in the Middle East. At that time, little on the internet was in Arabic.
“Samih and Hussam built the first Arabic version of email,” Mouchawar told Arab News. “And many Arabic speakers across the world started using this tool because it enabled you to write in Arabic regardless of where you were and what operating system you were using. Maktoob also provided an Arabic language chat room and instant messaging.
“We immediately saw traction with young people. It was all about self-expression, because we did not produce our own content — it was entirely user-generated.
“We would get energizing emails from customers who were using our platform to communicate, post blogs and create forums.”
But while Maktoob was growing in popularity, its revenue was low. “We wanted to monetize our portals as the traffic grew,” Mouchawar said.
“And we thought that building an e-commerce section would make a lot of sense.”
Mouchawar led the effort to create Maktoob’s online shopping platform, offering an auction system modeled on eBay.
This prototype online market faced commercial challenges at the outset because, as Mouchawar, 52, said: “Our business model was driven by online advertising, and at that time almost all of a firm’s media spend was on traditional outlets — TV, outdoor, print, newspapers, flyers and so on. Digital was still a very small segment.
“But the fun part was that every month, we felt we were better than the month before. Even though not everything made a lot of sense to us. We were always wondering: ‘How can we get people to trade safely? How can we get people to trust us? How can we get merchants to sell and can we get customers to buy?’
“It was a bit of chaos theory at work, in terms of learning, trying many new things and building trust.”
But their work paid off and Maktoob was established as a key e-commerce site in the Gulf.
Mouchawar’s influence within the firm grew but he remained an employee, although he had ambitions to be his own boss.
With investment from Toukan, Mouchawar co-founded the Souq.com marketplace (souq means market in Arabic), which was founded in Dubai in 2005. Toukan became the other co-founder of the business.
“We were incubated in a way within the Maktoob ecosystem,” Mouchawar said.
He added: “With Maktoob, we were trying to cover the entire region. The mission of Souq was to use technology to break barriers and borders, and enable trade, but focused on only three countries — the UAE, Saudi Arabia and Egypt.”
Souq concentrated on business-to-customer and peer-to-peer selling, where ordinary users sell among themselves.
There was an influx of funds in 2009 when Maktoob was bought by Yahoo for $164 million. Toukan was a key shareholder but Mouchawar also benefited from stock options he held.
Mouchawar said: “At that point, we took a hard look at the customer journey. We decided to become an entirely business-to-customer site, and shut down some of the early community tools.
“And that was the pivot point, where we moved from a kind of community environment to more what looked like an Amazon offering.”
Souq achieved growth in three ways. Its sales numbers lifted, it bought rivals, and launched other related logistics and online payment startups. The entrepreneur said that the moves proved to be a virtuous circle, as these areas supported one another.
Mouchawar also brought in global talent, hiring senior staff from US multinationals such as Proctor & Gamble, Gillette and major international banks.
This led to Souq’s first venture capital investment round in 2012, with $40 million in equity funding led by US investment firm Tiger Global Management and South African fund Naspers.
“That investment took us to another level in terms of being able to focus on service and delivery,” said Mouchawar. “Over the next four years, we went from $60 million to $400 million turnover. It was insane growth. And we were bringing in new people — college graduates who within two or three years were managing teams of 40 people. That was life-changing for them.
“And we were serving our customers better, shortening delivery times and improving our payment proposition. We held our first White Friday (a regional version of US-inspired Black Friday sales held in late November) in 2014 for the first time, with big brands involved.”
Advisers tempted Mouchwar to expand into many different countries, but he was intent on growing the business within its existing territories.
“I say this to many entrepreneurs — sometimes by doing less, you do more. There are many bright people with good ideas, but you need to stand for something —and we wanted to stand for business-to-consumer e-commerce in this specific part of the world. We wanted to facilitate trade, gain trust and help entrepreneurs build businesses online.”
Another key funding round came in 2016, when Souq raised $270 million of investment led by Standard Chartered Bank and venture capital group International Finance Corporation.
“This was a large round. That’s when we surfaced on the global map,” said Mouchawar.
The company raised a total of $425 million across several rounds of funding by 2017, according to tech data website CrunchBase.
By now, Mouchawar added that Souq’s early investors were hungry for returns, and with interest from the world’s biggest tech firms, the chance of an acquisition grew.
Dubai real estate company Emaar had sought to buy the online business.
But a team from Amazon, lead by CEO Jeff Bezos, flew in to meet Souq’s top executives and toured the region, leaving impressed by what they saw.
A takeover of Souq by Amazon made sense for both sides, said Mouchawar. For Souq, the US giant would deliver a new level of infrastructure. For Amazon, Souq represented access to one of the world’s fastest-growing online marketplaces.
“I thought that with Amazon, we could build a large business with exciting innovations in a region with high mobile adoption, a young user base and a huge opportunity for commerce, cloud content and devices. Also, with more than 420 million Arabic-speaking people in the world, there are still many services that we could develop for them.”
The deal was signed in March 2017 when Amazon paid Souq for $580 million for the business.
However, Mouchawar felt compelled to stay on and accepted the position of vice president at Amazon MENA.
“Like some other colleagues at Souq, I didn’t feel the mission was done,” he said. “There was still a lot to do. I was excited to learn a lot more about Amazon and how things operate at that scale. We could employ more people, empower more people and build more talent.”
Sales at Amazon lifted 38 percent to $386 billion as net income jumped 84 percent to $21.3 billion last year, as consumers in lockdowns around the world ordered from the platform. The tech giant’s international sales, which includes Souq, surged by 40 percent over the same period.
Mouchawar said: “Since then, we’ve launched Amazon in Arabic in the UAE, Saudi Arabia and Egypt. And the December release of our virtual assistant Alexa in numerous regional dialects of Arabic was another key moment.”
Mouchawar seems comfortable working as the tech giant’s main man in the region.
He said: “For me, it’s always about working with smart, bright people, both locally and globally. As long as I’m learning how to bring new things to the region, I still feel excited about the role I play.”
Startup of the Week: Saudi fintech joins battle for US retail investors
- Quant Alpha platform offers artificial intelligence-powered software for investors
RIYADH: Saudi entrepreneur Nezar Bakhsh has joined the battle for US retail investors after launching a financial technology startup that sells stock trading advice to traders.
His Quant Alpha platform offers artificial intelligence-powered software for investors, which he told Arab News: “Adds a layer of simplicity, reliability and academic rigor to investment strategies”.
The Jeddah-based firm, launched in March 2020, supplies research-based information that private investors can use to make long-term investments.
Quant Alpha, which employs five full-time staff and 30 freelancers, is aimed at investors in US stocks and is focused on small-cap investments — firms with a market capitalization between $300 million (SR1.1 billion) and $2 billion.
Bakhsh, 27, added: “We’re targeting high-net-worth clients in the US, UK, Germany and Switzerland, who tend to be tech-savvy investors who understand and appreciate our software.
“In the future, we have plans to build a system for the Tadawul as well as the Shanghai market and the London Stock Exchange.”
The fintech firm, which does not act as a fund manager or broker, has 500 current subscribers, and Bakhsh said he expects sales of over $1 million in the financial year to 2022. Quant Alpha aims for rapid growth, targeting over $13 million of income from 50,000 subscribers at the end of its third year.
The US retail investor market is seeing firms offer zero, or low, trading fees for small traders. California-based small investor platform Robinhood has grown rapidly since its 2013 launch to around 13 million users, while Virginia-based E-Trade has about 5.5 million retail and corporate accounts. These firms also offer some trading advice.
Bakhsh, 27, came to finance after an early start in science and engineering.
He gained a bachelor’s and a master’s degree in electrical engineering at Pennsylvania State University, before joining Saudi government-financed construction startup Istidama. That led to a three-month project in China, where he was part of a team that successfully converted farm waste into fertilizer and animal feed.
Soon after that Bakhsh found himself with time on his hands back in the Kingdom during the COVID-19 lockdown. Fascinated by the stock market, he began developing his own investment and trading strategies.
Bakhsh said: “My results started to show great promise. And a couple of friends also started seeing some profit using my strategies.
“One of them said: ‘All these online investment software platforms charge a hefty amount, they don’t work, and they’re not backed by any academic research. They are a complete rip-off. What if you started leasing your software?’ That got the ball rolling.”
Baksh said that his platform, which he funded himself, is backed by a great deal of data.
He said: “Our member base gets access to all our research, to some proprietary indicators and to our best performing portfolio, which is powered by our own AI algorithms.”
“We have what’s called a ‘multifactor portfolio’, based on four key factors — momentum, value, quality and size — all which are rigorously researched by the academic community.”
Baksh has published his trading strategies as an e-book, available exclusively to Quant Alpha subscribers.
He said: “Informed investors are the best clients to have because they understand the cyclic behavior of a portfolio. The difference between investors who actually make money, and ones who lose, are those who understand their portfolio and are willing to be patient during times of underperformance.”
Bakhsh noted that similar to his own experience, the pandemic lockdown triggered a huge interest in the stock markets from small investors in the US who could not go to work.
Around 15 percent of American retail investors began trading in 2020, according to a survey in April by US financial services giant Charles Schwab, which owns E-Trade.
However, many seasoned market observers say that a significant proportion of the trading by these new investors is led by anonymous tips on trading message boards, which can lead to wild stock price swings of companies that come across their radar.
Bakhsh said: “Unfortunately, I don’t see many private investors doing extensive research. They just keep trying things out and not sticking with them for the long-term.”
But this rush of new investors represents an opportunity for the Saudi platform.
Bakhsh added: “I’m definitely excited by this huge flood of new investors. I hope I get a chance to educate a lot of them. I’m doing my part and hopefully it will work out for us and our clients.”
Stocks stumble, yields jump on rates outlook; oil rallies
- Investors worry about how imminent US interest rate hikes would affect economy
Global stock markets stumbled again on Friday and US Treasury yields climbed as cautious investors worried about how imminent US interest rate hikes would affect
A warning from the largest US bank JPMorgan Chase & Co. that its profitability may fall below a medium-term target cast another pall on Wall Street.
MSCI’s gauge of stocks across the globe had shed 0.36 percent. The pan-European STOXX 600 index closed down 1.01 percent and had its worst week since Nov. 26, weighed in part by declines in technology stocks.
In the US, a spate of bargain hunting toward the end of the day helped stocks to narrow losses. The Dow Jones Industrial Average fell 0.56 percent, the S&P 500 ended flat, and the Nasdaq Composite flipped into the black, rising 0.59 percent.
“We are now entering a period where the Federal Reserve will engage in a never-before-seen experiment: Raising interest rates off zero and reducing the size of its balance sheet in the same year,” said Nicholas Colas, co-founder of DataTrek Research.
“The market is still left wondering what results will come from their decisions,” Colas said.
In line with expectations of rising rates, benchmark 10-year Treasury yields jumped to 1.7859 percent, rebounding toward a two-year high of 1.808 percent struck earlier this week. Two-year Treasury yields hit a high of 0.973 percent, a level last seen in February last 2020.
European bond yields also rose in choppy trade as investors focused on monetary policy tightening by central banks, though sharp falls in Germany’s benchmark 10-year yield earlier this week led it to notch its biggest weekly fall in 10 weeks.
Meanwhile, in Asia, the five- year Japanese government bond yield jumped to its highest since January 2016 and the yen rose after a Reuters report that Bank of Japan policymakers are debating how soon they can start an eventual interest rate hike.
Such a move could come even before inflation hits the bank’s 2 percent target, sources said.
The dollar, which has been slugged by a three-day selling spree as investors bet that expec- tations of rate rises are already priced into the currency, finally steadied on Friday.
The dollar index, which measures the greenback against a basket of six currencies, bounced 0.34 percent to 95.167, pulling away further from a two-month low hit this week.
A bounce in the dollar dragged on the euro, which lost 0.34 percent to 1.14135.
Sterling also slipped 0.22 percent to 1.36780, taking a breather after this week’s rally that pushed it to a 2-1/2-month high.
GDP data on Friday showed that Britain’s economy grew faster than expected in November and its output finally surpassed its level before the country went into its first COVID-19 lockdown.
Libya oil, gas exports hit 5-year high of $21.5 bn
- Total net revenues for oil and gas exports last year amounted to $21.5 billion
- Record levels were achieved in November and December, raising a combined $4.3 billion in the two last months of 2021
TRIPOLI: Libya’s lifeline oil and gas exports raised revenues of more than $21.5 billion in 2021, the highest level in five years, the National Oil Corporation announced Saturday.
Total net revenues for oil and gas exports last year amounted to $21.5 billion as well as 30 million euros in non-dollar sales, the state-run NOC said in a statement.
It said record levels were achieved in November and December, raising a combined $4.3 billion in the two last months of 2021.
“The end of the year 2021 recorded a recovery, and oil prices achieved their largest annual gains since 2016, driven by the recovery of the global economy from the state of stagnation” due to the coronavirus epidemic, NOC chief Mustafa Sanalla said.
Since the 1970s, Libya which sits on the largest known oil reserves in Africa has been heavily dependent on revenues from its hydrocarbon exports.
But in a decade of violence since the 2011 revolt that overthrew and killed dictator Muammar Qaddafi, armed groups have frequently blockaded or damaged oil installations.
The shutdowns have forced the NOC to declare force majeure, a legal move allowing it to free itself from contractual obligations in light of factors beyond its control.
Oil production has recovered to 1.2 million barrels per day, as opposed to between 1.5 million and 1.6 million bpd before the NATO-backed uprising of 2011.
But Sanalla warned “the ability of the oil sector in Libya to invest and advance the process of infrastructure modernization will remain weak in the foreseeable future, especially in light of the scarcity of budgets.”
“What we need more than ever is to think outside the box and create initiatives to save the infrastructure,” he stressed.