GWADAR, Pakistan: Remote and impoverished, Pakistan’s Gwadar port at first glance seems an unlikely crown jewel in a multi-billion-dollar development project with China aimed at constructing a 21st century Silk Road.
Situated on a barren peninsula in the Arabian Sea, Gwadar, or the “gate of the wind,” owes its fortuitous selection as Pakistan’s next economic hub to its strategic location near the Strait of Hormuz.
The city is set to become the bridgehead for the China-Pakistan Economic Corridor (CPEC), a $54 billion (SR202.50 billion) project launched in 2013 linking western China to the Indian Ocean via Pakistan.
The corridor is one of the largest projects in Beijing’s “One Belt One Road” initiative, comprising a network of roads and sea routes involving 65 countries.
The Chinese-financed initiative aims to connect the country with Africa, Asia and Europe through a vast network of ports, railways, roads and industrial parks.
But for Pakistan, participating in the project presents an enormous challenge in a country plagued by weak institutions, endemic corruption and a range of insurgencies in areas slated to host the corridor.
“This port is going to help Pakistan make linkages with neighboring countries. The entire nation will be getting benefits out of Gwadar,” Dostain Khan Jamaldini, chairman of the Gwadar Port Authority, told reporters.
But “the first beneficiaries of this port will be the people of Gwadar.”
The subject of economic dividends is extremely sensitive in resource-rich Balochistan — one of Pakistan’s poorest and most violent provinces, where separatist insurgencies have been waged for decades.
Since the beginning of the project militants have repeatedly attacked construction sites and targeted Chinese workers.
The project includes the country’s first deep-water port, a free-trade zone and 50 kilometers of dock space.
“Gwadar port is not Chinese, our strong partner is Chinese and we appreciate their boldness,” said Jamaldini.
“They came to Gwadar when nobody was accepting the idea to come and visit.”
China has eyed Gwadar for years.
Beijing financed an earlier scheme to develop the port prior to 2007, which was later overseen by a Singaporean group. But following bouts of insecurity, the Singaporeans handed it back to the Chinese in 2013.
The ambitious corridor is also far from popular in the region. India makes no mystery of its reservations over an infrastructure project that crosses through disputed Kashmiri territory.
This month US Defense Secretary Jim Mattis raised concerns about the issue, sparking a fierce backlash in Pakistan and claims Washington was trying to “contain China” in favor of arch-rival India.
Beyond diplomatic concerns, security remains a key issue in Gwadar, according to Brig. Kamal Azfar, who heads “Brigade 440” — a security outfit created to protect CPEC projects and personnel.
Hostile forces are trying to “scuttle or stall CPEC,” he said in reference to accusations India has backed insurgents hostile to the project.
The area also lacks water and electricity, which developers hope will be remedied by dams and desalination plants outlined in the scheme.
Officials also worry the peninsula will fall victim to real estate speculation. Property prices near the port doubled between 2014 and 2016, said Sajjad Baloch, the director of the Gwadar Development Authority, before falling 20 percent.
And despite promises of future prosperity, skilled labor is lacking, says Mohamed Siddique, who runs a local hospital. Even with modern facilities it operates at a limited capacity because of a dearth of specialists.
In Gwadar city, economic activity spurred by CPEC remains limited. A lone freighter was anchored in the port during AFP’s recent visit. Only three to four arrive every month, according to port authorities.
The expressway leading to the site is unfinished.
About 300 Chinese people working on various projects live in prefabricated houses on the port — coined Chinatown — but only venture out with a security escort.
The city itself, with a population of about 100,000 that is projected by one estimate to jump tenfold by 2050, has relied on fishing and the artisanal construction of boats for generations.
Up to 50,000 people, mostly fishermen, could be “gradually” resettled to make way for the project, Baloch said, adding the potential move could see them relocated to a “state-of-the-art jetty.”
The first priority for the jobs will go to Gwadaris, “then to the Balochis, then to the people of any part of Pakistan,” Baloch said.
However few Gwadaris have been hired at the port, according to locals building boats on a nearby beach.
“We are hoping to get a job there,” said Juneid.
For others, it’s a chance to right the wrongs of past subjugation.
“Balochistan province should get the maximum benefits instead of outsiders,” said Abdullah Usman, 47, a social worker.
“It will be unfortunate if the local Baloch do not benefit... that would cause an increase in the several decades long sense of deprivation.”
At a forgotten Pakistan port, China paves a new Silk Road
At a forgotten Pakistan port, China paves a new Silk Road
UBS gets green light to open Saudi branch for banking operations
RIYADH: In a move aimed at enhancing Saudi Arabia’s financial landscape, the Kingdom has granted permission for a branch of the Swiss bank UBS to operate within the nation.
According to the Saudi Press Agency, the approval was granted during a session chaired by the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al-Saud, held by the Cabinet in Jeddah on April 23.
The session commenced with King Salman briefing the Cabinet on the recent communications and discussions held between the Kingdom and several countries regarding shared relations, regional issues, and global developments, as reported by SPA.
In this context, the Cabinet reaffirmed Saudi Arabia’s steadfast stance toward promoting security and stability in the region and the world.
The Minister of Media, Salman bin Yousef Al-Dossary, stated in a press release following the session that the Cabinet praised the outcomes of the second ministerial meeting of the dialogue between the Gulf Cooperation Council countries and Central Asian countries.
He emphasized the Kingdom’s commitment to continue strengthening communication channels with various countries worldwide and supporting areas of joint coordination, including multilateral efforts.
Additionally, the Cabinet expressed its appreciation for the participants of the forthcoming World Economic Forum special meeting, set to take place in Riyadh in the upcoming week, highlighting the Kingdom’s dedication to encouraging global collaboration and tackling shared challenges.
Moreover, the Cabinet announced that the World Bank had selected Saudi Arabia as a center for knowledge dissemination to promote worldwide awareness of economic reforms, underscoring its leadership in achieving significant progress in global competitiveness indicators.
Al-Dossary further highlighted that the Cabinet applauded the achievement of five Saudi cities in obtaining advanced positions in the 2024 Smart Cities Index.
Following today’s session, the Cabinet approved cooperation agreements with Qatar, the Dominican Republic and the UK as well as Turkey, Chad, Portugal, Hong Kong, and Yemen.
Additionally, the body authorized discussions regarding statistical collaboration with Australia and maritime cooperation with Egypt. It also endorsed anti-corruption agreements with South Korea, archival partnerships with Greece, and financial technology collaboration with Singapore.
Authorization was granted for negotiations on science and technology cooperation with the Bahamas. A unified law for international road transport within GCC countries was approved, and additional compensation was granted to Tabah village’s affected families in the Hail region.
Furthermore, final accounts for various government entities were approved.
UAE and Oman establish $35bn investment partnerships across multiple sectors
RIYADH: Trade and economic ties between the UAE and Oman are set to further strengthen thanks to the signing of investment deals worth 129 billion dirhams ($35.12 billion).
According to a press statement, these agreements cover multiple sectors, including renewable energy, green metals, railway, digital infrastructure, and technology investments.
Economic ties between the UAE and Oman have remained robust in recent years, with non-oil trade volumes reaching approximately 50 billion dirhams in 2023.
“The UAE and Oman have strong historical relations that are founded on shared values, goals and principles. The agreements represent a major milestone in our bilateral ties, as they pave the way for us to leverage our collective strength to realize our shared vision of advancement and prosperity,” said Mohamed Hassan Al-Suwaidi, UAE’s minister of investment.
One of the major agreements signed by both countries was an industrial and energy megaproject valued at 117 billion dirhams. This project encompasses renewable energy initiatives, including solar and wind projects, alongside green metals production facilities.
The deal’s signatories included Abu Dhabi National Energy Co., Abu Dhabi Future Energy Co., and Emirates Global Aluminium, as well as Emirates Steel Arkan, OQ Alternative Energy, and Oman Electricity Transmission Co.
Another agreement, valued at 660 million dirhams, was signed between Abu Dhabi Developmental Holding Co. and Oman Investment Authority to establish a technology-focused fund.
A UAE-Oman rail connectivity project, valued at 11 billion dirhams, was also inked by both countries.
Additionally, UAE’s Ministry of Investment and the Ministry of Commerce and Trade signed another deal with Oman’s Ministry of Investment Promotion to cooperate in multiple sectors, including digital infrastructure, food security, and energy.
Etihad Rail, Mubadala, and Omani Asyad Group Co. signed a shareholding partnership valued at 3 billion dirhams.
Both countries also announced the formation of a UAE-Oman alliance to enhance bilateral economic and trade relations.
The UAE’s Ministry of Investment, in the press statement, further noted that the signing of these agreements will serve to bolster relations across key sectors and foster socio-economic benefits, contributing toward a stable and prosperous future for both countries.
Influx of Chinese models to drive Mideast EV sales amid global surge
- The IEA report disclosed that global EV sales grew by approximately 25 percent in Q1 of 2024
RIYADH: The entry of Chinese car models in the Middle East could drive regional electric vehicle sales, as global figures are projected to reach 17 million units by 2024.
According to the latest International Energy Agency report, this marks a 21.42 percent increase from the previous year, with nearly 60 percent of new electric car registrations in 2023 occurring in China, followed by 10 percent in the US and 25 percent in Europe.
“The continued momentum behind electric cars is clear in our data, although it is stronger in some markets than others. Rather than tapering off, the global EV revolution appears to be gearing up for a new phase of growth,” said Fatih Birol, executive director of the IEA.
The Global EV Outlook 2024 stated that the electric car market in Africa, Eurasia, and the Middle East is still in its nascent stage, with such vehicles representing just under 1 percent of total sales in these regions.
However, the decision of Chinese carmakers to explore these regions, along with producing vehicles domestically, could change this trend, allowing the market to expand in the coming years.
“In Uzbekistan, BYD (Chinese automaker) set up a joint venture with UzAuto Motors in 2023 to produce 50,000 electric cars annually, and Chery International established a partnership with ADM Jizzakh,” stated the IEA in the report.
This partnership has already led to a steep increase in electric car sales in Uzbekistan, reaching around 10,000 in 2023.
It added: “In the Middle East, Jordan boasts the highest electric car sales share, at more than 45 percent, supported by much lower import duties relative to ICE (internal combustion engine) cars, followed by the UAE, with 13 percent.”
Moreover, in July last year, Saudi Arabia’s Ministry of Investment signed a $5.6 billion deal with Chinese electric car maker Human Horizons to collaborate on the development, manufacture, and sale of vehicles.
Steady growth
The IEA report disclosed that global sales of electric cars grew by approximately 25 percent in the first quarter of this year compared to the same quarter in 2023.
Highlighting the growth of the EV market, the report revealed that the number of electric cars sold globally in the first three months of this year is roughly equivalent to the total units sold in 2020.
The steady growth in the first quarter of this year was driven by China, with 1.9 million EVs sold, marking a 35 percent rise compared to the same period in 2023.
In Europe, the first quarter of 2024 witnessed year-on-year growth of over 5 percent, slightly surpassing the growth in overall car sales and thus maintaining the EV sales share at a similar level to that of last year.
The US also experienced a 15 percent increase in sales in this segment during the first three months of this year, compared to the same period in 2023.
According to Birol, the rise in investments in the electric battery sector is a strong indication of the rise of the EV appetite globally.
“The wave of investment in battery manufacturing suggests the EV supply chain is advancing to meet automakers’ ambitious plans for expansion. As a result, the share of EVs on the roads is expected to continue to climb rapidly,” said the executive director of IEA.
He added: “Based on today’s policy settings alone, almost one in three cars on the roads in China by 2030 is set to be electric, and almost one in five in both the US and the EU. This shift will have major ramifications for both the auto industry and the energy sector.”
EV prices to fall
The report highlighted that the pace of the transition to EVs may not be consistent and will hinge on affordability.
IEA added that manufacturers have taken significant steps to deliver on the strengthening EV ambitions of governments by making significant financial commitments.
“Thanks to high levels of investment over the past five years, the world’s capacity to produce batteries for EVs is well positioned to keep up with demand, even as it rises sharply over the next decade,” said the report.
According to the intergovernmental organization, more than 60 percent of electric cars sold in 2023 were already less expensive to buy than their conventional equivalents in China.
However, the purchase prices for cars with internal combustion engines remained cheaper on average compared to EVs in the US and the EU.
The report suggested that intensifying market competition and improving battery technologies are expected to reduce the prices of electric cars in the coming years.
“Even where upfront prices are high, the lower operating costs of EVs mean the initial investment pays back over time,” said IEA.
Moreover, growing electric car exports from Chinese automakers, which accounted for more than half of all electric car sales in 2023, could add to downward pressure on purchase prices.
IEA also underscored the vitality of ensuring the availability of public charging slots to maintain the steady growth of the electric car market globally.
According to the report, the number of public charging points installed globally was up 40 percent in 2023 compared to 2022, and growth for fast chargers outpaced that of slower ones.
However, IEA added that charging networks globally need to grow sixfold by 2035 to meet the level of electric vehicle deployment in line with the pledges made by governments.
“At the same time, policy support and careful planning are essential to make sure greater demand for electricity from charging does not overstretch electricity grids,” concluded the report.
Closing Bell: Tasi slips for the second consecutive day
RIYADH: Saudi Arabia’s Tadawul All Share Index continued its downward trend for the second consecutive day as it shed 24.52 points to close at 12,484.41.
The total trading turnover of the benchmark index was SR8.44 billion ($2.25 billion), with 71 of the listed stocks advancing and 157 declining.
On the other hand, Saudi Arabia’s parallel market Nomu gained 95.74 points on Tuesday to close at 26,691.96.
However, the MSCI Tadawul Index slipped by 0.24 percent to 1,563.40.
The best-performing stock of the day was United Cooperative Assurance Co. The firm’s share price rose by 6.67 percent to SR13.44.
Other top performers include Etihad Atheeb Telecommunication Co. and Gulf Union Alahlia Cooperative Insurance Co., whose share prices surged by 4.84 percent and 4.54 percent, respectively.
The worst performer in the main market was Fitaihi Holding Group, as its share price slipped by 4.77 percent to SR4.19.
The parallel market’s positive performance was driven by Osool and Bakheet Investment Co., whose share price soared by 7.83 percent to SR36.50.
On the announcements front, Middle East Paper Co. said it has started its cardboard factory project, which will have a production capacity of 450,000 tonnes.
In a statement to Tadawul, MEPCO revealed that the feasibility study for the project has been completed with a final budget of SR1.78 billion.
The company went on to say that the undertaking would be completed in 42 months.
The initiative will be funded by the MEPCO’s internal resources, by long-term loans from local banks and the use of funds resulting from the issuance of the shares to Saudi Arabia’s Public Investment Fund, the statement added.
Meanwhile, in another statement, MEPCO revealed that it signed another agreement with J.M. Voith SE & Co. KG, for manufacturing, supplying and supervising the installation of the main machine for the cardboard project.
Egypt increases funding needed in 2024-2025 budget by over $59bn
RIYADH: Egypt has increased the amount of funding required in its 2024-2025 budget by over 2.8 trillion pounds ($59 billion) following successive shock waves.
In the financial statement of the new draft budget, Minister of Finance Mohamed Maait highlighted that the changes are reflective of the continuous struggles that the North African country has been facing following the COVID-19 epidemic.
The added funding aims to alleviate the inflationary effects that have been burdening the Egyptian public, improve the standard of living, and meet the developmental needs of citizens, the report said.
The allocation of spending in the budget will also seemingly reflect the needs of individuals by increasing spending on health and education and aiming to improve job opportunities.
Egypt’s economy has witnessed blows over the last half year due to the ongoing crisis in Gaza, which has slowed tourism growth and cut into Suez Canal revenue, two of the country’s biggest sources of foreign currency.
Amid a staggering shortage of foreign currency and rapidly increasing inflation, the challenges prompted the International Monetary Fund to expand its financial support to Egypt to $8 billion in an attempt to shore up the country’s economy.
In a statement in March, the IMF board said its decision would enable Egypt to immediately receive about $820 million.
Similarly, the UAE, represented by a private consortium led by the Abu Dhabi Developmental Holding Co., signed a landmark agreement with Egypt in February to invest $35 billion in Ras El-Hekma, a region on the Mediterranean coast 350 km northwest of Cairo.
Since securing the deal, which marked the single largest foreign direct investment in the North African country, the nation launched some long-sought reforms with the central bank delivering a 600 basis-point interest rate hike and a pledge to unshackle its currency alongside a devaluation.
This led S&P Global Ratings to note that it has been encouraged by the rush of financial support to Egypt, therefore lifting its economic outlook for the country to positive from stable after the long-awaited currency devaluation, which is poised to ease foreign currency shortages.
