As the stultifying summer heat sends Iraqis in search of cool spots, restaurateur Ali Hussein provides sanctuary — even though it means hooking up to an expensive generator.
“The clients must be comfortable when they eat,” said Hussein, who stakes his reputation on ensuring customers are constantly blasted by air conditioning.
Outside, temperatures at this time of year can reach 50 degrees Celsius (120 Fahrenheit), sending demand for electricity soaring.
But Iraq’s dilapidated power grid is unable to cope, leaving business owners — and the few citizens who can afford it — beholden to private supplies.
Hussein forks out 225,000 dinars ($190) a month to the owner of a generator for a 15 amp electricity supply to his Baghdad restaurant.
It’s the “gold” option, guaranteed to run uninterrupted.
But the cost is more than some Iraqis earn.
And for most citizens, there is little escape from a heat that barely abates even at night.
We have only “four or five hours of electricity” a day from the national grid, grocer Mouthanna Mehdi told AFP.
Anger over the power shortages fed into deadly unrest in July.
At least 14 people were killed in street protests that began in the oil-rich southern city of Basra on July 8 and spread to other areas including Baghdad.
Like Hussein, Mehdi earns enough to pay for electricity from a generator.
But he can only afford a five amp supply.
It’s “not enough to power all the lights and the air conditioning at the same time,” he said.
“Sometimes the generators break down or stop when they run out of fuel, which can damage our electrical appliances,” the 40-year-old added.
Generators are a regular fixture on street corners in Baghdad and other major cities, often hastily installed by small businessmen to exploit peak summer demand.
Tangles of wires protrude from the devices, disfiguring the city and sometimes causing electrical fires.
But as with every crisis, there are winners as well as losers.
If the power situation “was resolved, we would lose our work,” said Hussein Kazem, who sells fuel to the owners of generators.
Experts say supply of electricity falls at least 40 percent short of demand during the summer.
And a substantial slice of the estimated $40 billion allocated to the power sector over the past 15 years has vanished.
Money from public tenders has allegedly lined the pockets of corrupt politicians and businessmen who fronted fake contracts.
In a bid to quell protests, Prime Minister Haider Al-Abadi on Sunday fired electricity minister Qasim Al-Fahdawi.
Fahdawi had been the architect of a privatization program that was meant to herald electricity 24 hours a day.
Iraqis say the project worked well for a few months in the zones where it was tested.
But as soon as the summer heat arrived, power cuts multiplied once more.
The authorities say they have upped electricity generation by nearly 50 percent to 17,000 megawatts since 2014.
Ordinary Iraqis are skeptical about this figure.
“This is all lies and theft,” said Mazen, who fixes generators and did not want to give his full name.
“The leaders divert the money and hide it abroad. And when they say the situation is improving, you can be sure they are lying,” he said.
Electricity crisis leaves Iraqis gasping for cool air
Electricity crisis leaves Iraqis gasping for cool air
- Grid unable to cope with summer hear
- Crisis generates business for fuel sellers
Gulf Cooperation Council prioritizes economic diversification for sustainable growth, says official
RIYADH: The Gulf Cooperation Council aims to reduce reliance on oil revenues by implementing a comprehensive vision for economic diversification, as emphasized by its Secretary-General, Jasem Al-Budaiwi.
During the Gulf Creatives Conference, organized by the Diwan at Harvard University in Cambridge, Massachusetts, Al-Budaiwi outlined a vision that embraces diverse sectoral reforms. These initiatives are aimed at strengthening economic resilience and attracting foreign investments, the Saudi Press Agency reported.
He noted GCC countries have positioned themselves as competitive digital hubs on the global map, supported by their favorable geographic location and young population.
“The strategic location, coupled with robust infrastructure, paves the way for the council member states to attract international partnerships that support their long-term development goals,” Al-Budaiwi said.
He added: “This dynamic approach is vital for sustaining economic growth and ensuring the resilience of Gulf economies in the face of global economic fluctuations and regional challenges.”
Additionally, Al-Budaiwi emphasized the numbers and data supporting these plans and showcased the advancements made by GCC nations, including the establishment of the Customs Union, the GCC Common Market, and the Unified Economic Agreement. He cited Saudi Arabia’s NEOM project as an example of urban development initiatives within GCC nations.
He explained that smart cities are designed to reduce waste, enhance energy efficiency, and streamline urban management by leveraging artificial intelligence and the Internet of Things.
He continued by stating that this further underscores the GCC nations’ commitment to technologically advanced and environmentally friendly urban design, as well as the increased emphasis on cybersecurity to mitigate growing risks and maintain confidence in the digital economy.
Moreover, Al-Budaiwi emphasized the transition from oil-dependent to diversified economies and expressed satisfaction with the outstanding economic and integration achievements of the GCC countries.
In February, he held a series of meetings in Riyadh with foreign ambassadors to Saudi Arabia.
Al-Budaiwi met with the South Korean Ambassador to Saudi Arabia, Choi Byung Hyuk, at the general secretariat headquarters in Riyadh.
During the meeting, the secretary-general discussed the developments in the free trade agreement between the GCC countries and South Korea, which was signed in December 2023.
Both sides expressed their desire to enhance cooperation between nations and increase focus on mutual interests such as education, health, investment, and pharmaceuticals.
The meeting also reviewed relations between the GCC and South Korea, emphasizing the importance of enhancing strategic dialogue through the areas of cooperation outlined in the joint action plan.
Expat remittances from Saudi Arabia hit $3.2 billion in March
- The upswing is the highest since June 2022, SAMA data shows
RIYADH: Remittances by expatriates in Saudi Arabia grew 28 percent in March as compared to the preceding month to reach SR11.96 billion ($3.2 billion), the highest since 2022, official data showed.
The launching of new development projects in the Kingdom has led to an increase in the expatriate population, as they actively contribute to the growth of business activities. This, in turn, may have influenced their remittance patterns.
This growth in remittances is also exemplified by the Regional Headquarters Program, which has successfully attracted over 200 companies from across the globe to obtain licenses to set up their regional bases in Saudi Arabia.
These entities are driven by the prospect of securing lucrative government contracts. Additionally, the ongoing structural reforms to enhance foreign direct investment have further stimulated business growth in the Kingdom.
Alongside regulatory reform, Saudi Arabia has undergone modernization in its legal governance and enforcement practices such as digitization of employment contracts, virtual court hearings, and provision of online government services. These initiatives are integral components of a broader set of reforms aimed at positioning the Kingdom as one of the leading nations in terms of ease of doing business.
However, on a quarterly basis, there was a 0.34 percent decrease in expat remittances compared to the same period last year. This trend can be attributed to Saudi Arabia’s evolving economic landscape, particularly the implementation of financial sector reforms, which are increasingly enticing residents to invest a portion of their earnings within the Kingdom.
In February of this year, a report by Jadwa Investment noted that workers’ remittances were unexpectedly low despite the influx of expatriates.
This phenomenon according to their report may suggest that some expatriates opted to capitalize on the high savings rates in the Kingdom instead of remitting funds home.
The Saudi Central Bank, also known as SAMA, has raised key policy rates multiple times in 2022 and 2023, given that the Saudi currency is pegged to the dollar. This move aligns with the actions taken by the US Federal Reserve, which has been gradually increasing interest rates as part of its strategy to address inflationary pressures.
Conversely, remittances from Saudis saw a 9 percent monthly increase, totaling SR5.11 billion, yet experienced a quarterly decline of 0.53 percent.
The occurrence of Ramadan in March this year likely influenced the increase in Saudi remittances for this month. During this holy month, individuals often engage in increased charity, support their families, and fulfill religious obligations, such as zakat.
Egypt aims to attract Apple, pushing to solidify position as manufacturing hub
RIYADH: Egypt is making strides to become a manufacturing hub, with four of the top five mobile phone manufacturers — Samsung, Vivo, Oppo, and Xiaomi — agreeing to establish factories in the country.
Prime Minister Mostafa Madbouly emphasized these strategic initiatives during a tour of the 10th of Ramadan, the country’s largest industrial zone. The aim is to attract the fifth tech giant, Apple, to further bolster Egypt’s position in regional manufacturing.
Madbouly’s visit included several factories, including one specializing in producing sanitary devices at the highest standards for various international brands.
This stopover underscores the Egyptian government’s commitment, which President Abdel El-Sisi reinforced, to expanding and strengthening the industrial sector.
The prime minister noted the government’s efforts to attract significant global companies to Egypt, aiming to create high local value-added goods and foster a conducive environment for foreign investment.
He emphasized the state’s strategy to enhance communication with international investors and manufacturers, offering the necessary support to help them realize their expansion plans within the Egyptian market, particularly those targeting export activities.
This aggressive push to diversify Egypt’s industrial base and enhance its export potential is a key component of the nation’s broader economic strategy, aiming to secure a more prominent position in the global financial landscape.
The government is actively pursuing an increase in its investment attraction status as it aims to lower its import bill to reduce liquidity and foreign reserve pressures.
Earlier in May, global ratings agency Fitch revised Egypt’s outlook to positive from stable.
The agency affirmed Egypt’s rating at “B-,” citing reduced external financing risks and stronger foreign direct investment.
Since the country announced the International Monetary Fund loan program, foreign investors have poured billions of dollars into Egyptian treasury bills. After the investment in the country’s foreign portfolio and the support from the UAE, Egypt’s net foreign assets deficit shrank by $17.8 billion in March.
Fitch said that initial steps to contain off-budget spending should help to reduce public debt sustainability risks.
The country straddles North Africa and West Asia and has been grappling with an ongoing economic crisis linked to persistent foreign currency shortages. In the fourth quarter of 2023, its foreign debt climbed by $3.5 billion to $168.0 billion.
Meanwhile, Moody’s also revised its outlook on Egypt to “positive” in early March while affirming its ratings due to the high government debt ratio and weaker debt affordability compared to its peers.
Saudi delegation visits London to boost digital economy ties with UK
RIYADH: The digital economy ties between Saudi Arabia and the UK are poised to advance following the official visit of the Kingdom’s delegation to London.
The Governor of the Digital Government Authority, Ahmed Al-Suwaiyan, engaged with leaders and officials from the UK’s public and private sectors, focusing on strengthening cooperation between nations in the digital economy and learning from shared global experiences.
During the visit, Al-Suwaiyan, also chairman of the executive committee of the Digital Cooperation Organization, took part in the Annual 21st Middle East and North Africa Conference. He delivered a keynote speech showcasing Saudi Arabia’s leading model in digital transformation, highlighting the country’s best practices and success stories in the digital government division, the Saudi Press Agency reported.
Al-Suwaiyan also met with key figures, including Alex Burghart, the parliamentary secretary for the British Cabinet Office; Julia Lopez, minister for data and digital infrastructure and Saqib Bhatti, minister for technology and the digital economy.
The meetings, attended by officials from governmental bodies and CEOs of major companies, focused on expanding the strategic partnership between the two countries in digital government.
Furthermore, the Saudi Ambassador to the UK, Prince Khalid bin Bandar bin Sultan, hosted Al-Suwaiyan and the accompanying delegation at the embassy. During the meeting, they reviewed DGA’s efforts in developing digital government services and discussed opportunities for enhancing cooperation.
Additionally, the governor met with Amal bint Jameel Fatani, a Saudi cultural attaché to the UK, the SPA added.
He also convened with a selected cohort of Saudi scholarship students at the Saudi Cultural Mission in London. During this interaction, he delved into key initiatives in digital transformation and outlined strategic directions for digital government.
Moreover, the DGA governor engaged with the students to understand their perspectives, addressing the specific challenges they encounter in navigating digital government services. This initiative aimed to enhance their digital experience, providing services aligned with their aspirations and ensuring their satisfaction.
The visit exemplifies the DGA’s commitment to fostering partnerships and strengthening its global presence. It underscores the organization’s proactive role in spearheading international initiatives aimed at achieving a sustainable digital economy. These efforts closely align with the objectives outlined in Saudi Vision 2030.
Fitch affirms Jordan’s BB- rating with stable outlook
RIYADH: Jordan’s macroeconomic stability has led to Fitch Ratings affirming its long-term foreign currency issuer default ratings at BB- with a stable outlook.
This confirmation highlights the country’s progress in fiscal and economic reforms, alongside resilient financing supported by its liquid banking sector, public pension fund, and international assistance, as outlined in a press release.
However, the country’s ratings are constrained by high government debt, weak growth, and risks in domestic and regional politics.
“Jordan has preserved economic and political stability despite significant external shocks, including social instability in the region (Arab Spring) and wars in neighboring countries (Iraq and Syria), but these shocks have led to lower growth and significant government debt build-up,” stated Fitch in the report.
It further noted: “A prolonged or expanded Gaza conflict, even if it does not involve Jordan directly, could weaken growth prospects and increase the challenges for debt reduction.”
The analysis also pointed out that current account deficits and net external debt higher than rating peers have negatively impacted Jordan’s position.
According to the US-based agency, a BB- rating signifies an elevated vulnerability to default risk, particularly in the event of adverse business or economic changes.
This rating also indicates that there is business or financial flexibility in the country that supports the servicing of financial commitments.
Fitch further noted that Jordan’s government maintains its commitment to advancing its three pillars: economic, public administration, and political reform agenda despite the external challenges.
The report added that Jordan’s economy expanded by 2.6 percent in 2023. However, the rate of growth is expected to contract to 2.3 percent this year, driven by lower tourism inflows, weaker external trade performance, and continued regional political uncertainty.
Fitch noted that if geopolitical risks ease, the country’s economy is expected to grow by 2.8 percent in 2025.
The credit rating agency also highlighted that Jordan’s general government deficit increased to 3 percent of gross domestic production in 2023. This reflects a wider central government deficit, which stood at 5.2 percent of GDP.
“We project that the deficit will ease to 2.6 percent and 2.4 percent in 2024 and 2025, respectively, as expenditure restraint will balance lower-than-budgeted revenue growth and higher interest payments,” added Fitch.
