Abu Dhabi fund suspends debt service repayments for countries, companies

Abu Dhabi Fund for Development said debt service repayments would be suspended for eligible countries and individual companies from Jan. 1 until Dec. 31. (AFP file photo)
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Updated 13 July 2020

Abu Dhabi fund suspends debt service repayments for countries, companies

  • Debt service repayments would be suspended for eligible countries and individual companies from Jan. 1 until Dec. 31

ABU DHABI: Abu Dhabi Fund for Development has suspended debt service repayments for some countries and companies for the year, the state-financed fund said on Sunday.

The fund provides financial assistance to companies in the UAE and to developing countries, which has included Pakistan, Egypt, Sudan and Ethiopia.

Debt service repayments would be suspended for eligible countries and individual companies in the developing world from Jan. 1 until Dec. 31, the fund said in a statement. Countries and companies would need to request to have repayments suspended, it said.

The fund did not say what the criteria would need to be met to be eligible for the scheme.

“At a time when the world is reeling under the effect of the pandemic ... it is imperative for us to support particularly those that need it most, especially the low-income countries,” the fund’s director general Mohammed Saif Al-Suwaidi, said. 

Sectors such as banking and aviation in the UAE are facing a tough time due to the outbreak of the coronavirus pandemic.

According to a report, Emirates airline has cut a tenth of its workforce in layoffs that could rise to 15 percent, or 9,000 jobs, its president said.

The Middle East’s largest carrier, which operates a fleet of 270 wide-bodied aircraft, halted operations in late March as part of global shutdowns to stem the spread of the virus.

It resumed two weeks later on a limited network and plans to fly to 58 cities by mid-August, down from about 157 before the crisis.

However, its president Tim Clark has said previously that it could take up to four years for operations to return to “some degree of normality,” and the airline has been staging rounds of layoffs, as recently as last week, without disclosing numbers.

Before the crisis hit, Emirates employed some 60,000 staff, including 4,300 pilots and nearly 22,000 cabin crew, according to its annual report.

Clark said in an interview with the BBC that the airline had already cut a tenth of its staff and that Emirates “will probably have to let go of a few more, probably up to 15 percent.”

A company spokeswoman told AFP the airline had nothing to add to the report.

The International Air Transport Association (IATA) has said that airlines are in line to make a combined net loss of more than $84 billion this year in the wake of the pandemic crisis, the biggest in the industry’s history.

Clark said in the interview that Emirates was “not as badly off as others” but that the crisis hit just as it was “heading for one of our best years ever.”

The Dubai-based airline had reported a bumper 21 percent rise in annual profits in March.


Lebanon’s $15bn blast repair bill adds to economic misery

Updated 06 August 2020

Lebanon’s $15bn blast repair bill adds to economic misery

  • Beirut port devastation brings warnings of housing crisis and billion-dollar hit to exports, imports

BEIRUT: Lebanon could face a repair bill of up to $15 billion in the aftermath of a cataclysmic chemical blast at Beirut port, according to a top government adviser.

The explosion, which was felt as far away as Cyprus, killed at least 100 people, wounded thousands and left an additional 300,000 Beirut residents homeless. 

It is thought to have been caused by nearly three tons of ammonium nitrate, a common agricultural fertilizer, that was confiscated in 2013 and improperly stored in warehouses. But after months of economic misery, the collapse of the currency and mounting civil unrest, it is being seen as the consequence of years of neglect, financial mismanagement and corruption as across the country.

Charbel Cordahi, an economist and financial adviser to the president, estimated the cost of damages from the explosion, including compensation, at around $15 billion. 

“Up to 70 percent of Lebanon’s trade channels through the port of Beirut,” he told Arab News.

“Airports and other ports in the country can facilitate only 30-40 percent of this trade, and opening the borders with Syria can facilitate another 20 percent. This means that at least $5 billion of imports will not find their way to the country, and another $2 billion of exports will stay on ground in the coming eight months. This represents a loss of around $4 billion, or 15 percent of gross domestic product,” he said.

He added that without an international aid program, “Lebanon cannot face this disaster.”

The explosion caps months of misery for the Lebanese, nearly half of whom now live below the poverty line. Popular anger directed at the government and political classes has swelled as a wider economic crisis has been made worse by the impact of the coronavirus pandemic.

Efforts to assess the damage at Beirut port, the country’s main trade gateway, are already underway. The second priority will be to restore food security and ensure the country does not run out of wheat after grain silos were destroyed, while also making sure residents who have lost their homes are rehoused as quickly as possible. Maintaining medical supplies and mitigating the environmental impact will also be a priority for city chiefs.

Many residents of the city are unable to return to their homes, even if their buildings remain visibly intact, because of the potential structural damage caused by the 4.5 Richter-scale blast.

“We need other countries to help us reconstruct Beirut,” Gen. Mohammed Kheir, secretary general of the Higher Relief Council, told Arab News. “We would be grateful if each country rebuilt a street or neighborhood in Beirut, like they did following the 2006 Israeli aggression. That would be the best way.”

He also appealed for emergency prefab homes for families for whom the government may not be able to provide housing.

Beirut Gov. Marwan Abboud, who estimated the primary damage at $3-$5 billion, appealed to the international community and the Lebanese diaspora to help.

Health officials had told Arab News that the country was running low on medical equipment, especially items needed for major surgery, and hoped that aid from abroad would fill the gap.

It is still too early to assess the full environmental impact of the blast, but environmental expert Mostapha Raad said a potentially bigger catastrophe may have been averted when the wind carried away a toxic cloud filled with nitric acid away from land and toward open sea.

“We were afraid the ammonium nitrate residue would lead to cooling off the weather and causing acidic rain, but according to tests on air samples, the result was green and the cloud disappeared over the sea,” he said.