German ambassador hails ‘exemplary’ Saudi G20 role

Riyadh and Berlin enjoy longstanding connections in the economic, political and cultural fields. (Shutterstock)
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Updated 16 November 2020
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German ambassador hails ‘exemplary’ Saudi G20 role

  • Kingdom’s presidency stands symbolically for the country’s opening towards the world, says envoy

RIYADH: Saudi Arabia dealt with the coronavirus pandemic in an exemplary way, leading from the front in its role as president of the G20, German Ambassador to Saudi Arabia Jörg Ranau has told Arab News.

In an exclusive interview, Ranau said: “The Saudi G20 presidency has dealt with the effects of the pandemic in an exemplary way. The decisions to hold the numerous meetings virtually were based on a thorough and realistic assessment of the global situation and bear witness to the presidency’s responsibility in this respect.

“It was clear since the beginning of the pandemic that the agenda had to be refocused. Saudi Arabia certainly can take the credit for not losing the other main issues of global economic interest and working towards sustainable solutions with all G20 members under difficult circumstances,” the envoy added.

On the G20 presidency shouldering the responsibility to help the world move forward in the right direction, the envoy said that multilateralism and the belief in finding solutions to global challenges together lay at the heart of the G20.

“Germany has been a staunch supporter of the G20 since its inception. Founded in reaction to the financial crisis in Asia in the 90s, the G20 developed into the principal forum for international cooperation. The themes of the Saudi presidency are highly topical and require attention by the international community as a whole. The results of the discussions and coordination of efforts made by the G20 regarding the fight against climate change, as well as youth and women’s empowerment, will be important guidelines for future international efforts,” said Ranau.

On expectations from the Riyadh summit, he said: “As globalization continues, we increasingly witness how differently people are impacted by its consequences. For instance, while CO2 emissions are created especially in industrially strong regions, the consequences of global warming are felt most by nations in the Global South. Similarly, while some regions have been able to prosper in conditions of peace with their neighbors, others continue to struggle with violent conflict. In times like these, multilateral fora like the G20 are among the most important instruments in our toolbox to address global inequalities, by streamlining our efforts and exchanging our best practices. Only then can the opportunities created by our globalized world be enjoyed equally by all.”

He said that the G20 agenda was broad. “Climate change is probably the most pressing challenge of our time. Fundamentally global in its nature, it is a prime example for an issue that can only be addressed effectively by the international community as a whole.

“Climate change is linked intrinsically to industrial and consumer activities, and the G20, as the world’s leading industrial nations, should therefore assume the associated responsibilities,” he explained. “We should aim for a broad and unequivocal commitment to the implementation of the Paris Agreement and its irreversibility.” He said that Germany had long advocated for a prominent place of sustainable development on the G20 agenda. Under the Japanese presidency, the G20 committed to a timely implementation of the 2030 Agenda for Sustainable Development.

“It is thus fitting that the Saudi presidency seeks to implement concrete actions to finance the 2030 sustainable development agenda. It is also important that the Saudi presidency continues to advance the compact with Africa, initiated under the German G20 presidency in order to promote private investment in Africa,” he added.

On the need for resolutions for more employment and growth, the ambassador stated: “As we work towards the goal of an attractive economic future for our youth, employment and growth opportunities will clearly represent a major focus.

“Our dynamic markets are connected by trade, and I am convinced that a fair and free, rule-based global trade regime is needed to foster such an environment,” he said.

“Let me also mention finance, which plays a crucial role for the G20. Here we need to work on fair taxation for the digital economy. And we need to work towards a more level playing field for corporate taxes. This is an area where a solution is due in 2020,” he added.

Saudi Arabia hosting the 2020 G20 summit as the first country of the Arab world offers it the opportunity to share the perspective of the Middle East and North Africa region, the envoy said. “Saudi Arabia lies at the crossroads of two continents and at the intersection of emerging and developed markets. To make the G20 a truly global forum, issues such as youth and women’s empowerment, cleaner and more sustainable energy systems or water management need to be addressed from all conceivable angles and the regional perspective is of great importance in the G20 discussions,” said Ranau.




German Ambassador to Saudi Arabia Jörg Ranau

He said the relationship between Saudi Arabia and Germany was longstanding, with important connections in the economic, political and cultural fields.

“As the different delegations from Germany will attend the ministerial meetings and ultimately the Riyadh summit, existing Saudi-German ties will be strengthened and new connections will be created,” he added. “Over the past years, we have witnessed the tremendous reform progress Saudi Arabia is undergoing, illustrated most recently by the manifold activities that were offered during the Riyadh season,” he said. 

“Saudi Arabia has a lot to offer both for old and new visitors, and I will remain an interested witness during my posting as ambassador to this country,” said Ranau.

On the opportunity for Saudi society and its economy, on the path to diversification through Saudi Vision 2030, he said: “Saudi Arabia’s G20 presidency also stands symbolically for the country’s overall opening towards the world. Saudi Arabia has embarked on a major social and economic transformation: Vision 2030. Many aspects of it, such as empowering youth and women, or fostering small and medium sized enterprises, are mirrored by the G20 Agenda.

“I hope that the discussions at the G20 summit will be driven by the same ambition and innovative spirit that characterizes the Saudi Arabian reform process. Surely this year, more than ever, there is the need and the opportunity for a meaningful output by the G20 summit,” he added.


Islamic finance industry projected to grow in 2024-2025

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Islamic finance industry projected to grow in 2024-2025

RIYADH: The Islamic finance industry is projected to grow globally in 2024-2025 with total assets likely to witness single-digit growth driven by economic diversification efforts, a report said.

It predicted that sukuk issuance globally would hover between $160 billion and $170 billion in 2024, representing a steady momentum from $168.4 billion in 2023 to $179.4 billion in 2022. 

In its latest analysis, credit rating agency S&P Global highlighted that the industry grew by 8 percent and 8.2 percent in 2023 and 2022, respectively, stemming from growth in banking assets and the sukuk industry. 

According to the US-based firm, Islamic banking assets grew 56 percent in 2023 compared to 72 percent in 2022. 

Financial institutions across the Gulf Cooperation Council region accounted for 86 percent of the reserve increase in 2023, with Saudi Arabia becoming the chief contributor, having generated 56.7 percent of the maturation. 

“We expect the implementation of Vision 2030 and growth in corporate and mortgage lending to continue supporting the Islamic finance industry over the next 12-24 months. In addition, the UAE showed a stronger contribution in 2023 thanks to the good performance of the non-oil sector,” the report noted.

It added: “Elsewhere, we observed some growth, particularly in Turkiye and Indonesia. The performance in Malaysia and Turkiye was somewhat tempered by the depreciation of the ringgit and the lira.” 

According to the US-based firm, the issuance of this Shariah-compliant debt product began on a strong footing in 2024, with Saudi Arabia becoming a key contributor to the performance. 

“The drop in issuance volumes in 2023, which mainly resulted from tighter liquidity conditions in Saudi Arabia’s banking system and Indonesia’s lower fiscal deficit, was somewhat compensated by an increase in foreign currency-denominated sukuk issuance,” S&P Global said in the report. 

It added: “The market has started 2024 on a strong footing, with total issuance reaching $46.8 billion at March 31, 2024, compared with $38.2 billion at March 31, 2023.” 

The analysis highlighted that the sukuk market will continue its growth momentum in the near term as financing needs in core Islamic finance countries remain high, given ongoing economic transformation programs, especially in countries like Saudi Arabia. 

“We expect the sukuk market to fill in some of these needs. Specifically, we see some opportunities in the structured finance space with banks tapping the sukuk market to refinance their sizable mortgage books,” said the agency in the report. 

The agency highlighted that the drive for digitalization and sustainability initiatives have yielded mixed results in the Islamic finance industry. 

“While opportunities related to sustainable finance are significant as the industry is concentrated in oil exporting countries, progress has been relatively slow and limited in the global context,” according to S&P Global. 

However, the report noted that digitalization has helped the banking side of the industry. 

S&P Global concluded the study by saying that the future of Islamic finance is sustainable, collaborative, and digital. 

“It is sustainable thanks to the alignment between Shariah principles, overarching pillars of sustainability, and the value proposition of Islamic finance that capture more than just financial objectives,” said the report. 

According to the analysis, the future of Islamic finance is collaborative because stakeholders do not want to disrupt the industry equilibrium and erase the development achieved over the past 50 years. 

The report added that digitalization will also impact Islamic finance in the coming years, as leveraging emerging technologies could help the industry enhance its efficiency and ultimately increase its value proposition for investors and issuers. 

Earlier this month, another report released by Fitch Ratings noted that global outstanding sukuk expanded 10 percent year on year to reach $867 million at the end of the first quarter of 2024. 

The credit rating agency attributed the growth of this Islamic debt product to funding and refinancing needs, and the development of the debt capital market in the GCC region. 

The report, however, added that new Shariah requirements that could alter credit risk, geopolitical uncertainties and high oil prices, could affect the growth of the sukuk market this year. 


Saudi Aramco is looking at investment in new energies outside of the Kingdom, CEO says 

Updated 20 min 31 sec ago
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Saudi Aramco is looking at investment in new energies outside of the Kingdom, CEO says 

DUBAI: Saudi Arabia’s state-oil giant Aramco is looking at investments right now in new energies outside of the Kingdom, CEO Amin Nasser said on Monday at the sidelines of a World Economic Forum special meeting held in Riyadh. 


Malaysia targeting Gulf trade and tech ties at WEF, minister says

Updated 12 min 21 sec ago
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Malaysia targeting Gulf trade and tech ties at WEF, minister says

  • Malaysia is also exploring investment and technology-sharing deals in artificial intelligence and the digital economy

RIYADH: Malaysia is looking to partner with Gulf-based companies on renewable energy, the country’s minister of investment has said.

Speaking to Arab News at the two-day World Economic Forum meeting in Riyadh, Tengku Zafrul Aziz said that about 50 Malaysian companies are in discussions to invest in renewable energy and share technologies.

“There is a lot of demand now for green renewable energy. We want partners who can not only go by funding, as we have funding capabilities, but also more in terms of technology and know-how,” he said.

“Many GCC companies who have already invested in this area are willing to share technology pools and invest with our funds, our companies, and our sovereign wealth fund.”

Malaysia is also exploring investment and technology-sharing deals in artificial intelligence and the digital economy.

“We also got interest from GCC companies on that matter and they have invested a lot in this technology. Now we want to learn and partner, so that the infrastructure that we build using digital platforms can be applied using applications that some of these companies already have.”

The World Economic Forum meeting in the Saudi capital is focusing on global collaboration, growth and energy for development — themes that the Malaysian minister said were “apt” given the geopolitical challenges in the region.

“This is a platform where we can share ideas about how we can improve the standards of living for all and not just focus on issues that may benefit a few,” he added.

“We want to see growth, especially in terms of trade and economy, and that must be beneficial to all. We want to see growth that is sustainable and equitable — growth that is inclusive. This is an opportunity to strengthen trade and investment linkages between the GCC and Southeast Asia.

“We need to strike the right balance when we talk about the quantity of the growth vs. the quality of that growth.”

Aziz said that parties are also exploring new multilateral trade agreements between the ASEAN union and the GCC, in an effort to launch a more comprehensive economic partnership agreement.

“This will deepen the relationship between countries in terms of economy, which will bring about peace. Malaysia is an open economy,” he said.

“While we continue to engage China as Malaysia’s largest trade partner, we are looking to engage other countries in constructive ways.”


SFD, AfDB sign deal to finance development initiatives in Africa 

Updated 19 min 45 sec ago
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SFD, AfDB sign deal to finance development initiatives in Africa 

RIYADH: Emerging African economies are poised to receive a funding boost for growth initiatives following a deal involving the Saudi Fund for Development, aiming to foster sustainable progress.     

The memorandum of understanding, signed with the African Development Bank Group, aims to promote mutual objectives and activities for sustainable international development between the two parties, the Saudi Press Agency reported.   

This initiative aligns with SFD’s objective to enhance both social and economic growth by creating diverse opportunities.    

Moreover, the newly signed agreement aims to facilitate the exchange of knowledge and experiences while advocating for optimal co-financing strategies. It will also support the attainment of sustainable development goals and optimize the impact of these initiatives.   

Additionally, the MoU also aims to enhance collaboration in pursuit of shared goals that promote the expansion of crucial opportunities in diverse beneficiary African nations, ultimately contributing to global prosperity for the most impoverished and least developed communities. 

Since 1975, SFD has played a significant role in strengthening sustainable development in emerging economies on a global level. 

It focuses on improving living conditions, fostering knowledge development, capacity building, and providing job opportunities for individuals. 

The fund has provided support and financing for over 800 projects and development programs, with a total value exceeding $20 billion. 

These initiatives included a wide range of development and essential sectors that directly impact populations in over 100 developing countries. 

In January 2023, the SFD ventured into the Caribbean region by signing an $80 million financing agreement for the expansion of the University of the West Indies at Five Islands in Antigua and Barbuda. 

This funding was intended to be used to achieve sustainable development goals in the Caribbean, while also promoting scientific innovation and adding additional educational facilities to the university. 

The financing agreement also included constructing seven energy-efficient buildings to accelerate the sustainability journey. 

In May 2023, the fund signed two development loan agreements with Saint Vincent and the Grenadines, another country in the Caribbean.  

The $6 million agreement was intended to fund the construction of a primary care center to improve the quality and resilience of the healthcare sector in the island nation. Additionally, the $10 million agreement was allocated to construct a cultural center and a market for craft and agricultural products in Belle Vue. 

In August 2023, SFD laid the foundation stone to kick off the construction of the Mangoky Bridge in Madagascar, an island country lying off the southeastern coast of Africa.  

For this project, the fund contributed $20 million as a soft loan, while the construction works also received assistance from institutions and development funds in the Arab Coordination Group and the government of Madagascar. 

Upon completion, the Mangoky Bridge will connect the Atsimo-Andrefana and Menabe regions in Madagascar, and it is also expected to reduce the travel time between these two destinations, thus facilitating local farmers to get their produce to the market.


Saudi Central Bank and BIS co-host meeting on reserve management in Riyadh

Updated 29 April 2024
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Saudi Central Bank and BIS co-host meeting on reserve management in Riyadh

RIYADH: The evolving global landscape presents new challenges and opportunities for central bank reserve managers, the governor of Saudi Arabia’s apex financial institution explained at a high-level meeting.

Speaking at an event in Riyadh which was attended by the Bank for International Settlements, Ayman Al-Sayari set out his view on the complexities of the current macro-financial environment.

The two-day gathering, which began on April 28, brought together reserve managers and experts from central banks in the Middle East and North Africa region, as well as participants from other apex financial institutions, to discuss the latest trends in managing foreign exchange reserves. 

The event served as a platform for participants to exchange insights, perspectives and expertise on the most critical aspects of reserve management through a series of panel discussions and keynote speeches.

In March, SAMA’s monthly statistics bulletin revealed that foreign assets of Saudi Arabia’s commercial banks surged by 22 percent in February, reaching a total of SR347.63 billion ($92.7 billion) compared to the same month of the previous year.

This rise reflects a significant expansion in the commercial institutions’ international holdings and investments. 

The central bank added that its net foreign assets reached SR1.55 trillion in February. 

Central banks’ foreign holdings are primarily for reserve management and monetary policy purposes, while commercial banks’ foreign assets are for business operations, customer services, and investment activities.

The report added that Saudi Arabia’s total reserve holdings amounted to SR1.62 trillion, representing a five percent decline compared to the same month of 2023.