Saudi Arabia leads the way ‘in toughest G20 presidency’

Kirill Dmitriev is CEO of the Russian Direct Investment Fund. (Photo credit: Kremlin.ru)
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Updated 18 November 2020

Saudi Arabia leads the way ‘in toughest G20 presidency’

  • Russian investment partner praises Saudi leadership of the forum in the midst of the pandemic

LONDON: Kirill Dmitriev is the CEO of the Russian Direct Investment Fund, the country’s sovereign wealth fund which has close ties and joint investments with Saudi Arabia. He was awarded the King Abdul Aziz Order of Merit for his services to cooperation between the two countries. He tells Arab News what Russia is expecting from the G20 summit.

Q: From your perspective, what do you hope to see emerge from G20 summit in Riyadh? 

A: We believe that G20 should take a lead on international cooperation against the COVID-19 pandemic. At this point, it is clear that several working vaccines are the only way to achieve victory over the pandemic.

Currently there are 10 vaccines in the final stages of clinical trials and close to production, according to the World Health Organization (WHO). Russia’s Sputnik V vaccine, based on the human adenoviral vector platform, is one of them. 

However, no single vaccine will be sufficient for the world. We will need a number of solutions, and countries need to pursue portfolios of vaccines. Countries need several vaccines based on different technologies in their portfolio in order to ensure seamless mass vaccination programs. Obviously, vaccines based on the safe and tested human adenoviral vector platform should be part of this portfolio. 

We hope that G20 may issue clear guidance on future vaccine policy that will help member countries, as well as countries outside the G20, form their portfolios. We are also hoping for decisions that will help to facilitate vaccine global production ramp-up so that there are enough vaccines to start mass vaccination in the world already early next year. 

Q: The Saudi presidency has been conducted amid the COVID crisis. How do you think the Saudi leadership handled it? 

A: Obviously, it has been the toughest G20 presidency since the creation of the Group of Twenty, but I think that the Saudi leadership and, personally, King Salman and Crown Prince Mohammed bin Salman have done a formidable job pushing through the G20 agenda. I would like to stress the role that G20 under the leadership of Saudi Arabia played in stabilizing the oil markets in April 2020 through supporting the OPEC+ agreement to cut production. Taken in the midst of the COVID-19 pandemic, it was a historic decision that helped the global economy to avoid the turbulence that would have been unavoidable if oil prices had slipped to $10 per barrel. 

Q: If you were drafting the G20 communique, what would be the one essential item? 

A: We think that the G20 communique will include recommendations on the economic recovery plan. However, the recovery will depend largely on how soon COVID-19 vaccines will become available. Mass vaccination will help to resume economic activity and return to growth in many sectors of the economy. Markets have already shown some optimism. We have just seen a rally, triggered by positive news on vaccines’ efficacy data, including vaccines from Pfizer, Moderna and Sputnik V. With that in mind, the communique may also include some guidance on future vaccine policy.

Q: What is the latest on the Sputnik V vaccine? 

A: We had an important announcement on Nov. 11 when we said that the Sputnik V vaccine efficacy amounted to 92 percent. Currently 40,000 volunteers are taking part in double-blind, randomized, placebo-controlled Phase III of Sputnik V clinical trials in Russia, out of which over 20,000 have been vaccinated with the first dose of the vaccine, and more than 16,000 with both the first and second doses of the vaccine. 

The vaccine’s efficacy was demonstrated on the basis of first interim analysis obtained 21 days after the first injection. No unexpected adverse events were observed during the trials. Monitoring of the participants is ongoing. 




Under President Vladimir Putin the Kingdom has become an important strategic partner for Russia. (AFP)

The world’s first registration of COVID-19 vaccine, done in Russia on Aug. 11 under the emergency use authorization mechanism, also enabled Russia to start administration of the vaccine outside of the clinical trials to volunteers among high-risk groups such as medics and teachers. 

The interim research data will soon be published by the Gamaleya Center team in one of the leading international peer-reviewed medical journals.

Sputnik V clinical trials are also underway in Belarus, the United Arab Emirates (UAE), India and Venezuela. 

Q: When will Sputnik V become widely available? 

A: The vaccine is currently being produced at four local production sites: The Gamaleya Center itself and three more Russian companies — Binnopharm, Generium and Biocad. We will soon expand the production to two more production sites, which are run by companies R-Pharm and Pharmasyntez. 

The Russian Direct Investment Fund has signed a number of contracts securing the international production of Sputnik in India, Brazil, South Korea and China. Our international partners are able to produce up to 500 million doses a year after the technology transfer is completed and all necessary equipment installed. We are in talks with several leading pharmaceutical companies from the top-30 global list about possible joint production. 

We received preliminary applications for more than 1.2 billion doses of vaccine and signed agreements with 40 partners from 27 countries. We plan to start supplying the vaccine in November-December after local regulatory approvals. Our plan is to supply 32 million doses to Mexico, 50 million to Brazil, 100 million to India, 35 million to Uzbekistan, 25 million to Nepal and 25 million to Argentina. 

According to our survey, the level of trust in a vaccine based on human adenoviral vector (Sputnik V platform) is nine times higher than in other non-human adenoviral vector platforms. 

Q:  How do you see KSA-Russia relations progressing? 

A: The Kingdom remains Russia’s strategic partner. We are looking forward to a long-term partnership with Saudi Arabia on the Sputnik V vaccine. 

There was a visit earlier this year by a delegation from the Saudi Health Ministry to the Gamaleya Center in Moscow. We are already working closely with a partner in the Kingdom, a leading pharmaceutical company. We are sharing information about the Sputnik V with our partners in the Kingdom on a regular basis.


World Bank approves $400m green plan for logistics and transportation in Egypt

Updated 05 October 2022

World Bank approves $400m green plan for logistics and transportation in Egypt

  • The project is expected to reduce greenhouse gas emissions by 965,000 tons over the next 30 years while increasing freight capacity

WASHINGTON: The World Bank has approved a $400 million development-financing agreement to help boost Egypt’s logistics and transportation sectors and facilitate the transition to low-carbon technology along the Alexandria–the 6th of October–Greater Cairo Area railway corridor.

The Egyptian railway system is one of the largest in Africa. Although the main focus along the Alexandria–the 6th of October–Greater Cairo Area corridor is on passenger services, there are also three freight trains in both directions each day.

The Cairo Alexandria Trade Logistics Development Project plans to build a railway bypass to circumvent the congested corridor. It will provide freight trains with an alternate route to the west of the Greater Cairo area, between the Alexandria Sea Port and the new 6th of October Dry Port. By 2030, the bypass is expected to allow 15 container trains a day to access the dry port, and 50 by 2060. More freight trains will run between Alexandria Port, Upper Egypt and the Red Sea.

The transportation sector is the second-largest contributor to Egypt’s greenhouse gas emissions, accounting for more than 19 percent of the total, but the carbon footprint of transporting containers and other freight by train is smaller than that of road transportation. The development initiative is expected to reduce greenhouse gas emissions by 965,000 tons over a 30-year period, according to the bank.

“Reforming the transportation and logistics sectors is vital to Egypt’s competitiveness and economic development,” said Egyptian Transport Minister Kamel El-Wazir.

“This new project introduces several improvements in those vital sectors. The improvements are aligned with Egypt’s pressing development priorities, which include decarbonization, trade facilitation, private-sector participation, and gender balance in the workplace.

“Increasing the number of containers moved by rail from zero to 184,000 per year is one of the project’s key objectives. This flow of containers is primarily between the Alexandria Sea Port and the 6th of October Dry Port, both privately operated and railway oriented.”

Officials said the project will help Egypt integrate into global value networks and become a regional economic powerhouse. Given the predicted reductions in greenhouse gas emissions, it is also expected make a substantial contribution to the country’s 2050 National Climate Change Strategy.

“This operation is part of a wider set of efforts dedicated to offer timely and comprehensive support to Egypt’s economic development and climate change plans,” said Marina Wes, the World Bank’s country director for Egypt, Yemen and Djibouti.

“We hope that through supporting more job creation, including for women, a cleaner environment, and providing safer mobility, the operation will contribute toward a brighter and more prosperous future for all Egyptians.”


Global alliance on green economy launched in Dubai

Updated 04 October 2022

Global alliance on green economy launched in Dubai

  • UAE’s Economy Ministry is setting up shop inside the immersive virtual world

DUBAI: A “Global Alliance on Green Economy” was launched at the 8th World Green Economy Summit, which concluded in Dubai.

The summit was held under the theme “Climate action leadership through collaboration: The roadmap to net-zero.” A large number of ministers, experts, decision-makers, officials, representatives of institutions, and the academic community from around the world took part in the summit.

The alliance aims to build a coalition of countries, prioritizing a green economy in the context of climate action and sustainable development, to enhance the capacity of developing countries, provide support for their green economy transition projects and exchange knowledge on implementation.

“If we want to fast-track our transition to a green economy, we must all work together, and to do so, we need one platform with one common objective. The UAE Global Alliance on Green Economy seeks to provide such a platform,” said Mariam bint Mohammed Almheiri, UAE minister of climate change and environment.

Bet on tech

The UAE, which already boasts the world’s tallest skyscraper and has launched a bold Mars mission, now hopes to become a pioneer in the depths of the metaverse.

In a project launched at Dubai’s gleaming Museum of the Future, it announced that the UAE’s Economy Ministry was setting up shop inside the immersive virtual world that is now taking shape. 

If we want to fast-track our transition to a green economy, we must all work together.

Mariam bint Mohammed Almheiri, UAE minister of climate change and environment

Those who don their virtual reality goggles or use other means to venture within will find a ministry open for business with companies and even ready to sign bilateral agreements with foreign governments, officials said.

The metaverse is an online world where users will eventually be able to game, work and study, its proponents say — although it is still in a “test” phase, the UAE’s economy minister conceded.

Abdulla bin Touq Al-Marri was speaking at the inaugural Dubai Metaverse Assembly, held at the museum whose innovative ring shape decorated with Arabic calligraphy flanks the city’s main thoroughfare.

Representatives of tech giants mingled with entrepreneurs and developers exploring the potential of the metaverse, a network of digital spaces intended as an extension of the physical world.

DFM adopts new methodology

Dubai Financial Market said on Monday it planned to adopt a new methodology for its main equities indices, which will come into effect in the fourth quarter, according to Reuters.

The Dubai bourse’s general index, Shariah index and sector indices, will be calculated by S&P Dow Jones Indices, it said in a statement.

A key improvement among the changes is a limit on the weighting of a listed company to 10 percent from 20 percent, which should result in a larger representation of companies on the DFM’s benchmarks, it said.

The Dubai bourse said the index calculation will be based on actual free float adjusted market capitalization, and that the indices will be rebalanced on a quarterly basis, from semi-annually currently.

The bourse plans to align its sectors with an industry classification standard which is followed by institutional clients, it said.

DFM will have seven sectors: Financials, industrials, real estate, utilities, communication services, materials and consumer staples.

The bourse has invited market participants for consultations on the index methodology ahead of possible changes, with the revised indexes to be launched in Q4, it said.

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Egyptian pound weakens the most in four months

Updated 03 October 2022

Egyptian pound weakens the most in four months

  • Foreign currency has dried up in Egypt over the last six months, forcing banks and importers to scramble to find dollars to pay for imports and putting pressure on the central bank to let its value weaken

CAIRO: Egypt weakened its currency on Monday by the most in more than four months, with the Egyptian pound falling by more than 0.10 pounds to the dollar, according to Refinitiv data.

The pound was trading at 19.62 to the dollar at 1337 GMT, down from 19.49 at the open.

Foreign currency has dried up in Egypt over the last six months, forcing banks and importers to scramble to find dollars to pay for imports and putting pressure on the central bank to let its value weaken.

Dollars have disappeared in part because of the higher cost of imported commodities, a drop in Russian and Ukrainian tourists and a flight of dollars from Egyptian treasury markets.

The last time the central bank allowed the currency to weaken so quickly was from May 22 to May 25, when it fell by 0.34 pounds against the dollar in three days.

The pound weakened to a record low on Dec. 21, 2016, when it traded at 19.80 pounds per dollar during intraday trade, according to Refinitiv. But in subsequent years it rebounded.

Egypt since March has been negotiating a financial support package from the IMF, which has long been urging it to allow greater exchange rate variability.


OPEC+ may consider output cut of more than 1 million bpd

Updated 02 October 2022

OPEC+ may consider output cut of more than 1 million bpd

  • The figure is slightly above estimates for a cut given last week

RIYADH:  The Organization of the Petroleum Exporting Countries and its allies led by Russia, also known as OPEC+, will consider an oil output cut of more than a million barrels per day when it meets on Oct. 5, OPEC sources told Reuters on Sunday.

The figure is slightly above estimates for a cut given last week, which ranged between 500,000 bpd and 1 million bpd.

OPEC+ is meeting in person in Vienna for the first time since March 2020. “It is a meeting that is taking place at a very interesting global time,” one of the sources said.

The output cuts are being considered on the back of a slide in oil prices from multiyear highs reached in March and market volatility. Saudi Arabia first flagged the possibility of cuts to correct the market in August.

Earlier this week, a source familiar with Russian thinking said Moscow could suggest a cut of up to 1 million bpd, while an OPEC source put the likely figure closer to 500,000 bpd. Talks are expected to continue ahead of the meeting.

FASTFACTS

OPEC+ is meeting in person in Vienna for the first time since March 2020.

Saudi Arabia first flagged the possibility of cuts to correct the market in August.

The output cuts are being considered on the back of a slide in oil prices from multiyear highs reached in March and market volatility.

India cuts tax

The Indian government has cut a windfall tax on domestically produced crude oil to 8,000 ($97.99) rupees per ton from 10,500 rupees per ton from Sunday, after a decline in global oil prices.

India has also scrapped an export tax on jet fuel and halved export duties on diesel to 5 rupees per liter from Sunday, a government notification said.

NNPC transaction

Nigeria’s state-owned oil company NNPC Ltd. has bought the marketing business of unlisted OVH Energy, giving it access to 380 fuel stations in Africa’s largest oil producer and Togo, among other assets, the two companies said on Saturday.

OVH Energy Marketing, the owner and operator of Oando branded retail service stations, said the outlets would be rebranded NNPC and full integration is expected by the end of 2023.

The deal also gives NNPC access to eight liquefied petroleum gas plants, three aviation depots and 12 warehouses.

NNPC, which became a commercial entity in July, already owns more than 500 fuel stations across Nigeria and said it would be ready for an initial public offering by mid-next year.

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Saudi real GDP expected to rise by nearly 8 percent, say analysts

Updated 02 October 2022

Saudi real GDP expected to rise by nearly 8 percent, say analysts

  • Inflation is predicted to be 2.6 percent and 2.1 percent in 2022 and 2023 respectively: Al Rajhi Capital

RIYADH: Saudi Arabia’s budgeted revenues for 2023 are likely to be based on the Brent price at $76 per barrel, said Al Rajhi Capital in its assessment of the Kingdom’s budget figures.  

“For 2023, we believe oil revenues could reach SR754 billion ($200.7 billion) and non-oil revenue at SR417 billion,” said the head of research at Al Rajhi Capital Mazen Al Sudairi.

“Based on our assessment, the government’s 2023 budgeted revenues are likely based on an assumption of brent at around $76 a barrel.” 

Real gross domestic product growth is forecast to increase by nearly 8 percent year-on-year in 2022 and 3.1 percent year-on-year in 2023, according to Al-Rajhi Capital.

Inflation is expected to be 2.6 percent and 2.1 percent in 2022 and 2023 respectively, Al-Rajhi said.

Revised 2022 revenues are mostly in line with estimates, however, the expenditure budget is much higher than from an earlier announcement, it said.

The Kingdom’s Finance Ministry’s preliminary budget statement projected spending to reach SR1.11 trillion next year, with revenue of SR1.12 trillion. 

The 2023 spending budget was raised by 18 percent, with a slight fiscal surplus of SR9 billion expected for 2023.

The world’s largest oil exporter is expected to balance the books in the coming year, having emerged with a quickly developing balance sheet due to the rebound in crude. 

Saudi officials expressed intention to change the heavy reliance on petrodollars and “decouple” the Kingdom’s spending from oil volatility as it puts the country’s economy at the mercy of uncertainty in the oil market. 

Its budget surplus was recorded at SR78 billion in the second quarter of 2022, an almost 50 percent rise from the same time last year. 

Its revenue reached SR370.4 billion whereas expenditure totaled SR292.5 billion in the second quarter of this year, according to the ministry. 

The ministry’s estimates showed that oil revenue stood at SR250.4 billion, signaling an 89 percent year-on-year rise in the second quarter. 

However, the Kingdom’s non-oil revenues only rose by 3 percent to SR120 billion in the second quarter. 

Domestic debt reached SR604.8 billion at the end of June, up from SR558.8 billion in the previous half, showed the ministry data. 

The Finance Ministry’s data showed that the Kingdom’s external debt fell from SR379.3 billion to SR361.8 billion in the same period. 

The objectives of the state’s general budget for the fiscal year 2023 come as a continuation of the process of work to strengthen and develop the financial position of the Kingdom, Finance Minister Mohammed Al-Jadaan said.

“The government attaches great importance to enhancing the support and social protection system and accelerating the pace of strategic spending on Vision (2030) programs and major projects to support economic growth,” Al-Jadaan added.

The Kingdom’s economy has demonstrated its strength and durability by achieving high growth rates, after taking many policies and measures with the aim of protecting the economy from the repercussions of inflation and supply chain challenges, the minister said.