PARIS: Chinese President Xi Jinping warned global leaders at an all-virtual Davos forum Monday against starting a “new Cold War” while he championed multilateralism.
Representing the only major economy to record economic growth last year, Xi presented himself as the defender of multilateralism, as he did at the same forum four years ago when Donald Trump was about to assume the US presidency.
Without naming the United States, Xi seemed to have a message for Trump’s successor Joe Biden, who entered the White House just a few days ago, but who is not addressing the annual World Economic Forum (WEF).
“To build small cliques or start a new Cold War, to reject, threaten or intimidate others... will only push the world into division,” Xi told the world’s political and economic elite as the Biden administration plans to revitalize global alliances to counter China’s growing influence.
Trump had chosen open confrontation and verbal attacks, without tangible results for the enormous US trade deficit with China.
Though Biden may be dismantling one by one the controversial measures of the Trump era, he has nonetheless signaled the United States will closely look out for its own interests.
An executive order is to give US companies and products priority in contracting with the federal government as part of an overall plan to save industrial jobs by increasing investments in factories and workers.
Meanwhile, European leaders presented agendas of their own at the WEF — normally held in the Swiss ski resort of Davos but taking place virtually this year because of the pandemic.
German Economy Minister Peter Altmaier defended a controversial accord signed by the European Union and China in late December to provide increased mutual market access.
The deal duplicates “a lot of the arrangements that the US already has with China,” Altmaier said.
Herbert Diess, head of the German auto giant Volkswagen, which has several plants in China, noted that the country represented a great opportunity for European companies.
But some members of the European Parliament and activist groups say the accord should be contingent on Beijing’s ratifying international conventions banning forced labor.
And Kenneth Roth, head of Human Rights Watch, a non-governmental organization, commented on Twitter that Xi “promotes global collaboration on Covid-19, so long as it doesn’t involve investigating his three-week cover-up of human-to-human transmission in Wuhan, which enabled the virus to go global.”
A year ago, the emergence of a mysterious flu-like disease in China prompted few comments at the forum when it took place at its usual site in Switzerland.
A year later, the world is still struggling to contain the coronavirus, which has killed more than two million people and cost 225 million jobs, according to the UN’s International Labour Organization.
The world’s richest people have barely been touched, the non-governmental organization Oxfam charged.
Meanwhile, “it could take more than a decade for the world’s poorest to recover,” Oxfam said in the study titled “The Inequality Virus.”
Optimism raised late last year by new vaccines has been tempered by production delays and new variants, and many countries are again mulling lockdowns to stem the spread of the virus.
But European Central Bank chief Christine Lagarde nonetheless forecast that 2021 will be “the year of recovery.”
She said that while renewed economic activity “seems to be a little bit delayed,” it “should not be derailed.”
Other forum subjects broached on the first day was global taxation of digital giants, a priority for France that until recently has been opposed by the United States.
French Economy Minister Bruno Le Maire welcomed a more conciliatory tone from the new Biden administration on the subject.
He hoped that a multilateral accord under the auspices of the Organization for Economic Cooperation and Development could be reached by the middle of this year.
Chinese leader Xi Jinping warns Davos forum against ‘new Cold War’
Chinese leader Xi Jinping warns Davos forum against ‘new Cold War’
- Xi Jinping presents himself as the defender of multilateralism
PARIS: Chinese President Xi Jinping warned global leaders at an all-virtual Davos forum Monday against starting a “new Cold War” while he championed multilateralism.
GCC needs to secure its investment landscape: Report
- Call to focus on frontier sectors based on emerging technologies to attract FDI
CAIRO: Real and perceived political risks, the lack of focus on non-oil sectors, laxity in regulatory policies and a restrictive business environment are some of the factors impeding the growth of foreign direct investment in the Gulf Cooperation Council region, said a recent study.
According to Oliver Wyman’s recent report titled “De-risking the Investment Landscape: High-impact FDI Policies for the GCC,” the region needs to prioritize regulations and policies to de-risk investment.
This approach should help them attract additional FDIs, the report recommended.
“The best way to attract FDI may be to focus on frontier sectors, which are based on emerging technology, generate high growth, and have few incumbent players to disrupt,” the report stated.
The policies adopted earlier in the GCC were unfocused and aimed to attract all possible investments in all potential sectors, which proved unsuccessful, according to the report.
Although most Gulf countries have been proactive in developing initiatives to stimulate FDI, few have successfully attracted foreign investment in the region.
“Historically, FDI into GCC economies has fluctuated with the rise and fall of commodity prices,” explained Wyman’s report. “However, it has failed to materialize as a consistent driver of economic opportunity in non-oil economic sectors.”
“With such readily available domestic capital, many GCC states have historically not needed to prioritize FDI as a source of development finance,” it added.
The report further revealed that GCC states are becoming increasingly aware of the benefits of FDI and its potential impact on their economies, which could enhance productivity.
Foreign investment provides a good source of finance, promotes interactions of local suppliers and consumer markets, and stimulates human capital by training local workers and employing foreign ones.
As stated by the report, an increased level of private competition, an enhancement in technological know-how and a surge in cross-border activity are additional favorable consequences that arise from increased FDI.
The UN Conference on Trade and Development recently released the “World Investment Report 2022,” which showed that Saudi Arabia and the UAE, two of the largest economies in the GCC, saw 2021 FDI outflows exceed FDI inflows by $4.6 billion and $1.9 billion, respectively.
The difference for all GCC members stood at $6.4 billion, although a noticeable improvement from 2019 and 2020, where the differences were $11.1 billion and $8.3 billion, respectively.
Oman and Bahrain are the only two GCC economies that saw FDI inflows over outflows in each of the years from 2016 to 2021, according to the UNCTAD report.
In comparison, FDI inflows to Indonesia in 2021 surpassed the outflows by $16.5 billion. Similarly, FDI inflows to Vietnam and Malaysia trumped outflows by $15.4 billion and $6.9 billion, respectively, UNCTAD data show.
On the other hand, Saudi Arabia witnessed the highest FDI outflows in the GCC in 2021. It recorded $23.9 billion in net outflows in 2021 compared to only $4.9 billion in 2020. It is worth mentioning the Kingdom’s FDI inflows stood at $5.4 billion in 2020.
The UAE came in second with $22.5 billion worth of FDI outflows in 2021 compared to $18.9 billion the year before, the UNCTAD data showed.
While Kuwait registered FDI outflows totaling $3.6 billion in 2021, it saw a sharp drop from $8 billion in the previous year, the report stated.
Saudi Arabia targets $3.3tr of cumulative investments till 2030, says deputy minister
- Saudi Arabia’s regulatory transformation is directly impacting the base economy, Al-Shahrani says
RIYADH: Saudi Arabia has enacted over 600 economic reforms since the launch of the Vision 2030 blueprint in a bid to attract SR12.4 trillion ($3.3 trillion) of cumulative investment and SR1.8 trillion in foreign direct investment inflows between 2021 and 2030 as part of the National Investment Strategy, said a deputy minister from the investment ministry.
Speaking to Arab News Saad Al-Shahrani, the acting deputy minister for investment promotion in the Ministry of Investment of Saudi Arabia, said the Kingdom achieved an 18 percent increase in foreign direct investment in 2020, even as the global FDI declined by 35 percent due to the pandemic.
FDI flow in 2021 increased by 257 percent compared to 2020 largely driven by a SR46.5 billion infrastructure deal closed by Aramco with a global investor consortium in Q2 2021.
If Aramco's huge deal is excluded, the Kingdom attracted SR5.3bn in Q2 last year.
Al-Shahrani added that the NIS launched in 2021 is a blueprint for turning the Kingdom into a global hub for business and talent.
During the interview, the minister revealed that FDI flow in the first quarter of 2022 increased 10 percent to SR7.4 billion compared to the same period last year.
He further stated that NIS helped MISA achieve 49 investment deals valued at SR3.5 billion in the second quarter of 2022, creating 2,000 jobs across industries.
“These figures are a testament to the sound execution of the government’s strategy and the impact of new reforms, initiatives and investment opportunities,” said the deputy minister.
He added: “The Kingdom has achieved remarkable progress in many economic and investment indicators, ranking third in Ease of Protecting Minority Investors Index out of 132 countries, for the year 2021.”
Fastest growing among G-20 countries
The deputy minister further noted that the Kingdom achieved the top spot among 22 countries in the May 2022 Ipsos’ Global Consumer Confidence Index.
Citing the International Monetary Fund’s World Economic Outlook 2022, Al-Shahrani said that the Kingdom is now the fastest-growing nation among the Group of 20 countries, with a growth rate of 7.6 percent.
“Saudi Arabia’s regulatory transformation is directly impacting the base economy. Alongside healthy demand and investor interest in the oil sector, our non-oil economy has shown strong growth,” he added.
The deputy minister said that flash estimates of real growth in the gross domestic product in the second quarter showed 11.8 percent year-on-year growth, the highest rate since 2011, supported by the growth in real GDP of oil and non-oil activities by 23.1 percent and 5.4 percent, respectively.
Industrial production on the rise
Commenting on the rise in Industrial Production Index, Al-Shahrani said: “The IPI expanded by 24 percent year on year in May 2022, with manufacturing growing by over 28 percent. These figures are a direct consequence of the government’s active diversification efforts.”
He also asserted that the Kingdom will become one of the world’s most competitive economies and attractive investment destinations by 2030.
The deputy minister further noted that digital transactions are rising in Saudi Arabia, aligning with the government’s goal of having 70 percent of all transactions are digital by 2025.
“Policymakers have listened to the needs of investors and have responded appropriately to create an investment ecosystem that rivals the best in the world,” he continued.
Saudi Arabia’s future is tourism
The deputy minister further conveyed that tourism will soon become one of the prime drivers of the Saudi economy as the economic diversification effort continues.
He revealed that the Kingdom has already issued over 3,500 tourism investment licenses, a crucial leap to achieving 10 percent of the national GDP from tourism by 2030.
Al-Shahrani added that the Kingdom will welcome over 100 million tourists by 2030 and generate one million jobs in the sector.
“NEOM, The Red Sea Project, AlUla, Soudah, AMAALA and Diriyah Gate are massive opportunities for investors,” he continued.
The deputy minister further divulged that the Kingdom’s flag carrier SAUDIA will add 94 new destinations to bring visitors to the Kingdom by 2030.
Apart from tourism, MISA is also signing deals with companies in the renewables, logistics, and pharmaceutical sectors, the deputy minister added.
“It is quite clear that the headwinds souring global investor appetite are not blowing in the direction of Saudi Arabia. Government strategy, inspired leadership, talent at every level, well-executed reforms and a clear vision for the future have combined to make the Kingdom an investment powerhouse,” Al-Shahrani said.
Saudi companies to export supply chain prowess to GCC countries
- We aim to expand our operations to support land services with big companies: SMSCMC’s Ali Alshehri
RIYADH: Five years after Saudi Arabia announced its target to localize 50 percent of its military industries by 2030, companies in the Kingdom are now ready to export their supply chain capabilities.
The Riyadh-based Saudi Maintenance and Supply Chain Management Co. is working on expanding its network with companies around the world.
It is currently in talks with Gulf countries to discuss “the scope of work they can deliver and sign agreements,” Ali Alshehri, head of PR and communication at SMSCMC, told Arab News.
“We have made good progress with some of the Gulf Cooperation Council countries. We can’t disclose anything right now, but we have already established some contact and relationships. Hopefully, in the future, we can announce something specific,” he said due to the sensitivity of the talks and government restrictions.
This move comes after the state-owned Saudi Arabian Military Industries disclosed to Arab News that it is looking at opportunities with allied nations to export Saudi capabilities outside the Kingdom.
SMSCMC has been handling supply chain and logistics for some of BAE Systems’ defense platforms in the Kingdom, including the Typhoon, Hawk and Tornado aircraft.
Aside from the capital, SMSCMC operates in Dhahran, Taif and Tabuk with the same aircraft services.
“We would like to expand our operations to support any technology or land services with big companies in Saudi Arabia, the UK and Europe in general,” Alshehri said.
“We are in a very good position right now to support Vision 2030. SMSCMC has been growing rapidly, and the Saudization of our staff is now 72 percent working in the supply chain, which is a very critical yet relatively new sector in Saudi Arabia,” he added.
Alshehri said they have also worked closely with national partners and bodies specialized in realizing the Kingdom’s Vision 2030 to increase local procurement, including the General Authority for Military Industries — the Kingdom’s defense regulator, and SAMI.
Alshehri also said that SMSCMC, which has over 300 employees and processes more than 12,000 supply chain requests per year, has acquired several high governance standards, including licenses from the International Organization for Standardization and the International Traffic in Arms Regulations.
Alshehri said SMSCMC has also received an “establishment permit” from GAMI, which will give them the approval to go beyond the contracts of BAE Systems after previously being under the umbrella of the Saudi British Defense Cooperation Program.
With the Kingdom’s vision at its core, Alshehri said the company had been awarded “golden certificates” in supporting women and youth empowerment and people with disabilities in their working environment and has set up a diversity and inclusion committee to maintain these targets. Among these targets is having women in executive positions within five years.
“We now have females working in our offices in Riyadh in the supply chain operations. We also have some females working in our operations in Dhahran. So we are supporting Vision 2030 not only in numbers but also the culture we are trying to create within our organization and empowering people,” he said.
“We have some targets to increase the number of Saudi nationals in the organization, especially in critical roles like, for example, delivering simulator devices,” he added.
There are 60 executive employees at SMSCMC, including 26 Saudi nationals and 34 expatriates. The target will be to increase the number of Saudi citizens to 40 by 2025 and reduce the number of expatriates to 30. Moreover, 72 percent of the company’s workforce are Saudi nationals and there are plans to increase the number to 75 percent by 2025.
SMSCMC last month signed a defense agreement with General Electric Aviation in Riyadh to further opportunities in Saudi Arabia and beyond, which will include training and technology transfer in supply chain operations in the region and creating jobs for Saudi nationals in the Kingdom.
“Since we have established capabilities at SMSCMC’s supply chain and defense, General Electric would like to sign this agreement with us to utilize our capabilities to support them and increase their operations’ efficiency in Saudi Arabia,” Alshehri said.
SMSCMC provides a wide range of training programs, some long term, and has also signed agreements with major global training companies to transfer technologies and know-how.
Alshehri added: “Training will be done through SMSCMC and BAE Systems because BAE Systems has a big legacy in the supply chain.
“Some of our employees serve time in BAE Systems’ operations in the UK. They spend a few months there and then return to Saudi Arabia with this knowledge.”
SMSCMC has a bureau in the UK, a registered company with about 80 employees supporting the company’s operations in the Kingdom. It facilitates a lot of the procurement in Britain and Europe in general and can transport the goods to the Kingdom faster.
The negative impact of the COVID-19 pandemic on supply chains and logistics worldwide, Alshehri said, only affected SMSCMC in terms of operations. However, the company managed to deliver all its key performance indicators on time and fulfill its contractual agreements without any issues from 2020 to this year, which was very difficult for many major companies to meet.
“Of course, there were some challenges in the global economy in terms of new business opportunities, but in terms of delivering and continuity and sustainability, SMSCMC delivered the key performance indicators in a very challenging time, which is something we are proud of.”
SABIC drives compliance training business ethics programs to boost corporate governance
- The chemical manufacturing giant led the implementation of a global trade system that allows automated compliance screening of customers
RIYADH: Saudi Basic Industries Corp. and anti-bribery firm Trace International have successfully provided compliance training to 4,500 third-party business partners since July last year to advance corporate governance in the organization.
According to SABIC vice president of legal affairs Naveena Shastri, each of the company’s third-party business partners, which included suppliers, distributors and contract workers, were trained in four to five compliance training sessions, totaling 20,000 sessions.
Of the 20,000 sessions, 18,090 sessions constituted temporary employees. The company also trained 44.3 percent of its temporary workers in the first half of 2022.
A total of 619 training sessions were conducted for SABIC’s suppliers in the second quarter of 2022.
“In any place we operate, we develop ecosystems where doing business with integrity is the norm,” said Shastri.
The program offers face-to-face or online training in Arabic, with training materials and formats updated regularly.
By doing this, Shastri said that the company could ensure that its small and medium business partners understand the company’s compliance concepts.
All SABIC employees are required to attend comprehensive compliance training, refresher courses, and special training on specific topics, such as antitrust legislation, fair employment practices, and trade controls, to build the proper foundation for ethical compliance, she added.
In addition, Shastri pointed out that SABIC led the implementation of a global trade system that allows automated compliance screening of customers with applicable international trade sanctions.
Due to the company’s commitment to corporate governance and ethics, the chemical manufacturing major was awarded the
Compliance Leader Verification for 2022 and 2023 from Ethisphere, a global leader in defining and advancing ethical business practices, Shastri said.
It was the company’s second consecutive year to receive the award following November 2021.
In previous sessions for its suppliers, the speakers elaborated on the importance of an ethical business model and why stakeholders — both global and regional — are increasingly seeking evidence of effective compliance practices.
The company has been collaborating on this front with compliance organizations such as the Pearl Initiative and Nazaha, the Oversight and Anti-Corruption Authority in Saudi Arabia.
Often facilitated by nongovernmental organizations, SABIC also plays a crucial role in cross-industry collaboration.
It participates in several global, multilateral anti-corruption initiatives, including the annual Business 20, the official business dialogue forum of the Group of 20 nations and the World Economic Forum.
Due to the company’s size, it ensures that the e-learning courses reach the right people in its supply chain and that trainees have the tools to follow up if necessary. “The company builds capacity, awareness, and knowledge in countries where some of these are new compliance concepts, and sets standards that its suppliers must follow to participate in business activities with SABIC,” Shastri concluded.
UAE intends to invest $1 billion in Pakistani companies — WAM
- The move aims to explore new investment opportunities and areas for cooperation in projects across various sectors
- Emphasizes keenness of UAE and Pakistan to continue cooperation in various fields, including gas, energy infrastructure
ISLAMABAD: The Emirates News Agency reported on Friday the UAE’s intention to invest $1 billion in Pakistani companies across various sectors.
Relations between the UAE and Pakistan date back to the UAE’s formation in 1971, and have since evolved into wide-ranging cooperation in various fields. Pakistan was the first country to extend recognition of the United Arab Emirates, while the UAE continues to be a major donor of economic and financial assistance to Pakistan.
In recognition of the UAE’s humanitarian support to Pakistan, multiple institutions, bridges, airports and hospitals in Pakistan are named after the UAE’s founding father and first president, Sheikh Zayed bin Sultan Al Nahyan, such as the Sheikh Zayed Bridge in Swat Valley and Sheikh Zayed Medical Complex in Lahore.
“An official source in Abu Dhabi has emphasised the UAE’s intention to invest $1 billion in Pakistani companies in various economic and investment sectors,” the Emirates state news agency said.
“The move aims to explore new investment opportunities and areas for cooperation in projects across various sectors, so as to expand bilateral economic relations in the best interest of the two countries.”
WAM added: “It also emphasises the keenness of the UAE and Pakistan to continue cooperation in various fields, which include gas, energy infrastructure, renewable energy, health care, biotechnology, agricultural technology, logistics, digital communications, e-commerce and financial services.”