Okonjo-Iweala named first female, African WTO boss

Incoming World Trade Organization President (WTO) Ngozi Okonjo-Iweala speaks during an interview with Reuters in Potomac, Maryland, US, February 15, 2021. (Reuters)
Short Url
Updated 16 February 2021

Okonjo-Iweala named first female, African WTO boss

  • She will take over an organization mired in multiple crises

GENEVA: Nigeria’s Ngozi Okonjo-Iweala was appointed Monday as the first female and first African head of the beleaguered World Trade Organization, saying a stronger WTO would be vital for the global coronavirus recovery.

The WTO called a virtual special general council meeting at which member states officially selected the former Nigerian finance minister and World Bank veteran as the global trade body’s new director-general. She will take up her post on March 1 and her term, which is renewable, will run until Aug. 31, 2025.

The near-paralyzed institution desperately needs a kick-start — something Okonjo-Iweala immediately addressed after being confirmed in the job.

“A strong WTO is vital if we are to recover fully and rapidly from the devastation wrought by the Covid-19 pandemic,” the 66-year-old economist said in a statement.

“I look forward to working with members to shape and implement the policy responses we need to get the global economy going again.

“Our organization faces a great many challenges but working together we can collectively make the WTO stronger, more agile and better adapted to the realities of today.”

South Korean Trade Minister Yoo Myung-hee had been the only other remaining contender for the post but pulled out when it became clear that new US President Joe Biden was swinging firmly behind Okonjo-Iweala’s candidacy.

The organization has been leaderless since Brazilian career diplomat Roberto Azevedo stepped down last August, a year ahead of schedule.

The process of picking one of eight candidates to succeed him had been expected to wrap up by November, but the administration of former US president Donald Trump blocked the consensus to appoint Okonjo-Iweala.

Okonjo-Iweala, who boasted US, EU and African backing, was not at the WTO’s Geneva headquarters for Monday’s meeting, but was scheduled to hold an online press conference after its conclusion.

She will take over an organization mired in multiple crises and struggling to help member states navigate the severe global economic slump triggered by the coronavirus pandemic.


African nations eye Dubai Expo for image overhaul

Updated 10 May 2021

African nations eye Dubai Expo for image overhaul

  • Africa witnessed 25 years of growth before falling into a COVID-induced recession

DUBAI: African nations are attending this year’s Dubai Expo 2020 in force, hoping to project an image of a modern and ambitious continent and shed stereotypes of conflict and underdevelopment.

The six-month mega-event, delayed by the coronavirus disease (COVID-19) pandemic, is a milestone for the wealthy Gulf emirate. It has spent some $8.2 billion transforming a barren stretch on the outskirts of the city into an eye-popping site bristling with high-tech pavilions.

As the huge project nears completion ahead of the scheduled October 2021 opening, African delegates touted their ambitions to generate trade and investment at a high-level meeting this week.

With nearly all African states represented for the first time, Expo provides a stage to advertise a “continent that is ready to move forward” and “a secure place to do business,” Levi Uche Madueke from the 55-member African Union (AU) said.

“The time has come for us to actually reach out to the world, and for the world to understand us, and also see how they can collaborate with us,” said Madueke, the AU’s head of strategic partnerships.

Since the first World Expo was held in London in 1851, global fairs have been used to showcase innovations and as a branding exercise for participating countries. And in its quest to gain influence on the international scene, the UAE has increased its political and economic presence in Africa in recent years, particularly in the eastern Horn.

Africa witnessed 25 years of growth before falling into a COVID-induced recession in 2020. It continues to dominate the bottom half of the global Human Development Index.

Aside from exceptions such as Rwanda, Morocco and Kenya, African states also fare poorly on indices that measure the ease of doing business. But Madueke said that despite the need to develop infrastructure and the existing barriers to international trade, Africa has “a lot to offer” thanks to its rich natural resources and youthful population.

The Democratic Republic of Congo, long seen as a country marred by conflict and corruption, is looking to attract investment from around the world.

“Often when we talk about Africa, about Congo, people will say — there is war in the east, there are rebels ... No!” said Eugene Manga Manga, DR Congo’s general commissioner for Expo 2020. “We have everything we need. If you go out at night in Kinshasa, life is good.” Known for its rich mineral resources, DR Congo will showcase its culture and landscape in promotional videos in a bid to attract tourists, from its pavilion that that will also promote the country’s agricultural potential.

“The Congo has 80 million hectares of arable land. We exploit only 10 percent,” Manga said, adding that the country has taken steps to ease property ownership hurdles and improve the business climate. “This image of Africa that is sold — of misery, suffering, war — that’s in the past!” he told AFP.

At the Dubai meetings, members of the Benin delegation said the country was working overtime to promote tourism by rehabilitating cultural sites and improving its business potential through economic reforms. “The objective is to sell the destination,” said Ines Monwanou, the country’s main delegate at Expo 2020.

While expectations are high, even the continent’s heavyweights acknowledge that selling a revitalized image at the Dubai Expo will be a challenge.

The Egyptian pavilion, featuring pyramids and hieroglyphics, will showcase the country’s ancient history and vast tourism appeal, but the main objective is to draw in business investment and cooperation, particularly in new technologies.

“The world has started to look at Africa and rediscover it,” said Ahmed Maghawry Diab, an official from Egypt’s Ministry of Trade and Industry who is representing the country at Expo 2020.

“The continent has a lot of difficulties, but it has also started to develop.”


KSA travel sector set for recovery as Saudis prepare for holidays

Updated 10 May 2021

KSA travel sector set for recovery as Saudis prepare for holidays

  • 80 percent of those surveyed plan to go abroad within 6 months of borders reopening

JEDDAH: Saudis are as eager as ever to explore other countries, with a survey by travel operator Almosafer finding that 80 percent are planning  to go abroad within six months of the borders reopening on May 17.

Speaking to Arab News in mid-April, Capt. Ibrahim Al-Koshy, CEO of Saudia, the Kingdom’s state-owned flag carrier, said initial bookings were healthy but “people are still a bit cautious about long-distance traveling.”

This was supported by Muzzammil Ahussain, executive vice president of the consumer travel business unit at Seera Group, the parent company of Almosafer, who found that initial interest among travelers was for locations predominantly within the Middle East and North Africa, especially nearby countries like Bahrain, Dubai, Qatar, and Egypt, as well as new locations like Bosnia, Georgia, the Maldives, and Morocco.

“This is what customers told us in Q1 in the survey, as the borders open soon, and this is exactly what we saw, there is a spike in the traditional countries that Saudis usually travel to in terms or searches and bookings,” Ahussain told Arab News.

Before the coronavirus disease (COVID-19) pandemic, European destinations like France, Italy and Switzerland were popular in the summer. “However, Europe now is not as safe as places like the Maldives,” Ahussain said. 

Muzzammil Ahussain, Executive VP, Seera Group

He added that Saudis have shifted their interest away from Turkey to alternative locations like Georgia and Bosnia.

Another recent trend Ahussain noticed is an increased preference for boutique hotels and alternative accommodation with a more personal touch.

Previously known as the Al-Tayyar Travel Group, Seera Group is the largest travel and tourism group in the MENA region. It was hit hard by the economic impact of the pandemic, with net profit down around 91 percent in 2020. While various subsidiaries of the company are recovering at different rates, Ahussain believed it would take time to get back to pre-pandemic levels. “Collectively, we are looking at a full recovery by 2023,” he said, while adding the general consumer travel division will “reach 50 to 60 percent of pre-pandemic levels this year.”

FASTFACTS

• Saudis are taking interest in visiting countries like Bahrain, Dubai, Qatar, and Egypt, as well as new locations like Bosnia, Georgia, the Maldives, and Morocco.

• Before the pandemic, European destinations like France, Italy and Switzerland were popular in the summer.

Seera Group invested in Dubai-headquartered ride-hailing app Careem in December 2014 and when the company was sold to international rival Uber it received a large cash injection when it exited in 2019. 

Ahussain said the Careem exit provided it with timely liquidity for the company’s balance sheet of around SR1.78 billion ($470 million). This helped it focus on Lumi, its homegrown car rental division.

Lumi was the key division for Seera in 2020, with its gross book value increasing by 27 percent year-on-year to SR434 million.

“Lumi, The group’s car rental unit is increasing, year-on-year, it is already above the pandemic numbers, it has not slowed down,” Ahussain said. “It increased its profit last year and it is expected to increase this year.”

Ahussain added that there are plans to expand Lumi’s digital offerings through rentals, used car sales, mobile workshops, and pick-up and drop-off services. The new platform is expected to be launched within two months. “We are heavily investing in the digital solution of Lumi,” he said.

The Saudi Interior Ministry recently announced that vaccinated Saudis and those who have recovered from COVID-19 would be allowed to travel abroad as of 1 a.m. from May 17.

Related


Economic recovery seen key to Macron’s reelection

Updated 09 May 2021

Economic recovery seen key to Macron’s reelection

  • French president focusing on saving jobs, reviving pandemic-hit economy

PARIS: President Emmanuel Macron’s plans for bringing France out of the pandemic are not just about resuscitating long-closed restaurants, boutiques and museums. They are also about preparing his possible campaign for a second term.

A year before the next presidential election, Macron is focusing on saving jobs and reviving the pandemic-battered French economy as his country inches out of its third partial lockdown.

The centrist president’s ability to meet the challenge will be significant for his political future and for France. While he has not officially declared his candidacy, Macron has made comments suggesting he intends to seek reelection. And he has pushed recent legislation on issues that potential rivals on the right and the left hold dear, from security to climate change.

Pollsters suggest Macron, who four years ago became the youngest president in French history, has a good chance of winning the presidency again in 2022 despite his government’s oft-criticized management of the pandemic and earlier challenges to his policies.

The coronavirus reopening strategy Macron unveiled this month calls for most restrictions on public life to be lifted June 30, when half of France’s population is expected to have received at least one vaccine shot. 

With up to 3 million people in France getting vaccinated each week, the government plans to allow outdoor areas of restaurants and cafes, as well as museums and nonessential shops, to resume operating on May 19.

In an interview with French media, Macron said he would visit France’s regions over the summer “to feel the pulse of the country” and to engage with people in a mass consultation aimed at “turning the page of that moment in the nation’s life.” “No individual destiny is worthwhile without a collective project,” he said, giving the latest hint about a potential reelection bid.

At the moment, all opinion polls show Macron and Marine Le Pen, the far-right leader he beat in a presidential runoff election in 2017, again reaching the runoff next year. The polls also forecast that Macron would defeat National Rally leader Le Pen again, though by a smaller margin.

Macron was elected on a promise to make the French economy more competitive while preserving the country’s welfare system.

French politics expert Luc Rouban, a senior researcher at the National Center for Scientific Research, said the president’s immediate goal “is to show he is still able to continue implementing his project, which has more or less been stopped by the health crisis.”

Macron needs to show he is addressing inequality, economic mobility and other social justice issues that are important to France’s left wing, Rouban said.

In the French newspapers interview, Macron also praised the country’s benefits for low-income workers, who since 2019 have received up to additional €100 ($120) per month.

Macron’s public image appears to have partially recovered from drubbing it took at the height of the “yellow vest” movement, which started in late 2018 to oppose a fuel tax and grew into a weekly anti-government protest targeting alleged social and economic injustice. At the time, critics angry over Macron eliminating a wealth tax labeled him the “president of the rich.”

During the virus crisis, Macron applied a “whatever it takes” strategy based on state intervention to save jobs and businesses, including a massive partial unemployment program and subsidized child care leave. The government also approved a two-year €100 billion rescue plan to revive the economy.

Macron promised there would be no tax increases to repay the debt, which soared last year to 115.7 percent of gross domestic product.

Despite strong opposition from unions about planned changes to the pension system and unemployment benefits, he has pledged to keep reforming “until the last quarter of hour” of his five-year term, which runs out in May 2022.


Positive IMF assessment seen as vote of confidence in Saudi reform strategy

Updated 10 May 2021

Positive IMF assessment seen as vote of confidence in Saudi reform strategy

  • Latest assessment of the Kingdom’s economy is a vindication of Vision 2030 and the pandemic response
  • IMF has the power to deliver a positive or negative verdict on the way the economy is being run

DUBAI: Economic policymakers sometimes feel a little edgy when the International Monetary Fund (IMF) comes to town.

The 77-year-old global financial institution is not a regulator in the strict sense of the word, but it does have the power to deliver a positive or negative verdict on the way those policymakers — ministers, central bankers, and officials — are running their economy.

In extreme circumstances, the IMF can approve or withhold potentially life-saving finds from an economy in crisis. In more normal conditions, its verdict can have a big influence on the international credit ratings all countries use when accessing global capital markets.

When the IMF “mission” finished its visit to Saudi Arabia last month, there must have been at least a sliver of apprehension among economic policymakers in the Kingdom as they awaited the IMF’s formal verdict on their handling of the pandemic and its related economic shocks in 2020.

The oil sector has benefited from the Kingdom’s role in rebalancing global markets through OPEC+. (AFP)

There was no question of resource-rich Saudi Arabia seeking IMF financial assistance, but as the organization had not carried out its usual annual visit in coronavirus-ravaged 2020, there was a lot of ground to cover after a year of radical policy changes to handle the sharp recession that followed the outbreak of the pandemic.

As it turned out, there had been no need for the Saudi officials to worry at all. The “concluding statement”, when it came last week, was a ringing vote of confidence in the way they had handled the huge challenges presented by the pandemic.

More than that, it was a firm endorsement of the Vision 2030 strategy to diversify the Kingdom’s economy away from oil dependency.

Independent economists were not surprised by the IMF’s positivity. Nasser Saidi, former chief economist at the Dubai International Financial Centre (DIFC), told Arab News: “The country has been proactive in rolling out a spate of reforms despite the pandemic and lower oil prices. The public health system has proven to be resilient.”

The IMF experts were categoric. “The authorities responded quickly and decisively to the COVID-19 crisis. Strict early containment and health mitigation measures limited cases and fatalities and the vaccination program has advanced well in recent months,” they said.

The IMF report came as an endorsement of  the Kingdom’s plans to diversify its economy and invest in non-oil sectors such as tourism and entertainment. (AFP)

The experts added: “Fiscal, financial and employment support programs introduced by the government and SAMA helped cushion the impact of the pandemic on businesses and Saudi workers.”

A major reason for this performance, the IMF visitors concluded, lay in the Vision 2030 reform plan that has been in place since 2016, aiming to modernize the Kingdom’s economy and create a more dynamic, entrepreneurial private sector to take the place of government spending as the economic driving force.

“Reforms under Vision 2030 have played a key role in helping the economy navigate the pandemic. Efforts to establish a robust structure of inter-agency coordination and governance, the growing digitalization of government and financial services, reforms to increase labor market mobility, and strong fiscal and financial policy buffers, all equipped the economy to manage the crisis,” the IMF said.

All the indicators are moving in the right direction. Real GDP growth is projected at 2.1 percent this year, representing a dramatic turnaround from the 4.1 percent decline in 2020. In the critical non-oil sector — the key measure of the success of the diversification plan — real GDP growth rebounded in the second half of 2020 and the signs are that this will continue in 2021.

Non-oil growth is projected by the IMF at 3.9 percent this year and 3.6 percent next. Inflation, often a prime concern for the IMF, will be a very manageable 2.8 percent next year, while unemployment — another key indicator for the diversification strategy — fell to 12.6 percent for Saudi nationals at the end of last year.

Moreover, the role Saudi Arabia has played in the OPEC+ cuts strategy to rebalance global markets will pay off this year and next, as oil GDP recovers to 6.8 percent growth next year when oil supply returns to normal at higher crude prices.

The Kingdom’s fiscal policymakers also got a slap on the back from the IMF. “The deficit widened in 2020 to 11.3 percent of GDP (4.5 per cent of GDP in 2019) as oil revenues fell and spending needs increased, and it was comfortably financed by new borrowing and the drawdown of government deposits.” The deficit will decline to 4.2 percent this year, the IMF said, lower than the official forecast.

Some of the controversial measures introduced during the pandemic, like the tripled VAT rate, as well as the removal of cost-of-living allowances and domestic-energy price subsidies, “are all important contributors to the planned fiscal adjustment and should not be reversed or delayed.”

INNUMBERS

3.9% Projected non-oil growth this year.

2.8% Projected inflation rate next year.

The work of the Ministry of Finance was recognized by the IMF. “Steps to continue to strengthen fiscal transparency are needed, including by publishing more detailed information in budget documents and broadening the coverage of fiscal data beyond the central government,” they said.

Mohammed Al-Jadaan, Saudi Arabia’s finance minister, appreciated the IMF’s praise. “Such results have been achieved despite the impact of the COVID-19 pandemic, fluctuations in oil prices, sharp economic fluctuations, declines in global demand, receding growth and other challenges that the Saudi government has risen to,” he said in response.

Saudi Minister of Finance Mohammed al-Jadaan. (AFP)

The IMF included the Kingdom’s financial and capital markets sectors in its praise. “The financial sector continues to be well-regulated and supervised by SAMA,” it said.

“Banks are well-capitalized and liquid despite a decline in profitability and a slight increase in non-performing loans (which remain low) over the past year.”

It added: “The impressive pace of equity and debt market reforms has continued under the guidance of the Capital Market Authority and the National Debt Management Center. These reforms are increasing capital raising options for companies and investment opportunities for savers.”

Saidi, the former DIFC chief economist, said: “Saudi Arabia’s fiscal prudence has to be complimented, in addition to the efficient tapping of debt markets and structuring of key energy infra structuring to finance deficits.”

On one crucial subject — the gradual erosion of Saudi Arabia’s foreign reserves under the impact of pandemic pressures and the need for continued investment in Vision 2030 initiatives — the IMF was sanguine. “The exchange rate peg continues to serve Saudi Arabia well given the current economic structure. SAMA’s foreign exchange reserves remain at very comfortable levels,” it said.

‘Fiscal, financial and employment support programs helped cushion the impact of the pandemic on businesses and Saudi workers.’ (AFP)

There were some caveats from the IMF assessors. “To secure the recovery and spur stronger growth, policymakers need to carefully manage the exit from the remaining COVID-related support and continue the longer-term reform agenda under Vision 2030,” they said.

They also highlighted the need to continue support for the “social security net” to support low-income households which may be struggling from the effect of economic recession compounded by higher tax rates and the withdrawal of cost of living allowances.

“If the recovery stalls, the planned reduction in government capital spending could also be slowed while keeping the medium-term capital spending envelope unchanged,” the IMF said.

The IMF report came as an endorsement of  the Kingdom’s plans to diversify its economy and invest in non-oil sectors such as tourism and entertainment. (AFP)

Above all, it is important to maintain the momentum of economic reform. “Increasing the competitiveness of Saudi workers in the private sector is important to the success of the reform agenda. Developing a competitive and diversified private sector will be difficult unless the wage expectations of Saudi workers are in line with their productivity,” the IMF assessors concluded.

According to Saidi, the pace of continued growth depends on global oil markets and the future pattern of the virus, but the signs are as good as the IMF’s conclusions.

“Saudi Arabia’s growth prospects with continued macroeconomic stability and prudent fiscal stance will encourage increased domestic and foreign investment in addition to housing investment and consumption by households,” he said.

_______________

Twitter: @frankkanedubai


UAE’s TIME Hotels expansion plans to include new KSA hotels

Updated 09 May 2021

UAE’s TIME Hotels expansion plans to include new KSA hotels

  • The company currently has one property in the Kingdom, in Dammam, but it will shortly take over the management of two boutique hotels in Riyadh

RIYADH: TIME Hotels is set to nearly double its portfolio of properties by 2025, including new hotels in Saudi Arabia.

The UAE-headquartered hospitality company and hotel operator will reveal its plans to open eight new properties across the Middle East and the Indian Ocean over the next 18 months.

Mohammed Awadalla, CEO, TIME Hotels, said in a press statement: “We currently have 14 properties consisting of 1,465 keys in operation across the UAE and wider GCC (Gulf Cooperation Council) with new additional properties opening this year in Dubai, Sharjah, Fujairah, Saudi Arabia and Egypt…Our goal is to expand our portfolio to 30 properties by 2025.”

The company currently has one property in the Kingdom, in Dammam, but it will shortly take over the management of two boutique hotels in Riyadh, the TIME Elite Suites in Al-Muruj and the TIME Express Olaya Hotel in the Saudi capital’s Olaya district.

It also plans to open three hotels in the UAE: the 91-key TIME Moonstone Hotel Apartments in Fujairah; the 99-key TIME Burj Al-Saadah Hotel Apartments in Sharjah; and the four-star, 232-room TIME Asma Hotel, in Al-Barsha, Dubai.

This year will also see the opening of its first two hotels in Egypt: the five-star TIME Coral Resort Nuweiba in the Red Sea resort of Nuweiba and the four-star TIME Marina Hotel & Conference Centre near Al-Alamein on the Mediterranean coast.

The brand is also venturing outside the GCC with the opening next year of the TIME Phoenix Hill, its debut on the Indian Ocean island of Mauritius.