CAIRO: Egypt’s central bank governor resigned Wednesday as the Middle East’s most populous nation struggles to curb inflation triggered by Russia’s war in Ukraine, high oil prices and a drop in tourism.
President Abdel Fattah El-Sisi accepted the resignation of Tarek Amer and named him a presidential adviser, the Egyptian leader’s office said in a statement. The brief statement offered no explanation for Amer’s resignation.
No replacement was immediately named for Amer, who had been appointed governor of the central bank in November 2015. He has been criticized for his handling of Egypt’s financial challenges.
The currency is under pressure, sliding in value to about 19 Egyptian pounds to the US dollar. That followed a central bank decision allowing the currency to depreciate by around 16 percent in March to try to stem a growing trade deficit.
“It seems there’s a lot of tensions within policymaking circles, and I think that’s ultimately what led to Mr. Amer’s resignation,” said Jason Tuvey, a senior emerging markets economist at Capital Economics.
Tuvey said there are officials that oppose devaluing the pound and instead support measures like rationing gas consumption by curbing electricity usage, which could in turn harm business activity. Amer had traditionally been seen as in the camp that supported the pound’s depreciation as a way to secure a loan from the International Monetary Fund.
The London-based Capital Economics research firm predicts that Egypt’s currency will continue to slide, reaching 25 pounds to the dollar by the end of 2024 amid sustained pressure.
The resignation of the central bank head comes after key ministries were reshuffled Saturday as the government faces mounting pressure from economic challenges. The Cabinet shake-up, which was approved by parliament in an emergency session, affected 13 ministries, including health, education, culture, local development and irrigation. The country’s minister of tourism and antiquities also was replaced.
Egypt’s expansive tourism industry, which employs millions, was hit hard by years of turmoil, the COVID-19 pandemic and then the war in Ukraine. Prior to the conflict, around a third of tourists to Egypt came from Russia.
Russia’s war has been deeply felt in other ways in Egypt, the world’s largest wheat importer that sources around 80 percent of it from the Black Sea region.
In the first weeks after the invasion of Ukraine in late February, the price of wheat and other grains skyrocketed, as did the price of fuel. Although prices have come down somewhat, the cost of grains remains at least 50 percent higher than before the pandemic in early 2020. Furthermore, the cost of shipping to export those grains through the Black Sea is high.
Inflation in the country of 103 million people reached 14.6 percent in July, increasing pressure on lower-income households and everyday necessities. Around a third of Egyptians live in poverty, according to government figures.
The World Bank notes that Egypt’s government announced an assistance package worth 130 billion pounds (more than $8 billion) just before devaluing the pound in March to alleviate the impact of rising prices. The package aimed to increase public-sector wages and pensions, as well as expand direct cash assistance programs.
Egypt’s Gulf Arab allies have come to its assistance with multibillion-dollar investments buoyed by high oil prices that have helped their bottom line.
Saudi Arabia’s sovereign wealth fund, known as the Public Investment Fund, recently established a division in Egypt that has already announced deals worth $1.3 billion with the aim of bringing in $10 billion into Egypt.
Egypt’s central bank governor resigns as economic woes mount
https://arab.news/6ze3s
Egypt’s central bank governor resigns as economic woes mount
- President Abdel Fattah el-Sissi accepted the resignation of Tarek Amer and named him a presidential adviser
- The currency is under pressure, sliding in value to about 19 Egyptian pounds to the US dollar
Turkish inflation rises to its highest level this year
- Aggressive rate-hiking cycle may be beginning to cool demand
ISTANBUL: Turkiye’s annual inflation rate edged up to 61.98 percent in November, data showed on Monday, its highest level this year but just shy of expectations, signaling that an aggressive rate-hiking cycle may be beginning to cool demand.
Month-on-month, consumer price inflation was 3.28 percent, according to the Turkish Statistical Institute, less than a forecast of 3.9 percent in a Reuters poll.
Annual inflation was expected to have risen to 63 percent in November before ending the year at 67 percent, the poll showed. Price rises are seen peaking in May between 70-75 percent before dipping due to the monetary tightening cycle that is winding down.
The data “adds to evidence that inflation pressures in the economy continue to cool,” said Liam Peach, senior emerging markets economist at Capital Economics.
The “monetary tightening cycle is likely to come to an end with one final interest rate hike later this month,” he wrote.
In October, annual inflation dipped for the first time in three months to 61.36 percent.
Inflation soared after a currency crisis at the end of 2021 and touched a 24-year peak of 85.51 percent in October last year. This year, the lira has so far lost some 35 percent of its value, compounding the cost-of-living crisis for Turks.
The monthly CPI was driven by an 11 percent jump in housing-related costs in November, while clothing and transportation costs were nearly flat, the data showed.
Concern autos will become less affordable due to rising prices and the ongoing lira depreciation has driven sales to an annual record, up 60.8 percent in the January-November period, trade association data showed on Monday.
The domestic producer price index was up 2.81 percent month-on-month in November for an annual rise of 42.25 percent.
The latest run-up in inflation began in July on the back of tax hikes and a sharp decline in the lira following May elections.
Since June, the central bank has reversed a yearslong policy of low rates that had long been favored by President Recep Tayyip Erdogan. It has hiked rates by 3,150 basis points to stem inflation and also adjusted a raft of credit rules.
As part of Erdogan’s pre-election pledges, household monthly natural gas consumption up to 25 cubic meters was provided free until May next year.
The lira weakened 44 percent against the dollar in 2021 and another 30 percent in 2022. Inflation fell to as low as 38.2 percent earlier this year, partly due to base effects and a relatively stable lira.
The central bank raised its benchmark rate to 40 percent last month and said tightening will be completed in a short period of time.
The bank said domestic demand appears to be moderating however its existing high level, along with stickiness in services prices, and geopolitical risks keep inflation pressures alive.
Women complain of unfulfilled promises to tackle gender disparity
DUBAI: As Gender Day was observed on Dec. 4 at the 2023 UN Climate Change Conference in Dubai, female participants advocated for increased awareness regarding climate change’s acute impact on women, especially in the developing world.
Despite the extensive ongoing discussions surrounding the topic, numerous female participants expressed dissatisfaction, asserting that akin to various other facets of climate change, the gender gap has largely remained mere discourse. They highlighted that changes are unlikely to occur, even as the repercussions of climate change, particularly affecting women, continue to heighten.
Vinita Apte, founder of TERRE Policy Centre, a Pune-based NGO working with women living in rural areas, outlined the challenges climate change presents for women, particularly in India.
Apte spoke with Arab News on the sidelines of the forum, saying: “In terms of climate change, women are facing a lot of problems, especially with water scarcity, which is a major issue in their life because they have to walk for long (distances) just to get even a pot of clean water. Besides water, they have a lot of problems typical of climate change in terms of heavy rains or hot summers.”
She added that in the absence of training or outside aid, women, many of whom are illiterate, remain unaware of how to adapt to the current climate crisis.
“They don’t know what needs to be done, like changing farming patterns or how to conserve rainwater and also how to prepare for heat waves,” Apte said.
Naliba Mamman, from Nigeria, added that women, especially in rural areas, face several problems due to a lack of resources.
“For cooking, they need to arrange for fuel, which is mainly by cutting down trees in their villages. They need energy to run homes. They are also impacted in terms of farming, getting their produce to the local markets or getting their kids to school,” Mamman said.
The pain of women in developing countries is also being felt in other parts of the world where there is less gender disparity in terms of climate change.
“While in the UK, we may not feel any difference gender-wise, but it is recognized just around the world. And there are a lot of places, especially developing countries, where there is a massive difference between how climate change affects men and women. And so I think there are issues with the different kind of traditional roles that some women have in the community, like collection of kind of resources, water, food, that kind of thing, which can be more difficult in droughts and floods, that kind of situation. Also, the child care and family caring responsibilities fall mainly on the women, which again is, you know, in times of drought, climate crisis, food shortages, water shortages, illness, climate catastrophes, you know, that that’s an added pressure on kind of women as well,” said Rachel Mulholland, a British woman currently working in Saudi Arabia.
In certain nations, government entities, more so than multilateral bodies, have taken note of the issues surrounding women and have initiated action.
Habon Aden Awaleh of Djibouti highlighted that its government has already created a plan to help women adapt to the issues raised by climate change.
However, Awaleh revealed that for women from urban and rural backgrounds, there are implements in place to help lessen the impact of climate change. For the nomadic population, however, which is widespread throughout Djibouti, like many other African nations, the challenge is much greater as these populations are in transit, and therefore, delivering assistance becomes more difficult.
Celina Ewbuomwan of Nigeria highlighted that, like in various facets of the climate change debate, including the gender gap, the era of mere discussions has ended. She asserts it is now imperative to transition from talk to tangible action.
“This year, the whole thing is beyond ambition. We’re talking about action. So we hope that at the end of this, every country will take something back home and be able to implement that next year when everybody’s coming back again. There’s something we have probably a milestone that we say this is what we have done and this is where we are today,” said Ewbuomwan.
“Yes, the issue is there are so many beautiful plans, the issue is implementation, which is the challenge. We must have a timeline to achieve our goals. This year, the theme is ‘Unite. Act. Deliver.’ So, I would like to see some delivery on this issue,” said Mamman.
COP28: Saudi Arabia’s Red Sea economy shifts to regeneration
DUBAI: Saudi Arabia’s push toward sustainability has evolved as large corporations aim for regeneration in the Red Sea, according to the person in charge of one of the Kingdom’s giga-projects.
During a panel discussion at the 2023 UN Climate Change Conference in Dubai, John Pagano, CEO of Red Sea Global, highlighted how the company has shifted from sustaining its natural landscape to healing and recovering what has been damaged.
“When we started our journey six years ago, we talked about setting new standards in sustainability and we came to realize fairly quickly that sustainability is no longer enough, and we coined the term regeneration,” Pagano said.
He further underscored that maintaining the status quo is no longer adequate, stating: “We are on a terrible trajectory.”
Moreover, Pagano urged global leaders to take action and “change course,” emphasizing the current bleak outlook of the future.
Accompanying Pagano, Carlos Duarte, professor and marine scientist at King Abdullah University of Science and Technology, supported the call for action.
“We have a commitment to our youth not to hand over a planet that is crippled, but a planet with oceans and a Red Sea that can support generations to come,” Duarte said.
“The bold decision that we are taking globally is that we are no longer content with conservation; we need to go into regeneration,” he added.
Both speakers highlighted the concept of “natural capital” and how this will be used as a global metric for investors to measure a country’s economic performance. Natural capital refers to the stock of renewable and non-renewable natural resources that aid citizens. The term highlights the importance of maintaining and managing ecosystems and their services for the long-term benefit of society.
“The private sector is key to the future of biodiversity and the future of climate and without the involvement from the private sector, we will not meet our goals. That is where concepts like natural capital are very important. Now, natural capital is the new real estate,” Duarte said.
Pagano further added that aside from a country’s gross domestic product, investors will use natural capital as a measure for investment analysis.
RSG has become one of Saudi Arabia’s leading sustainable tourism developments with projects that bring together luxury and clean energy.
“We’ve delivered on the promises that we made dating back to six years ago but we’re doing it sustainably. Six Senses Southern Dunes is totally renewable energy-powered, 24 hours a day, completely off-grid,” Pagano said during the panel discussion.
“We are able to literally push the boundaries of what is possible today,” he added.
Not enough renewable energy to meet global demand: Aramco chief
RIYADH: The amount of renewable energy coming to the international market falls short of fulfilling the rising demand, according to Saudi Arabian Oil Co.’s CEO.
Speaking on a panel at the Saudi Green Initiative Forum on the sidelines of the 2023 UN Climate Change Conference, Amin Nasser highlighted that more investments are needed in the oil and gas sector to ensure a smooth energy transition.
“Even with all the renewable coming to the market, it is still not enough to handle the additional demand we are seeing,” said Nasser.
He added: “If you compare the investments in the energy sector, it was around $740 billion. Right now, we are doing 40 percent below that at around $500 billion. Considering the higher demand we are anticipating in the future, I think we need more investments.”
Patrick Pouyanné, CEO of TotalEnergies, who was also present on the panel, said that investments in the energy sector are rising, but the industry should learn how to split investments between renewables and hydrocarbons.
“Investments in the energy sector are growing. The question is, how do we split these investments? Because we want to triple renewables, and at the same time, we need to maintain the production of oil and gas, which is the energy of today. Let us do more investments in the energy sector, but in an orderly manner,” said Pouyanné.
During the talk, Nasser highlighted that the demand for clean energies like green hydrogen remains low due to its high associated costs.
Regarding the world’s energy divide based on socio-economic characteristics, Nasser said: “Today, 60 percent of what we produce goes to the global south, and 40 percent goes to the global north. By 2050, almost 70 percent will go to the Global South, and in hydrocarbons, 80 percent will be going to the Global South.”
Nasser added: “We need to take care of all stakeholders in terms of making sure that we provide affordable, sustainable, and secure energy for the whole world.”
The Aramco chief further noted that Saudi Aramco is one of the energy companies in the world that has made significant strides in ensuring sustainability in its operations.
“Today, we have the lowest methane and CO2 emissions globally at Saudi Aramco. We will continue to drive it down. We have made the commitment to zero methane by 2030. We are building the carbon capture and storage. We are getting into e-fuels.” said Nasser.
Last year, Saudi Aramco partnered with the Kingdom’s Ministry of Energy to establish a carbon capture and storage hub in the region.
Following the launch, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said the hub will have a storage capacity of up to 9 million tons of carbon dioxide annually by 2027.
Riyadh aims to transform into global sustainability hub by 2030 with $92bn Expo investment
DUBAI: Riyadh is poised to transform into one of the world’s most sustainable cities by the end of the decade, thanks to substantial investments earmarked to prepare the Saudi capital for the upcoming Expo 2030.
Saudi Vice Minister of Tourism Princess Haifa bint Muhammad Al-Saud announced a $92 billion investment for the global showpiece event at the third Saudi Green Initiative Forum on the sidelines of the UN Climate Change Conference in Dubai.
Riyadh has secured the hosting rights for the 2030 World Expo, scheduled to take place between Oct. 1, 2030, and March 31, 2031.
The SGI Forum kicked off on Dec. 4 as COP28 continues to mobilize world leaders toward serious action against climate change.
Addressing the event, Princess Haifa set the tone by emphasizing the projected growth in international arrivals, expected to reach 1.8 billion by 2030.
She underscored the collective responsibility, stating: “Those are the types of commitments that we need to start proactively doing, and it starts from a role as individuals, all the way to the roles of the communities, to the roles of government and the roles of the private sector.”
Beyond Riyadh, Saudi Arabia is spearheading a significant push toward sustainable tourism, with the NEOM giga-project taking center stage.
Nadhmi Al-Nasr, CEO of NEOM, outlined the ambitious vision for this new urban project, which starts from scratch. He detailed the plan to designate 95 percent of the region as an untouched nature reserve, with only 5 percent allocated for the city, envisioned to accommodate 9 to 10 million people.
Al-Nasr said: “We are starting from zero. We have no legacy. We have nothing to undo. And that's a blessing, but that’s a big responsibility.”
He added: “We said look, first we want the nature reserve to govern how NEOM will be done. Immediately we decided to make 95 percent of this whole region untouched nature reserve.”
Furthermore, Al-Nasr emphasized the commitment to renewable energy, stating: “We said we need to build the city or this NEOM by having it all energized by renewable energy. Renewable energy is the base of NEOM.”
Mohammad Al-Tayyar, the program director of Saudi Arabia’s Oil Sustainability Program — an initiative aimed at developing new and environmentally and economically advantageous applications for hydrocarbons — shared insights into effective climate action.
He stated, “So if you focus on the four R’s — reduce, reuse, recycle, and remove — you can really achieve a lot of your mitigation and abatement activities.”
Speaking at the same forum, Governor of Public Investment Fund Yasir Al-Rumayyan highlighted Saudi Arabia’s economic successes and unveiled plans for a net-zero transition by the first quarter of the following year.
He discussed the transformation of the sovereign wealth fund to the seventh rank globally and its potential role in the India-Saudi-Europe corridor, with a focus on green hydrogen and renewable energy.
“We are doing our part, and I hope the rest of the world will do theirs,” said Al-Rumayyan.
Saudi Minister of Economy and Planning Faisal Al-Ibrahim emphasized the significance of Vision 2030 in diversifying the country’s economy and empowering the youth.
He acknowledged the experimental nature of their approach, stating: “We’re very experimental. We’re very humble about learning from others’ experiences, including our own experiences.”
The minister stressed the importance of stable and growing economies in achieving effective climate action and shared their commitment to building institutional capabilities, and said: “I think, from our point of view, the thing that we don’t regret doing is building institutional capabilities, educating people.”
He continued: “We have the cleanest oil in the world being produced in Saudi Arabia. And we still want to be a large, and the most reliable and cleanest conventional, hydrocarbon energy producer.”
President of the New Development Bank Dilma Rousseff remarked on the challenges faced by developing nations, stating: “There is a problem in the Global South countries. The burden of public debt. The public debt is rising too much and too fast.”
The leaders collectively emphasized Saudi Arabia’s commitment to sustainable practices, renewable energy, and nature conservation.
The announcements made at the third SGI Forum reflect the Kingdom’s determination to lead the charge in addressing the global climate crisis and fostering a more sustainable future for generations to come.
