US debt standoff overshadows G7 finance leaders’ meeting

The finance ministers and central bank governors are meeting for three days ahead of a G7 summit later this month in Hiroshima. (Shutterstock)
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Updated 11 May 2023
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US debt standoff overshadows G7 finance leaders’ meeting

RIYADH: The financial leaders of the G7 wealthy nations meet in Japan beginning Thursday as a standoff over the US debt ceiling looms as one of the biggest potential threats to the global economy. 

Treasury Secretary Janet Yellen said one of her priorities in Niigata, a port city on the Japan Sea coast, would be to emphasize the importance of resolving the standoff over the national debt in the world's largest economy. 

“I will underscore the importance of Congress acting to resolve the debt limit to maintain America’s economic leadership and protect the global economy,” Yellen said in a tweet Thursday. 

Yellen also is bound to be seeking to reassure her counterparts over recent bank failures that have raised worries over risks for the global financial system. 

The finance ministers and central bank governors are meeting for three days ahead of a G7 summit later this month in Hiroshima. 

President Joe Biden said Wednesday that he and congressional leaders had a “productive” meeting Tuesday on trying to raise the nation’s debt limit. They will meet again Friday to try to avert the risk as soon as June 1 of an unprecedented government default if lawmakers in the divided Congress don't agree to raise the debt ceiling. 

Yellen said in remarks prepared ahead of Thursday’s meetings that strengthening the global financial system is a key G7 priority. So is a renewed show of support for Ukraine as a coalition of over 30 countries seeks to impose heavy economic costs on Russia for its war. 

Global outlook dampens  

Global economic risks, including stubbornly high inflation and the fallout from aggressive US and European interest rate increases, will likely be among key topics of debate for the G7 finance ministers and central bankers. 

Yellen said the global economy was in a “better place than many had predicted six months ago,” with inflation moderating in many G7 countries including the US. 

As rapid rate hikes by the Federal Reserve weigh on the US economy, however, recent data has shown signs of weakness in China, the world's second-largest economy. 

China’s consumer prices rose at the slowest pace in more than two years in April, while factory gate deflation deepened, data showed on Thursday, dashing policymakers’ hopes that a rebound in the country’s demand would underpin global growth. 

Other key themes to be discussed at the G7 finance gathering include ways to strengthen the global financial system, steps to prevent Russia from circumventing sanctions over its invasion of Ukraine, and diversifying supply chains away from countries like China through partnerships with low- and middle-income nations. 

G7 nations include Canada, France, Germany, Italy, Japan, the UK and the US. Other invitees to the meetings in Niigata include the EU, International Monetary Fund and World Bank, and the finance ministers of Brazil, Comoros, India, Indonesia, South Korea and Singapore. 

(With inputs from Reuters, AP)


Saudi master developer KEC inks 2 deals worth $78m for Al-Alya project    

Updated 14 April 2024
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Saudi master developer KEC inks 2 deals worth $78m for Al-Alya project    

RIYADH:  Saudi master developer Knowledge Economic City Co. is set to deliver 396 residential apartments within the first phase of its mixed-use project Al-Alya, having signed two contracts.  

In Tadawul filings, the Saudi Stock Exchange-listed firm announced signing two deals with Elkhereiji Commerce and Contracting Co., totaling SR288.6 million ($77.92 million). 

The first agreement entails fully implementing contracting works for additional residential buildings in the first phase of the Al-Alya mixed-use project. This comprises a group of four houses, offering 132 apartments of various sizes valued at SR117.5 million, excluding value-added tax. 

The second contract involves the implementation of electromechanical, finishing, gardening, and site coordination works for a group of eight residential buildings valued at SR171.13 million, providing 264 apartments, as stated by the company in a statement to Tadawul. 


Jordan’s new mining strategy is set to create a $2.9bn industry 

Updated 14 April 2024
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Jordan’s new mining strategy is set to create a $2.9bn industry 

RIYADH: Jordan’s mining sector is set to grow substantially, with projections indicating that its contribution to the nation’s gross domestic product will reach 2.1 billion Jordanian dinars ($2.9 billion) by 2033. 

Up from 0.7 billion dinars in 2023, this ambitious target is part of the government’s newly announced initiative to transform Jordan into a mining state by 2033, as outlined in the country’s National Mining Strategy. 

This strategic overhaul aims to elevate the sector’s workforce to 27,500 and boost the value of its exports to 3.5 billion dinars from 1 billion dinars, according to a report issued by the state-owned Jordan News Agency, also known as Petra.   

The strategy emerges from its Economic Modernization Vision and is backed by directives from Jordan’s King Abdullah, emphasizing the need to accelerate investment-stimulating procedures in mineral exploration.  

A cornerstone of this transformation was the formulation of the strategy, spearheaded by the global consultancy firm Wood Mackenzie.  

In 2023, the Jordanian Ministry of Energy and Mineral Resources completed initiatives and projects under the EMV for the mining sector and set priorities within the vision’s executive program.  

The vision’s main pillars revolve around expediting the nation’s full economic potential while improving the quality of life for its citizens and maintaining sustainable measures. 

Moreover, the ministry’s proactive engagement has led to the signing of 11 memorandums of understanding to bolster investment in Jordan’s extractive industries.  

An additional three memorandums of cooperation were signed with various companies to further these goals.  

According to statements made to Petra, the ministry plans to continue advancing these undertakings throughout 2024, pushing these MoUs toward value-added mining operations.  

These initiatives are part of the nation’s ongoing efforts to boost its standing in the mining and minerals industry. 

In a report carried by Petra earlier in January, the ministry said that it aims to position the country on the global mining map by capitalizing on positive mineral exploration results. 

Over the past two years, the country established several partnerships with international companies in mining exploration.  

Moreover, it recently launched an investment platform to showcase national resources and opportunities in the energy sector. 


Egypt to increase funds for health sector by 25% in upcoming budget

Updated 14 April 2024
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Egypt to increase funds for health sector by 25% in upcoming budget

RIYADH: Egypt will increase health sector allocations in the next general budget to 495.6 billion pounds ($10.4 billion), according to the country’s finance minister.   

The North African country’s upcoming fiscal year is set to begin in July. 

Mohamed Maait said in a statement that this reflects an annual growth rate of 24.9 percent compared to the funds allocated for the sector in the current fiscal.   

This is in line with the nation’s goal to improve medical services for citizens, which is also an objective of Egypt’s Vision 2030.  

Moreover, the minister added that allocations for the education sector will also be raised to 858.3 billion pounds, with an annual growth rate of 45 percent.   

Scientific research reserves are also on track to increase to more than 139.5 billion pounds in the next budget, reflecting an annual growth rate of 40.1 percent.

Mait noted that the country will continue to provide the necessary funds to expand healthcare initiatives, supply medicines and medical aids to hospitals, and increase support for health insurance programs. 

He emphasized how Egypt was also working on targeting the speed of gradual expansion in extending the umbrella of comprehensive health insurance.

Furthermore, the minister said the last social package implemented in March included allocating 15 billion pounds in additional increases for doctors, nurses, teachers, and university faculty members. 

The breakdown was divided into 8.1 billion pounds to approve an additional increase in the wages of teachers in pre-university education as well as 1.6 billion pounds to approve a raise for faculty members and their assistants at universities, institutes, and research centers. 

There was also 4.5 billion pounds to approve a supplementary rise for members of the medical professions and nursing bodies.

In 2022, Egyptian President Abdel Fattah El-Sisi discussed strengthening cooperation with the World Health Organization to improve the country’s healthcare sector. 


Oman’s top 5 ports handle over 93.2m tonnes of cargo in 2023

Updated 14 April 2024
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Oman’s top 5 ports handle over 93.2m tonnes of cargo in 2023

RIYADH: Oman’s top five ports saw a 1.5 percent annual increase in cargo handling in 2023, surpassing 93.2 million tonnes, underscoring their growing significance in maritime trade. 

The terminals of Sultan Qaboos, Salalah Sohar and Khasab as well as Shinas, and A’Suwaiq handled approximately 91.8 million tonnes of general, liquid, and bulk cargo in 2022, according to the Oman News Agency.

It also highlighted a significant increase in the number of berthed ships in 2023, reaching approximately 11,005 vessels compared to 10,553 watercraft in 2022, marking a 4.3 percent rise.

Cruise ship passengers at the Sultan Qaboos, Salalah, and Khasab Ports increased considerably. This achievement reflects the government’s collaborative efforts with tourism partners to enhance hospitality traffic to Oman.

The news agency added that the government succeeded in attracting major cruise ship operators to several Omani connection points, including Salalah, Khasab, and Sultan Qaboos Port.

It also reported that in 2023, 229 cruise ships brought 599,000 passengers to Omani terminals, compared to around 87 ocean liners carrying over 205,000 travelers in 2022. This represents an increase of over 190 percent in commuters.

Credit rating

In another report, the news agency noted that economic experts and specialists attribute Oman’s improved credit rating to government efforts to control spending, reduce debt, increase non-oil revenues, and enhance financial performance indicators.

Mohammed Abu Bakr Al-Ghassani, chairman of the board of directors of the Oman Development Bank, emphasized that his country’s enhanced credit rating by various international agencies, notably Standard & Poor’s, rising from “BB” with a positive outlook in March 2023 to “BB+” with a positive outlook in March 2024, underscores the government’s commitment to optimizing spending, increasing state revenues, and persistently reducing public debts, particularly those with high costs.

Al-Ghassani said the progress in credit rating is a crucial indicator of confidence for investors and borrowers in the economy and the banking sector, adding that Oman stands to benefit from potential future loans with lower interest rates, encouraging foreign investors to engage in diverse investments and large capital inflows.

This, he said, aids in accelerating the economic diversification strategy and achieving the goals of Vision 2040.

Trade balance

According to preliminary statistics released by the National Center for Statistics and Information, Oman’s trade balance showed a surplus of 877 million rials (nearly $2,280 billion) by the end of January 2024, compared to a surplus of 686 million rials during the same period in 2023.

The figures also showed that the value of commodity exports by the end of January 2024 reached over 2.3 billion rials, marking a 16.7 percent increase compared to the same period in 2023.

Meanwhile, the value of commodity imports for Oman amounted to 1.43 billion rials by the end of January 2024, reflecting a 10.6 percent increase compared to the same period in the previous year, which stood at 1.28 billion rials.

According to the state’s news agency, the significant increase in export value is primarily attributed to the rise in Oman’s exports of oil and gas, reaching 1.45 billion rials, marking a 9.6 percent increase compared to the end of January 2023, when it amounted to 1.32 billion rials.

It is noteworthy that Oman’s crude oil exports by the end of January 2024 amounted to approximately 1.13 billion rials, marking a 30.5 percent increase compared to the same period of 2023. 

However, the value of refined oil exports decreased to 95 million rials, reflecting a 36.5 percent decline, while the value of the country’s liquefied natural gas exports dropped to 229 million rials — a decrease of 26.1 percent compared to January 2023.

The same statistics also revealed a 38.5 percent increase in the value of non-oil commodity exports by the end of January 2024, reaching 749 million rials, compared to the end of January 2023, when it was at 540 million rials.

Metal products achieved the highest value among non-oil commodity exports, reaching 356 million rials, indicating a notable increase of 115.9 percent. They were followed by ordinary metals and their products at 122 million rials, reflecting a rise of 21.3 percent. Subsequently, chemical industry products, with export values amounting to 86 million rials, saw a decline of 11.2 percent.

Meanwhile, the statistics also showed that Saudi Arabia led non-oil commodity export trade operations, with a value reaching 103 million rials by the end of January 2024, marking an increase of 82 percent from the end of January 2023.

On the other hand, the UAE led the trade in re-exports from Oman, with values reaching 31 million rials by the end of last January. Furthermore, the Emirates also secured the top spot in the list of countries exporting the most to Oman, with a value of 315 million rials, up by 4.2 percent from the end of January 2023.


Saudi ADES secures $93.3m contract to operate jack-up rig in Qatar

Updated 14 April 2024
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Saudi ADES secures $93.3m contract to operate jack-up rig in Qatar

RIYADH: Saudi drilling firm ADES is set to operate a SR350 million ($93.3 million) jack-up rig in Qatar, having secured a contract from TotalEnergies.  

ADES noted in a statement to Tadawul that the letter of award from the French petroleum company includes a mandatory and optional extension period of up to 18 months. 

The project is expected to commence in the second half of 2024, utilizing the firm’s fleet of jack-up offshore drilling units. 

Additionally, ADES indicated that the contract will enable it to maintain its market share in Qatar by operating three drilling rigs. This comes after the relocation of its Emerald Driller platform to Indonesia, anticipated to take place in the second half of 2024. 

Commenting on the letter of award, Mohamed Farouk, CEO of ADES Holding, said: “We are very pleased with our ability to quickly market and secure new campaigns for the five recently suspended rigs in Saudi Arabia.”

Farouk added: “New capacities made available have allowed us to quickly find a technically suitable unit to maintain our three-rig presence in Qatar following the planned departure of our jack-up rig, Emerald Driller, from Qatar to Indonesia in the second half of 2024.”  

He added that the Emerald Driller had delivered an exceptional safety and operational performance during its operation in the Al-Khaleej field over the past few years, and “we look forward to continuing our journey in Qatar with our client and to providing exceptional safety and operational performance that has become synonymous with the ADES name.” 

In November, ADES Holding Co. secured three new contracts totaling $293 million, marking its entry into Indonesia and strengthening its presence in Algeria. 

The company announced its foray into Southeast Asia with a long-term contract valued at SR803 million with Pertamina Drilling Services Indonesia, according to a bourse filing. 

ADES will operate Pertamina’s existing jack-up drilling rig, Emerald Driller, located in the Java Sea. This contract, comprising a three-year firm period and a two-year option, is slated to commence in the second half of 2024.  

With this expansion, ADES now operates in eight countries. 

“We are pleased with the opportunity to enter the Indonesian market through our strategic partnership with Pertamina Drilling Servies Indonesia, who is a leading drilling contractor in Southeast Asia, to provide our best-in-class drilling service to Pertamina in Region 2,” said Farouk.   

With this award, he said ADES extends its geographical footprint to a promising and demanding market, namely Indonesia and Southeast Asia.