New Lord Mayor of London hails maturity of Gulf economies

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Updated 02 December 2023
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New Lord Mayor of London hails maturity of Gulf economies

  • Michael Mainelli, heading to COP28 in UAE, says appointment of new UK foreign secretary will ‘help deepen connections with Saudi Arabia’
  • Mainelli tells Arab News he is ‘extremely impressed at the commitment to net zero’ in both Gulf states

LONDON: Maturation of Gulf states’ economies presents further opportunities to deepen the relationship between the region and the UK, the new Lord Mayor of the City of London told Arab News before departing for COP28 in the UAE.

Just a few weeks into the role and Michael Mainelli was on hand, like his predecessor, to witness yet another British Cabinet reshuffle.

But with the return to frontline politics of former Prime Minister David Cameron, Mainelli is optimistic that this will further strengthen ties with Saudi Arabia, one of several Gulf states to have announced participation in a £30 billion ($37.9 billion) investment pledge into the UK.

“When it comes to that investment it’s enormously welcome, but what I think is great is it shows how Saudi and other Gulf states have really matured their economies,” Mainelli said.

“They’ve gotten a better understanding of what they want to achieve with their sovereign wealth funds beyond just investments and returns, and that includes knowledge transfer. That’s really exciting as it offers two-way transference between us and them,” he added.

“With Cameron’s appointment (as foreign secretary), you get undoubted foreign policy expertise, including in the Gulf, which I think will prove a good move and help deepen connections with Saudi Arabia.”

Pushing the idea of London as a “hub of connectivity” appears central in Mainelli’s year-long tenure, which he said he is serving under the theme “Connect to Prosper.”

Asked where the Gulf figures in this, he replied: “The Lord Mayor typically spends 100 days traveling each year. Of this, three weeks will be in North America, three in Asia, after which a smattering of other countries.

“And then, interestingly, the Lord Mayor will typically spend two weeks of travel around the Gulf each year. This shows you just how important it is as a destination, being right up there with Asia and North America.”

COP28 in Dubai has been designed with a strict focus on carbon, which plays into Mainelli’s “personal ambition.”

While he would be “going in with an open mind,” he said he would also use the event to revive interest in the notion of voluntary carbon markets, which first emerged during COP3 in Kyoto in 1997.

“I believe there’s a lot more work to be done when it comes to carbon markets … but we do need to get these to work,” he added.

“The initial idea was to have emission trading permits and businesses paid to remove carbon from the atmosphere — typically this would involve planting trees or seagrass — with the idea being we reduce our environmental impact by taking it out of the atmosphere.

“But it became subject to a lot of issues, ranging from the difficulty of measuring to ensuring the carbon was sequestered properly, and frankly also issues of fraud and corruption.”

Despite the initial difficulties, Mainelli remains convinced that it is a feasible and practical solution to reducing carbon levels in the atmosphere.

“It’s just the market hasn’t been fully formed and the basis upon which prices are set not properly calculated,” he said.

Of particular concern is what he described as the “final bit,” adding: “Let’s say I pay you to for a ton of carbon offset a year over a 25-year period, which you agree to facilitate through the planting of a forest.

“Now let’s say having planted that forest, a hurricane hits and uproots the trees, or there’s an avalanche, perhaps there’s a parasite, and the trees are destroyed, maybe the soil doesn’t allow them to grow, or maybe at the end of the 25 years you simply chop the forest down.

“Were any of these to happen, then nothing really has been achieved. All that has happened is you’ve deferred 25 years of emissions.”

For Mainelli, the solution to the issue and restitution of carbon markets as a tool in the route to net zero resides in the “appropriate use of insurance,” which he said would put a financial impetus behind the idea and “drive clearer, harder standards.”

Of particular pertinence, he noted, would be the fact that insurers would not insure carbon capture sites without having conducted “sufficient due diligence.”

Insurers “would crawl all over whoever was planning to set up one of these carbon capture sites, and they’d want to know what trees were being used, where seeds were sourced,” he said.

“They’d survey the ground, they’d ask why it was located at the base of a mountain. They’d do all this, and not only would they insure the site, they’d be building knowledge.”

This, said Mainelli, would be pivotal as that increased understanding would serve to improve the means and methods of carbon capture deployed in these carbon markets, leading to standardization.

It is “fairly evident” that the Gulf is determined to find workable solutions to address the climate crisis, he added.

“I spent a week earlier this year in Abu Dhabi, and also spent a week last year in Saudi, really trying to understand the situation on the ground there, and I was extremely impressed at the commitment to net zero in both nations and in other areas,” he said.

Pointing to the 25 substantial hydrogen projects in place in the UAE and the 40 Saudi Arabia has in the pipeline, Mainelli said there is an opening for closer ties with the City of London.

While development of hydrogen production would always be of interest, he said there is also reason to considering the creation of a sufficient transport mechanism for getting this hydrogen out into the world. This, he added, offers “great potential for collaboration.”


FII Priority: Leaders in Miami and the Kingdom are fostering environments for growth and talent

Updated 23 February 2024
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FII Priority: Leaders in Miami and the Kingdom are fostering environments for growth and talent

  • Diversity, inclusivity are key ingredients to make a place attractive, panelist said
  • Kingdom has made great improvements to rebrand itself as global talent hub

MIAMI: Leaders in Saudi Arabia and Miami share common ground in their efforts to foster environments conducive to growth and talent, experts highlighted at the FII Priority conference in Miami on Friday.

Over the past few years, both have prioritized initiatives aimed at improving living standards for their residents, focusing on socio-economic policies that promote diversity and inclusivity.

“There are so many parallels between what’s going on here (in Miami) and what’s going on there (Saudi Arabia),” said Jeff Zalaznick, restaurateur and managing partner of hospitality company Major Food Group.

During a session titled “The special sauce: what is the recipe for a vibrant city?” he added: “Both are fostering environments where people can grow (and) excel in their fields. They want to attract talent.”

Zalaznick noted that both regions strike a balance between cultivating diversity and talent locally while also attracting the best from around the world, fostering their potential across various domains such as sports, music, and culinary arts.

Aligned with its Vision 2030, Saudi Arabia has undertaken significant policy reforms, placing diversity and inclusion at the forefront of its development agenda.

This shift has been especially pivotal for the Kingdom’s youthful demographic, as they aspire to leverage this momentum and carve out their niches in various industries.

“(When you make) young people feel optimistic about what they can do, you basically are writing the future,” said Steve Stoute, CEO of marketing agency Translation and music label UnitedMasters.

“I do believe that this idea of multiculturalism, of embracing emerging subcultures and helping enforce that, are (fundamental) ingredients that this city gets and (only) a couple other cities get really well.”

He emphasised that places lacking diversity and inclusive support systems miss out on attracting the brightest young talent, as they fail to cultivate the dynamic and vibrant environments necessary for growth and innovation.

Renowned as a haven for retirees, Miami has undergone a transformation in recent years, enticing a younger demographic with a blend of job prospects and reduced tax obligations.

Similarly, Saudi Arabia has embarked on a campaign to redefine itself as not just a regional hub, but a global magnet for young talent.

With its population surpassing 32 million, as per a 2022 census by the General Authority for Statistics, Saudi Arabia boasts a youthful majority, with those under the age of 30 constituting 63 percent of the total.

Drawing parallels between these two “renaissances,” Zalaznick noted the evolving criteria for vibrant cities and the changing preferences of city dwellers.

He highlighted the growing importance of cultural dynamism and multiculturalism in city selection, particularly for companies seeking diverse talent pools and innovative environments.

“It’s about young people,” said Tom Garfinkel, vice chairman, president and CEO of the Miami Dolphins and Hard Rock Stadium and managing partner of the Formula One Miami Grand Prix.

“We have to attract young people, we have to have cultural dynamics where young people can afford to live, where business opportunities exist, where it’s easy to start businesses and to create.

“The talent goes to the city that attracts, that has the culture that attracts young talent, and the companies go there and not the other way around,” he concluded.


UAE and Kenya finalize terms of Comprehensive Economic Partnership Agreement

Updated 23 February 2024
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UAE and Kenya finalize terms of Comprehensive Economic Partnership Agreement

RIYADH: The UAE and Kenya have concluded negotiations on a trade deal that will boost investment flows in logistics, healthcare, and travel and tourism between the two countries. 

The Comprehensive Economic Partnership Agreement will enhance market access for businesses on both sides, according to a press release.

Investments in the infrastructure and ICT sectors are also set to benefit, and the deal will also see a platform for small and medium enterprise cooperation and expansion on both sides.

Kenya's economy experienced real annual GDP growth of 5 percent in 2023, up from 4.8 percent in the previous 12 months. 

Its services sector, which accounts for 53.6 percent of Kenya’s economy, and agriculture sector, comprising around a quarter of national GDP, offer vast potential for UAE businesses looking to expand into the region, the release added.

The UAE’s Minister of Foreign Trade Thani bin Ahmed Al-Zeyoudi described the new agreement as marking a “significant milestone” in the country’s trade deal program.

He added: “It is a testament to our commitment to strengthening economic ties with the African continent and to creating new opportunities for businesses and investors in both of our countries. 

“The UAE-Kenya CEPA will not only boost trade and investment, but also foster innovation and sustainable growth in key sectors such as agriculture, technology and tourism. 

“We look forward to deepening our relationship with Kenya and to further expanding our presence in Africa as a trusted partner and investor.”

Kenya’s Cabinet Secretary for Investments, Trade and Industry Rebecca Miano said the agreement was testament to her government’s drive to use international commerce as “a key lever of economic growth and transformation.”

She added: “The Comprehensive Economic Partnership Agreement with the United Arab Emirates will play a key role in these efforts, enabling our exports to reach important markets in Asia and the Middle East, and also in stimulating the investment inflows that will further develop our national capabilities. We look forward to its implementation and the mutual benefits it will deliver.”

In 2023, the UAE’s non-oil trade in goods reached an all-time high of $710 billion, a 12.6 percent increase on 2022 – and 34.7 percent more than 2021. 

The UAE has already concluded 10 CEPAs, including with India, Israel, and Indonesia, as well as Türkiye, Georgia, and South Korea.


Oil Updates – crude falls after US Fed governor says no rush to cut interest rates

Updated 23 February 2024
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Oil Updates – crude falls after US Fed governor says no rush to cut interest rates

SINGAPORE: Oil prices fell on Friday after a US Federal Reserve official said interest rate cuts should be delayed at least two more months, but indications of healthy demand and concerns over supplies could boost prices in the coming days, according to Reuters.

Brent crude futures were down 38 cents, or 0.5 percent, at $83.29 a barrel at 8:24 a.m. Saudi time, while US West Texas Intermediate crude futures were 40 cents, or 0.5 percent, lower at $78.21.

US Fed policymakers should delay interest rate cuts by at least another couple of months to see if a recent uptick in inflation signals stalling progress toward price stability or is just a bump in the road, Fed Gov. Christopher Waller said on Thursday.

Higher interest rates for longer slow economic growth, which could curb oil demand in the world’s largest oil consumer. But some analysts say demand has remained largely healthy, including in the US.

Analysts at ANZ research said US crude oil inventories rose at a less-than-expected rate last week, while run rates at refineries ended a streak of declines and may increase in coming weeks.

JPMorgan’s high frequency demand indicators are showing oil demand rising 1.7 million barrels per day month-over-month through Feb. 21, its analysts said in a note on Friday.

“This compares to 1.6 mbd increase observed during the prior week, likely benefitting from increased travel demand in China and Europe,” the analysts said.

Oil benchmarks pared some of their Thursday gains after Waller’s comments.

The US central bank has held its policy rate steady in the 5.25 percent-5.5 percent range since last July, and minutes of its policy meeting last month show most central bankers were worried about moving too quickly to ease policy.

Waller also pushed back on the idea that the Fed risks sending the economy into recession if it waits too long to cut rates, saying the Fed can afford to “wait a little longer.”

Oil futures had settled higher on Thursday as hostilities continued in the Red Sea, with Houthis stepping up attacks near Yemen to show support for Palestinians in the Gaza war.

Israel Prime Minister Benjamin Netanyahu’s war cabinet has approved sending negotiators to truce talks taking place in Paris on Friday as pressure mounts in the Middle East, according to a source briefed on the matter and Israeli media. 


AI can bridge North-South divides, Accenture CEO tells FII summit

Updated 23 February 2024
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AI can bridge North-South divides, Accenture CEO tells FII summit

  • Julie Sweet: ‘One of the things that’s been great to see is Saudi Arabia taking the lead in many places’
  • ‘It’s really important to always stay focused on what are the opportunities with AI to solve the world’s problems’

MIAMI: Artificial intelligence has the potential to bridge North-South divides, Accenture’s CEO told the Future Investment Initiative Priority summit in Miami on Thursday.

Julie Sweet explored the far-reaching impact of AI on addressing global challenges in a panel discussion titled “FII Priority Compass: What matters most to citizens?”

She said: “The question is how much AI can actually help the Global South and the countries that need help through precision farming, through telemedicine and better healthcare.”

Highlighting Saudi Arabia’s proactive stance in leveraging AI for societal advancement, Sweet stressed the importance of global collaboration in harnessing AI’s potential to tackle complex issues.

“One of the things that’s been great to see is Saudi Arabia taking the lead in many places to think through how can AI help and how can they be a leader.

“So I think it’s really important to always stay focused on what are the opportunities with AI to solve the world’s problems.”

However, Sweet acknowledged that the definitive solution to utilizing AI to close existing divides is not currently available.

Highlighting the vital efforts of organizations such as the UN, she emphasized the urgency of understanding how technology can be harnessed to avoid widening disparities.

Since the increased accessibility of AI in the public market and its “democratization,” experts have emphasized the need to regulate the technology.

“Regulation needs to be the outcome of a very strong public-private partnership, because most governments in the world don’t have the access or the talent inside to know it,” Sweet said, adding that there have been a few successful examples of governments balancing innovation and safety.

“That’s one of the most important things that governments need to do, particularly because the technology is changing rapidly. And I think the good news is that everyone has agreed that some regulation is needed.”

Regarding AI-related risks in the upcoming US election, Sweet cautioned against relying solely on government regulation. Instead, she advocated for increased collaboration among private entities.

“That’s as important as government regulation,” she said. “It’s responsible companies coming together in an agile fashion to solve the risks.”

Addressing concerns about job displacement due to AI, Sweet said while her role as a lawyer would persist, the nature of the job would evolve. She emphasized the need to reskill workforces and prepare the new generation to use AI.

Sweet highlighted Accenture’s annual investment of $1.1 billion in staff training, and stressed the importance of adapting school curricula to future-proof the younger generation through enhanced communication skills and basic technology education.

“All of us will have to continue to adapt and learn … because our skills have to constantly be improved and there’s so much change,” she concluded.


Oman opens its market to Brazilian live cattle

Updated 23 February 2024
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Oman opens its market to Brazilian live cattle

  • Announcement made following meeting of officials from both countries in Muscat
  • Both sides emphasized interest in expanding governmental cooperation, commercial partnerships

SAO PAULO: The Brazilian livestock sector is now authorized to export live cattle for slaughter and fattening to Oman.

The announcement was made after a meeting between Roberto Perosa, Brazil’s secretary for trade and international relations, and Ahmed Nasir Al-Bakri, undersecretary at Oman’s Agriculture Ministry. There were other members of the Omani government at the meeting.

“This new market adds to the other 14 opened this year, totaling 93 since the beginning of last year, during President Lula’s third term,” Perosa said.

“At the request of (Agriculture) Minister Carlos Favaro, we continue our mission in the Middle East, visiting countries aiming to expand Brazilian agricultural trade, opening new markets, obtaining approvals for plants through the pre-listing system (eliminating the need for local audits), and negotiating the import of nitrogen fertilizers.”

The Brazilian delegation visiting Oman also includes Julio Ramos, deputy secretary for trade and international relations, and Marcel Moreira, director of trade promotion and investments.

These new markets are the result of joint work by Brazil’s ministries of agriculture and livestock, and foreign affairs.

Representatives of both countries’ agriculture ministries emphasized their interest in expanding governmental cooperation and commercial partnerships.

They identified synergies between Oman’s Vision 2040 plan, which includes food security, and the Brazilian program to convert degraded pastures into agricultural areas.

They also discussed the possibility of partnerships in areas such as fertilizers, sugar, grains for animal feed, live animals, chicken meat and fish.

The Brazilian delegation also met with Ibtisam Ahmed Said Al-Farooji, undersecretary for investment promotion at Oman’s Ministry of Commerce, Industry and Investment.

She presented an Omani program that aims to increase investments in her country and abroad, focusing on food security and Oman’s interest in becoming a hub for the Gulf region.

Al-Farooji also underlined Oman’s neutrality and stability, adding that Brazil could be a great partner.

During the meeting, Perosa emphasized the good relations and complementarity between the two countries, saying Brazil could contribute even more to Oman’s food security and encourage Brazilian companies to process their products in Oman, as is the case with chicken and beef.

He added that the program to convert degraded pastures into agricultural areas represents a great opportunity to strengthen this partnership, including the possibility of acquiring nitrogen fertilizers from Oman.

The Omani side welcomed the idea and said that along with the Oman Investment Authority and Nitaj, the government arm for promoting food security, it will help build the partnership strategy between the two countries.