GCC States, Labor Markets and Covid-19
I was delighted to join colleagues Raymond Karam (AGSIW), Steffen Hertog (LSE), Eman Al-Hussein (AGSIW), and Tariq Haq (ILO), deftly moderated by Robert Mogielnecki (AGSIW), for a discussion on GCC labor markets in the wake of the Covid-19 pandemic on May 20. The full video link is below
Middle East Business Telegraph Monitor – May 1 – May 5
The top business/economic stories from the MENA region as reported in the regional and industry press – May 1-5
Aviation/Tim Clark – “More airlines could have collapsed or consolidated globally without government intervention amid the Covid-19 pandemic and the aviation industry will see a decline in passenger traffic as well as the number of aircraft used by carriers once the crisis subsides, Emirates president Tim Clark said. ‘It might have happened had there not been massive state intervention over the last months,’ Mr Clark said in an interview with The National. ‘You would have seen companies that would have ordinarily sought to merge, amalgamate with others to relieve themselves jointly of the financial predicament they face,'” The National reports.
Iran Currency – “Iran’s parliament has passed a bill allowing the government to slash four zeros from the rial, Iranian state media reported on Monday, after a sharp fall in the value of the currency as a result of crippling U.S. sanctions. Iran’s national currency will be changed from the rial to the Toman, which is equal to 10,000 rials, under the bill,” Reuters reports.
Egypt/Tourism – “Egypt is allowing hotels to reopen for domestic tourists on condition they operate at no more than 25% capacity until the end of May and implement a range of other health measures to guard against the new coronavirus, the cabinet said on Sunday. The virus has shut down Egypt’s tourist sector, which accounts for 12%-15% of gross domestic product, leading to losses estimated at $1 billion per month,” Asharq Al-Awsat reports.
Egypt Economy – “Egypt’s non-oil private sector activity collapsed in April, hit by a shutdown in the tourism industry, weakening demand and the imposition of a curfew as the government battled the new coronavirus pandemic, a survey showed on Tuesday. IHS Markit’s Purchasing Managers’ Index (PMI) for the non-oil private sector came in at 29.7 last month, down from 44.2 in March and far below the 50.0 threshold that separates growth from contraction. It was the lowest reading since the survey began nine years ago,” Reuters/Ahram Online reports.
Morocco Economy – “In light of the novel coronavirus crisis, the international rating agency Fitch Ratings has downgraded the Moroccan economy outlook from stable to negative. The new revision follows Morocco’s “severe hit” from the coronavirus pandemic, which will cause the sharpest gross domestic product (GDP) contraction in 25 years, according to the agency,” Morocco World News reports.
Ride Hailing/Careem – “Dubai ride-hailing company Careem is laying off 31 percent of its workforce to cope with the impact of Covid-19, which has led to an 80 percent drop in its overall business, according to a letter from its CEO addressing staff. Coronavirus-related restrictions have also led to a 90 percent drop in the company’s ride-hailing business and 60 percent in its delivery business across the Middle East, North Africa and Pakistan,” Arabian Business reports.
Lebanon/IMF – “Lebanese Prime Minister Hassan Diab and International Monetary Fund managing director Kristalina Georgieva discussed the government’s plan to rescue the economy from its worst crisis in three decades…Lebanon formally asked the IMF for a loan of at least $10 billion (Dh36.7bn) on Thursday. The economy has buckled under the weight of mounting debt that forced the country to default on eurobonds in March.Lebanon’s gross domestic product is set to contract 12 per cent this year, according to IMF projections. The country’s debt ballooned to $92 billion at the end of January, making it one of the highest debt-to-GDP ratios worldwide,” The National reports.
UAE/NMC – “More than 300 staff members at NMC Trading, the division that handles distribution of medical equipment and personal care brands, have been laid off, and with more likely to follow. These cuts could provide the first hints of what the UK High Court appointed administrators hope to do with NMC Health’s individual divisions. ‘Even before the administrators came in, NMC Trading was seen as the first candidate to be sold off and help the Group generate some funds to clear off part of the debt,’ said a senior official with the Group. ‘Now, with the administrators in control, nothing much changes on that strategy – anything that is seen as non-core will be sold,'” Gulf News reports.
Saudi Riyal – “The Saudi Arabia’s central bank on Monday affirmed its commitment to the exchange rate policy of pegging the Saudi riyal to the US dollar. The Saudi Arabian Monetary Authority (SAMA) said the currency peg was a strategic option that contributed to the growth of the Kingdom’s economy for more than 30 years,” Arab News reports.
Coronavirus.Majid Al-Futtaim – “Alain Bejjani is in no doubt about the destructive power of the ‘tsunami’ that has swept over the world with the coronavirus pandemic. The chief executive of Majid Al Futtaim (MAF), one of the biggest and best-known conglomerates in the Middle East, told Arab News: ‘This is beyond business. This will change how we live on this Earth as human beings in societies. The coming 10 years will be marked by the reverberations of this crisis,'” Arab News reports.
Iran/Coronavirus – “More than 64% respondents to an opinion poll in Tehran said they need government aid amid the coronavirus outbreak. According to the telephone survey of 1,028 residents conducted by the Iranian Students Polling Agency from April 5-8, a total of 64.4% said they need government aid due to the economic hardship inflicted by the coronavirus outbreak, 34.6% said they don’t and 1% didn’t respond,” Financial Tribune reports
Middle East Business Telegraph Monitor – April 29-30
The top business/economic stories from the MENA region as reported in the regional and industry press – April 29-30
Regional Aviation Plummets – “Middle East’s passenger numbers plummeted by nearly half in March, the most disastrous month so far for the aviation business, the International Air Transport Association (IATA) said Wednesday. Figures released by IATA showed that air traffic in the region, measured in total revenue passenger kilometers (RPK) plummeted 45.9 percent last month compared to the same period a year ago, reversing a 1.6 percent increase in February. Capacity also fell 33.5 percent and load factor dropped 13.7 percentage points to 59.9 percent,” Zawya reports.
Lebanon Crisis – “The Lebanese government met Thursday to approve a long-awaited plan to rescue the debt-saddled economy from its worst crisis in decades, following a fresh wave of angry streets protests. A lockdown to fight the coronavirus pandemic has added to the economic woes besetting the country, which include soaring inflation, a liquidity crunch and a plummeting currency. In March the cash-strapped government defaulted on its sovereign debt for the first time,” Arabian Business reports.
Lebanon/IMF – “Lebanon’s government signed off on a rescue plan that relies on financing from the International Monetary Fund to begin an overhaul of an economy facing its worst financial crisis in decades. President Michel Aoun described Thursday’s Cabinet session as a historic day for the country “because it’s the first time an economic, financial plan is approved” that would place Lebanon on the path of reforms.Ministers backed the proposals with slight amendments of the original draft, he said on Twitter. Some of the items in the plan will require parliamentary approval,” The National reports.
US/Saudi – “As the United States pressed Saudi Arabia to end its oil price war with Russia, President Donald Trump gave Saudi leaders an ultimatum. In an April 2 phone call, Trump told Saudi Crown Prince Mohammed bin Salman that unless the Organization of the Petroleum Exporting Countries (OPEC) started cutting oil production, he would be powerless to stop lawmakers from passing legislation to withdraw U.S. troops from the kingdom, four sources familiar with the matter told Reuters. The threat to upend a 75-year strategic alliance, which has not been previously reported, was central to the U.S. pressure campaign that led to a landmark global deal to slash oil supply as demand collapsed in the coronavirus pandemic – scoring a diplomatic victory for the White House,” Reuters reports.
UAE/NMC – “NMC Health, the troubled UAE-based hospitals group, has been the victim of fraud, forgery and impersonation on a multibillion-dollar scale, according to its founder and former chairman B.R. Shetty. In a strongly worded statement, Shetty detailed what he described as ‘serious fraud and wrongdoing’ at the company and at his other major business venture, the financial services group Finablr, as well as at some of his private companies and against him personally,” Arab News reports.
UAE/TAQA – “Shareholders of the Abu Dhabi National Energy Company (TAQA) approved a deal to combine assets with Abu Dhabi Power Corporation’s (ADPower), creating one of the largest utilities companies in the GCC, UAE state news agency WAM reported Wednesday. The deal will see ADPower transfer the majority of its water and electricity, transmission, and distribution assets to TAQA, leaving the company with majority stakes in almost all power and water generation plants in the UAE. The deal is scheduled to close in the third quarter of 2020,” Al-Arabiya Business reports.
UAE/Aviation – “The UAE airlines will lose $6.8 billion (Dh25 billion) in revenues due to the impact of impact of coronavirus, putting 378,678 jobs at risk, according to the International Air Transport Association’s (IATA) latest data released on Thursday. The figures are higher than IATA’s previous forecast released three weeks ago when it predicted $5.36 billion revenue loss and 287,863 jobs at stake in the UAE,” Khaleej Times reports.
Abu Dhabi Aviation – “Wizz Air Abu Dhabi, which will be the emirate’s second low-cost airline, plans to start operations by the fourth quarter this year, foreseeing no delays on its plans. The company said its strong cash position as well as a UK government-backed loan meant the group remained in a healthy position despite challenges faced by the industry after the COVID-19 pandemic brought travel to a complete halt,” Gulf News reports.
Egypt/IMF – “A one-year bailout loan Egypt may receive from the International Monetary Fund (IMF) will not lead to a rise in the prices of commodities and services, Prime Minister Mostafa Madbouly said on Wednesday. Earlier this week, Egypt said it had asked the IMF for financial assistance to deal with the economic fallout of the coronavirus,” AhramOnline reports.
Tunisia – “Tunisia will start relaxing its coronavirus lockdown next week, reopening parts of the food and construction sectors and allowing half of government employees to return to work, it said on Wednesday. Its lockdown, in place since March, has stopped 25,000 cases of the virus and 1,000 deaths, Health Minister Abdelatif el-Makki said on television. Tunisia, which has about 500 intensive care beds, has confirmed fewer than 1,000 cases in all,” Asharq Al-Awsat reports.
Saudi Budget – “Saudi Arabia revealed that government spending for Q1 2020 has increased to $60 billion with total revenue standing at $51 billion, leaving a $9 billion deficit. Saudi financial results were released amid difficult conditions faced by the international economy, as oil revenues take a nosedive with prices in the global markets tumbling under the repercussions of the coronavirus crisis, which also impacted the results of the non-oil sector. That reversed a first quarter surplus of around $7.4 billion in 2019,” Asharq Al-Awsat reports.
Kuwait/Jazeera Airways – “Kuwait’s Jazeera Airways has laid off over a third of its staff and can dip into its cash reserves to get through the coronavirus crisis, its chairman said. Several governments around the world are supporting airlines hammered by the pandemic that has virtually halted international travel. Kuwait halted all commercial flights on March 13 as the Gulf Arab state rolled out restrictions to control the spread of the virus that has now infected 3,740 people and killed 24 there,” Reuters/Zawya reports.
Turkish Airlines – “Turkish Airlines will not operate any domestic or international flights until May 28, the company announced on April 28. Turkey’s national flag carrier said the decision to extend the suspension of operations has been taken in the public interest,” Hurriyet Daily News reports.
Geopolitics – “On Thursday, Germany has officially announced that it has designated the Iranian-backed Hezbollah as terrorist organization. In a statement, the German Interior Minister Horst Seehofer said that Hezbollah criminal activities violate all international laws, adding that the organization was behind a multitude of attacks resulting in hundreds of deaths and injuries worldwide,” Baghdad Post reports.
Eastern Star Aviation Times Weekly – April 29
Airbus Survival – “Airbus CEO Guillaume Faury gave a dramatic warning to employees that heralds potentially deeper production cuts than initially planned. ‘The survival of Airbus is in question if we don’t act now,’ he wrote in a letter to staff sent on April 24. Airbus was ‘bleeding cash at an unprecedented speed,’ Faury said. ‘We must now act urgently to reduce our cash-out, restore our financial balance and, ultimately, to regain control of our destiny,'” Aviation Week reports.
Airlines Recovery – “The planemaker Airbus has warned that the aviation industry could take as long as five years to recover to the levels seen before the coronavirus pandemic, as customers such as British Airways try to secure their survival by cutting thousands of jobs. The Airbus chief executive, Guillaume Faury, warned on Wednesday that it could take ‘three to five years’ for passengers to be as willing to fly as before the crisis,” The Guardian/Skift reports.
AirAsia – “AirAsia intends to take no new aircraft deliveries in 2020 and is relooking Airbus order, the carrier revealed on April 29, 2020. Two of the company’s carriers, AirAsia Malaysia and AirAsia X Malaysia, together have orders for 480 planes left unfilled with the European manufacturer. ‘We do not intend to take any new aircraft deliveries this year with the target to end 2020 with 242 aircraft, a net reduction of 1 aircraft from last year,’ Executive Chairman of AirAsia Group, Datuk Kamarudin Meranun said in the company’s statement. ‘We are relooking at our orderbook with Airbus,'” Aerotime reports.
Air Cargo – “The International Air Transport Association (Iata) warned of an “immediate and severe” shortage in global air cargo capacity due to the Covid-19 pandemic. Global air cargo demand fell 15.2 per cent in March, compared to the same month last year, while capacity shrank by nearly a quarter, Iata said in a statement on Wednesday. The coronavirus crisis has idled passenger planes, leading to a nearly 44 per cent cut in the belly hold capacity that carried air cargo. ‘At present, we don’t have enough capacity to meet the remaining demand for air cargo,’ Alexandre de Juniac, Iata’s director general, said. ‘The gap must be addressed quickly because vital supplies must get to where they are needed most,'” The National reports.
Air India – “In light of current circumstances, the government of India has extended the deadline for bids for Air India. The new date, June 30th, gives potential bidders two more months to submit an offer for the state-run carrier. The government’s decision hardly comes as a surprise considering the current conditions. However, this could be the first of many extensions as companies and airlines deal with heavy financial losses. Many potential bidders for the airline, such as the Tata Group (majority owners of Vistara and AirAsia India) and Hinduja Group, will likely wait for their financial situations to improve before such a purchase,” Simple Flying reports.
South African Airways – “South African Airways seems to have reached the end of the line. Despite clinging on to life for the past few months, the airline is now just days away from either being wound down slowly or liquidated quickly, depending on the actions of its 4,700 employees. This would make way for a new national carrier, one which it is hoped will provide jobs for the many who are set to lose out with the closure of SAA,” Simple Flying reports.
Thailand Rescue – “Eight Thai carriers have sought a soft loan of around Bt25 billion ($771 million) from the Thai government, according to a 24 April Reuters report that cites a Thai AirAsia executive. Tassapon Bijleveld, the executive chairman of Thai AirAsia and its parent company Asia Aviation, added that the carriers seeking the loan are Bangkok Airways, Nok Air, NokScoot, Thai AirAsia, Thai AirAsia X, Thai Lion Air, Thai VietJet Air, and Thai Smile,” Cirium/Flight Global reports
BA Job Cuts – “British Airways (BA) today launched a consultation process likely to result in 12,000 layoffs among its 42,000 staff. The move was confirmed in a statement issued by the UK carrier’s parent group, IAG, which also owns Spain’s Iberia and Ireland’s Aer Lingus. The airline has requested talks with trade unions and it is unclear, for now, how many of the company’s approximately 4,500 pilots and 16,000 cabin crew might lose their jobs. Pilots union BALPA said it intends to oppose the proposed layoffs,” AIN reports.
UAE/Aviation – “The UAE airlines will lose $6.8 billion (Dh25 billion) in revenues due to the impact of impact of coronavirus, putting 378,678 jobs at risk, according to the International Air Transport Association’s (IATA) latest data released on Thursday. The figures are higher than IATA’s previous forecast released three weeks ago when it predicted $5.36 billion revenue loss and 287,863 jobs at stake in the UAE,” Khaleej Times reports.
RwandAir – “RwandAir has resumed cargo flights to Guangzhou, China, as the airline embarks on a recovery path following suspension of passenger flights in March to stop the spread of Covid-19. The airline has been operating cargo flights only to Brussels and London at least once a week using its A330 jets, and had suspended cargo flights to China in February,” The East African reports.
Middle East Aviation – “’Urgent’ help is needed to help airlines across the Middle East and North Africa, where many are ‘struggling to survive’ amid the Covid-19 pandemic, according to Muhammad Al Bakri, the regional vice president of the International Air Transport Association (IATA). On Thursday, IATA said that MENA airlines could lose $24 billion worth of passenger revenue compared to 2019 – approximately $5 billion more than it had forecast at the beginning of April,” Arabian Business reports.
Abu Dhabi Aviation – “Wizz Air Abu Dhabi, which will be the emirate’s second low-cost airline, plans to start operations by the fourth quarter this year, foreseeing no delays on its plans. The company said its strong cash position as well as a UK government-backed loan meant the group remained in a healthy position despite challenges faced by the industry after the COVID-19 pandemic brought travel to a complete halt,” Gulf News reports.
Etihad Airways – “Etihad has suspended all online sales for flights before June 16, the airline announced on Wednesday. Bookings are currently only being accepted for flights that are scheduled to depart after that date, although these bookings are subject to change,” Arabian Business reports.
Egypt/Aviation – “Egypt’s Nile Air on Sunday urged the government to buy stakes in private airline companies to help them survive the crisis caused by the new coronavirus pandemic. The North African country grounded flights on March 19 until further notice among a raft of measures to slow the spread of the respiratory disease. Private airlines appealed to the government last month to intervene to halt their losses,” Reuters/Ahram Online reports.
Singapore Airlines – “The worsening environment for aviation amid the Covid-19 pandemic has made it very difficult for airlines to tap debt capital markets, Singapore Airlines (SIA) has said, in explanation of the need for its proposed $15 billion debt and equity capital raising. It was responding to questions from the Securities Investors Association (Singapore), or Sias, in a Singapore Exchange statement on Friday evening, ahead of the April 30 extraordinary general meeting (EGM), when shareholders are to vote on the move,” Singapore Straits-Times reports.
Indonesia/Aviation – “In an effort to contain the spread of the coronavirus, Indonesian authorities will prohibit both international and domestic air travel from tomorrow through to June 1st. Largely an Islamic country, this move coincides with the start of Ramadan – a time when Muslims travel to their hometowns,” SimpleFlying reports.
Thailand/Aviation – “Suvarnabhumi airport is set to resume its services on Friday when airlines restart flights following a month-long suspension over Covid-19 fears, airport general manager Suthirawat Suwanawat said. Wg Cdr Suthirawat said the number of foreign travellers had fallen considerably since the Civil Aviation Authority of Thailand banned all international flights from landing in Thailand at the start of this month,” Bangkok Post reports.
Lion Air – “Thai Lion Air is reducing its workforce again amid the freezing of its business due to the coronavirus outbreak in the country. The airline informed its staff in a statement last week that almost 120 employees with less than a year’s experience would be let go on the understanding that they would be the first priority for recruitment in the future if business returns to normal,” Bangkok Post reports.
Etihad/Air Arabia – “Air Arabia Abu Dhabi, the new joint venture between Etihad Airways and Air Arabia, secured its air operating licence, making it the UAE’s fifth national airline once it begins service from the capital. The new discount carrier, which was expected to start operations in the second quarter of 2020, is working with the UAE’s civil aviation regulator to finalise its launch date once market conditions improve and skies re-open, it said in a statement on Thursday,” The National reports.
Middle East Aviation Losses – “Air traffic in the Middle East and North Africa is set to plummet by more than half this year due to the coronavirus pandemic, a global aviation body said on Thursday,” AFP/Jordan Times reports.
India/Aviation – “Airlines in India are likely to suffer a revenue loss of 11.2 billion dollars this year leading to 2.9 million jobs at risk as passenger demand falls by 47 per cent due to COVID-19 crisis, the International Air Transport Association (IATA) said on Friday. The latest estimates from IATA indicate a worsening of the country impact from coronavirus pandemic and travel restrictions in the Asia Pacific region,” Business Standard reports.
Middle East Business Telegraph Monitor – April 28
The top business/economic stories from the MENA region as reported in the regional and industry press – April 28
Lebanon Unrest – “Protests against growing economic hardship erupted in Tripoli and spread to other Lebanese cities on Tuesday, with banks set ablaze after a night of rioting that left one demonstrator dead, according to security and medical sources. A collapse in the currency, soaring inflation and spiralling unemployment are convulsing Lebanon, in deep financial crisis since October. A shutdown to fight the new coronavirus has made matters worse for the economy,” Reuters reports.
UAE/China – “United Arab Emirates-based RS Global Energy, fully-owned by Angola-based Ridge Solutions Group, announced on Sunday that it has signed a five-year copper cathode supply deal with China’s Xinjiang Wal Optoelectronic Technology. Ridge Solutions Group said in a press statement that it would supply 525,000 metric tonnes (MT) of Copper Cathode Grade A (non-London Metal Exchange (LME) registered) to the Chinese firm,” Zawya reports.
Abu Dhabi Aviation – “Wizz Air Abu Dhabi, which will be the emirate’s second low-cost airline, plans to start operations by the fourth quarter this year, foreseeing no delays on its plans. The company said its strong cash position as well as a UK government-backed loan meant the group remained in a healthy position despite challenges faced by the industry after the COVID-19 pandemic brought travel to a complete halt,” Gulf News reports.
Iran/Covid-19 – “Iran’s daily coronavirus caseload rose by 12.2% on Tuesday while overnight deaths dropped sharply by 26%, health officials announced. According to a Health Ministry tally gathered from the reports of laboratories and medical schools across the country, Iran has registered 1,112 new confirmed coronavirus cases on Tuesday, bringing the national total to 92,584, ISNA reported,” Financial Tribune reports.
Morocco Contraction – “Morocco’s planning agency revised downwards on Tuesday its growth forecast for the second quarter to -6.8 percent year-on-year instead of an earlier estimate of -1.8 percent as the coronavirus lockdown hit both foreign and domestic demand,” Reuters/Al-Arabiya reports
Dubai Tourism – “Dubai is aiming to reopen for tourists as early as July as it looks to gradually come out of a lockdown due to the coronavirus pandemic that disrupted tourism and air travel, according to its tourism chief. The return of tourism will happen in a staggered approach and may be pushed back until September, depending on when other countries ease travel restrictions, Helal Al Marri, director general of Dubai’s Department of Tourism and Commerce Marketing told Bloomberg TV on Tuesday,” The National reports.
Africa Free Trade – “The implementation of a mammoth African free trade agreement will not begin on July 1 as planned due to disruptions caused by the coronavirus outbreak, a senior official said on Tuesday. ‘It is obviously not possible to commence trade as we had intended on 1 July under the current circumstances,’ Wamkele Mene, Secretary-General of the African Continental Free Trade Area, said during a conference call,” Ahram Online reports.
Jordan/Covid-19 – “The World Bank approved a $20 million (Dh73.4m) project to help Jordan deal with the health effects of the Covid-19 outbreak. The Covid-19 Emergency Response project, part of a $6 billion global rapid response programme approved by the lender’s directors earlier this month, will support the Ministry of Health’s efforts in detecting and preventing the spread of the pandemic, as well as strengthening public health preparedness, according to a statement,” The National reports.
Abu Dhabi Ports – “Abu Dhabi Ports has installed Covid-19 testing facilities at Zayed Port and Khalifa Port to help safeguard maritime personnel in the emirate, it was announced on Tuesday. The new facilities – which were constructed in just one day – can process up to 700 tests a day. They are accessible to all Abu Dhabi Ports employees, contractors and subcontractors active in the ports,” Arabian Business reports.
Sudan Economy – “Sudan’s annual inflation rate has topped 80 percent, the government said Tuesday, as the country grapples with an acute economic crisis. ‘The annual inflation rate reached 81.64 percent in March, compared to 71.36 in February,’ the Central Bureau of Statistics said in a statement, attributing the rise to price hikes including on food,'” Asharq Al-Awsat reports.
Turkey Economy – “Turkey’s government aims to begin reviving the economy in late May after a sharp slowdown due to measures to contain the coronavirus outbreak, while minimizing the risk of a second wave of infections, a senior official said on Tuesday. Separately, the head of a group of Turkish malls – which closed their doors independently last month – said there were plans for a gradual reopening from May 11 depending on demand from retailers and approval from a health advisory board, Asharq Al-Awsat reports.
Middle East Business Telegraph Monitor – April 25-27
The top business/economic stories from the MENA region as reported in the regional and industry press – April 25-27
Egypt/IMF – “Egypt is seeking an aid package from the International Monetary Fund to offset the economic impact of the coronavirus pandemic, Prime Minister Mostafa Madbouli said Sunday. In a televised press conference with the central bank governor and other ministers, Madbouli did not specify the size of the one-year financial aid package the government was seeking from the IMF alongside technical assistance,” AFP/Arab News reports
Iran/China – “Iran’s commercial exchanges with its top trading partner China stood at $3.94 billion during the first three months of 2020 to register a 30.4% decline compared with the corresponding period of 2019. As data provided by the General Administration of Customs of the People’s Republic of China show, Iran’s exports to China totaled $1.81 billion, indicating a 52.7% year-on-year decrease,” Financial Tribune reports.
Turkey – “Turkey may run out foreign currency reserves as early as July if the pressure on its lira currency keeps intensifying, analysts at TD Securities estimated, while a number of analysts said its net reserves excluding swaps may already be negative,” Reuters/Al-Arabiya reports.
Lebanon – “Clashes broke out between protesters and security forces in northern Lebanon Monday amid a crash in the local currency and a surge in food prices. Dozens of young men smashed the fronts of local banks and set fire to an army vehicle, as the protests turned into riots,” Baghdad Post reports.
Iran/Iraq/US – “Washington on Sunday granted Iraq a 30-day extension to a waiver allowing it to import Iranian gas for its dilapidated power grids despite American sanctions, an Iraqi official said.Washington on Sunday granted Iraq a 30-day extension to a waiver allowing it to import Iranian gas for its dilapidated power grids despite American sanctions, an Iraqi official said,” Al Bawaba reports.
UAE/Etihad Airways – “Abu Dhabi’s Etihad Airways plans to resume passenger flights on Saturday, May 16, the airline has announced. In a statement posted online, Etihad said that it is ‘working closely with the UAE government and global aviation authorities, our aim is to gradually return to a fuller schedule as soon as it is safe for us to do so,'” Arabian Business reports.
UAE/NMC – “NMC Health, the embattled firm now in administration, asked the London Stock Exchange to delist its shares, following a string of revelations about the financial position of the company. The ‘continued listing of the shares in NMC Health incurs significant cost and adds complexity in a situation where decisions need to be made quickly in partnership with the group’s stakeholders. Against this backdrop, the administrators have concluded that delisting NMC Health’s shares is appropriate’, the company said in a statement to London Stock Exchange on Monday,” The National reports.
Lebanon/Riad Salameh – “When times were good it was rare for anyone to complain about Riad Salameh, Lebanon’s central bank governor of 27 years. As the country emerged from a 15-year civil war in 1990 and dealt with a series of major events, including the assassination of former Lebanese prime minister Rafik Hariri in 2005, conflict with Israel in 2006, domestic strife in 2008 and the global financial crisis that same year, Mr Salameh was hailed as a hero for maintaining the stability of the economy and the peg of the Lebanese pound to the dollar…The picture is very different today,” The National reports.
UAE/ADNOC – “Abu Dhabi National Oil Company (Adnoc) and Abu Dhabi Power Corporation (ADPower) have issued a joint tender for what is said to be a first-of-its-kind project in the Middle East and North Africa. The tender sets out to develop and operate the region’s first high-voltage, direct current sub-sea transmission system that will connect Adnoc’s offshore oil and gas production facilities to ADPower’s onshore electricity grid,” Gulf News reports.
Egypt/Aviation – “Egypt’s Nile Air on Sunday urged the government to buy stakes in private airline companies to help them survive the crisis caused by the new coronavirus pandemic. The North African country grounded flights on March 19 until further notice among a raft of measures to slow the spread of the respiratory disease. Private airlines appealed to the government last month to intervene to halt their losses,” Reuters/Ahram Online reports.
Saudi Aramco/EV – “A new hybrid electric-petrol engine reducing harmful greenhouse gasses by 50 percent could be developed from a study by scientists at Saudi Aramco and King Abdullah University of Science and Technology. Developed in collaboration with scientists in China, it could bridge the gap between traditional internal combustion engines and the next generation of fully electric motor engines. It was unveiled in a paper published in the prestigious journal Applied Energy,” Arab News reports.
Morocco/Covid-19 – “A total of 4.3 million families headed by workers in the informal sector will benefit from a stipend granted from the Special Fund for the Management and Respond to COVID-19, said the minister of economy, finance, and administrative reform, Mohamed Benchaaboun, on Monday in Rabat,” Morocco World News reports.
East Asia Business Telegraph Monitor Weekly – April 26
China/Exxon Mobil – “Multinational oil and gas corporation ExxonMobil yesterday broke ground on its solely funded chemical complex in Huizhou, in southern China’s Guangdong Province, a sign of China’s rebounding economy as the impact of the COVID-19 pandemic fades…The complex, worth US$10 billion, will be built in two phases. The first with a 1.6 million ton-per-year ethylene cracker and down-stream production equipment is scheduled to be completed by 2023 when construction on the second phase will begin,” Xinhua/Shanghai Daily reports.
SE Asia/Private Equity – “Indonesian private equity firm Northstar Group announced the closure of its fifth flagship funds to be invested in companies and start-ups working on COVID-19 recovery and sectors such as consumption, digital economy and finance. The funds, representing one-third of the company’s US$800 million target, will be invested in growth-stage companies and early-stage start-ups in Indonesia and other Southeast Asian countries,” Jakarta Post reports.
S. Korea/Shipbuilding – “The South Korean government has pledged a hefty KRW1.25trn ($1bn) to support the country’s ailing shipping industry severely impacted by the coronavirus (COVID-19) outbreak. The aid to shipping is part of a government KRW40trn emergency relief package to seven key industries including shipping, so as to cushion the impact of COVID-19,” Sea Trade Maritime News reports.
S. Korea Economy – “Korea’s economy is expected to contract 0.3 percent this year, a private research institute said Sunday, as the coronavirus pandemic crippled economic activities worldwide. The forecast by Hyundai Research Institute, however, is higher than the IMF’s, which has predicted that Korea’s economy will shrink 1.2 percent this year as the global economy is expected to face its worst year since the Great Depression of the 1930s over the pandemic. The world economy is expected to contract 3 percent this year, the IMF said,” Korea JoongAng Daily reports.
Regional/Food – “The battle for market share in Asia’s meatless meat sector is heating up, even amid an economic slowdown driven by Covid-19 lockdowns, which have badly affected the restaurant industry. Industry participants agreed that public concern over health and food safety in the wake of the pandemic will boost the long-term fortunes of alternative protein makers such as Impossible Foods and Beyond Meat, the two best-known manufacturers. The pandemic, along with the African swine fever, which decimated China’s pig herds, are expected to accelerate consumer adoption. Moreover, interest among Asian entrepreneurs has grown alongside that of investors and consumers,” South China Morning Post reports.
N. Korea/Kim Jong Un – “A special train possibly belonging to North Korean leader Kim Jong Un was spotted this week at a resort town in the country, according to satellite images reviewed by a Washington-based North Korea monitoring project, amid conflicting reports about Kim’s health and whereabouts. The monitoring project, 38 North, said in its report on Saturday that the train was parked at the ‘leadership station’ in Wonsan on April 21 and April 23. The station is reserved for the use of the Kim family, it said,” Korea Times reports.
Japan/Covid-19 – “Prime Minister Shinzo Abe and his team are likely to extend the state of emergency for the coronavirus in prefectures still struggling to curb the pandemic, sources said Friday. The emergency declaration was set to expire on May 6, when the Golden Week holidays officially end,” Japan Times reports.
Japan/Mitsubishi – “Japanese automaker Mitsubishi Motors Corp said Friday it expects 26 billion yen ($240 million) in losses for the fiscal year through next March, as sales plunge because of the coronavirus pandemic. Tokyo-based Mitsubishi, allied with Nissan Motor Co, announced the revision to its earnings projection. The maker of the Pajero sports utility vehicle earlier forecast a profit of 5 billion yen ($46 million),” Japan Today reports.
Singapore Airlines – “The worsening environment for aviation amid the Covid-19 pandemic has made it very difficult for airlines to tap debt capital markets, Singapore Airlines (SIA) has said, in explanation of the need for its proposed $15 billion debt and equity capital raising. It was responding to questions from the Securities Investors Association (Singapore), or Sias, in a Singapore Exchange statement on Friday evening, ahead of the April 30 extraordinary general meeting (EGM), when shareholders are to vote on the move,” Singapore Straits-Times reports.
Indonesia/Aviation – “In an effort to contain the spread of the coronavirus, Indonesian authorities will prohibit both international and domestic air travel from tomorrow through to June 1st. Largely an Islamic country, this move coincides with the start of Ramadan – a time when Muslims travel to their hometowns,” SimpleFlying reports.
Thailand/Aviation – “Suvarnabhumi airport is set to resume its services on Friday when airlines restart flights following a month-long suspension over Covid-19 fears, airport general manager Suthirawat Suwanawat said. Wg Cdr Suthirawat said the number of foreign travellers had fallen considerably since the Civil Aviation Authority of Thailand banned all international flights from landing in Thailand at the start of this month,” Bangkok Post reports.
Malaysia/Palm Oil – “Palm exports from Malaysia’s biggest producer of the edible oil, Sabah state, will be hit by a closure of private jetties due to coronavirus-related curbs, an industry body said on Saturday. Sabah accounts for about a quarter of the total palm oil produced in Malaysia, the world’s second biggest producer and exporter of the widely used vegetable oil after Indonesia,” EdgeMarkets reports.
Philippines/Remittances – “The Bangko Sentral ng Pilipinas (BSP) on Friday kept its negative growth projection for overseas Filipino worker (OFW) remittances this year as the coronavirus pandemic continues to affect deployment,” Manila Times reports.
Philippines/ADB – “THE Asian Development Bank (ADB) has approved a record $1.5 billion loan for the Philippine government to fund its fight against the coronavirus disease 2019 (COVID-19),” BusinessWorld reports.
Vietnam/Growth – “Standard Chartered Bank forecasts Vietnam’s economic growth will slow to 3.3 percent in 2020 due to a worsening of external conditions. In an economic outlook report titled ‘Darkest Before The Dawn’, the bank forecast manufacturing growth is likely to decline sharply on slowing global demand, with growth rate expected at close to 3 percent compared to around 11 percent in 2019,” VN Express reports.
Cambodia Logistics – “The Cambodia Logistics Association (CLA) has expressed concern about the severe impact on the logistics and transportation sector which faces a downturn in business due to the Covid-19 outbreak, it said in a statement on Saturday. A supply shortage of imported raw materials from China has led to a loss of jobs in the garment sector, the Kingdom’s largest industry and largest user of logistics services, it said,” Phnom Penh Post reports.
Singapore/Lim Oon Kuin – “The letters started to arrive in early April. One after the other, the titans of global finance, from JPMorgan to HSBC Holdings, demanded the immediate and urgent repayment of hundreds of millions of dollars in loans. On the receiving end was Hin Leong, one of the most powerful and secretive names in oil trading. Founded in 1963 by a Chinese immigrant known to everyone in the industry as OK Lim, it was a giant in the world of shipping fuel from its base in Singapore. Over the decades it had become one of the most fabled trading houses, the source of a billion-dollar fortune, and the subject of stories about legendary deals that made rivals sweat. But earlier this month, as oil prices collapsed in the fallout from the coronavirus, its foundations crumbled,” South China Morning Post reports.
Middle East Business Telegraph Monitor – April 24
The top business/economic stories from the MENA region as reported in the regional and industry press – April 24
Turkey Economy – “Turkey’s economy faces growing risks as it enters a downturn with dwindling reserves and a fragile lira, financial markets signaled on Friday, as data showed factories slowing due to the coronavirus outbreak. For the first time since the worst day of a currency crisis in 2018, the Turkish lira on Wednesday briefly breached 7 versus the dollar after the central bank slashed rates twice as much as expected,” Reuters/Al-Arabiya reports.
Aviation Losses – “Air traffic in the Middle East and North Africa is set to plummet by more than half this year due to the coronavirus pandemic, a global aviation body said on Thursday,” AFP/Jordan Times reports.
Regional Aviation – “Middle Eastern and African governments are failing to take the action required to protect their airlines from the economic crisis caused by the new coronavirus pandemic, the International Air Transport Association (IATA) said on Thursday. Several states have stepped in to help airlines, with travel demand decimated by the outbreak, such as the US, Singapore and Australia, though few in the Middle East have made their intentions clear,” Reuters/Arab News reports.
Iran/US Conflict – “President Hassan Rouhani called on Iran’s armed forces on Friday to seek regional stability while maintaining vigilance against ‘provocations’, state TV reported, as a war of words with arch-enemy the United States escalated. The head of Iran’s elite Revolutionary Guards said on Thursday Tehran would destroy U.S. warships if its security is threatened in the Gulf, a day after U.S. President Donald Trump warned Tehran over ‘harassment’ of U.S. vessels,” Reuters reports.
Oil Price – “Oil prices rose on Friday, but both the Brent and U.S. benchmarks were on track for their third straight week of losses as global production shutdowns failed to keep pace with the collapse in demand caused by the coronavirus pandemic,” Reuters reports.
GCC Banks – “The strength of earning capacity of banks in the GCC will help them navigate the shocks related to COVID-19 and the oil price drops, S&P Global Ratings said yesterday. It expects most of the banks to generate positive net income in 2020. The rating agency noted the GCC banks have raised around $20bn of hybrid capital the GCC banks instruments over the past five years and some of them are reaching their first call dates in 2020,” The Peninsula reports.
Lebanon Pound – “The Lebanese central bank set an exchange rate of 3,625 Lebanese pounds to the US dollar to be applied by money-transfer firms on Friday, 58 per cent weaker than the official peg as the country grapples with its financial crisis, a central bank source said. The new rate is seen as part of wider moves by the central bank away from a peg in place since 1997, bankers said. Though the official pegged rate of 1,507.5 pounds is still in place, it amounts to an effective devaluation of the pound, they said,” The National reports.
Egypt/ENI – “A deal struck between Spanish gas firm Naturgy Energy Group, Italy’s Eni and the Egyptian government to resolve a series of disputes over a shuttered gas plant in northern Egypt has fallen through, Naturgy said on Thursday. The agreement had been due to end Naturgy’s business interests in Egypt and dissolve a joint venture between Naturgy and Eni, while Eni and state-owned Egyptian firms would have increased their holdings in the Damietta plant,” Ahram Online reports.
Turkey/China – “Turkish industrial goods exports to China have rallied as Chinese factories resume production and businesses reopen after a shutdown to stem the spread of the novel coronavirus. ‘After the Chinese economy reopened gradually, acceleration started in firms exporting to China,’ said Murat Kolbaşı, the chairman of the Asia-Pacific Business Council of Turkey’s Foreign Economic Relations Board (DEİK)…’Some 75% of factories have restarted production in China, and domestic demand is now around the level of 60%-80%,’ Kolbaşı told Anadolu Agency (AA),” Daily Sabah reports.
DP World – “DP World has launched new online logistics tools and services, covering sea, land and air shipping around the world.The new connected ecosystem of platforms will enable freight forwarders and any business, to book shipments of cargo from and to anywhere in the world, by any combination of sea, land and air,” Sea Trade Maritime News reports.
Mauritania – “The International Monetary has approved a grant of $130 million (Dh477.1m) for Mauritania – under the Rapid Credit Facility – to fight the coronavirus outbreak. The new funds will help the north-west African nation to increase spending on health services and social protection programmes, said IMF in a statement,” The National reports.
UAE/Retail – “In accordance with the announcement by the Supreme Committee of Crisis and Disaster Management, Al Futtaim will open its malls across the UAE on April 25 (Saturday), with trading hours of 12pm-10pm. Family entertainment, cinemas, gyms, prayer rooms, changing rooms and shisha services will remain closed, as per the directive. The opening comes in line with the supreme Committee of Disaster Management’s announcement of the partial easing of restrictions on movement in Dubai. Prior to opening, both malls are mandated to comply with the various guidelines and protocols and the partial opening is within strict health and safety guidelines,” Khaleej Times reports.
Indian Ocean Business Times Weekly – April 24
Top business stories from countries across the Indian Ocean region: Australia, Bangladesh, Comoros, India, Indonesia, Iran, Kenya, Madagascar, Malaysia, Mauritius, Mozambique, Oman, Pakistan, Seychelles, Singapore, Somalia, South Africa, Sri Lanka, Tanzania, Thailand, UAE and Yemen. Collectively, they account for 35% of the world’s population and nearly 20% of global GDP.
East Africa – “All five East African Community countries should brace for drastic drops in their economic growth rates this year as a direct result of the global coronavirus crisis. The International Monetary Fund’s latest World Economic Outlook projections for 2020 pegs Kenya and Tanzania’s respective GDP growth rates at one per cent and two per cent respectively in 2020, down from 5.6 and 6.3 per cent respectively in 2019. Uganda will maintain a 3.5 growth rate this year, compared with 4.9 per cent in 2019,” The East African reports.
South African Airways – “South African Airways (SAA) is set to lay off all of its employees at the end of April. A document detailing the airline’s severance package, obtained by Bloomberg, shows that 4,700 employees will leave the company by the end of this month. The collapsing airline will reportedly make sales of its assets to foot the salary pay-outs,” Bloomberg/The Standard reports.
India/Aviation – “Airlines in India are likely to suffer a revenue loss of 11.2 billion dollars this year leading to 2.9 million jobs at risk as passenger demand falls by 47 per cent due to COVID-19 crisis, the International Air Transport Association (IATA) said on Friday. The latest estimates from IATA indicate a worsening of the country impact from coronavirus pandemic and travel restrictions in the Asia Pacific region,” Business Standard reports.
Facebook/Reliance – “With the pandemic battering assets and oil nosediving, Indian tycoon Mukesh Ambani needed a win to stem the investor exodus from Reliance Industries Ltd., the energy conglomerate he’s been trying to reinvent. This week, Facebook Inc. and its Chief Executive Officer Mark Zuckerberg delivered just that. The U.S. social-media giant said it will buy about 10% of Reliance’s digital assets for $5.7 billion — its biggest purchase since acquiring WhatsApp six years ago,” Bloomberg/Economic Times reports.
UAE/DP World – “DP World, the Dubai-based ports and logistics giant, said the real impact of Covid-19 will be seen from the second quarter onwards after it posted a 1.7 per cent dip in first-quarter shipping container volumes. The ports operator warned that global trade and container volumes are forecast by industry analysts to decline in 2020, with estimates on the scale of the drop ranging from 3 per cent to 10 per cent, it said in a statement on Thursday,” The National reports.
Etihad/Air Arabia – “Air Arabia Abu Dhabi, the new joint venture between Etihad Airways and Air Arabia, secured its air operating licence, making it the UAE’s fifth national airline once it begins service from the capital. The new discount carrier, which was expected to start operations in the second quarter of 2020, is working with the UAE’s civil aviation regulator to finalise its launch date once market conditions improve and skies re-open, it said in a statement on Thursday,” The National reports.
East Africa Locusts – As the East African Community partner states are continuing to grapple with the effects of Covid-19, the Food and Agriculture Organization of the United Nations (FAO) has warned of a possible re-invasion of locusts in the region,” The Tanzania Daily News reports.
Kenya/Ports – “Importers in the region have called on the Kenya Ports Authority (KPA) and the Kenya Ship Agents Association to increase the free demurrage quota and free cargo period as a result of slow clearance and transportation of goods due to lockdowns and curfews imposed by various countries,” The East African reports.
Pakistan/ADB – “The Asian Development Bank (ADB) has pledged to provide $1.7 billion to Pakistan to combat the economic impacts of coronavirus in the country, it was learned on Friday. The assurance was given by the ADB President to the Minister for Economic Affairs Khusro Bakhtiar, during a virtual meeting,” Business Recorder reports.
Pakistan/Moody’s – “The financial support from the International Monetary Fund (IMF) and other multilaterals has lowered Pakistan’s financing risks from the coronavirus-related economic shock even though its fiscal deficit may touch double digits. ‘The substantial financial support from official-sector creditors reduces Pakistan’s financing risks,’ said the Moody’s investors service on Thursday, adding that the fiscal stimulus announced by the government could widen the country’s budget deficit to 9.5-10 per cent of GDP,” Dawn reports.
Bangladesh/Port – “State Minister for Shipping Khalid Mahmud Chowdhury said the government is pledged-bound to keep the operational activities of Chitagong port in the normal pace for national interest. Khalid Mahmud told this journalists after a view-exchanging meeting with senior officials of Chattogram Port at the port building on Thursday, reports BSS,” Dhaka Tribune reports.
Mozambique/Militants – “Some 52 young people were shot dead or beheaded in the country’s north as an Islamist insurgency gains strength. Local and national security services as well as foreign mercenaries have been unable to stop the militants,” AllAfrica.com reports.
Seychelles/Covid-19 – “The Seychelles Health Authority said on Thursday that it is maintaining the extension of the prohibition of outdoor movement until May 4, four days longer than the April 30 date previously announced. Public Health Commissioner Jude Gedeon said during a weekly press conference that the additional days will ensure more time for active surveillance and monitoring,” Seychelles News Agency reports.
Geo-Strategy – “If Chinese military planners thought they could use the Covid-19 crisis to steal a march in the Indian Ocean, they may have been mistaken. India may be under the world’s largest coronavirus lockdown, but its navy is not. On April 14, the Indian Navy issued a public statement saying that its Eastern Naval Command’s Dornier squadron continues its maritime surveillance missions and that its naval assets remain ‘mission-ready and prepared for immediate deployment should the need arise,'” Asia Times reports.
India/Geo-Politics – “Amid this entire crisis, India has been playing an important role. India’s role could be considered at both the domestic level – the steps taken to tackle the crisis at home — and the diplomatic level — India’s assistance to other countries, especially in the Indian Ocean Region (IOR), amid the pandemic…One of the first steps taken by India was to evacuate citizens of different countries along with its own citizens from Wuhan, China, the epicenter of the first COVID-19 outbreak. Those evacuated as compassionate cases included citizens from Indian Ocean Rim countries such as Bangladesh, Myanmar, the Maldives, South Africa, and Madagascar. India not only evacuated these people, but also quarantined them in India as a precautionary measure before sending them to their respective countries.” The Diplomat reports.
India/Covid-19 – While death rates in some countries have risen sharply in recent weeks, in India the opposite seems to be happening, at least in some places, leaving hospitals, funeral parlours and cremation sites wondering what is going on. ‘It’s very surprising for us,’ said Shruthi Reddy, chief executive officer of Anthyesti Funeral Services, which operates in of Kolkata and Bengaluru,” LiveMint India reports.
Sri Lanka/India – Sri Lanka is set to enter into an agreement with the Reserve for a currency swap worth moe than $400 million to boost foreign reserves and ensure financial stability of the country which is badly hit by the Covid-19 pandemic, The Times of India reports.
India/Foreign Investment – “Franklin Templeton Mutual Fund has said it would close six yield-oriented, managed credit funds with total assets under management of Rs 25,856 crore in India from April 23 over severe market dislocation and illiquidity caused by the coronavirus pandemic…Franklin Templeton is shutting these fixed-income and credit-risk funds run, locking in Rs 308 billion ($4.1 billion) of investors’ money,” Hindustan Times reports.
Maldives/IMF – “The International Monetary Fund (IMF) has approved a disbursement of 28.9 million US dollars to the Maldives as the number of COVID-19 cases in the country continued to rise, local media reported. The Executive Board of the IMF approved the disbursement on Thursday under the Rapid Credit Facility (RCF), which the government can use to manage fiscal needs and balance of payments amid a worsening COVID-19 outbreak, reports Xinhua,” Financial Express reports.
Troubles Mount for Sudan Amid Covid-19 Challenge
Two recent articles on Sudan, one in the New York Times and the other in Asharq Al-Awsat, highlight the immense challenges faced by the East African country over the next year amid the Covid-19 pandemic. According to the IMF, Sudan faces a 7.2% economic contraction – disastrous for an economy that was already having difficulty creating jobs for its mostly young and rural population.
According to the article in Asharq Al-Awsat, some 80% of the population are dependent on agriculture, and the sector accounts for some 44% of GDP.
An excerpt from the piece below:
Food security in Sudan faces new challenges as the government takes restrictive measures on stemming the spread of the novel coronavirus.
The measures have greatly affected producers especially those working in the agriculture sector, which represents 44% of the Sudanese economy.
The curfew imposed on producers in the agriculture and industrial sectors threatens the future of food security in the African country, where preparations for summer seasonal crops are usually made in April and May.
The New York Times reported on the stark lack of ventilators and overall preparedness for a major coronavirus outbreak in the country of 41 million people. A doctor was quoted as saying: “On a normal day in Sudan you can’t find a ventilator. It’s going to be a disaster. Those who have immunity will live, and those who don’t will have to pray.”
An excerpt from the piece below:
“The government is in a position (where it has) to make very difficult decisions when they don’t have that sense of security,” said Nada Abdelmagid, assistant professor at the London School of Hygiene and Tropical Medicine.
International donors have held back, demanding a reform plan and the lifting of fuel subsidies costing about $3.5 billion a year.
Potential donors from the West and the Gulf have postponed from April to June a “Friends of Sudan” economic conference, and with the pandemic there could be more delays.
The European Union and United States have pledged 80 million euros ($86.62 million) and $13.7 million respectively to aid the coronavirus efforts. Two shipments of supplies have arrived from Chinese billionaire Jack Ma.
