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Friday, April 16, 2021

Dubai, the business capital of Africa

Growing numbers of Africa-focused companies are basing themselves in the emirate

 

 
                             Sheikh Zayed Road, Dubai (Paul Cochrane)
 
 

Middle East Eye: For hundreds of years, the business capitals of Africa were in Europe - in London, Paris, Berlin and Lisbon.

Despite decolonisation, money still flows from Africa to European financial hubs, but over the past decade business headquarters have geographically shifted. Not back to Africa, but to another former British colony: Dubai.

There are now more than 21,000 African companies in Dubai, which is part of the United Arab Emirates (UAE). It's a number that has increased by over a quarter since 2017, according to Dubai Chamber of Commerce and Industry figures.     

The emirate has also attracted 45 Middle East and Africa headquarters of multinational companies - compared to just 26 in Africa, according to a 2018 report by Infomineo, a data and research outsourcing provider specialising in Africa and the Middle East.

 

 



 To read the rest go to: https://www.middleeasteye.net/news/uae-dubai-africa-business-capital

Monday, March 08, 2021

Saudi Arabia’s ‘Programme HQ’: Can Riyadh rival Dubai as a business hub?

 Plans to make access to mega-project contracts conditional on companies establishing regional headquarters in the kingdom are ambitious but ambiguous

 


Middle East Eye: In the pre-pandemic days of globalisation, countries competing in emerging markets were often engaged in a "race to the bottom" to attract multinational companies, which typically involved offering them incentives such as tax breaks and favourable labour laws.

More recently, governments with large enough economies have opted for the stick-over-the-carrot approach in allowing companies to set up shop, often for political objectives.

Last year, for instance, Turkey passed a law requiring any social media platform based abroad with over one million daily Turkish users to set up a representative office in the country.

Saudi Arabia is taking a leaf from the same playbook as it grapples with the economic fallout of the Covid-19 pandemic and embarks on its ambitious Vision 2030 plans.

In mid-February, Minister of Investment Khalid al-Falih announced that any company seeking contracts with the government, state-owned firms and the Public Investment Fund (PIF, the sovereign wealth fund) will have to base its regional headquarters in the kingdom by 2024.

Saudi Arabia is hoping that the allure of being the Middle East’s biggest economy, with hundreds of billions of dollars earmarked for mega-projects over the coming decades, will force companies to comply.

“There was surprise at the announcement, and there are some merchant families that will not be happy,” said Theodore Karasik, a senior adviser to Gulf State Analytics, a Washington-based consultancy.

“But at the same time, others will see the benefit of such a regulation, and in how the city states of the Arabian peninsula interact with each other for recovery purposes. Because of Covid-19, they are rebooting and restructuring their economies."

The requirement, called “Programme HQ”, is still at the discussion phase, with “as many questions as answers. It is a reminder of the intense competition for investment within the Gulf Cooperation Council,” said Rachel Ziemba, a non-resident fellow at the Gulf International Forum, a Washington-based institute.

To read the rest go to: https://www.middleeasteye.net/news/saudi-arabia-uae-dubai-programme-hq-rival-business-hub

 

Red Sea cables: How UK and US spy agencies listen to the Middle East

 An expanding network of undersea fibre optic cables from the Mediterranean to the Gulf has made surveillance of regional communications easier than ever

 

The Mediterranean viewed from the Troodos Mountains, Cyprus (Paul Cochrane)


Middle East Eye: The growth of Middle Eastern fibre optic cable networks has given Western signals intelligence agencies unprecedented access to the region’s data and communications traffic.

“There is no question that, in the broadest sense, from Port Said [in Egypt] to Oman is one of the greatest areas for telecommunications traffic and therefore surveillance. Everything about the Middle East goes through that region except for the odd link through Turkey,” said Duncan Campbell, an investigative journalist specialising in surveillance since 1975.

The Five Eyes, a signals intelligence (SIGINT) alliance of the US, the UK, Canada, Australia and New Zealand, has been snooping on the Middle East since the network was formed during the Second World War.

The key players are the US’s National Security Agency (NSA), and the UK’s Government Communications Headquarters (GCHQ), utilising both known and secret facilities in the region to collect data.

The Middle East is a hotbed of surveillance for obvious reasons: its strategic political-economic importance, the Arab-Israeli conflict, and political divisions between the allies of the Five Eyes and their adversaries, from militant groups to countries such as Iran and Syria.

While all conventional forms of surveillance are carried out, from airspace surveillance to tapping phone lines, the region is a strategic asset for mass surveillance due to the current routes of fibre optic cables.

“The importance of cables is still largely unknown by the average person. They think smartphones are wireless and it goes through the air but they don’t realise it is through cables,” said Alan Mauldin, research director at telecommunications research firm TeleGeography in Washington.

Spy agencies have tapped into fibre optic cables to intercept vast volumes of data, from phone calls to the content of emails, to web browsing history and metadata. Financial, military and government data also passes through cables.

To read the rest go to: https://www.middleeasteye.net/news/red-sea-cables-how-us-uk-spy-agencies-listen-middle-east

 

'Digital Suez': How the internet flows through Egypt - and why Google could change the Middle East

Most web traffic between Europe and Asia passes through fibre optic cables crossing Egypt. Could a proposed new route through Israel and Saudi Arabia break the 'Red Sea bottleneck'?
 

Most internet traffic between Europe, the Middle East and Asia passes through Egypt (MEE/Illustration by Mohamad Elaasar)

 

Middle East Eye: There are only a few historically strategic transit points around the Mediterranean Sea: the Strait of Gibraltar, the Bosphorus, and the Suez Canal.

While the Suez Canal has been a jewel in Egypt’s crown since 1869, netting the country some $5.6bn in revenues in 2020, it accounts for just eight percent of world cargo shipments.

But Egypt’s location as a fibre optic cable hub, linking Europe, Africa, the Middle East and Asia, means up to 30 percent of the global population’s internet connectivity transits through the country.

“If you want to route cables between Europe and the Middle East to India, where’s the easiest way to go? It is via Egypt, as there’s the least amount of land to cross,” says Alan Mauldin, research director at telecommunications research firm TeleGeography in Washington DC.

Egypt, through its state-owned monopoly Telecom Egypt (TE), has successfully capitalised on its position to entice cable operators to transit the country.

“It is one of Egypt’s trump cards, like the Pyramids, which never goes out of fashion. They are used to making business out of transit and tourism, but now they’re doing it with data. It is a digital Suez canal, which trades on its geopolitical position,” Hugh Miles, founder of Arab Digest, in Cairo, told Middle East Eye.

There are 10 cable landing stations on Egypt’s Mediterranean and Red Sea coastlines, and some 15 terrestrial crossing routes across the country, of which 10 are operated by the Egyptian telecom giant, spanning a region stretching from the Mediterranean as far as Singapore, according to TE.

 

To read the rest go to:  https://www.middleeasteye.net/news/google-egypt-suez-digital-internet-flow-change-middle-east

 

 

 
 
 
 

Thursday, January 07, 2021

Dubai, Switzerland, London: How the UAE became a smuggling hub for 'blood gold'

Emirates urged to clean up their act amid numerous reports about role in dirty gold trading

 

                                         Credit: Stevebidmead/Wikicommons

 

Middle East Eye: There are no mines under Dubai's sands with artisanal miners or children toiling away trying to strike gold. But there is the Dubai Gold Souk and refineries that vie with the largest global operations as the United Arab Emirates (UAE) strives to expand its position as a major gold hub. 

In recent years, the UAE, with Dubai in particular, has established itself as one the largest and fastest-growing marketplaces for the precious metal, with imports rising by 58 percent per annum to more than $27bn in 2018, according to data collated by the Observatory for Economic Complexity.  

With no local gold to tap, unlike neighbouring Saudi Arabia, the UAE has to import gold from wherever it can, whether it be legitimately, smuggled with no questions asked, sourced from conflict zones, or linked to organised crime.

Gold has become so important to Dubai's economy that it is the emirate's highest value external trade item, ahead of mobile phones, jewellery, petroleum products and diamonds, according to Dubai Customs.

And it is the UAE's largest export after oil, exporting $17.7bn in 2019. Gold's importance has only increased as Dubai's oil reserves have dwindled and the UAE has tried to diversify its economy.

To read the rest go to: https://www.middleeasteye.net/news/dubai-switzerland-london-how-uae-became-smuggling-hub-blood-gold

 

 

Wednesday, December 16, 2020

In 2020 as more of life went online, we ask: What are the limits to Virtual Islam?

Salaam Gateway: In 2020, more of life went online than ever before, including religious activities. Prayers and lectures were streamed over platforms like Zoom, and Ramadan virtual iftars became commonplace.

Will this become the 'new normal', as believers accept the shift to a virtual religious life amid COVID-19, possible future pandemics, and looming challenges like climate change, which may affect the very way hajj is carried out? Is Virtual Islam on the horizon?

“It is a transformative moment in some respects because the traditional religious establishment within Islam is having to rapidly adapt to modernity in its fullest sense, not just because of COVID-19, but of where human society is,” said Adnan A. Zulfiqar, Associate Professor of Law at Rutgers Law School, USA.

A NEW DIMENSION

As religious life went online with earnest earlier in the year, especially in the lead up to Ramadan and during the holy month itself, certain questions were raised about religious obligations and practices. Religious leaders, for instance, were careful to virtually present lectures instead of actual sermons as they were not physically in mosques with their congregation.

“Another dimension has been opened up: to what extent is ritual practice and worship able to be conducted through technology? There has been a real struggle over this,” said Zulfiqar, who has researched Islamic legal responses to COVID-19, including congregational prayers and funeral rights.

“The idea of conducting your Friday prayers via Zoom, where people are in various locations and the prayer leader in another - is that permissible? There has been, frankly, a lot of resistance to that, as if you open up the space of ritual practice, essentially you are giving everybody a marketplace in which they can choose. If you say this is just for COVID-19, to what extent can you later on put the genie back in the bottle?”

A technological shift was already underway before the pandemic confined people to their homes, and apps were launched to book prayer slots at mosques once stay-at-home restrictions eased.

Zulfiqar noted that fatwas have been increasingly issued verbally or through visuals on social media platforms rather than via the printed word. “Islam is much less written than it was before. Traditionally speaking, there is a really formal way that fatwas are written, but I often couldn’t find them written down. People have become comfortable with the (fatwa's) presentation by video as its the primary medium out there,” said Zulfiqar.

The generational gap over technological adoption, and acceptance, has also become more pronounced. “The physical sacred space is historically, and for the human psyche, so important that it will be difficult for the virtual to completely take over, but we will see. You already have in a lot of the Muslim diaspora third-way movements that are essentially 'un-mosqued', of young people gathering virtually but also organising virtually and meeting outside of the mosque or masjid,” said Zulfiqar.

To read the rest go to: https://www.salaamgateway.com/story/in-2020-as-more-of-life-went-online-we-started-asking-what-are-the-limits-to-virtual-islam

 

One month until ‘Brexit’: Is the UK looking to seal a Gulf free trade deal?

With talks with the EU still deadlocked, London is looking to forge closer trading ties with the GCC

 

Middle East Eye: The British government has been scouting the world to drum up business with the clock ticking down as it prepares to finally exit the European Union at the end of the year.

And while discussions over the UK’s critical future trade relationship with its erstwhile EU trading partners still appear deadlocked, London has its eyes set on securing a free trade agreement (FTA) with the Gulf Cooperation Council (GCC) countries.

Inking an FTA would be a big headline grabber for Downing Street, with bilateral trade worth $60.1bn in 2019, more than with India and Canada combined.

Some analysts suggest that the British government could attempt to package its lucrative arms dealings with the Gulf states into an agreement, even with weapons sales to Saudi Arabia the subject of a continuing legal battle focused on allegations of war crimes carried out by Saudi-led forces in Yemen.

But is an FTA likely to actually materialise, given the GCC’s current internal divisions – over Qatar – and its weak track record in actually ratifying such agreements? Furthermore, what benefits are there for both parties?

 

To read the rest go to: https://www.middleeasteye.net/news/brexit-uk-gulf-free-trade-deal-seal

 

 

The US's long financial war on Hezbollah - and Lebanon

The United States has piled sanctions on the Lebanese movement, but to what effect?

 

The Lebanese and Hezbollah flags fly above Bayt Al Ankabout - The Spider's Web - a Hezbollah exhibition about the 2006 War in Beirut's southern suburbs. (Paul Cochrane)

 

Middle East Eye: Over the past two decades, Lebanon has been under close scrutiny from the US Treasury for potential money laundering or financing of US-designated terrorist organisations.

This has led to two banks shutting their doors, bans on the use of Paypal and other payment operators, headaches for ordinary Lebanese to make transfers, and lots of pressure on banks to comply with international standards.

The reason for such scrutiny is straightforward. 

“Lebanon is always under the spotlight because Hezbollah is in Lebanon,” said Wissam Fattouh, the secretary-general of the Union of Arab Banks to the UK publication Money Laundering Bulletin.

This month, the United States, which considers Hezbollah a terrorist organisation, sanctioned more Hezbollah members and allegedly connected businesses.

But in a first for the US Treasury, which has focused more on curbing Hezbollah’s financial operations over the years than going after corrupt Lebanese politicians, it sanctioned Gebran Bassil, former foreign minister and head of Free Patriotic Movement, which holds the biggest bloc in parliament, for corruption earlier in November.

The move has been widely considered as linked to Bassil’s ties to Hezbollah.

Such moves come amid the heightened use of sanctions by the US government against governments and political parties it opposes, from plans to intensify sanctions on Iran until President Donald Trump leaves office in January 2021, to sanctions against Syria, Venezuela, North Korea and China.

The US currently has two pieces of legislation targeting Hezbollah – the Hezbollah International Financing Prevention Act (HIFPA) of 2015, and the Hezbollah International Financing Prevention Amendment Act (HIFPA 2) of 2018.

A new bill was proposed in September, the Hezbollah Money Laundering Prevention Act of 2020, “to stop the Iranian backed terrorist organization Hezbollah’s money laundering activities across the world, especially in Lebanon and Latin America.”

 

To read the rest go to: https://www.middleeasteye.net/news/lebanon-us-hezbollah-financial-war-sanctions

 

 

Monday, November 02, 2020

Renewable energy: What does it mean for oil-dominated Middle East?

MENA countries that are reliant on oil revenues face uncertainty as solar and wind power gain ground

                 

 Masdar, Abu Dhabi 2012 (Paul Cochrane)

 

Middle East Eye: The theory of peak oil, whereby the cost of extraction would exceed how much consumers were willing to pay while demand outstripped supply, was first floated more than 60 years ago. Oil production, geologist M King Hubbert predicted, would peak by the turn of the millennium.

That didn’t happen - but the spectre of peak oil raised its head again in the mid-2000s, in part pushed by Matthew Simmons’ book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.

Simmons argued that Saudi Arabia had inflated its colossal oil reserves - a point that has some credence, as further highlighted in Wikileaks US diplomatic cables from 2011 - with some 90 percent of Saudi’s oil coming from seven giant oil fields, of which three are more than 50 years old.

With the level of reserves questionable, particularly from one of the world’s top producers, and demand constantly rising, oil prices would rise ever higher.

Prices did indeed surge, reaching more than $140 a barrel in 2008. Peak oil theories played a part in the speculation that drove up prices. That same year, some observers were forecasting oil at $200, even $500, a barrel. Several even predicted the subsequent implosion of civilisation and World War Three.

But high oil prices and pressure to move away from an over-reliance on oil propelled a global move towards renewable energies. More than a decade later, the oil price is around $40 a barrel - and there is plenty still under the ground, largely due to enhanced oil recovery technologies, particularly for shale oil in the US.

 

                

 

To read the rest go to: https://www.middleeasteye.net/news/renewable-energy-oil-middle-east

 

 

Thursday, October 22, 2020

Saudi Arabia's economic crisis, explained in 10 graphics

The kingdom has been hit hard by the coronavirus pandemic and falling oil prices among other challenges

Middle East Eye: Saudi Arabia has been trying to diversify its economy for decades, as emphasised in Vision 2030, launched by Crown Prince Mohammad Bin Salman.

But the the dual shocks of coronavirus and tumbling energy prices have hurt its plans, particularly in the non-oil sector, which is forecast to contract by 14 percent this year. 

For your average citizen in Saudi Arabia, that means only one thing - more belt tightening. These are the key threats.

1. Saudi Arabia can no longer rely on oil

Oil revenues account for around two-thirds of the kingdom’s exports. But while Saudi Arabia was once responsible for nearly 30 percent of global oil exports, that figure has now dropped to just 12 percent, according to Capital Economics.

Riyadh started a price war in March in an apparent bid to damage rival producers, even as global demand was sinking due to Covid-19. It flooded the market, but in doing so saw its crude export revenues dropped by 65 percent compared to April 2019. “The sharp decline in oil prices, exacerbated by demand loss from the pandemic, has hit Saudi Arabia particularly hard,” said Boris Ivanov, founder and managing director of consultancy GPB Global Resources.

Prices have recovered since to about $44 a barrel – but that is still well below the $77.6 a barrel that the kingdom needs to balance its budget. Nor is there any sign that it will return to those levels.

Nor is the global outlook positive: demand is projected to fall “by 8.1 million barrels a day, the largest in history” because of Covid, according to the International Energy Agency (IEA). Looking forward, the organisation predicts that demand will peak by 2030 due to the rise in renewable energy.

To read the rest (and check out the great graphics) go to: https://www.middleeasteye.net/news/saudi-arabia-economic-crisis-oil-coronavirus-debt-vision-2030

 

Beirut explosion: How the port blast will hit Lebanon's economy

 Disaster spells catastrophe for country's much-needed imports and will likely hit the already flagging currency, experts tell MEE

Middle East Eye: The huge explosion at Beirut’s port is a crippling blow to a country that had been reeling from a political and financial crisis, a depreciating currency and the Covid-19 pandemic. Economic damage from the blast is being estimated in the billions of dollars.

“It’s hard to imagine the financial cost of this disaster, it is in the billions. The port is completely destroyed, and much of the city is damaged. Who will pay for the reconstruction of Beirut?” said Laury Haytayan, a Beirut-based expert at the National Resource Institute.

Beirut port, which was the epicentre of the explosion, is the country’s main logistics hub and its deepest sea port. 

“It was the beating heart of the country as it provided around 80 percent of imported goods, which kept the economy moving,” said Sami Halabi, director of knowledge and co-founder of Triangle Consulting in Beirut.

The closure of the port threatens food security in the country, which is import reliant for an estimated 65-85 percent of food needs, according to a Triangle report. Some 15,000 tonnes of wheat had been stored at the port’s silos.

“The disaster will have a dramatic impact on food security. Bread prices were already up, spiking food prices will go up further, and 50 percent of Lebanese are under the poverty line. This is the perfect storm over the next several months,” said Martin Keulertz, assistant professor in the food security programme at the American University of Beirut.

The country’s second port, in Tripoli 80km north of the capital, is significantly smaller than Beirut’s and will struggle to handle additional cargo volumes.

“Tripoli is not really fitted out to deal with the amount of food imports needed. There is an absolute urgency to import, and the government doesn’t have the foreign currency to do that,” said Halabi.

A third shock

The disaster is the third shock to hit the country since protests erupted in October 2019, and the economic impact of the coronavirus pandemic.

Despite banks imposing informal capital controls to limit cash withdrawals, over $25bn has flowed out of the country over the past year, while the Lebanese lira has depreciated by around 80 percent to the US dollar. Public debt has also skyrocketed to $92bn, equivalent to over 170 percent of GDP.

With foreign currency having dried up, importers had been struggling to pay for goods, reflected in imports dropping by 50 percent this year, according to Lebanese Customs authority data.

The impact of the explosion on the economy could cause further falls in the lira, which has dropped from LL1,507 to the dollar to over LL8,000, which would make imports even more expensive.

“Once the markets open the lira will take a hit, but the extent of that is as yet unknown. Whatever local demand there was for lira, it is going to be dampened by people having even less economic prospects than before,” said Halabi.

The ongoing ramifications of the financial crisis will impede the economy’s ability to rebound from the explosion.

“How will businesses start up again when there are capital controls that don’t let people take money out of banks? And with a fluctuating black market rate for currency? It’s a complete disaster,” said Haytayan.

Across the board, the Lebanese economy has been on the decline, with construction permits down 60 percent, car sales down 70 percent and tourism down by half this year on 2019.

“Everything is at a standstill, and putting it all back together again will be difficult as many people had not taken out insurance to cover for this type of disaster, and the insurance companies are tied to the banking sector, which was in the doldrums due to the financial crisis,” said Halabi.

 “Many businesses will not recover.”

 This article is available in French on Middle East Eye French edition.

 

 

 

Supertanker state: How Qatar is gambling its future on global gas dominance

 Doha sets course to become 'Saudi Arabia of gas' with $21bn order for new shipping fleet. But with demand and prices sinking, is the emirate heading for the rocks?

 Middle East Eye:  When Saudi Arabia caused oil prices to tumble in March the impact on oil producers’ revenues was immediate. But in neighbouring Qatar, which is a leading producer of liquefied natural gas (LNG), the situation is more complicated.

Last year, LNG accounted for $45.3bn (62 percent) of Qatar’s $73.1bn in export revenues. LNG prices are linked to oil and have also plummeted since March, though with one crucial difference.

Qatar exports 77 million tonnes (MT) of LNG a year, but it sells just 6 MT of that on the spot markets for immediate delivery. Most of Qatar’s LNG revenues are tied up in medium and long-term contracts, with a time lag before any drop in oil price is felt by both sellers and buyers.

“Around about 85 percent of Qatar’s gas contracts are linked to oil, with a six-month delay, so in terms of fiscal impact it will only be felt in September. This is a problem, and there’s a debate as to what extent LNG volumes will be impacted,” said a senior member of a state-linked Qatari financial firm speaking on condition of anonymity.

“Saudi Arabia saw the impact [of the oil price drop] immediately, here we’re behind the curve.”

 To read more: https://www.middleeasteye.net/news/qatar-gas-lng-market-oil-prices-dominance

Mohammed bin Salman's Vision 2030: Can Saudi Arabia afford it?

MBS's multi-trillion-dollar project was supposed to be a catalyst for social and economic reform. But Covid-19 and an oil price crash have thrown its future into doubt

Middle East Eye: “All success stories start with a vision” was blazoned across huge posters of Saudi Arabia’s crown prince in Seoul last year when Mohammed bin Salman made his first state visit to South Korea.

The slogan appears to have been directly lifted from a Saudi media consultant “applauding” the announcement of Vision 2030 by Mohammed bin Salman in 2016 to the Arab News, “to lead us to a bright future”.

But as the Vision plan starts its fifth year - and with a decade to go - the kingdom is reeling from the dual shocks of low oil prices and the economic fallout from the Covid-19 pandemic. Is there light at the end of the tunnel for Vision 2030?

When the Vision was announced to much fanfare by the then-deputy crown prince, figures were thrown around of $1tn to be invested in mega projects, and another $1tn to be attracted in foreign investment. The Public Investment Fund’s (PIF) assets would reach $2tn by 2030, it was predicted.

To read more: www.middleeasteye.net/news/saudi-arabia-vision-2030-mbs-neom-coronavirus

Monday, June 01, 2020

COVID-19 impact ‘will take years to process’: Mental health challenges surge for British Muslims

COVID-19 lockdown restrictions start easing in England from today, with primary schools re-opening and gatherings of up to six people allowed. Throughout the pandemic, the UK, with the highest number of COVID-19 related deaths in Europe, has seen a rise in calls from young British Muslims seeking mental help support during Ramadan.

(Image courtesy of MYH)


Salaam Gateway: The Muslim Youth Helpline has had a busy few months. Just before the UK implemented COVID-19 related restrictions in March, there was a spike in calls from young people wanting to talk, particularly about anxiety. As the lockdown took hold, calls increased by 313% and the small team of volunteers at MYH struggled to handle them.

“It has been relentless. Our statistics for April show we dealt with 700 inquiries – that is the most we’ve had in 19 years,” MYH’s director, Zohra Khaku, told Salaam Gateway.

Several weeks into the pandemic, anxiety is still one of the biggest issues the helpline deals with. “If you had anxiety disorder before, it is worse, if you didn’t, now maybe you do,” she said.

As the lockdown continued and Ramadan started, more serious cases started to emerge. In early May, Khaku tweeted: “Last night about half of our calls at Muslim Youth Helpline were about suicidal feelings.”

But it was not just that night, she said.


To read the rest click here