GULF STATES – ECONOMICS & FINANCE
Saudi Arabia to set up $10b oil refinery in Pakistan
Saudi Arabia plans to set up a $10 billion oil refinery in Pakistan’s deepwater port of Gwadar, the Saudi energy minister said on Saturday, speaking at the Indian Ocean port that is being developed with the help of China. Pakistan wants to attract investment and other financial support to tackle a soaring current account deficit caused partly by rising oil prices. Last year, Saudi Arabia offered Pakistan a $6 billion package that included help to finance crude imports. “Saudi Arabia wants to make Pakistan’s economic development stable through establishing an oil refinery and partnership with Pakistan in the China Pakistan Economic Corridor [CPEC],” Saudi Energy Minister Khalid Al Falih told reporters in Gwadar. He said Crown Prince Mohammed bin Salman would visit Pakistan in February to sign the agreement. The minister added that Saudi Arabia would also invest in other sectors. Beijing has pledged $60 billion as part of the CPEC that involves building power stations, major highways, new and upgraded railways and higher capacity ports, to help turn Pakistan into a major overland route linking western China to the world. “With setting up of an oil refinery in Gwadar, Saudi Arabia will become an important partner in CPEC,” Pakistan Petroleum Minister Ghulam Sarwar Khan said. The Saudi news agency SPA earlier reported that Al Falih met Pakistan’s petroleum minister and Maritime Affairs Minister Ali Zaidi in Gwadar to discuss cooperation in refining, petrochemicals, mining and renewable energy.
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UAE, Netherlands to promote sustainability
The UAE and Netherlands are exploring many ventures to promote sustainability that will, in turn, help the UAE to achieve food security, water security, clean energy and a sustainable future, among other benefits, said Hans Sandee, Netherlands’ Consul-General to Dubai and Commissioner-General of the Netherlands Pavilion at Expo 2020 Dubai. Currently, there are about 350 Dutch firms operational in the UAE and this number is expected to rise. “The UAE is actively promoting sustainability and this is evident from the just concluded Abu Dhabi Sustainability Week. The awareness is huge and this affirms a national commitment to its citizens to provide a better and healthy future,” added Sandee. The Netherlands will use Expo 2020 as a platform to showcase home-grown innovations that can be applied in the Middle East, Africa and South Asia (MEASA) region to help create a greener, more sustainable future. Inspired by the theme of ‘Uniting Water, Energy and Food’, the Dutch pavilion will house a ‘miniature world’ – or biotope – in which precious natural resources will be intrinsically linked and the climate will be naturally controlled. A giant cone-like structure covered with plants will form the centrepiece of the Dutch pavilion at Expo 2020.
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Dubai’s non-oil private sector growth eases in Dec
Non-oil private sector growth in Dubai eased in December as the three main sectors expanded at a slower pace compared to November, Emirates NBD said on Tuesday. Dubai’s largest bank said in a report that although total activity continued to rise at a strong overall pace, new business increased at the second-slowest rate in over two years and employment remained broadly unchanged. “Inflationary pressures remained weak as input costs rose modestly and firms continued to cut their charges.” The bank’s Dubai Economy Tracker Index fell from November’s 55.3 to 53.7 in December – the second-lowest reading in over two years and below the historic average (since 2010) of 55.2. The report said this signalled relatively muted non-oil growth. Moreover, the average for the fourth quarter of 2018 (53.8) was the lowest of any quarter since first quarter 2016. Khatija Haque, head of Mena Research at Emirates NBD, said all three of the individual sectors tracked in the index expanded at a slower pace in December as compared to November, with the construction sector slowing from the particularly strong 57.5 seen last month to 53.7 in the latest print. Travel & tourism remained the underperformer, falling from 52.8 to 52.0, compared to wholesale & retail trade’s 54.2. “Output in the whole of Dubai survey remained solidly expansionary, with over a quarter of respondents seeing greater activity, while nearly a third of firms saw greater new orders, in a positive for future output. The majority also expected future conditions to improve, with only 5.3 percent expecting a deterioration over the next 12 months,” said Haque. All three of the key monitored sectors – construction, wholesale & retail and travel & tourism – registered slower improvements in business conditions in December. Travel & tourism continued to post the weakest overall growth (52.0), followed by construction (53.7) and wholesale & retail (54.2).
| UAE statistics | |||
|---|---|---|---|
| Overview | Last | Reference | Previous |
| GDP Annual Growth Rate (%) | 0.8 | Dec/17 | 3 |
| Unemployment Rate (%) | 1.72 | Dec/17 | 1.64 |
| Inflation Rate (%) | 1.3 | Nov/18 | 1.6 |
| Interest Rate (%) | 2.75 | Dec/18 | 2.5 |
| Balance of Trade (AED Million) | 315100 | Dec/17 | 251400 |
| Current Account (AED Million) | 971000 | Dec/17 | 48500 |
| Current Account to GDP (%) | 7.3 | Dec/17 | 3.8 |
| Government Debt to GDP (%) | 20.7 | Dec/17 | 20.7 |
| Government Budget (% of GDP) | -2.6 | Dec/17 | -3.9 |
| Manufacturing PMI | 54 | Dec/18 | 55.8 |
| Consumer Confidence (Index Points) | 111 | Sep/18 | 116 |
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Expo live supports global sustainability
The UAE has always been a strong supporter of sustainability and it is also one of its three key subthemes at the core of Expo 2020 Dubai. The World Expo’s innovation and partnership programme Expo Live is already playing a crucial role in driving sustainability by providing funding, guidance and exposure to social innovators who are helping to improve lives, preserve the planet – or both. Through initiatives such as Expo Live, Expo 2020’s aims to bring the world together to create a positive impact by collectively working towards building a sustainable future in the UAE and beyond. By harnessing the convening power of a World Expo, Expo Live demonstrates how innovations coming from all places and people can advance the pace of progress, connecting minds to inspire a shift that results in a more sustainable future for all. The Innovation Impact Grant Programme (IIGP) is Expo Live’s flagship global initiative to fund and support novel and innovative prototype-level solutions that address at least one of Expo’s three key subthemes. The eight global innovators – Coolar; Jaan Pakistan; Saathi Eco Innovations; Kabadiwalla Connect: The Plastic Bank; Unique Quality Products Enterprise; WooBox and Paptic – secured backing from Expo Live during the first three cycles of the IIGP. Working across a variety of sectors, these social entrepreneurs are developing creative solutions with the potential to help shape a more sustainable future. To date, the programme has attracted 6,965 applications from 174 countries. Following the first three cycles of applications and rigorous evaluation, Expo Live committed its support to 70 Global Innovators from 42 countries. Applications for the IIGP’s fourth cycle closed in December 2018, and the next cohort of grantees will be announced later this year.
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Personal touch is key to bank of Baroda success
Bank of Baroda, the only Indian financial institution in the UAE, stresses on personal relationship to build lasting partnership with customers. Bank of Baroda executive director Papia Sengupta said in the age of Internet banking, personal touch is still required for business and makes a lot of difference in the long run. “Digital banking is there for ease but personal relationship is developed through emotions and sentiments. Our tagline itself says – banking on your future. We may not be very technologically competent as some other global banks but back in India we are doing fine. We are trying to be at par with all of the banks. We are also investing a lot on Artificial Intelligence and analytics,” she said after inauguration of the branch post relocation to Al Jazira Tower on Hamdan Street in Abu Dhabi. “We offer much better location and ambiance. We wanted to give customer a feel good factor. A customer can come with any financial issue and we will have a solution for you. We assure a complete financial package.” Papia noted merger with Vijaya Bank and Dena Bank will create a lot of synergy. “We will become a pan-India bank with more presence in the south. The trinity will become a force to reckon with. Overseas, there will be many customers of Dena Bank and Vijaya Bank who was having relationship outside will now come to us. So that overseas customer base will increase. As of now we haven’t planned any further expansion but will wait and see how things unfold,” she added. Meanwhile, Indian Ambassador to the UAE Navdeep Singh Suri, who opened the new facility, said the bank has done an outstanding job of serving the needs of the Indian community, especially businessmen. “This bright and elegantly designed facility in the heart of Abu Dhabi will go a long way in meeting the needs of their customer base and enhance the brand,” the ambassador said. Businessman and community leader B.R. Shetty said it was Bank of Baroda, which is the reason behind all his success. “I came to this country with lot of loan back home. I wanted to start a pharma company but it was difficult to get banks to support me. It was then Bank of Baroda chairman P.S. Shenoy who helped me. I never had a need to go to anyone else for finances. ” Shetty said.
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This is why it’s the best time to move to Dubai
Thanks to persistent decline in rents, reduced government fees and fines, and freezing of school fees, Dubai has become even more affordable in 2019 compared to the previous year with rentals and prices of groceries and restaurants declining on a year-on-year basis. According to the latest Cost of Living Index data by Numbeo, which collects databases about cities and countries worldwide, Dubai is rated as the 217th costliest city in the world in 2019 compared to 210th in the previous year – helped by a fall in inflation, a stronger dirham and a substantial increase in purchasing power of residents. When compared to the world’s six costliest cities, Dubai was 53 to 58 percent cheaper than the Swiss cities of Basel, Zurich, Lausanne, Bern, Geneva and Lugano, which were rated the costliest cities in the world, in terms of prices of groceries and restaurants. Restaurant and grocery prices in Dubai are substantially cheaper compared to Basel by 53 percent and 70 percent, respectively. Rentals in Dubai are cheaper by just five percent. But if the cost of living index is combined with the rental index, the emirate becomes much cheaper at 45 percent. Among other top cities, Dubai overall is 45 percent cheaper compared to New York because rents in the emirate are lower by 57 percent, groceries by 38.4 percent and restaurant prices by 41 percent compared to the US city. Dubai is 33 percent more economical than London because rents, groceries and restaurants costs are less by 38 percent, 37 percent and 10 percent, respectively, against The City, which was rated the 26th costliest in the world. Monica Malik, chief economist at Abu Dhabi Commercial Bank, said the fall in property prices across Dubai has been a central factor behind the marked moderation in headline inflation, with other causes such as the drop in oil prices also contributing.