NEW DELHI: Uber Technologies Inc’s chief executive pledged to continue investing aggressively in Southeast Asia even though the US ride hailing firm expects to lose money in the fast growing market due to costly battles with rivals such as Grab.
SoftBank’s 15 percent stake purchase in Uber last month has opened up the possibility of combining Uber with other ride-hailing assets the Japanese group owns across Asia.
SoftBank has stakes in Singapore-based Grab and India’s Ola.
At the time of the investment, SoftBank said it wants Uber to focus on growing in the US, Europe, Latin America and Australia — not Asia, which has been among the most costly and competitive regions for the ride-services firm, a source had told Reuters.
Uber is preparing to sell its Southeast Asia ride-hailing business to Grab in return for a substantial stake in the company, CNBC reported earlier this month, citing sources familiar with the matter.
But Dara Khosrowshahi seemed to dismiss that strategy on Thursday in his first official visit to Asia since he became Uber CEO last year.
“We expect to lose money in Southeast Asia and expect to invest aggressively in terms of marketing, subsidies etc,” Khosrowshahi told reporters in New Delhi, adding there is huge potential in the region thanks to a big population and fast Internet user growth.
“From a competitive standpoint we think we can improve,” he said.
Khosrowshahi said that a decade from now he expects 80 percent of growth at Uber to be organic and some through acquisitions.
“We will look at anything ... But right now the plan for Southeast Asia is to go forward, lean forward and to invest.”
Khosrowshahi said SoftBank is an investor but Uber, which has a valuation of around $68 billion, will take any final decisions along with the board on mergers and partnerships. He said he does not expect any change in Uber’s India operations following the deal with SoftBank.
India is one of Uber’s fastest-growing international markets and accounts for more than 10 percent of Uber’s trips globally, but it’s not making money yet, Khosrowshahi said.
Uber and India’s market leader Ola have been locked in a fierce battle, pumping in millions of dollars of investors’ money for a bigger piece of the country’s $12 billion taxi market.
“The greatest value that we can create here is to continue to invest and grow our business here, not just for India but the role it is going to play in shaping our product for the rest of the world,” he said.
Khosrowshahi declined to comment on specific investments for India but said “it is a lot” and will continue to increase.
“We as a company need to have a balanced profile in terms of growth and investment. There are developed markets that we are going to continue to invest in that are going to be more profitable ... and we should actively be investing in markets like India and Latin America that have huge growth ahead of us.”
Khosrowshahi, who took the helm in August after former CEO Travis Kalanick was asked to step down amid a litany of regulatory problems, driver and consumer scandals and court cases, has pledged to make a clean break with past practices that have lead to accusations of a toxic work culture.
Uber has faced bans, restrictions and protests around the world as it disrupts conventional taxi services and Khosrowshahi is tackling this head-on by working with regulators, putting an end to the take-no-prisoners culture he inherited.
He said that the company has a responsibility to local governments and regulators, and it needs to have a dialogue with them.
Uber will aggressively invest in SE Asia, won’t let SoftBank rule it
Uber will aggressively invest in SE Asia, won’t let SoftBank rule it
Saudi Arabia and Tajikistan ink deal to boost non-oil trade
RIYADH: Saudi Arabia and Tajikistan have signed a memorandum of understanding to accelerate non-oil exports and knowledge sharing.
According to the Kingdom’s press agency, the MoU was signed by the Saudi Export Development Authority and the Export Agency of Tajikistan on the sidelines of an event which agreed to establish a bilateral business council between the countries.
That agreement was reached by the Federation of Saudi Chambers and the Chamber of Commerce and Industry in Tajikistan, and will see the promotion of trade and investment relations.
Bolstering non-oil exports and promoting trade between nations is a crucial goal outlined in Saudi Arabia’s Vision 2030 agenda, as the Kingdom is on an economic diversification journey by reducing its dependence on crude revenues.
The Saudi-Tajik Business Council is expected to serve as a platform for private sector communities in the Kingdom and Tajikistan to network, showcase their activities, and foster commercial partnerships.
The council will also work to open new areas for economic collaboration, facilitate continuous interaction between the private sectors of both countries, and exchange information on market opportunities.
During the ongoing 28th edition of the World Investment Conference in Riyadh, Bandar Alkhorayef, Saudi Arabia’s minister of industry and mineral resources, held a bilateral meeting with the First Deputy Prime Minister of Tajikistan, Hakim Khalikzoda, and discussed ways to enhance cooperation in the mining and industrial sectors.
Alkhorayef also met with the Tunisian Minister of Economy and Planning, Samir Abdel Hafeez, and discussed ways to develop bilateral relations in the industrial sector between both nations.
Earlier this month, the Kingdom and Tunisia signed an MoU to strengthen bilateral cooperation and promote direct investments between the two nations.
The deal, which was inked by Saudi Arabia’s Minister of Investment Khalid Al-Falih and Tunisia’s Minister of Economy and Planning, focuses on sharing regulations and laws to enhance the investment environment in both countries.
The agreement between Tunisia and Saudi Arabia is seen as a crucial step in deepening the economic and industrial ties between both nations as they seek to diversify their economies and create new growth opportunities through strategic partnerships.
A report released by Saudi Arabia’s General Authority for Statistics in November revealed that the country’s non-oil exports reached SR79.48 billion ($21.16 billion) in the third quarter of this year, representing a rise of 16.76 percent compared to the same period in 2023.
Saudi education POS defies trend, surges 178%: SAMA data
RIYADH: Education spending in Saudi Arabia soared 178.6 percent to SR249.5 million ($66.4 million) during the week of Nov. 17–23, bucking the broader decline across other sectors.
According to the Saudi Central Bank’s weekly point-of-sale transactions bulletin, education was the sole sector to record growth. Transactions in the category climbed 62.3 percent to 164,000.
By contrast, other consumer spending categories experienced sharp declines. Clothing and footwear posted the steepest drop, falling 25.1 percent to SR694 million. Hotel expenditures followed, dipping 23.5 percent to SR305.6 million.
Spending in restaurants and cafes, which accounted for the second-largest share of total POS value, decreased 19.6 percent to SR1.66 billion.
Overall, Saudi Arabia’s POS transactions shrank 13.1 percent week on week, with total expenditures declining to SR11.5 billion from SR13.2 billion in the prior week.
The central bank’s figures showed that the electronics sector saw a 9.3 percent slide to SR179.6 million, while telecommunications expenditures dropped 11.2 percent to SR104 million.
The food and beverages category — the largest contributor to POS transactions — saw a 9.8 percent dip to SR1.7 billion. Miscellaneous goods and services, which ranked third, fell 10.6 percent to SR1.3 billion. Together, the top three categories accounted for 41.3 percent, or SR4.7 billion, of the week’s total transaction value.
At 3 percent, the smallest decrease occurred in spending on construction and building materials, leading total payments to SR340.5 million. Expenditures in the health sector dipped by 7.3 percent to SR710 million.
Regional insights
Geographically, Riyadh dominated POS transactions, representing 35.9 percent of the total, with expenses in the capital reaching SR4.1 billion — an 8.2 percent decrease from the previous week.
Jeddah followed with a 14.2 percent dip to SR1.5 billion, and Dammam came in third at SR590.5 million, down 7.9 percent.
Hail experienced the most significant dip in spending, decreasing 20 percent to SR177.4 million. Tabouk and Abha recorded declines by 11.4 percent and 9.8 percent reaching SR209 million and SR134.9 million, respectively.
Makkah and Madinah saw the largest transaction decreases, falling 15.2 percent and 14.9 percent, respectively, to 7.6 million and 7.8 million transactions.
Oil Updates – prices steady with focus on Israel-Hezbollah ceasefire, OPEC+ policy
TOKYO: Oil prices steadied on Wednesday, with markets assessing the potential impact of a ceasefire deal between Israel and Hezbollah, and ahead of Sunday’s OPEC+ meeting of producers.
Brent crude futures rose 5 cents to $72.86 a barrel by 7:15 a.m. Saudi time, while US West Texas Intermediate crude futures were up 3 cents at $68.80 a barrel.
Both benchmarks settled lower on Tuesday after Israel agreed to a ceasefire deal with Lebanon’s Hezbollah.
A ceasefire between Israel and Hezbollah will take effect on Wednesday after both sides accepted an agreement brokered by the US and France, US President Joe Biden said on Tuesday.
The accord cleared the way for an end to a conflict across the Israeli-Lebanese border that has killed thousands of people since it was ignited by the Gaza war last year.
Israeli Prime Minister Benjamin Netanyahu said he was ready to implement the deal with Lebanon and would “respond forcefully to any violation” by Hezbollah.
“Market participants are assessing whether the ceasefire will be observed,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
“We expect WTI to trade within the range of $65-$70 a barrel, factoring in weather conditions during the Northern Hemisphere’s winter, a potential increase in shale oil and gas production under the incoming Donald Trump administration in the US, and demand trends in China,” he said.
On the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, sources said the group is discussing a further delay to a planned oil output hike that was due to start in January, ahead of a Dec. 1 meeting to decide policy for early 2025.
The group pumps about half the world’s oil and had planned to gradually roll back oil-production cuts with small increases over many months in 2024 and 2025. But a slowdown in Chinese and global demand, and rising output outside the group, have put a dampener on that plan.
“Our longstanding base case has been that OPEC+ defers the tapering of output cuts all the way through 2025,” Citi Research analysts said in a note, adding that the tapering could start in April instead of January.
“From the producer group’s point of view, holding off the unwind could allow the market the chance to be more balanced, via supply disruptions or more resilient demand, while bringing barrels back makes lower prices a foregone conclusion.”
In the US, President-elect Donald Trump said he would impose a 25 percent tariff on all products coming into the US from Mexico and Canada. Crude oil would not be exempt from the trade penalties, sources told Reuters on Tuesday.
Meanwhile, US crude oil stocks fell while fuel inventories rose last week, market sources said, citing API figures on Tuesday.
Crude stocks fell by 5.94 million barrels in the week ended Nov. 22, exceeding analysts’ forecast of a drop of about 600,000 barrels.
Saudi Arabia, Pakistan in talks on refinery upgrades, greenfield project: official says
RIYADH: Saudi Arabia is set to deepen its strategic partnership with Pakistan through talks on refinery upgrades and a greenfield project for petroleum products, according to an official.
Speaking to Arab News on the sidelines of the World Investment Conference held in Riyadh, Musadik Malik, senator and minister of state for petroleum of Pakistan, noted that the collaboration extends beyond energy projects and includes an agreement to connect power grids between the two nations.
“We are working very closely with the Kingdom to figure out how, what are the future energy needs, particularly in the area of renewables, and jointly, we’re going to identify and scope the opportunity, and jointly we’re going to build a program to fulfill those needs,” Malik said.
He continued: “We have two different projects which are right now under, to say, research.
One is the upgradation of quantifier refineries, and the other is a large greenfield refinery which would not only produce petroleum products but also hydrocarbons. These are under research and negotiation, so these are not finalized.”
Malik highlighted that the partnership goes beyond just securing investments or transferring advanced technology. Instead, it involves a joint effort to carefully analyze Pakistan’s future energy needs and map out potential scenarios for how these demands might evolve over time.
This forward-looking approach ensures that both nations are not just reacting to immediate energy challenges but are proactively planning for the long term.
By working together to address these evolving requirements, Saudi Arabia and Pakistan aim to guarantee Pakistan’s energy security, creating a sustainable and reliable framework that supports the country’s growth and development.
Saudi Arabia and Pakistan are making significant strides in strengthening private-sector collaborations, with multiple agreements already yielding tangible results.
Malik highlighted the proactive approach both nations are taking to foster business-to-business partnerships.
“Our prime minister believes that the government should not be in the business of doing business but should facilitate it,” he said, emphasizing the central theme of the collaboration.
“A very large part of the concept we are jointly building on is the private sector of the Kingdom working with the private sector of Pakistan.”
The minister added that around $2.8 billion worth of memorandums of understanding have been signed between the two countries in October.
“Out of these 28 to 30 MOUs, seven or eight have already been converted into contracts and executed within just three to four months,” Malik said.
He continued, explaining the momentum of the partnership: “We have transacted significant deals, and contracts are in motion. Yesterday (Nov. 25), during a roadshow with the Kingdom’s private sector, we secured a non-disclosure agreement that could pave the way for a $1.8 billion investment.”
Malik emphasized the multifaceted nature of Saudi Arabia’s involvement in Pakistan, describing it as a “360-degree view” encompassing both public and private sectors.
“We are not only receiving investments and technology but also collaborating on long-term strategies to meet Pakistan’s growing energy demands,” he said. “The Kingdom’s Public Investment Fund and subsidiaries are actively identifying opportunities for mutual growth.”
Pakistan is tackling the challenge of energy demand fluctuations, a longstanding issue where consumption peaks in summer and drops to a third during winter.
This cyclicality forces the country to make capacity payments to investors, covering equity returns and debt servicing even when energy is underutilized, Malik explained.
To address this inefficiency, Pakistan signed an MoU with Saudi Arabia to connect their power grids.
“This grid connection will allow energy produced in the Kingdom and Pakistan to be transacted seamlessly,” Malik said. “When we connect with Saudi Arabia, it effectively means connecting with the GCC as well.”
The initiative also aligns with regional energy strategies, as Pakistan seeks similar arrangements with Central Asian states.
“In Central Asia, energy demand is high in winter and negligible in summer. With this connectivity, deficits will no longer remain deficits, and surpluses will clear in real-time,” he added, highlighting plans for a unified energy market facilitated by a shared grid.
Malik concluded the interview by praising Saudi Arabia’s unwavering support for Pakistan, describing the Kingdom as a true and steadfast ally.
“In good times and bad, we have always found the Kingdom by our side. This is the hallmark of true friendship,” he said.
Saudi Arabia reveals 33.8% annual spending boost on Vision 2030 projects
RIYADH: Spending on Vision 2030 programs by Saudi Arabia has increased by an annual rate of 33.8 percent since the launch of the Kingdom’s economic development initiative.
The announcement was made by Finance Minister Mohammed Al-Jadaan following the budget’s approval.
Al-Jadaan explained that the 2025 budget is designed to continue strategic investments in developmental projects, aligning with sectoral strategies and programs under Saudi Vision 2030.
On Tuesday, Saudi Arabia approved its state budget for the fiscal year 2025, with projected revenues of SR1.18 trillion ($315.73 billion) and expenditures of SR1.28 trillion, resulting in a deficit of SR101 billion.
The minister emphasized that the government remains dedicated to projects that promote sustainable economic, social, and environmental benefits. These include improving the business environment, boosting the trade balance, and increasing both local and foreign investments.
“We identified that the nominal GDP has achieved greater growth from 2015 to 2023,” Al-Jadaan said during a press conference on the budget.
He also highlighted the growing contribution of non-oil sectors to the country’s GDP. “The contribution of non-oil activities to the gross domestic product increased from approximately 47 percent in 2016 to around 52 percent by the end of the first half of 2024,” Al-Jadaan noted, adding that such a shift was “extremely challenging to achieve within six years, as structural economic transformation does not occur in one or two years.”
The finance minister reaffirmed that the government continues to prioritize citizens' basic needs, with a focus on education, health, and social services. “There is a continued approach of planned expansion by the government to improve services provided to citizens and enhance the quality of these services. This expansion focuses on accelerating strategies with significant economic impact on jobs, business opportunities, and the sustainability of the Saudi economy,” he said.
He also reiterated the government’s commitment to completing ongoing projects, integrating technology and infrastructure into the broader economic system.
Al-Jadaan expressed optimism regarding the Kingdom’s economic indicators. “Economic indicators call for optimism, and non-oil GDP helped (overall) GDP continue to grow,” he remarked.
The minister clarified that the projected deficit in the 2025 budget aligns with the government’s financial planning framework, stating that Saudi Arabia plans to continue both local and international financing operations to cover the deficit and meet its debt obligations.
He also noted that the Kingdom is focusing on alternative financing methods to bolster economic growth, particularly through strategic spending on Vision 2030 programs. “The 2025 budget aims to maintain the Kingdom’s financial position and achieve fiscal sustainability by preserving manageable public debt levels and substantial government reserves,” Al-Jadaan explained.
“Debt levels in Saudi Arabia remain lower than those of most countries in the G20,” he added.
Al-Jadaan confirmed that government reserves are expected to remain stable at around SR390 billion by the end of 2025.
The finance minister also discussed the role of various sectors in driving economic growth. “The industrial sector is extremely important for several reasons, the foremost being national security. Having a robust industrial base means reducing exposure to external risks,” he said.
He further emphasized that exports and job creation within the industrial sector enhance the country’s balance of payments and support the broader economy.
Al-Jadaan highlighted tourism as another key sector contributing to job creation and economic stability. “Tourism, both in Saudi Arabia and globally, is one of the largest sectors contributing to job creation in the economy. It is also among the key sectors that significantly support the balance of payments,” he said. He noted that investments are being directed towards tourism projects and services across the Kingdom.
The transportation and logistics sectors were also emphasized as essential to the Kingdom's economic future. Al-Jadaan pointed out that a robust logistics infrastructure is crucial for the success of the industrial sector. “The transportation and logistics sector also has direct benefits, including the creation of logistics hubs that capitalize on Saudi Arabia’s central location, connecting three continents and serving as a strategic global crossroads,” he stated.
Turning to the energy sector, Al-Jadaan clarified that Saudi Arabia’s energy strategy encompasses much more than oil. “When discussing the energy sector, I am not referring solely to oil. I am speaking about the broader concept of energy, including renewable energy, gas, gas networks, and their delivery to industrial zones across the Kingdom,” he said.
He also discussed progress in the military sector, noting that the Ministry of Defense has completed its 10-year plan, with implementation already underway.
“The military sector has seen significant progress, with the Ministry of Defense completing its 10-year plan and the military sector now moving forward with its implementation,” Al-Jadaan explained.
Addressing the broader global economic landscape, Al-Jadaan assured that the Kingdom is maintaining stability despite external challenges. “Inflation in the Kingdom is under control despite its rise globally,” he said.
On public finances, the finance minister highlighted the role of Saudi Aramco in supporting government revenue. “Public finances in Saudi Arabia receive main sources of revenue, one of which comes from oil through the Aramco company. The first source is called the ‘royalty,’ which is a well-established concept with international standards. In Saudi Arabia, the royalty rate is set at 15 percent of Aramco’s oil sales,” he said. He also pointed out that Aramco is required to remit 50 percent of its profits to the government.
Al-Jadaan also touched on government efforts to control fuel prices, stating that billions are being spent to prevent price hikes. “When the Saudi government listed Aramco shares on the financial market, it had several objectives, all of which have been achieved. These included enhancing transparency, monetizing some of these assets, and utilizing the proceeds to support ongoing economic initiatives,” he said.
Finally, when discussing major infrastructure projects such as NEOM, Qiddiya, Diriyah Gate, and the Red Sea Project, Al-Jadaan emphasized that these initiatives have dedicated companies with their own budgets. “These companies have budgets allocated from the sovereign fund, not from the public treasury. They spend based on these budgets and they’re held accountable accordingly,” he stated.
Addressing inflation, Al-Jadaan clarified: “There is no officially targeted inflation rate in Saudi Arabia. However, globally, an inflation rate of 2 percent or 3 percent is considered acceptable.”
In conclusion, Al-Jadaan reaffirmed that the Saudi economy remains on a positive trajectory thanks to the government’s proactive policies and long-term planning, positioning the Kingdom to navigate both local and global challenges effectively.
