TEHRAN: Just one shop among the thousands in Tehran's sprawling Grand Bazaar can offer a tableau of the darkening mood descending across Iran as American sanctions again take hold.
A salesman who wants to move to Europe for a better life shows off his pots and pans to a mother now struggling to pay for the gifts she wanted before her daughter's marriage amid the collapse of Iran's rial currency. Another salesman loudly blames internal politics and corruption for the country's woes. Muttered curses and even shouts against the government follow the journalists talking to them.
While only a small moment in a nation of 80 million people, it shows the dangers ahead for the government of the relatively moderate President Hassan Rouhani. His signature nuclear deal with world powers now has become a noose around his neck that hard-liners gleefully tighten. Meanwhile, the sporadic and leaderless protests the nation has seen over its worsening economy threaten to roar back to life at any time.
That has many expecting the worst is yet to come.
"It has become more difficult, but we need to lower our expectations," said Kiana Ismaili, 26, shopping ahead of her wedding.
For centuries, Iran's bazaar has been the beating heart of both its economic and political life. While some now go to the Western-style mega-malls of Tehran's tony northern suburbs, the Grand Bazaar's narrow alleys, cramped stalls and wandering musicians still draw crowds of thousands.
Strikes in Iran's bazaar also have served as political bellwethers.
Bazaar families opposed the Iranian Shah Mohammad Reza Pahlavi and supported the 1979 Islamic Revolution that saw him replaced by the Shiite theocracy and elected officials. More recently in June, protesters swarmed Tehran's Grand Bazaar and forced shopkeepers to close their stalls, apparently in anger over the rial dropping to 90,000 to the U.S. dollar on the black market despite government attempts to control the currency rate.
The rial in the meantime has dropped as much as 150,000 to $1 with many anticipating further drops as the U.S. restores punishing sanctions on Iran's crucial oil industry in early November. The Trump administration denies it is seeking to overthrow Iran's government through the economic pressure, though Iranian officials say the link between the two is clear.
Fear over the economy has brought many to the Grand Bazaar in recent days to buy what they can before their savings further dwindle away.
"People are buying more because they think they won't be able to buy stuff with current prices anymore. They are worried about price fluctuations," said Omid Farhadi, a 25-year-old sales clerk at the kitchenware shop Zomorrod, or "Emerald" in Farsi.
"You have no price stability in this country. You go to bed and overnight a car that was worth 100 million rials is now worth 140 million."
As shoppers looked over his pots and pans, Farhadi said he hoped to immigrate soon to the Netherlands. He said other young Iranians with the financial means want to leave the country as well, while those without, longingly look at life in Europe.
Farhadi largely blamed Iran's poor relations with the rest of the world for the faltering economy.
That's spearheaded by President Donald Trump's decision to pull America out of the 2015 Iran nuclear deal, which saw Iran agree to limit its enrichment of uranium in exchange for the lifting of economic sanctions. While the United Nations repeatedly has said Iran complies with the accord, Trump said he wanted a stricter deal that also constrained Iran's ballistic missile program and its foreign policy while permanently limiting its atomic program.
While Iranians remain angry at Trump over adding them to his travel ban and pulling out of the deal, many feel even angrier at their own government. That's due to a steady stream of corruption cases and allegations of mismanagement by officials.
Farhadi's colleague at the shop made a point to tell visiting Associated Press journalists he believed Iran's main problem lay with Rouhani's administration. The government's management of Iran's economy, already hobbled by high unemployment, growing inflation and debt-laden banks, also faces widespread criticsm.
"Ninety percent of our problems are because of the infighting," said salesman Alireza Alihosseini. "I don't know why but the government and the supreme leader have differences. Only 10 to 5 percent is because of America."
The mother of Ismaili, the young woman shopping ahead of her wedding, then came up and asked to talk as well. She spoke carefully about how Iran has faced sanctions and international pressure in the nearly 40 years since the 1979 Islamic Revolution, calling the recent pressure nothing new.
Men listening to her speak then started muttering, some cursing her loudly for her comments. A man in the market, who requested anonymity for fear of reprisals for his criticism of the government, put his blame squarely on those in charge of the country.
"For someone like me, a young man, if I'm hungry and I don't have a job I'll turn into a thief. I'll turn into a vampire," he warned.
Elsewhere in the market, some even defended Trump, like Mahdirashid Mohammadzadeh, whose small stall in the jewelry section of the bazaar has seen customers eagerly buying gold as a hedge against the falling rial.
"Once we made peace with Obama, we were never so cheap," he said.
Asked what caused the economic woes, Mohammadzadeh blamed Iran's costly foreign intervention in Syria.
"This is the people's money," he said. "We have done nothing wrong to deserve this, but they are sending all our money to Syria."
Unease, anger in Tehran's Grand Bazaar, Iran's beating heart
Unease, anger in Tehran's Grand Bazaar, Iran's beating heart
- Strikes in bazaar serve as political bellwether
- Shoppers worried about declining value of rial
Saudi Arabia’s demand for apartments pushes new mortgages over $16bn
RIYADH: Banks in Saudi Arabia granted SR60.92 billion ($16.24 billion) in residential mortgages in the first 9 months of 2024, an annual rise of 4.88 percent.
The data was released by the Saudi Central Bank, also known as SAMA, and it showed the bulk of the loans — constituting 64 percent or SR38.85 billion — was allocated for house purchases.
This segment did witness a 3.38 percent dip year on year, with its proportion of total loans shrinking from the 69 percent seen during the same period of 2023.
Demand for apartments surged, capturing 31 percent of total mortgages, up from 25 percent a year ago, as this category of lending reached SR18.6 billion.
This shift represents a 26.8 percent growth, underscoring the increasing preference for apartment ownership amid urbanization and demographic changes.
Additionally, loans for land purchases showed a promising trajectory, achieving an annual growth rate of 8.26 percent and amounting to SR3.5 billion, which signals a sustained interest in land investment across the Kingdom.
The rise in new residential bank loans across Saudi Arabia is being driven by a blend of population growth, evolving mortgage policies, and increasing interest in apartment living.
According to a recent report from online real estate platform Sakan, the Kingdom’s population surged by four million over the past five years, with demand for housing climbing in response.
While this trend fuels the broader housing market, apartments have become a prominent focus, reflecting changing demographics and affordability needs.
The growth of the expatriate population, which expanded from 9.9 million in 2010 to 13.4 million in 2022 and now makes up over 40 percent of the population, also adds pressure on the rental market, particularly in major cities.
The government’s push for greater home ownership through buyer-friendly mortgage policies is helping fuel this apartment demand.
Favorable mortgage options and the recent introduction of the Premium Residency Visa, often dubbed the “Saudi Green Card,” allow foreign investors to enter the market with purchases over SR4 million, fostering interest in upscale residential investments.
Additionally, the value proposition of apartments is clear, as with SR1 million, buyers can access apartment sizes that vary by city — for instance, around 131 sq. meters in North Riyadh to a more spacious 333 sq. meters in Dammam, according to the report.
Saudi Arabia’s liberalized foreign ownership policies and affordable mortgage terms further boost demand, particularly for apartments in desirable areas.
The high rental yields offered by apartments in Saudi Arabia also attract investors, with two- and three-bedroom apartments in Riyadh delivering yields of 9 to 10 percent, and even higher returns in Jeddah, where a two-bedroom unit yields 11.7 percent.
These returns are notably higher than apartment yields in neighboring Gulf cities, where they average between 5 to 6 percent in Dubai, Abu Dhabi, and Doha.
High rental yields not only make apartments attractive as long-term investments but also help offset rising property costs, driving both end-users and investors to favor this category in a market characterized by shifting residential preferences.
According to the report, the surge is also driven by the rapid evolution of real estate technology.
Platforms like Sakan are reshaping the real estate landscape by enhancing transparency, streamlining property transactions, and providing data-driven insights for buyers and investors alike.
Leveraging local knowledge and international expertise, these platforms are supporting the sector’s growth by simplifying access to property listings, improving market transparency, and facilitating faster transaction times.
As property technology continues to integrate into the Saudi market, it is poised to play a pivotal role in sustaining the momentum of residential lending and meeting the needs of a tech-savvy, expanding population.
Saudi Arabia’s official reserves reach $457bn, up 4%
RIYADH: Saudi Arabia’s official reserve assets reached SR1.71 trillion ($456.97 billion) in September, marking a 4 percent increase year-on-year, according to new data.
Figures released by the Saudi Central Bank, known as SAMA, show these holdings include monetary gold, special drawing rights, the International Monetary Fund’s reserve position, and foreign reserves.
The latter, comprising currency and deposits abroad as well as investments in foreign securities, made up 94.5 percent of the total, amounting to SR1.62 trillion in September. This category grew 4.11 percent during this period.
September data indicated that special drawing rights rose to SR79.86 billion, marking a 4.18 percent increase and reaching the highest level in two and a half years. SDRs now account for 4.66 percent of Saudi Arabia’s total reserves.
Created by the IMF to supplement member countries’ official reserves, SDRs derive their value from a basket of major currencies, including the US dollar, euro, Chinese yuan, Japanese yen, and British pound sterling. They can be exchanged among governments for freely usable currencies when needed.
SDRs provide additional liquidity, stabilize exchange rates, act as a unit of account, and facilitate international trade and financial stability.
The IMF reserve position totaled around SR12.64 billion, but decreased by 11.45 percent during this period. This category represents the amount a country can draw from the IMF without conditions.
Saudi Arabia’s official reserves have been a fundamental pillar of the nation’s economic stability and are closely tied to its strategic investments in foreign securities.
The Kingdom’s reserves include an extensive portfolio of foreign assets, diversified across currencies and geographies, ensuring the country has a robust financial buffer against global economic uncertainties.
This prudent reserve management has helped Saudi Arabia maintain a resilient fiscal position and a strong credit rating, affirmed at “A/A-1” by S&P Global, which recently upgraded the Kingdom’s outlook to positive due to its sustained reform momentum.
In alignment with Vision 2030, Saudi Arabia has adopted an expansionary fiscal policy to support transformative projects aimed at reducing its economic dependence on oil.
This ambitious agenda has led to budget deficits and prompted the country to tap into debt markets to finance key infrastructure and social initiatives.
Despite the uptick in debt, the Kingdom remains fiscally well-positioned, with ample reserves and substantial net assets, projected to stay above 40 percent of GDP through 2027 according to S&P Global.
This buffer underscores Saudi Arabia’s capacity to absorb potential economic shocks while continuing to pursue its development goals.
The nation’s significant reserve base not only underpins its economic stability but also provides the flexibility to recalibrate spending on large infrastructure projects as needed, maintaining a balance between growth and fiscal discipline.
This strategy is essential as Saudi Arabia seeks to nurture its non-oil sectors, supported by the Public Investment Fund and other governmental entities.
The PIF’s role in fostering a diversified economy is central to Vision 2030’s objectives, from investment in renewable energy to technology and healthcare, creating a more resilient and diversified economic base.
With the positive outlook and strategic focus on sustainable growth, Saudi Arabia’s economic reforms are expected to drive strong non-oil growth over the medium term, further cementing the Kingdom’s fiscal stability and enhancing investor confidence in its long-term economic vision.
COP29: Clean energy a catalyst for stability, recovery in conflict zones
- Environmental solutions reduce dependence on imports
- Micro-grids support conflict-ridden communities
BAKU: As COP29 progresses in Baku, attention is turning to the ways in which clean energy can transform post-conflict recovery efforts, bringing both environmental resilience and social stability to regions affected by war.
This year’s discussions have highlighted how renewable energy offers more than environmental benefits, having the potential to catalyze economic recovery, improve living standards and build long-term resilience in areas most vulnerable to conflict.
Renewable energy in conflict recovery: A new dimension of aid
Experts have highlighted how sustainable infrastructure can reduce dependence on foreign energy imports and fuel local economies in war-torn areas.
Hafed Al-Ghwell, a North African geopolitics expert, said in an interview with Arab News that “clean energy isn’t just about generating power; it’s about autonomy and resilience.” For regions dependent on volatile foreign fuel supplies, renewables offer a more stable power source that strengthens local autonomy.
Gilles Carbonnier, vice president of the International Committee of the Red Cross, highlighted the critical role of renewable energy in supporting communities severely affected by both conflict and climate change.
“The people who are most affected by climate change risks are those who live in zones of armed conflict and have the least capability to adapt and face these risks,” Carbonnier said.
He described how the ICRC is using solar power to help protect communities from droughts, floods and extreme weather across the Sahel, the Horn of Africa and the Middle East.
“What we need is to scale these efforts, which means directing much more climate funding to conflict zones,” Carbonnier added.
This local approach provides immediate aid while laying the foundation for sustainable recovery in areas struggling with limited resources and infrastructure damage.
Gaza: The intersection of war and environmental crisis
The war and occupation in Gaza represents a severe environmental and humanitarian crisis.
Crown Prince Hussein of Jordan addressed COP29. In calling for global solidarity with Gaza, he said: “Saving our planet must start from the premise that all lives are worth saving.” He described how the war is “compounding environmental challenges for Gaza and beyond.”
A recent UN Environment Program report highlighted severe contamination of Gaza’s land, water and air due to the destruction of critical infrastructure, including sewage and waste systems, leaving communities surrounded by hazardous debris.
Carbonnier said that Gaza is emblematic of the dual crisis faced by many conflict zones, where war intensifies environmental damage and deepens humanitarian challenges.
“In Gaza, conflict has degraded critical infrastructure to the point where basic resources like clean water and electricity are scarce,” he said.
“Renewable energy solutions, such as solar micro-grids, could offer essential relief by providing stable power to hospitals, schools and homes,” he added.
In Gaza, solar micro-grids deployed by NGOs are already providing essential power for hospitals and emergency shelters, offering a sustainable alternative to fuel imports which have been blockaded by Israeli forces since the conflict began.
Resilience through clean energy infrastructure
Renewable energy infrastructure, particularly solar and wind power, is highly adaptable to conflict and post-conflict settings due to its low maintenance requirements and modular design.
Solar panels and wind turbines require minimal upkeep and their modular nature allows for incremental infrastructure development as security improves.
This approach has proved effective in Syria, where solar-powered micro-grids are supplying power to refugee camps, providing consistent electricity for vital services like sanitation and healthcare.
According to Carbonnier, these micro-grids “reduce dependence on often costly and dangerous fuel deliveries and stabilize power supplies for communities under stress.”
Renewable energy micro-grids are now recognized as a cornerstone of humanitarian aid, offering stability to populations affected by protracted crises.
Policy implications and international support
For renewable energy to become a reliable tool in post-conflict recovery, coordinated international support and robust policy frameworks are essential.
Azerbaijan’s lead COP29 negotiator, Yalchin Rafiyev, highlighted the need for financial support specifically directed at conflict zones. “Bridging the gaps between climate finance and peace-building efforts can unlock substantial benefits for communities emerging from conflict,” Rafiyev said.
Rumen Radev, president of Bulgaria, highlighted the link between climate resilience and global stability, telling Arab News: “Extreme meteorological events threaten not just people and economies, but also the security and stability of the world.”
His remarks highlight the importance of COP29’s goals in fostering peace through enhanced climate resilience.
Oil Updates – crude heads for weekly loss as Chinese demand continues to underperform
SINGAPORE: Oil prices fell on Friday on signs demand in China, the world’s biggest crude importer, continues to underperform amid its uneven economic recovery.
Brent crude futures were down 65 cents, or 0.9 percent, at $71.91 a barrel by 7:50 a.m. Saudi time. US West Texas Intermediate crude futures were down 62 cents, or 0.9 percent, at $68.08.
For the week, Brent is set to fall 2.7 percent while WTI is set to decline 3.3 percent.
“While oil prices have somewhat stabilized around the $71.00 level of support this week, the lack of a concrete bullish catalyst suggests that price recovery remains tepid for now,” Yeap Jun Rong, market strategist at IG, said in an email.
The prospect of higher supplies from the US and OPEC+ along with doubts over China’s economic recovery continue to be of concern, while the odds of a December rate cut are now “closer to a coin flip” under a less dovish Federal Reserve, Yeap added.
China’s oil refiners in October processed 4.6 percent less crude than a year earlier, falling year-on-year for a seventh month, amid the closures of some plants and reduced operating rates at smaller independent refiners, data from the National Bureau of Statistics showed on Friday.
The decline in run rates occurred as China’s factory output growth slowed last month and demand woes in its property sector showed few signs of abating even though consumer spending increased, government data showed.
Oil prices also fell this week as major forecasters indicated market fundamentals remained bearish.
The International Energy Agency forecast global oil supply will exceed demand in 2025 even if cuts remain in place from OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, as rising production from the US and other outside producers outpaces sluggish demand.
The Paris-based agency raised its 2024 demand growth forecast by 60,000 barrels per day to 920,000 bpd, and left its 2025 oil demand growth forecast little changed at 990,000 bpd.
OPEC this week cut its forecast for global oil demand growth for this year and 2025, highlighting weakness in China, India and other regions, marking the producer group’s fourth-consecutive downward revision to its 2024 outlook.
US crude inventories last week rose by 2.1 million barrels, the Energy Information Administration said on Thursday, much more than analysts’ expectations for a 750,000-barrel rise.
Gasoline stocks fell by 4.4 million barrels last week to the lowest since November 2022, the EIA said, compared with analysts’ expectations in a Reuters poll for a 600,000-barrel build.
Distillate stockpiles, which include diesel and heating oil, also fell unexpectedly by 1.4 million barrels, the data showed.
Fortune Global Forum to be held in Riyadh in 2025
RIYADH: American football legend Tom Brady tossed a football to Saudi Arabia's General Secretariat of Council of Ministers Fahd bin Abdulmohsan Al-Rasheed who announced that the 2025 Fortune Global Forum will be held in Riyadh.
The elite of the world's business leaders will converge on Riyadh next year as the Fortune Global Forum makes its inaugural appearance at the Saudi capital.
Al-Rasheed joked that if he fumbled the ball, it was Brady's fault and if he caught it he is “a great player.”
With an epic football toss from @TomBrady, His Excellency Fahd bin Abdulmohsan Al-Rasheed announces the 2025 #FortuneGlobalForum will be held in Riyadh, Saudi Arabia.
— FORTUNE (@FortuneMagazine) November 12, 2024
Next year, we'll gather leaders of the world’s biggest multinational companies to talk about the dynamic… pic.twitter.com/Nrabd1LWrG
The event, organized by Fortune magazine, is attended by presidents, chairmen and CEOs, as well as prestigious economists.
Fahd bin Abdulmohsan Al-Rasheed, chairman of the Saudi Convention and Exhibitions General Authority, said for the past 30 years the forum had brought together “the titans of industry around the world to the forefront of economic development.”
Speaking at this year’s forum, which concluded in New York on Tuesday, he added: “And that forefront today is the Kingdom of Saudi Arabia.”
He urged delegates to visit the Kingdom’s business epicenter to see what it had to offer.
