TEHRAN, Iran: Stay-at-home mom Maryam Alidadi used to lead a comfortable middle-class life. The 35-year-old and her husband, a mechanic, could afford a spacious rental apartment in a central neighborhood of Tehran, along with a car, occasional restaurant meals and holidays abroad.
Now they are barely hanging on, even after drastically cutting spending.
Like most Iranians, the family was hit hard by the collapse of the national currency, accelerating inflation and eroding wages — fallout from unprecedented US sanctions.
Perhaps most devastating for Iran’s large middle class has been the sharp spike in housing prices, more than double in a year. That has uprooted tenants and made home ownership unattainable for most.
The Alidadis sold their car and borrowed from friends and family to buy a smaller apartment in a less desirable area on the outskirts of Tehran — in hindsight a smart move, since they’ve been priced out of their old neighborhood by now.
“Right now, this is the most difficult period ever,” said Alidadi’s 58-year-old mother, Shahla Allahverdi, reflecting on the Islamic Republic’s 40-year history as she shared a park bench with her daughter.
Iranians worry about the future as tensions between Iran and the West continue to rise.
The escalation — triggered by the Trump administration’s withdrawal last year from Iran’s 2015 nuclear deal with world powers — seems unstoppable, and European mediators trying to defuse the situation keep coming up short.
The showdown between Washington and Tehran has upended the lives of Iranians as they try to survive on less. A bride borrowed a wedding dress because she couldn’t afford to buy or even rent one. More newlyweds move in with their families to save money. Visa requests are up at foreign embassies, with young Iranians eager to leave.
Some wonder how far Washington is willing to push its “maximum pressure” campaign.
The Trump administration says the sanctions are aimed at getting Iran to renegotiate the nuclear deal, which offered sanctions relief in exchange for curbs on Iran’s nuclear program.
Washington denies its ultimate aim is to end the rule of Shiite Muslim clerics — though John Bolton, an architect of the pressure campaign, called for regime change before he became Trump’s national security adviser.
Some say Washington’s actions appear to have strengthened the paramilitary Revolutionary Guard and other hard-liners at the expense of President Hassan Rouhani, once the nuclear deal’s most prominent champion.
The Guard has been able to deepen its role in the economy, domestic politics and foreign policy under the guise of security, said Ellie Geranmayeh, a senior fellow at the European Council on Foreign Relations.
Despite the economic upheaval, there have only been sporadic protests.
Iran analyst Adnan Tabatabai said he believes Iranians are “reluctant to take their grievances to the street” for now, amid fear of further chaos and pushback by the authorities.
The economy contracted by 4.9% from March 2018 to March 2019. It is expected to shrink by an additional 5.5% in the year ending March 2020, according to Iranian figures. The official inflation rate has risen to 35%, up from 23.8% in the March 2018 to March 2019 period.
The housing and construction sector, which makes up about one-quarter of the economy and is the top destination for savings and investments, has been thrown out of balance.
Property owners are reluctant to sell and landlords are sharply raising rents because of the currency collapse, said Ali Dadpay, a finance professor at the University of Dallas. He said an estimated 490,000 homes stand empty in and around the capital, including more than 40,000 units added this year.
At the same time, construction lags far behind the need of 1.2 million new homes a year nationwide, said Hesam Oghabaei, deputy head of the Tehran association of real estate agents. He said about 25% of Tehran’s residents live in rented apartments, and the vast majority cannot afford the price increases.
The Peyman family — elderly parents and eight adult children — own a 110 square meter (1,180 square feet) apartment in Tehran’s District 12, a poor area plagued by drug addiction and other social problems. More than a decade ago, the Peymans rented the apartment, and used the extra income to move to a nicer area.
Now they are back in District 12, renovating the old apartment after being squeezed out of the good neighborhood by a rent hike.
“We have to come here because we have no other choice,” said the patriarch, Muslim, 65. Four unmarried children will live with him and his wife. Across-the-board price increases put marriage out of reach.
One of Tehran’s newest areas, District 22, is under construction on the northwestern edge of the city. It consists of apartment high-rises and shopping malls arranged around an artificial lake called Chitgar.
Maryam Alidadi and her husband bought an 82-square-meter (880 square feet) apartment here in December, downsizing by a third from their rented home in a more affluent area.
“Our standard of living has dropped considerably,” she said, adding that she now regrets having quit her government job four years ago when her son Rami was born.
The US sanctions have proven particularly devastating for Iran’s large middle class, said Dadpay, the finance professor. “This is the economic class that depends on the global economy, depends on their skillsets, and most of them are earning fixed incomes,” he said.
The economic freefall could shape Iran’s domestic politics, with parliament elections in February posing the first test. Middle class voters have traditionally favored reformist candidates but might sit out voting because of a lack of alternatives, inadvertently boosting hard-liners.
Pro-reform politicians who favor a greater opening to the West are closely linked to the nuclear deal.
With the deal faltering, the hard-liners, including the Revolutionary Guard, are becoming more entrenched, said Geranmayeh, the analyst.
The Guard, she said, “is going to be a force to be reckoned with for many years to come.”
US sanctions squeeze Iran middle class, upend housing sector
US sanctions squeeze Iran middle class, upend housing sector
- Most Iranians were hit hard by the collapse of the national currency, accelerating inflation and eroding wages
- Perhaps most devastating for Iran’s large middle class has been the sharp spike in housing prices, more than double in a year
Biban 24 sees deals worth over $359m on its 2nd day
RIYADH: Agreements totaling SR1.35 billion ($359 million) were signed on the second day of Biban 24, a key event focused on supporting startups and small and medium enterprises in Saudi Arabia.
The agreements, finalized during the forum organized by the General Authority for Small and Medium Enterprises, also known as Monsha’at, are set to benefit a range of entrepreneurial initiatives across the Kingdom. The event, held under the theme “A Global Destination for Opportunities,” aims to enhance financial support and empower SMEs, fostering growth in the national economy.
Among the most notable agreements was a memorandum of cooperation between Monsha’at and the Qatar Development Bank. The partnership seeks to strengthen joint training programs, develop accelerators and incubators, and support innovation initiatives to benefit entrepreneurial projects.
Another key agreement was signed between Monsha’at and Milton International, aimed at providing further support to startups and fostering billion-dollar business collaborations between the two organizations.
Monsha’at also entered into a cooperation agreement with Arab National Bank to launch a business accelerator focused on financial technology, designed to bolster the growth of fintech enterprises.
The event also saw the signing of a memorandum of understanding with the National Events Center to support entrepreneurship within the events sector. This collaboration will involve launching competitions to address challenges through an innovation center.
In another significant move, Monsha’at partnered with Noon Co. to enhance its Mahali platform. This initiative will help local businesses develop online stores and tap into new sales opportunities, promoting competitive, locally-produced goods throughout the Kingdom.
These agreements are part of Monsha’at’s broader strategy to drive the growth and competitiveness of SMEs by forging partnerships with key industry players, both locally and internationally.
Energy efficiency investment to hit $660bn in 2024: IEA
- Skilled labor shortages and cooling solutions among key challenges, IEA warns
RIYADH: The International Energy Agency has projected global investment in energy efficiency to reach a record $660 billion in 2024, maintaining the levels seen in 2022.
Significant increases are expected in emerging markets, with Africa anticipated to see a 60 percent rise, the Middle East a 40 percent increase, and Latin America a 20 percent boost.
Despite this positive growth, the Energy Efficiency 2024 report emphasizes that to meet net-zero targets by 2030, global investment in energy efficiency needs to rise to $1.9 trillion.
A major hurdle in achieving these ambitious targets is the ongoing shortage of skilled labor in the energy sector. The IEA report highlights a critical need for workers in specialized fields like HVAC (heating, ventilation, and air conditioning), heat pump installation, and electrical work to support the growing demand for energy-efficient technologies.
To address this skills gap, the IEA calls for more inclusive policies that encourage greater participation of women in the energy workforce. Women currently represent less than 20 percent of the energy sector, despite making up 39 percent of the global labor force. Increasing women’s representation in the sector could help fill the labor shortage and accelerate energy efficiency progress.
The report also points to the urgent need for energy-efficient cooling solutions in response to rising global temperatures. With 2024 seeing record-breaking heatwaves and soaring air conditioner sales, the IEA stresses that efficient cooling systems can alleviate pressure on electricity grids, especially in regions like Southeast Asia, where efficient air conditioners offer substantial lifetime savings.
These models are becoming increasingly cost-competitive in rapidly growing markets, helping to reduce both energy consumption and grid strain.
The IEA also underscores the critical role that energy efficiency plays in reducing reliance on fossil fuels. In its net-zero emissions by 2050 scenario, the IEA projects that energy efficiency improvements could account for more than a third of the carbon dioxide reductions needed by 2030.
For instance, a transition to electric vehicles and improvements in building insulation could reduce oil demand to levels equivalent to China’s total oil consumption and cut natural gas consumption to levels comparable to Europe’s total use in 2024.
The report highlighted notable progress toward the energy efficiency targets set at the 2023 COP28 summit, where nearly 200 countries committed to doubling the global rate of energy efficiency improvements by 2030. The IEA views this as a significant milestone for energy efficiency in global policy.
However, the global energy efficiency improvement rate for 2024 is projected to remain at 1 percent, consistent with the previous year. The report emphasizes that meeting the targets will require a much stronger push in policy implementation and stronger enforcement of energy efficiency measures.
A key driver of progress is electrification, which is expected to increase by nearly 2 percent in 2024. The growing adoption of electric vehicles and energy-efficient air conditioners, especially in regions facing extreme heat like India and Southeast Asia, is accelerating this transition.
The report also highlights regional trends, with China and India projected to see energy efficiency improvements of 1.5 percent and 2.5 percent, respectively. These gains are largely supported by national policies aimed at promoting energy-efficient technologies and encouraging the adoption of EVs.
“China, India, Southeast Asia, Africa, and Latin America together account for nearly half of global energy demand, positioning these regions as key drivers of global energy efficiency improvements in the years ahead,” the report said.
To support global efforts, the IEA has launched the Energy Efficiency Progress Tracker, a new tool that provides real-time data on national and regional trends in energy intensity, demand, and electrification. This tracker is designed to help policymakers and stakeholders monitor progress and implement actions needed to meet the energy efficiency targets set at COP28.
“The IEA is working more closely than ever with governments to ensure that energy efficiency remains central to secure, affordable, and inclusive energy transitions,” the report concluded. “Well-designed and effectively implemented policies will be essential to achieving these global goals.”
Sustainable bond issuance surges 9%, market set to hit $950bn by year-end: Moody’s
RIYADH: Global issuance of sustainable bonds in the third quarter of 2024 reached $216 billion, marking a 9 percent annual increase, according to Moody’s.
The year-on-year increase in green, social, sustainability, and sustainability-linked bonds came despite a quarter-on-quarter drop, with the volume issued down 14 percent in the three months to the end of September compared to the preceding period.
For the first nine months of 2024, sustainable bond volumes reached $769 billion, marking a 3 percent decline compared to the same period last year.
Despite the quarterly dip, Moody’s expects total sustainable bond volumes to reach $950 billion in 2024 “buoyed by relatively robust volumes in the first half of the year and continued issuer appetite for funding environmental and social projects with labeled bonds.”
Of the $216 billion issued in the third quarter, green bonds made up the majority at $129 billion. In comparison, social bonds accounted for $37 billion, sustainability bonds for $41 billion, sustainability-linked bonds for $6 billion, and transition bonds for $3 billion.
Green bonds remained the preferred choice for most issuers, comprising 60 percent of the third-quarter sustainable bond market and accounting for 59 percent of issuance so far this year.
Although green bond issuance fell 18 percent from the previous quarter, Moody’s expected it will surpass its annual forecast: “Despite the decline in the third quarter, green bonds will likely eclipse our forecast of $580 billion given the strength of year-to-date issuance and continued issuer preference for the green label.”
Europe’s sustainable bond issuance faced notable pressure, dropping by 38 percent in the third quarter to around $80 billion, the largest regional decrease.
While the continent maintained its position as the leading region in sustainable bond issuance, accounting for 37 percent of global volumes, this marked its lowest share since early 2020.
The Asia-Pacific region showed resilience, with sustainable bond issuance totaling $60 billion, raising its global share to 28 percent — the region’s highest since the third quarter of 2023.
North America’s sustainable bond market, however, remained subdued, with volumes of just $26 billion, marking its lowest level since the second quarter of 2020.
Latin America and the Caribbean brought $12 billion to market, while the Middle East and Africa contributed nearly $5 billion, making up 8 percent of the total global sustainable bond.
Among sectors, nonfinancial companies led in sustainable bond issuance in the third quarter with a 28 percent share, or $60 billion, although this was a 26 percent drop from the previous quarter.
Financial institutions followed, contributing $48 billion to the market, marking a 12 percent increase from the prior quarter and representing the second-largest share at 22 percent.
Supranational issuers saw notable growth, issuing $33 billion, which represented a 51 percent increase quarter-over-quarter and an 80 percent rise year-over-year.
Municipal issuance, on the other hand, declined 17 percent to $13 billion, the lowest since early 2022.
Sovereign and government agency issuance also saw quarter-over-quarter declines of approximately 30 percent.
Sustainable loan volumes experienced a more pronounced decrease, falling 34 percent year-to-date to $380 billion, following two years of strong growth.
Sustainable loans averaged $127 billion per quarter over the first nine months, a notable drop from the quarterly averages of $201 billion in 2022 and $192 billion in 2023.
The third-quarter volume of $101 billion was the lowest recorded since the first quarter of 2022.
Sustainability-linked loans led the sector with $283 billion year-to-date, while green loans contributed $90 billion. In the third quarter alone, SLL volume stood at $71 billion, relatively flat from the previous quarter but down 35 percent year-over-year and 58 percent from the third quarter of 2022.
Green loan volumes in the third quarter reached $27 billion, representing a 13 percent decrease from the previous quarter and a 54 percent year-over-year decline.
Moody’s highlighted that “while the decline in market share could be driven in part by some of the challenges issuers have faced amid heightened scrutiny around the quality of instruments and perceived greenwashing risks, there may also have been a greater number of unlabeled bonds this year as issuers have sought to quickly execute transactions when market conditions were favorable.”
European borrowers continued to dominate SLL volumes in the third quarter, holding a 42 percent share, with North American borrowers at 35 percent and Asia-Pacific borrowers at 18 percent.
“European SLL volumes declined by 22 percent to $30 billion in the third quarter, their lowest quarterly tally since the third quarter of 2021,” the report said.
The analysis highlighted the role of recent biodiversity and climate COPs in spotlighting the importance of closing financing gaps in the sustainable debt market.
Biodiversity COP16 in Cali, Colombia, held at the beginning of November, emphasized mobilizing $200 billion annually for projects, including debt-for-nature swaps for high-debt nations. Though a small share of bond proceeds currently go to nature-related uses, Moody’s expected this to grow as more issuers fund biodiversity initiatives.
The upcoming climate change COP29 in Baku, Azerbaijan, due to be held from Nov. 11 to Nov. 22, is set to introduce a new finance target, replacing the current goal.
“Establishing a new climate finance goal to replace the current $100 billion target will likely be a major topic of discussion at COP29. The aim of this new quantified goal is to support developing countries in their climate action plans beyond 2025,” said Moody’s.
Emerging markets, which face higher climate risks, may see increased sustainable bond issuance, especially as the “Climate Bonds Initiative’s expansion of its taxonomy in September to facilitate greater channeling of capital to adaptation and resilience projects,” according to the report.
Jordan, Egypt discuss enhanced energy connectivity through Arab Gas Pipeline link
RIYADH: Jordan and Egypt are taking steps to bolster regional gas connectivity as top energy officials from both nations met to explore potential infrastructure and supply partnerships.
The Middle Eastern country’s Minister of Energy and Mineral Resources, Saleh Al-Kharabsheh, and Cairo’s Minister of Petroleum and Mineral Resources, Karim Badawi, held talks on these issues on the sidelines of the ADIPEC 2024 conference in Abu Dhabi.
A key focus of the discussions was the feasibility of linking Jordan’s Risha Gas Field to the Arab Gas Pipeline through a 300-km connection.
This proposed expansion follows recent studies that identified commercially viable gas reserves in the Risha field.
The Arab Gas Pipeline is a regional infrastructure project designed to transport natural gas from Egypt to Jordan, Syria, and Lebanon. Spanning over 1,200 km, the pipeline enhances connectivity and supports energy security across the Middle East.
The talks also explored potential cooperation on gas-related projects, including initiatives to expand the use of natural gas in Jordanian and Egyptian vehicles, according to a statement released by Jordan’s Ministry of Energy and Mineral Resources.
Both ministers agreed to set up technical meetings between Jordan’s Ministry of Energy and Mineral Resources and the Egyptian General Petroleum Co. to advance joint oil and gas exploration efforts within Jordan. These technical sessions are expected to facilitate knowledge-sharing and support the country’s ambitions in energy development.
Additionally, the ministry’s statement highlighted a recent agreement signed between Egypt Gas Co. and Jordan’s Aqaba Development Co.
This deal aims to supply natural gas to Quweira Industrial City in Aqaba. It includes provisions for constructing a natural gas pipeline network and establishing infrastructure in line with regulatory safety standards.
At the event, Badawi also announced plans to introduce a policy paper focused on increasing investment in Egypt’s oil and gas sector.
The initiative seeks to attract investors across the oil, gas, refining, and petrochemical industries.
The announcement followed Badawi’s meeting with TotalEnergies CEO Patrick Pouyanne, where the executive presented the company’s upcoming exploration and production activities.
The two discussed TotalEnergies’ progress in boosting output at the Bashrush Gas Field, as well as its involvement in the Idku liquefaction plant and the firm’s expansion into jet fuel supply and marketing.
Additionally, Pouyanne expressed interest in acquiring new exploration areas in the Mediterranean, aligning with the recent international bid round launched by the Egyptian Natural Gas Holding Co. for oil and gas exploration.
Riyadh Air plans new jet order decision early next year
LONDON: Saudi startup Riyadh Air is wading back into the jet market after buying dozens of Airbus and Boeing planes and aims to finalize a new deal involving the industry’s largest twin-aisle jets early next year, its CEO said.
The country’s newest national airline is weighing up the Boeing 777X and the Airbus A350-1000 and expects to make a decision in the first or second quarters of 2025, CEO Tony Douglas told Reuters.
Riyadh Air last year ordered 39 Boeing 787 wide-body jets with options for another 33 as part of a wider deal also involving national carrier Saudia, and last week it added a firm order for 60 Airbus A321neo-family aircraft.
Douglas declined to comment on the size of the new order but reiterated that the airline, which plans to start operations next year, ultimately aimed to operate more than 200 aircraft.
Douglas told Reuters in a separate interview last week that Riyadh Air would start formal talks for a new order for large wide-body aircraft within two months.
The roughly 200-seat A321neo is an in-demand single-aisle aircraft that competes with the larger versions of Boeing 737 MAX. Airbus says it is sold out through the rest of the decade.
Despite the long lead times for most new purchases, Douglas said the A321neos would be delivered between the second half of 2026 and the end of 2030 and hinted at further purchases.
“That puts us right back in the standard order window with Airbus so the door is wide open,” he said.
Industry sources said the aircraft had become available as part of a complex financing deal driven by the availability of future delivery slots originally assigned to Capital A unit AirAsia, which has been restructuring its order book.
Airbus declined to comment and AirAsia did not reply to a request for comment.
Douglas declined to comment on the deal’s structure, saying only that it was a “complex multi-party transaction.”
The growth of Riyadh Air, owned by Saudi Arabia’s Public Investment Fund, is one of the industry’s fastest launches.
Douglas said the A321neo would be used to open new routes or to fly in sectors where there is not enough demand to fill the 290-seat Boeing 787-9, adding that flying such big jets less than three-quarters full would not make sense economically.
Riyadh Air has not decided which version of A321neo to take but is likely to include some long-distance models, he added.
