LONDON/BRUSSELS: The EU made clear on Monday that Britain could not expect a zero-tariffs and zero-quotas deal trade with the bloc unless London agrees to terms that ensure there is fair competition with the European single market.
European Union Brexit negotiator Michel Barnier, laying out his mandate for negotiations with the UK following its exit from the EU last week, said there should be a level playing field over the long term on social, state aid and environmental standards.
He told a news briefing that all sides needed to prepare for the prospect of a “cliff edge” no deal at the end of the year.
Barnier was speaking shortly before British Prime Minister Boris Johnson was due to lay out his negotiating terms for talks with the EU. He is expected to say that Britain will prosper even if he cannot strike his preferred trade deal.
After marking Britain’s departure from the EU at a party in his Downing Street residence on Friday, Johnson will use a speech to ram home his message that Brexit, for him, means that sovereignty trumps the economy.
The sides have until the end of the year, when a transitional period expires, to try to secure a deal on trade and future relations — something London and Brussels both say they want to do, but on very different terms.
Trade talks will begin in March. After criticizing his predecessor Theresa May’s approach in negotiating a divorce deal with the EU, Johnson is striking a much tougher tone, saying Britain will not adhere to the bloc’s rules and regulations.
And he will say that, if the EU fails to grant a trade deal allowing for tariff- and quota-free trade in goods, similar to the terms the bloc now has in place with Canada, Britain will pursue a much looser arrangement, like one Australia has.
“There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar, any more than the EU should be obliged to accept UK rules,” Johnson will say, according to excerpts of his speech distributed by his office.
Promising to maintain “the highest standards,” Johnson will suggest the EU has already offered a free trade deal along the lines of the one it has with Canada, which does not have to follow the bloc’s rules.
“We have made our choice: we want a free trade agreement, similar to Canada’s, but in the very unlikely event that we do not succeed, then our trade will have to be based on our existing Withdrawal Agreement with the EU,” he will tell businesses, think tanks and ambassadors.
“The choice is emphatically not ‘deal or no-deal’. The question is whether we agree a trading relationship with the EU comparable to Canada’s – or more like Australia’s.”
At the moment, much of EU-Australia trade runs along basic World Trade Organization rules, though there are specific agreements for certain goods. Australia is in the process of negotiating a trade deal with the EU, however.
One British source who declined to be named has said UK negotiators are furious because they believe the EU, Britain’s biggest trading partner, is going back on the divorce deal by suggesting that London would have to adhere to the bloc’s rules to secure a free trade agreement.
Post-Brexit: EU sets out red lines as UK’s Johnson talks tough on trade deal
https://arab.news/bj3ah
Post-Brexit: EU sets out red lines as UK’s Johnson talks tough on trade deal
- After criticizing his predecessor’s approach in negotiating a divorce deal with the EU, Boris Johnson is striking a much tougher tone
- ‘We have made our choice: we want a free trade agreement, similar to Canada’s’
Craig Smith explores the media’s role in AI conversations
RIYADH: The media’s primary role is to translate complex ideas into digestible content for the public, said Craig Smith, host of the Eye on AI podcast and a former correspondent.
In a recent conversation with the Saudi Data and Artificial Intelligence Authority’s GAIN podcast, Smith discussed the rapidly evolving field of artificial intelligence and the challenges media faces in accurately covering it amid both excitement and misinformation.
“You can put AI in a robot, but robotics is one field, and AI is another,” Smith explained, stressing the need for more precise portrayals of AI in the media.
As AI discussions have intensified in the past two years, particularly around its potential threats, Smith emphasized that these debates are meant to encourage further research into AI safety and prompt regulation. However, he noted that the popular press often misinterprets the purpose of these discussions, leading to sensational headlines that contribute to widespread fear.
“The purpose of that discussion is to generate more research around the safety of AI and to spur regulation to get the governments looking at what’s happening,” Smith said.
“But the media often misses this goal, resulting in alarmist narratives like AI will ‘kill us all,’ which detracts from the vital work of understanding and regulating this technology.”
While it’s easy to imagine a dystopian future for AI, Smith pointed out the far more nuanced reality. “We’re still working on getting large language models to be truthful and stop spouting nonsense,” he said, illustrating the long and challenging path ahead in developing reliable AI systems.
Reflecting on the rapid pace of change in the field, Smith highlighted the exciting progress in AI research, particularly since the introduction of the transformer algorithm in 2017.
“It was Ilya Sutskever at OpenAI who built a model around the transformer algorithm and scaled it up,” Smith noted, acknowledging the profound impact this algorithm has had on the development of large language models like ChatGPT and Claude.
Smith’s insights underscored the media’s crucial responsibility in accurately covering AI. By bridging the gap between complex technological advancements and public understanding, journalists have the power to foster informed discussions that will ultimately shape the future of AI in society.
Oman’s non-oil sector grows 4.2% in H1
RIYADH: Oman’s non-oil sector experienced a 4.2 percent growth year on year in the first half of 2024, driven by the country’s strategic focus on economic diversification as outlined in its 10th Five-Year Plan (2021-2025).
In an interview with the state-run Oman News Agency, Nasser Al-Mawali, undersecretary of the Ministry of Economy, highlighted that this expansion marks significant progress in Oman’s efforts to reduce its dependency on oil revenues and build a more resilient economic base, in line with the objectives of Oman Vision 2040.
By mid-2024, the non-oil sector contributed 13.5 billion Omani rials ($35.1 billion) to the country’s gross domestic product, up from 13 billion rials during the same period in 2023. This sector now accounts for 72.2 percent of Oman’s GDP at constant prices.
Al-Mawali attributed the continued growth in non-oil activities to national programs aimed at accelerating economic diversification and expanding the productive capacity of the economy. The 10th Five-Year Plan, which forms the first phase of Oman Vision 2040, prioritizes increasing private sector participation, supporting small and medium-sized enterprises, and broadening the country’s economic base.
According to Al-Mawali, strategic initiatives under this plan have reached a 90 percent implementation rate as of 2024, with major accomplishments in sectors such as green hydrogen, logistics, pharmaceuticals, and fisheries.
Foreign direct investment in Oman reached approximately 26 billion rials by mid-2024, up from about 17.8 billion rials at the end of 2021.
The country’s overall GDP, at constant prices, grew by 1.9 percent in the first half of 2024, rising from 18.4 billion rials to 18.7 billion rials compared to the same period in 2023. At current prices, GDP increased from 20.4 billion rials to nearly 21 billion rials.
While the non-oil sector posted strong growth, Oman’s oil sector experienced a 2.5 percent decline during the same period, primarily due to a 4 percent drop in crude oil production. On a more positive note, natural gas activities saw a 6.6 percent increase, providing a boost to the energy sector.
Al-Mawali emphasized that the rise in non-oil activities has helped provide a stable foundation for economic growth, buffering the country against fluctuations in global oil prices. Key projects, such as the Duqm Refinery and the development of the integrated economic zone in Al-Dhahirah in partnership with Saudi Arabia, have significantly bolstered Oman’s industrial capabilities and enhanced export potential.
The Duqm Refinery, inaugurated earlier in 2024, is expected to play a crucial role in increasing the manufacturing sector’s contribution to GDP.
Oman Vision 2040 targets an average annual GDP growth rate of 5 percent. So far, the country has achieved a growth rate of around 4.5 percent over the first three years of the 10th Five-Year Plan, indicating strong progress toward this goal.
The 10th Five-Year Plan also aims for an annual growth rate of 3.2 percent in the non-oil sector, with a long-term objective of increasing the sector’s contribution to GDP to 90 percent by 2040.
On a separate note, Oman’s banking sector saw positive growth in the first half of 2024, with total credit rising by 5 percent, reaching 32 billion rials by the end of September. Credit extended to the private sector increased by 4.2 percent, amounting to 26.7 billion Omani rials.
The majority of this credit was allocated to non-financial corporations, which accounted for 45.2 percent, followed by individual borrowers at 45 percent. Financial corporations received 6.3 percent, and other sectors made up the remaining 3.5 percent.
Total deposits in Oman’s banking sector grew by 13.7 percent, reaching 31.6 billion rials as of September. Private sector deposits saw a significant increase of 12.7 percent, totaling 20.7 billion Omani rials.
According to the Central Bank of Oman, individuals held the largest share of private sector deposits at 50.2 percent, followed by non-financial corporations at 29.5 percent, and financial corporations at 17.8 percent. Other sectors accounted for 2.5 percent of the total private sector deposits.
Saudi Arabia’s non-oil economy to grow 4.4% in 2025: PwC
- Kingdom’s non-oil economy expanded by 3.8% in first half of 2024
- Saudi Arabia is aligning its economic diversification efforts with sustainability goals
RIYADH: Saudi Arabia’s non-oil economy is expected to grow by 4.4 percent in 2025 as the Kingdom continues its path toward economic diversification, according to a new analysis.
In its latest report, professional services firm PwC Middle East said Saudi Arabia is aligning its economic diversification efforts with sustainability goals, including achieving net-zero emissions by 2060.
In the first half of the year, the Kingdom’s non-oil economy expanded by 3.8 percent, with the non-energy private sector seeing a 4.9 percent growth in the second quarter, it added.
Strengthening the non-oil private sector is a core objective of Saudi Arabia’s Vision 2030 program, which aims to reduce the Kingdom’s dependence on oil revenues.
“Saudi Arabia’s transformational journey combines economic diversification with sustainable growth. The expansion of renewable energy, focus on advanced industries, and vision for a green future highlight the Kingdom’s commitment to its national goals and its role in the global energy transition,” said Riyadh Al-Najjar, Middle East chairman of the board and Saudi Arabia senior partner at PwC Middle East.
PwC said the Kingdom’s trade and hospitality sectors grew by 6.4 percent year on year in the first half of the year, while transport and communications, and finance and business services also posted positive growth of 4.8 percent and 3.8 percent, respectively.
The report noted Saudi Arabia’s progress in the electric vehicle sector, with significant investments in EV manufacturing.
The Kingdom is building a hub in King Abdullah Economic City to produce 150,000 vehicles by 2026 and 500,000 by 2030.
The Saudi government is expanding EV infrastructure through the Electric Vehicle Infrastructure Co., a joint venture between the Public Investment Fund and Saudi Electricity Co., to install 5,000 fast chargers by 2030.
“Saudi Arabia’s drive toward a diversified and sustainable economy showcases its adaptability and resilience. These efforts reflect our nation’s commitment to a greener future and set a benchmark for global energy transition,” said Faisal Al-Sarraj, deputy country senior partner in Saudi Arabia and PwC Middle East consulting clients and markets leader.
In October, Moody’s projected that Saudi Arabia’s non-hydrocarbon real GDP would grow by 5 percent to 5.5 percent from 2025 to 2027, driven by increased government spending.
The International Monetary Fund also projected Saudi Arabia’s economy to grow by 4.6 percent in 2025, largely driven by the Kingdom’s diversification strategy and the expansion of the non-oil private sector.
Saudi Arabia, Tunisia sign deal to boost bilateral investments
- Deal focuses on sharing regulations and laws to enhance investment environment in both countries
- Talks covered several sectors of mutual interest, including industry, transport, and logistics
RIYADH: Saudi Arabia and Tunisia have signed a memorandum of understanding to strengthen bilateral cooperation and promote direct investments between the two nations.
The deal, which was inked by Saudi Minister of Investment Khalid Al-Falih and Tunisian Minister of Economy and Planning Samir Abdel Hafeez in Tunis, focuses on sharing regulations and laws to enhance the investment environment in both countries.
The agreement, which also aims to improve investment opportunities, was discussed during a meeting attended by Saudi Ambassador to Tunisia Abdulaziz bin Ali Al-Saqr. The talks covered several sectors of mutual interest, including industry, transport, and logistics, with a focus on enhancing collaboration and facilitating joint ventures, the Saudi Press Agency reported.
Tunisian President Kais Saied welcomed Al-Falih, where the Saudi minister conveyed greetings from King Salman and Crown Prince Mohammed bin Salman, expressing the Kingdom’s commitment to Tunisia’s ongoing progress and stability.
Saied thanked Saudi Arabia for its leadership role in the Arab and Islamic worlds, praising the Kingdom’s efforts in fostering regional unity and development.
He added that the agreement marked a significant step in strengthening economic ties between the two countries, with the MoU serving as a catalyst for joint development initiatives.
The deal follows recent discussions on strengthening industrial and economic cooperation.
In October, Saudi Vice Minister of Industry Affairs Khalil bin Salamah confirmed to Arab News that collaboration with Tunisia was imminent, noting that the two countries were in the process of selecting key sectors, such as pharmaceuticals and automotive components, for initial investments.
He emphasized the need for common policies among Arab nations to serve as a foundation for regional collaboration across various industrial sectors.
On the sidelines of the Multilateral Industrial Policy Forum in Riyadh las month, Tunisian Minister of Industry, Mines, and Energy Fatma Thabet Chiboub also pointed out that Tunisia’s distinctive mining resources presented significant opportunities for Saudi investors.
She emphasized the automotive components and pharmaceutical industries as key areas for potential collaboration, while also expressing concern that the current level of investment from Saudi Arabia did not fully reflect the bilateral relationship’s potential.
The MoU is seen as a crucial step in deepening the economic and industrial ties between Saudi Arabia and Tunisia, both of which are looking to diversify their economies and create new growth opportunities through strategic partnerships.
Saudi insurers expect financial boost from new reinsurance mechanism
- Move aims to boost role of local reinsurance firms in mitigating insurance risks
- Kingdom’s insurance industry is forecast to grow at a compound annual growth rate of 5.2% through 2028
RIYADH: Saudi insurance companies are expecting a positive impact on their financial performance from a new mechanism that directs reinsurance premiums to the local market.
The move, introduced by the Saudi Insurance Authority, aims to boost the role of local reinsurance firms in mitigating insurance risks within the Kingdom.
“The mechanism stipulates that when insurance companies wish to reinsure, they must offer at least 30 percent of their treaty and facultative reinsurance agreements to companies licensed to conduct reinsurance activities within the Kingdom,” according to a statement on the Saudi Stock Exchange.
The mechanism is set to take effect on Jan. 1, giving licensed reinsurance companies the priority to accept or decline these assignments, it added.
Saudi Arabia’s insurance industry is forecast to grow at a compound annual growth rate of 5.2 percent through 2028, with its market size expected to reach SR83.7 billion ($22.28 billion), according to London-based data analytics and consulting company GlobalData.
This growth, up from SR68.3 billion in 2024, is largely attributed to the health and motor insurance sectors, which are projected to account for 86 percent of total gross written premiums.
Earlier data compiled by Arab News from Bloomberg showed a strong performance in the sector, with earnings increasing by 25 percent in the first half of 2024, reaching SR2.2 billion ($585 million), compared to the same period in 2023.
The Saudi Reinsurance Co. expects the new mechanism to boost its reinsurance revenues in the Saudi market by more than 5 percent. The company also said that the financial impact will be reflected in its earnings from the first quarter of next year.
Walaa Cooperative Insurance Co. said that the mechanism will positively affect its financial performance, with results expected to be seen starting in the first quarter of 2025.
As one of the companies licensed by the insurance authority to conduct reinsurance activities, Walaa said the impact would be reflected in its financial results for that period.
Mediterranean & Gulf Cooperative Insurance & Reinsurance Co., known as MEDGULF, said the new mechanism presents an opportunity to reassess its strategy regarding accepting additional reinsurance premiums from local insurers.
Tawuniya Co. also expressed optimism, saying that it would positively impact its revenues from the Saudi market.
“It is expected that positive financial impact will have an effect on 2025 financial results,” said Tawuniya.
Gulf Insurance Group and LIVA Insurance Co. have also said that the new mechanism is expected to contribute positively to their financial performance starting next year.
