Nations debate easing lockdown as hardship grows

Volunteers work with the charity organisation Circolo San Pietro distributing food to people in need as Italy enters its sixth week of lockdown. (Reuters)
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Updated 18 April 2020
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Nations debate easing lockdown as hardship grows

  • Public health experts say that wider testing is essential to prevent the virus from coming back

BERLIN: As unemployment rises many around the world, governments are wrestling with when and how to ease restrictions designed to control the coronavirus pandemic.

Mandatory lockdowns to stop the spread of the new virus, which has so far infected more than 2.2 million people and for which there is no vaccine, have brought widespread hardship.
In a joint statement Saturday, a group of 13 countries including Canada, Brazil, Italy and Germany called for global cooperation to lessen the economic impact of the pandemic.
“It is vital that we work together to save lives and livelihoods,” they said. The group, which includes Britain, France Indonesia, Mexico, Morocco, Peru, South Korea, Singapore and Turkey, said it was committed to “work with all countries to coordinate on public health, travel, trade, economic and financial measures in order to minimize disruptions and recover stronger.”
The countries emphasized the need to maintain “air, land and marine transportation links” to ensure the continued flow of goods including medical equipment and aid, and the return of travelers.
In the US, the debate has taken on partisan tones ahead of this fall’s presidential elections. Republican President Donald Trump urged supporters to “liberate” three states led by Democratic governors, tweeting the kind of rhetoric some have used to demand an end to stay-at-home orders that have thrown millions out of work.
Most governments remain cautious, even as the economic toll rises. Public health experts warn that easing shutdowns must be accompanied by wider testing and tracing of infected people to keep the virus from coming back.
Singapore, which has been held up as a model for other nations after taking strong measures to clamp down on the virus, reported a new daily record of 942 infections Saturday that brought its total to 5,992.
The number of cases in the city-state has more than doubled just this week alone amid an explosion of cases among foreign workers staying in crowded dormitories, that now make up 60 percent of Singapore’s infections.
Japan also reported a surge of 556 new cases Saturday, pushing its total to more than 10,000. Prime Minister Shinzo Abe expressed concern on Friday that people were not observing social distancing and announced a 100,000-yen ($930) cash handout to each resident as an incentive to stay home.
In Africa, the pandemic is only just getting underway. The continent now has more than 1,000 coronavirus deaths, according to the Africa Centers for Disease Control and Prevention. Fifty-two of the continent’s 54 countries have reported the virus, with the total number of cases more than 19,800 as of Saturday morning.

FASTFACT

8% - France has warned its economy could shrink 8 percent this year. leading to its worst recession since World War II.

Top leaders of China’s ruling Communist Party called for deficit spending and a more flexible monetary policy after the economy shrank 6.8 percent in the first three months of the year.
France’s lower house of parliament approved an emergency budget that takes into account the government’s €110 billion ($120 billion) plan to save the economy from collapse. The government has warned that France’s economy, one of the world’s biggest, could shrink 8 percent this year and suffer its worst recession since World War II.
South Korea’s Health Minister Kim Gang-lip said on Saturday that new guidelines could be issued that officials have said would allow people to engage in “certain levels of economic and social activity.”
The East Asian country was among the 13 nations to issue the joint statement on protecting global trade. The declaration also stressed “the importance and critical role of the scientific community in providing guidance to governments,” and suggested pooling scientific resources and efforts to tackle the pandemic.
While most of those sickened by the virus recover, the outbreak has killed at least 155,000 people worldwide, according to a Johns Hopkins University tally.
The number very likely underestimates the actual toll. Authorities said that almost everywhere, thousands have died with COVID-19 symptoms — many in nursing homes — without being tested for the virus, and have gone uncounted. In Britain, with an official count of about 14,600 dead, the country’s statistics agency said the real number could be 15 percent higher.


Saudi Arabia’s refined crude exports hit 23-month high at 1.54m bpd

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Saudi Arabia’s refined crude exports hit 23-month high at 1.54m bpd

RIYADH: Saudi Arabia’s refinery crude exports surged 23 percent in September compared to the previous month, to reach 1.54 million barrels per day – the highest level for almost two years.

According to figures from the Joint Organizations Data Initiative, the increase to a 23-month high was fueled by strong demand for refined products, including diesel, motor gasoline, aviation gasoline, and fuel oil. 

Diesel led the export mix, accounting for 47 percent of shipments, with volumes rising 35 percent month on month to 727,000 bpd. Motor and aviation gasoline made up 23 percent of exports, while fuel oil contributed 7 percent. 

Refinery output in Saudi Arabia remained steady at 2.76 million bpd, with diesel representing 44 percent of refined products, followed by motor and aviation gasoline at 25 percent, and fuel oil at 17 percent. 

Crude oil exports rose modestly by 1.41 percent to 5.75 million bpd, while production edged down by 0.19 percent to 8.97 million bpd. 

Despite the rise in exports, domestic petroleum demand dropped sharply by 267,000 bpd to 2.62 million bpd, possibly due to seasonal factors and improved efficiency. 

OPEC announced in November that eight key OPEC+ nations, including Saudi Arabia, Russia, and Iraq, have agreed to extend voluntary production cuts of 2.2 million bpd through December.  

Initially introduced in 2023 to stabilize the oil market, the cuts reflect the group’s commitment to the Declaration of Cooperation, with plans to offset overproduction by September 2025. Iraq, along with Russia and Kazakhstan, reaffirmed adherence to the agreement and compensation schedules earlier this month.  

Direct crude usage 

Saudi Arabia’s direct crude oil burn dropped significantly in September, falling by 296,000 bpd compared to August to 518,000 bpd — a 36.4 percent decline and the lowest level in five months. 

This decline is largely attributed to seasonal temperature changes, as the weather begins to cool from the peak summer heat, reducing the demand for air conditioning and, consequently, the need for crude oil in power generation. 

Compared to September last year, the lower burn levels also reflect the Kingdom’s ongoing efforts to enhance energy efficiency and diversify its power sources. 

By expanding its natural gas network and scaling up renewable energy projects, the Kingdom is reducing its reliance on crude oil for electricity generation, aligning with its Vision 2030 strategy for a sustainable and diversified energy mix. 


More than 70 Saudi firms travel to Poland, Slovakia to boost trade ties

Updated 15 min 18 sec ago
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More than 70 Saudi firms travel to Poland, Slovakia to boost trade ties

JEDDAH: Representatives from 72 Saudi firms are part of a group visiting Poland and Slovakia in a bid to increase trade with the European countries.

Delegates from Federation of Saudi Chambers are also part of the trip, which will see high-level economic meetings involving senior government officials and private sector representatives. Their objective is to explore investment opportunities and sign several agreements and commercial partnerships.

The delegation, led by Chairman of the Federation of Saudi Chambers Hassan bin Mujib Al-Huwaizi, includes over 72 business representatives from various economic sectors, along with governmental entities and authorities, according to the Saudi Press Agency.

In August, the Kingdom and Poland established a joint business council for the 2024-2028 term to boost trade and investment between the two countries. The move is part of the nation’s broader strategy to deepen economic ties with Europe, with a particular focus on Poland, one of the continent’s largest economies.

Poland has seen impressive growth in its agri-food sector, with exports reaching a record €47.9 billion ($51.1 billion) in 2023 — a €10 billion increase from the previous year.

In 2023, Saudi Arabia’s trade exchange with Poland reached SR33.7 billion. The Kingdom’s primary exports to Poland include mineral products and plastics, while Poland’s main exports to the Arab country consist of tobacco, machinery, and mechanical appliances.

The relationship between Saudi Arabia and Slovakia has also witnessed growth following the official opening of the Slovak Embassy in Riyadh in recent years. Additionally, bilateral trade has increased significantly, highlighting untapped investment opportunities.

The delegation will begin its visit to Poland by holding the Saudi-Polish Business Council meeting, a joint forum, and bilateral meetings between representatives.

In Slovakia, the delegation will host the Saudi-Slovak Business Forum, conduct meetings between companies from both sides and sign an agreement to establish a joint business council.

Through its recent series of international visits to ten countries, the federation is leading efforts to open new markets and opportunities for the Kingdom’s backers and to boost trade and investment exchanges with countries worldwide, in alignment with the aspirations of Saudi Vision 2030.


Blatco, Golden Star Rubber to build Middle East’s largest tire plant in Saudi Arabia

Updated 2 min 31 sec ago
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Blatco, Golden Star Rubber to build Middle East’s largest tire plant in Saudi Arabia

JEDDAH: Saudi Arabia’s Black Arrow Tire Co., or Blatco, has partnered with Thailand’s Golden Star Rubber Co. to build the Middle East’s largest tire manufacturing facility in Yanbu, with a $470 million investment. 

The plant will initially produce 4 million tires annually for passenger vehicles, with plans to expand production to 6 million tires per year, including truck and bus tires.

The Yanbu facility is set to boost Saudi Arabia’s industrial capabilities and will create more than 2,000 local jobs. The partnership will supply the facility with the natural rubber required for tire production in the Kingdom. 

The Saudi tire market, which produced 22.6 million units in 2023, is projected to grow at a compound annual growth rate of 1.26 percent, reaching 25.5 million units by 2032, according to market research firm IMARC Group. 

Largely import-driven, the sector is dominated by Chinese tire brands due to their affordability and availability. However, flagship brands have gained traction in recent years, thanks to their higher quality and longer product lifecycles, the report added.

The ceremony to mark the deal, signed by Blatco Chairman Abdullah Al-Wahibi and Golden Star Rubber Chairman Amir Zafar, was also attended by Hassan Al-Huwaizi, president of the Federation of Saudi Chambers of Commerce, Al-Ekhbariya reported. 

The agreement aligns with Vision 2030’s goals to localize industries, transfer knowledge, and support domestic content. The partnership is also supported by the Saudi-Thai Business Council, aimed at strengthening commercial and investment ties between Saudi Arabia and Thailand. 

The plant will be situated in the Kingdom’s industrial city on the Red Sea, under the Royal Commission for Jubail and Yanbu. Blatco officials anticipate that 50 percent of production will be consumed locally, with the remainder to be exported to regional markets. 

Earlier this year, Blatco signed a 20-year technology export agreement with South Korea’s Kumho Tire. As part of the deal, Kumho Tire agreed to supply Blatco with the technology to produce passenger car tires for the Middle East, including Saudi Arabia. 

Founded in Riyadh in 2019, Blatco aims to become a key player in automotive manufacturing and distribution in the region. The company focuses on contributing to Saudi Arabia’s economy, creating jobs, and supporting technology transfer initiatives, according to its website. 

In October 2023, the Kingdom’s Public Investment Fund announced a separate $550 million tire factory in a joint venture with Italy’s Pirelli. 

PIF holds a 75 percent stake in the venture, with Pirelli providing technology and commercial support. The facility, set to begin operations in 2026, will produce tires for passenger vehicles under the Pirelli brand and a new local brand for domestic and regional markets. 


Pakistan PM calls for tax compliance by all sectors amid tough IMF conditions

Updated 4 min 54 sec ago
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Pakistan PM calls for tax compliance by all sectors amid tough IMF conditions

  • IMF’s unplanned visit last week was reportedly prompted by revenue collection shortfall of $685 million during Q1 of current fiscal
  • Agreement for a $7 billion loan program approved in September came with tough measures such as raising taxes, privatization 

ISLAMABAD: Prime Minister Shehbaz Sharif on Monday called for all sectors to fulfill their tax obligations, days after the IMF concluded an unscheduled visit to Pakistan for discussions on economic policy and reform efforts.

The IMF’s visit last week was widely reported to have been prompted by, among other factors, a shortfall of nearly Rs190 billion ($685 million) in revenue collection during the first quarter of the current fiscal year. The period also saw an external financing gap of $2.5 billion, while Pakistan failed in its bid to sell its national airline, a major setback on the path to privatizing loss-making state-owned enterprises, required by the IMF.

The government wants to increase the tax-to-GDP ratio to 13 percent over the next three years. The ratio stood at 9 percent during 2023-24, according to the Federal Board of Revenue, the country’s main tax collection body. 

“Economic development is only possible when everyone fulfills their share of responsibility,” Sharif was quoted as saying in a statement released by his office after he chaired a meeting of his cabinet to review economic policies. “All sectors must pay taxes to contribute to national progress.”

Pakistan’s economy has faced significant challenges in recent years, including high inflation and fiscal deficits. In May last year, the CPI inflation rate hit a record high of 38 percent but has seen a downward trajectory in recent months, moving to 7.2 percent year-on-year in October.

Pakistan has struggled for decades with boom-and-bust economic cycles, prompting 23 IMF bailouts since 1958.

After wrapping up the visit last week, the IMF had said it was encouraged by Islamabad’s reaffirmed commitment to the economic reforms under the Extended Fund Facility its board had approved in September to reduce vulnerabilities. 

The external financing gap and failure to sell PIA has prompted fears that Pakistan might need to impose new taxes to bridge the shortfall. But Finance Minister Muhammad Aurangzeb has repeatedly said the shortfall will be met only with enforcement to get people to pay their taxes, implying there would not be any new revenue measures.


Dubai’s annual inflation rate slows to hit lowest level in 14 months

Updated 17 min 10 sec ago
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Dubai’s annual inflation rate slows to hit lowest level in 14 months

RIYADH: Dubai’s annual inflation rate slowed again in October, reaching its lowest level in 14 months, official figures showed.  

According to data released by the Dubai Statistics Center, the emirate’s inflation rate reached 2.4 percent in October, driven by a deeper deflation in transport prices, which fell by 10.6 percent compared to an 8 percent decline in September.  

Dubai’s inflation rate has been relatively low compared to other major cities in the region, reflecting the government’s proactive measures to manage price stability and sustain economic growth.   

Amid global inflationary pressures, the emirate’s economy has remained resilient, benefiting from diversified sectors such as tourism, real estate, and trade.  

In light of global and domestic factors, the UAE Central Bank projects inflation in the country as a whole for 2024 at 2.3 percent, compared to 1.6 percent in 2023, due to a moderate increase in commodity prices, wages, and rents. 

The data further indicated a deflation in the tobacco price category to 3.63 percent, similar to that recorded in September.  

The figures also showed slower deflation in the information and communication category, which saw an annual fall of 1.92 percent, compared to a decline of 2.05 percent in September.  

Recreation, sport, and culture prices witnessed a year-on-year drop of 1.74 percent in October, a smaller decrease than the 2.66 percent seen in the previous month.  

The data also revealed that the housing, water, electricity, gas, and other fuels sector witnessed a price increase, with a 7.16 percent surge, compared to 7.02 percent in September.  

The insurance and financial services sector also witnessed a rise in prices, with a 5.83 percent rise in October, compared to 5.20 percent in the previous month.  

Prices in education, health, and food and beverages also advanced in October. Education rose by 2.94 percent, health by 1.87 percent, and food and beverages by 1.85 percent.   

In comparison, September’s increases were 2.94 percent for education, 1.88 percent for health, and 1.81 percent for food and beverages.   

The personal care, social protection, and miscellaneous goods and services sector recorded a 1.67 percent jump in prices, while clothing and footwear was up 1.15 percent.  Both of these were lower rises than in September. 

In 2023, Dubai announced a plan aiming to boost foreign trade and investment in the UAE’s financial hub and “double the size” of its economy by 2033.