INTERVIEW: Sherpas do the heavy lifting at the U20

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Updated 04 October 2020
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INTERVIEW: Sherpas do the heavy lifting at the U20

  • Innovative financing and investments are on every city’s top priority list

Whether helping climbers reach challenging heights or drafting a troublesome passage of a controversial communique, the job of a sherpa is to do the heavy lifting for the main actors in an ambitious venture.

While Abdulmohsen AlGhannem did not have to carry any heavy physical burdens over the past year as sherpa for the U20 track of the G20, when the final communique was issued, it was the culmination of a long period of demanding work. You might almost imagine him planting a flag on top of the final document, like a climber at the summit of Everest.

“It was a year-long process for the Riyadh chairmanship,” he told Arab News. “We had to understand the ecosystem of the G20 as a whole and the U20 within that, and find out what our role was.”

The U20 specializes in urban issues, and it is a comparatively new element in the G20 set-up.

Whereas the G20 in its present form grew out of the global financial crisis of 2009 and the need for a coordinated response to that emergency, and has been performing the role of global economic and financial overseer ever since, the U20 was only established in Buenos Aires in 2018, and continued in Tokyo last year.

Focusing on the world’s great cities was a natural extension of the G20’s work. Around 55 percent of the world’s population lives in cities or big urban conurbations, and they generate nearly 80 percent of global gross domestic product.

At the same time, however, cities also typify many of the most intractable challenges that the world faces today. They consume a disproportionate amount of energy, they are more vulnerable than other areas to climate change issues, and they are the locations of some of the biggest economic inequalities on the planet with all the social problems that accompany that.

In 2020, cities have also been rocked by the COVID-19 pandemic, and have suffered big hits to traditional urban economic life through lockdowns and migration away from centers of infection.

That presented a new set of challenges for Riyadh, which was hosting the U20 under the chairmanship of Fahd Al-Rasheed, and for AlGhannem.

“When you look at it from the perspective of the U20, you see that local governments form the closest form of governance that touches residents’ lives on a daily basis,” AlGhannem said.

The U20 is just one track of a set of “engagement groups” beneath the main G20 apparatus. 

Others deal with specialist areas such as business, science, womens’ and youth issues. 

“Something that we were able to achieve this year that has not been done before in the U20 has been greater collaboration with other engagement groups, and all of these subjects are things that cities deal with on a daily basis. So we are able to understand their priorities as well as ours.


BIO

Born: Riyadh, 1988

Education: Graduate in urban planning, California State University

Career

  • Internship, City of Calabasas, Los Angeles
  • Urban Planner, Royal Commission for Riyadh City
  • U20 Sherpa to G20

“As a young engagement group, there was not a lot of structure to the U20. So part of our time was invested this year in creating some structure. This is something the cities really appreciate. We sit together and exchange technical viewpoints, our experiences, how we tackle our problems, at an experts’ level,” he said.

In addition to the 20 cities representing the G20 members, this year there were 22 other urban centers as invited observers, as well as “knowledge partners” such as the UN Habitat and World Bank and experts from  academia, urban planning and finance.

One of the innovations of the Riyadh U20 was the creation of task forces to coordinate the main thematic subject matter of the event. Even back in February, when the task forces were set up but before the pandemic forced an end to air travel, the task forces were designed to be virtual meetings.

“That was fortunate, but it also coincided with one of our main priorities in the U20, which was to use technology and innovation to share our experiences.”

The task forces were themed along three main lines: Working toward a circular carbon-neutral economy, the need for inclusive prosperity in cities, and the ambition to reach nature-based solutions in urban environments. 

The strategy was to localize the effort toward the UN’s Sustainable Development Goals through innovation and — especially important — to generate the financial resources to do so.

Carbon neutrality is of special interest to Saudi Arabia, where it chimes both with national energy policy and with the strategy of Riyadh, where AlGhannem was an urban planner before the U20 called him in as sherpa.

“Riyadh is planting 7.5 million trees — one per resident — to help with carbon sequestration, which is one of the elements of carbon neutrality. We are supportive of national government aims, of course, but also want to engage with private business and with citizens. The tree-planting program does that.”

He reported good progress in discussions with financial institutions backing the U20 aims, and said that projects such as tree-planting had important benefits for bigger sectors such as infrastructure investment and water projects in an arid city like Riyadh. 

“Innovative financing and investments are on every city’s top priority list. When it comes to money, we are definitely talking to the right people — the G20 leaders of the world’s biggest economies.”

So the job of sherpa, with liaison between multiple U20 participants, task forces and engagement groups, is a time-consuming and demanding one. But in the end it all boils down to the push to the summit after all that preparation is over — the final negotiations and compromises that enable all parties to agree to a communique encapsulating their positions, but which is also inclusive enough to accommodate often wide-ranging views.

It requires a large measure of empathy and diplomacy. 

“The communique for us is the final document that synthesizes everything that we put into it, and we have to have consensus. We have 42 cities, so this can be a difficult task.”

Preparation was crucial. All 42 cities were involved in the process since February, when they were presented with a skeleton of how the final communique should look, and they were kept updated throughout the process.

“Giving the cities clarity on the process makes them your partners in achieving success. That’s why I keep thanking them, because them understanding the process made the job a lot easier to get consensus among them.”

In the end, the U20 was able to claim a record level of agreement in its final communique, with 39 of the 42 cities signing up by the communique deadline.

“It’s a huge success,” AlGhannem said, adding that some cities were distracted this year by climate challenges and — above all ­— the pandemic’s impact. “They wanted to be vigilant about the rate of spread of COVID and they wanted to keep it under control, which is very understandable.”

Now that he has successfully led the U20 to the summit, AlGhannem will resume his role as an urban planner with the Royal Commission — “my dream job” — where there is a very important project to deliver. 

He has been involved in the transit section of the department for urban and strategic planning, which is responsible for the long-awaited opening of the Riyadh Metro, regarded as a crucial element of the city’s ambitious plans to double its population over the next 10 years.

“Having this public transportation will give us the opportunity to increase density around the stations, diversify land use and transform the city from being car to transit-oriented. It’s a big task.”

He will also get involved in the “troika” arrangements for the next G20, where previous G20 presidencies (Japan) work with the current one (Saudi Arabia) to assist the future host: Italy in 2021.

“We will be very supportive. We have invested a lot of time, money, sleepless nights and gallons of coffee to work on this U20, so we will not stop that. We will continue the momentum and support that.”


Saudi commercial records surge 68% in 20 months

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Saudi commercial records surge 68% in 20 months

RIYADH: Saudi Arabia has seen a remarkable 68 percent growth in commercial records over the 20 months since the implementation of its New Companies Law, according to a recent government report.

The law, which took effect on Jan. 19, 2023, introduced significant reforms aimed at simplifying business processes and fostering a more dynamic corporate environment. By the end of the third quarter of 2024, the number of commercial records had risen to 389,413, up from 230,762 before the law’s introduction, the Ministry of Commerce reported.

Among the law’s key innovations are streamlined processes for setting up joint-stock companies, the ability for shareholders to participate remotely, and improved financing options, including allowing limited liability companies to issue debt instruments. These changes have reshaped the corporate landscape by simplifying company formation and offering flexible financing avenues.

The law also encourages broader ownership by easing the purchase of shares and equity stakes. Notably, it introduces a simplified joint-stock company model and includes provisions for non-profit organizations. Other reforms include allowing sole proprietorships to transition into any company type, modernizing rules for corporate mergers and transformations, and permitting company splits.

Small and micro enterprises are exempt from the requirement of an external auditor, reducing their compliance burdens. Additionally, the law enhances digital services, enabling remote shareholder meetings and decision-making, and removes restrictions across all stages of company formation, operation, and exit.

The reforms also introduce a family charter to govern family-owned businesses and simplify the process for foreign companies to operate in the Kingdom, creating a more flexible and investor-friendly environment.

In its September report, the International Monetary Fund praised the reforms for improving access to financing, reducing fees, and strengthening governance, which has helped attract record levels of foreign investment. The IMF also noted that the reforms have contributed to the growth of non-oil sectors and increased employment.

The IMF further highlighted that the rise in non-oil revenues underscores the effectiveness of these reforms, which have also led to better compliance and alignment of customs procedures with international best practices.

In addition, in September, Saudi Arabia approved new laws related to commercial registration and trade names, further streamlining business operations and improving the overall business environment.

These changes were approved at a Cabinet session in Riyadh on Sept. 17, chaired by Crown Prince Mohammed bin Salman.


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

Updated 53 min 55 sec ago
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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 18 November 2024
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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 56 min 20 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. 


Saudi Aramco, Sinopec begin construction of petchem complex in Fujian

Updated 11 min 29 sec ago
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Saudi Aramco, Sinopec begin construction of petchem complex in Fujian

RIYADH: Saudi energy giant Aramco, in collaboration with China Petrochemical & Chemical Corp. and Fujian Petrochemical Co., has launched the construction of a refinery and petrochemical complex in Fujian province, China.

The project, which is slated to be fully operational by the end of 2030, will feature an oil refinery with a capacity of 320,000 barrels per day, according to a company statement. In addition to the refinery, the complex will include a 1.5 million-tonne-per-year ethylene unit, a 2 million-tonne paraxylene unit with downstream derivatives capacity, and a 300,000-tonne crude oil terminal.

Aramco’s long-standing relationship with China spans more than three decades. This new venture is part of Aramco’s broader strategy to solidify its position as a key player in the global energy sector, while also supporting Saudi Arabia’s economic growth.

“Building on our strong relationships with both Sinopec and Fujian Petrochemical, today’s groundbreaking further expands Aramco’s growing downstream investment portfolio in China,” said Mohammed Al-Qahtani, Aramco’s downstream president.

He continued: “We will supply in excess of 1 million barrels per day of our crude oil to these high chemical conversion assets in China, reinforcing Aramco’s role as a reliable and long-term partner in China’s development. This also advances our liquids-to-chemicals strategy, through which we intend to direct more of our crude toward helping meet rising global petrochemicals demand.”

The new facility will also supply around 5 million tonnes of feedstock annually to the Gulei Petrochemical Base, the statement added.

The Fujian Petrochemical Complex will be a joint venture, with FPCL, a collaboration between Sinopec and Fujian Petrochemical Industrial Group Co., holding a 50 percent stake. Aramco and Sinopec will each own a 25 percent share.

Ma Yongsheng, chairman of Sinopec, highlighted that the Fujian project represents a significant milestone in the partnership between Saudi Arabia and China.

“Both Sinopec and Aramco are committed to promoting the high-quality development of the petroleum and petrochemical industry. Aramco’s participation supplies long-term reliable and competitive feedstock for the project and further boosts the healthy development of Gulei Petrochemical Base,” said Yongsheng.

This new deal further deepens Aramco’s collaboration with Sinopec in the energy sector. Earlier this year, in January, Aramco awarded contracts worth over $3.3 billion to Sinopec and Spain’s Tecnicas Reunidas for the construction of a gas facility in Saudi Arabia. The project involves the development of a new natural gas liquids facility at the Jafurah unconventional gas production site in Saudi Arabia.

In October, Aramco also strengthened its ties with Chinese partners, signing a five-year partnership with China National Building Material Group to explore advanced materials, including the potential manufacturing of wind turbine blades in the Kingdom.