BEIRUT: At least $250 million in UN humanitarian aid intended for refugees and poor communities in Lebanon has been lost to banks selling the local currency at highly unfavorable rates, a Thomson Reuters Foundation investigation has found.
The losses — described in an internal United Nations document as “staggering” and confirmed by multiple sources — come as Lebanon grapples with its worst ever economic crisis, with more than half the population living under the poverty line, according to the World Bank.
They stem from a plunge in the value of the Lebanese pound since the economy began to collapse in late 2019, sending prices soaring and forcing many Lebanese into poverty.
The unfavorable exchange rates offered by Lebanese banks have hit Syrian and Palestinian refugees and poor Lebanese particularly hard as they are able to buy far less with the cash handouts they receive from the UN
Pre-crisis, refugees and poor Lebanese received a monthly payout of $27, equal to about 40,500 Lebanese pounds, from the World Food Programme (WFP).
That has now risen to about 100,000 Lebanese pounds per person, but its real value is a fraction of what it was before — about $7 at the current rate.
“The buying power used to be very good, we could get an acceptable food basket,” said Abu Ahmad Saybaa, a Syrian refugee who runs a Facebook page that highlights the challenges faced by refugees in Lebanon.
“But now (the handouts) can’t get us more than a gallon of cooking oil. There’s a huge difference in purchasing power,” said the father of five, who has lived in a refugee camp in Lebanon’s rugged northeast since 2014.
“It’s weighing on all of our health — mental and physical.”
An aid official and two diplomats from donor countries confirmed that between a third and half of all direct UN cash aid in Lebanon had been swallowed up by banks since the outset of the crisis in 2019. All spoke on condition of anonymity.
During 2020 and the first four months of 2021, banks exchanged dollars for UN agencies at rates on average 40 percent lower than the market rate, the aid official said.
Lebanon maintains an official exchange rate of about 1,500 pounds to the dollar, but since the crisis has only been able to apply that rate to a handful of essential goods.
All other imports have to be bought at much higher exchange rates, resulting in soaring prices.
Most of the losses came from a 2020 UN assistance program worth about $400 million that provides around 1 million Syrian refugees in Lebanon with monthly funds for food, education, transport, and winter weather-proofing of shelters.
Lebanon is home to over 1 million Syrian refugees, nine in 10 of whom live in extreme poverty, according to UN data.
The country received at least $1.5 billion in humanitarian aid in 2020.
An internal UN assessment in February estimated that up to half the program’s value was absorbed by Lebanese banks used by the UN to convert donated US dollars.
The document, seen by the Thomson Reuters Foundation, said that by July 2020 a “staggering 50 percent” of contributions were being lost through currency conversion.
The Association of Banks in Lebanon (ABL), which represents the country’s commercial banks, denied using aid to raise capital.
It said the UN could have distributed in dollars, or negotiated a better rate with Lebanon’s central bank.
A central bank spokesperson did not respond to a request for comment on the rates provided to humanitarian organizations
The $400 million UN program, known as LOUISE, receives funding from the United States, the European Commission, Germany, the United Kingdom, Canada, the Netherlands and France among others, according to its website.
It comprises the WFP, the UN refugee agency (UNHCR) and the UN Children’s Fund (UNICEF).
The Thomson Reuters Foundation compared the rates at which the banks converted US dollars in 2020 and 2021 with the concurrent market exchange rates to calculate the amount of aid lost.
The losses amounted to about $200 million in 2019 and 2020 and at least $40 million so far in 2021.
The figures are in line with the UN internal assessment and were independently verified by an aid official.
A UNICEF spokesperson said the agency was “very concerned that recipients receive the full value of cash transfers” and had recently renegotiated to obtain a rate close to the market rate.
It is also testing disbursement in dollars for some programs, the spokesperson said.
Banque Libano-Francaise (BLF), which was contracted by LOUISE agencies to give out aid, declined to comment on the unfavorable conversion rates, saying it was bound by a confidentiality agreement with them.
It also said the agencies could have distributed the money directly in dollars.
WFP funding of monthly cash assistance to 105,000 vulnerable Lebanese people, worth some $23 million last year, used the same unfavorable exchange rates, a WFP spokesperson said, meaning up to half of funds were lost to banks.
The WFP and UNHCR referred the Thomson Reuters Foundation to the UN humanitarian coordinator’s office, which declined to comment on the reasons for the massive losses.
A spokesperson for the UN agency for Palestinian refugees (UNRWA) said between a third and half of the aid it distributed since October 2020 – up to $7 million — was lost through currency conversion. The agency has repeatedly warned of funding shortfalls.
The documented losses from the LOUISE, WFP and UNRWA programs amount to at least $250 million since October 2019.
Following pressure by the UN agencies, the discrepancies between the average market exchange rate and the rate offered by the banks have shrunk, but not disappeared.
Confronted with a financial system keen on sucking in as many dollars as possible, donors and UN agencies have struggled to develop a cohesive approach that maintains the full value of aid.
In May, a top World Bank official said Lebanon had agreed to disburse the aid from a $246 million World Bank loan to poor Lebanese directly in dollars, but the payouts have been delayed.
Dollarization of aid, which was recommended in the February internal assessment and lobbied for by donor countries and independent analysts, would keep the full value of the donations for beneficiaries regardless of fluctuations in currency rates.
But Lebanese authorities have resisted efforts to dollarize aid inflows as they seek to maintain control over one of the few remaining sources of hard currency.
Meanwhile, donor nations have grown increasingly impatient and fearful of reputational damage tied to the millions in taxpayer money absorbed by banks.
“We’ve been more than ready to invest in helping people, but we need a credible counterpart that’s not going to pocket money that we are ultimately accountable for at home,” said one Western diplomat on condition of anonymity.
Jad Chaaban, a professor of economics at the American University of Beirut, said international organizations operating in Lebanon often walked a tight line between making compromises in a difficult political environment and holding to standards of accountability.
“In this case, it’s unacceptable and there must be much higher standards. We effectively see the same dynamics as contractors or crony businessmen siphoning off money that they received to build a school or infrastructure project,” Chaaban said.
“Right now, every cent counts for Lebanon.”
Lebanese banks swallow at least $250m in UN aid
https://arab.news/gduk8
Lebanese banks swallow at least $250m in UN aid
- Officials from donor countries confirmed that banks swallowed between a third and half of all direct U.N. cash aid in Lebanon
- An internal assessment in February estimated that up to half the UN assistance programme's value was absorbed by Lebanese banks
70% of Saudi employers say technological literacy is increasingly important skill, report finds
- World Economic Forum predicts net gain of 78m jobs by 2030, as half of employers globally plan to reshape businesses to benefit from technology-related opportunities
- However, largest job growth is expected to be among frontline roles such as farm workers, delivery drivers and construction workers
DUBAI: Macroeconomic conditions, geopolitical tensions and advancements in technology are among the factors shaping the global workforce, as the World Economic Forum projects 170 million jobs will be created worldwide by 2030.
The latest edition of the forum’s “Future of Jobs” report also predicted the displacement of 92 million jobs, leaving a net gain of 78 million over the next five years.
The largest job growth is expected to be among frontline roles such as farm workers, delivery drivers and construction workers. The WEF also expects increased demand for healthcare and educational professionals, and in the fields of artificial intelligence and energy, particularly renewable energy and environmental engineering.
The report said skills gaps are the leading barrier to business transformation. Nearly 40 percent of skills required for jobs are set to change and 63 percent of employers cited this as a key challenge they face.
Half of employers globally said they planned to reshape their business to benefit from technology-related opportunities and this will be reflected in the job market, with 77 percent of employers intending to upskill their employees.
Despite this growing demand for technological skills, human skills, such as creative and analytical thinking and agility, will remain essential, the WEF said.
However, 41 percent of employers said they plan to reduce workforce size because AI is capable of automating some tasks, with cashiers, administrative assistants and secretaries expected to see the largest declines in the next five years.
Companies in the Middle East and North Africa region are more positive about the availability of talent for recruitment by 2030 than their global peers, the report found, with 46 percent of regional employers expecting the hiring outlook to improve.
“The big trends creating new jobs globally — such as increasing digitalization, adoption of artificial intelligence and the transition away from a carbon-heavy economy — are the same ones driving economic transformation across the Middle East,” Till Leopold, the WEF’s head of work, wages and job creation, told Arab News.
Employers in the region, most notably in Saudi Arabia and the UAE, are also planning to accelerate the process of automation. For example, the proportion of work tasks expected to be mostly automated through the use of technology is projected to reach 45 percent by 2030 in the Kingdom and 43 percent in the UAE, both well above the global average of 34 percent.
As companies invest more in the latest technology, more 70 percent of employers in Saudi Arabia and 87 percent in the UAE identified technological literacy as a skill on the rise, along with growing demand for skills in networks and cybersecurity, and AI and big data.
The report stressed the need for “urgent and collective action across government, business and education” as employment continues to evolve, with key priorities including efforts to bridge skills gaps, invest in reskilling and upskilling initiatives, and enable easy access to the fastest-growing jobs and skills development.
“It is essential that public- and private-sector leaders work together to ensure people across the region are equipped with the right skills to benefit from these opportunities, including technology literacy, resilience and creative thinking,” said Leopold.
Saudi Arabia’s Hafr Al-Batin forum seals $4.5bn in investments
RIYADH: The Hafr Al-Batin Investment Forum 2025, held in Saudi Arabia’s Eastern Province, concluded with the signing of seven agreements totaling SR17 billion ($4.5 billion) across key sectors, underscoring the region’s growing economic potential.
The event, organized by the Hafr Al-Batin Chamber of Commerce in collaboration with the Federation of Saudi Chambers and hosted at the University of Hafr Al-Batin, aimed to position the province as a competitive hub for both local and international investors, in alignment with Saudi Arabia’s Vision 2030.
The forum was inaugurated by Eastern Province Gov. Prince Saud bin Nayef Al-Saud, who emphasized the province’s strategic advantages for investors.
He highlighted Hafr Al-Batin’s competitive investment landscape, noting its diversified economic opportunities and advantageous location, making it an ideal destination for investors looking to capitalize on sustainable growth prospects.
He also underscored the region’s infrastructure developments, which are critical for attracting investment and creating job opportunities for Saudi nationals.
The agreements signed during the forum marked a significant milestone in Hafr Al-Batin’s economic development, with the forum serving as an important platform for showcasing the region’s investment opportunities.
These agreements are expected to contribute to the province’s growing role in the Kingdom’s economic agenda, aligning with Vision 2030’s objectives of economic diversification and job creation. The event also highlighted Hafr Al-Batin’s efforts to attract foreign capital and foster local content within its industries.
In conjunction with the forum, the Eastern Province Development Authority launched a master plan for Hafr Al-Batin aimed at attracting SR47 billion in private sector investments. This plan is projected to contribute SR11 billion to Saudi Arabia’s gross domestic product and create more than 60,000 job opportunities for local residents.
One of the key announcements at the forum was the unveiling of the Middle East’s largest livestock city, a SR9 billion project designed to support Saudi Arabia’s goals of achieving self-sufficiency in livestock production and enhancing food security.
The city, backed by the Hafr Al-Batin Livestock and Marketing Association, will be developed on an expansive 11 million sq. meter site. Once operational, the project is expected to meet 30 percent of Saudi Arabia’s demand for red meat while generating over 13,000 jobs.
It will include state-of-the-art livestock farms, fodder production plants, a veterinary hospital, and advanced meat processing facilities. Sustainability will be a core feature, with the city powered by renewable energy, generating 15 billion kilowatt-hours of green electricity annually, producing 140,000 liters of milk per day, and 100 tonnes of fodder per hour. The facility will also feature an automated abattoir spanning 170,000 sq. meters, contributing 1.5 million sq. meters of leather production each year.
The forum drew a wide range of participants, including Prince Abdulrahman bin Abdullah bin Faisal, governor of Hafr Al-Batin, as well as high-ranking officials, business leaders, and investors from across the globe. The event was designed to showcase the province’s investment potential in sectors such as agriculture, livestock, healthcare, logistics, and infrastructure—critical areas for the region’s economic transformation.
Hassan Al-Huwaizi, chairman of the Federation of Saudi Chambers, emphasized the forum’s importance in advancing the Kingdom’s economic goals.
He pointed to the growth of Saudi Arabia’s trade and commerce ecosystem, driven in large part by Vision 2030’s transformative strategies, and highlighted the role of the Hafr Al-Batin Investment Forum as a vital platform for introducing the region’s opportunities to both national and international investors.
Sulaiman Al-Aqil, chairman of the Hafr Al-Batin Chamber of Commerce, described the forum as a pivotal moment in the province’s economic evolution.
The event featured participation from 24 government and private entities from 12 countries, four panel discussions with 19 speakers, and the release of a comprehensive economic study on Hafr Al-Batin’s investment potential.
With these agreements and initiatives, the forum not only highlighted the region’s expanding role in Saudi Arabia’s economic future but also reaffirmed the Kingdom’s commitment to becoming a leading global investment hub in line with Vision 2030’s objectives.
PIF invests $200m in new Saudi ETF by State Street Global Advisers
RIYADH: Saudi Arabia’s Public Investment Fund has invested $200 million in the newly launched SPDR J.P. Morgan Saudi Arabia Aggregate Bond UCITS exchange-traded fund.
In a press release, State Street Global Advisers, the US-based asset manager behind the ETF, called it the first fixed-income UCITS ETF focused on the Kingdom to launch in Europe.
This move comes as global investors look to capitalize on Saudi Arabia’s growing bond market, supported by economic and infrastructure developments under Vision 2030.
The ETF launch further underscores PIF’s strategy to enhance international access to Saudi Arabia’s diversified market and attract foreign investment. PIF’s portfolio also includes investments in ETFs listed in Hong Kong, Shanghai, Shenzhen, and Tokyo.
“PIF’s investment into the first internationally listed fixed-income Saudi ETF further deepens the Saudi market, while attracting investors and strengthening cross-geography partnerships, increasing international investment in Saudi Arabia,” said Yazeed Al-Humied, deputy governor and head of Middle East and North Africe Investments at PIF.
Undertakings for Collective Investment in Transferable Securities, or UCITS, are EU regulations that establish a standardized framework for investment funds marketed and sold to investors within the economic bloc.
Listed on the London Stock Exchange and Deutsche Börse’s Xetra in Frankfurt, the new fund tracks the J.P. Morgan Saudi Arabia Aggregate Index. This index provides exposure to the Kingdom’s financial instruments, including liquid dollar- and SR-denominated government and quasi-government bonds, as well as sukuk bonds.
“We are delighted to see such significant early-stage commitment from PIF into the SPDR J.P. Morgan Saudi Arabia Aggregate Bond UCITS ETF, a first of its kind in the industry. The creation of this fund sprung from our ambition to provide investors a compelling and innovative opportunity,” said Yie-Hsin Hung, CEO of State Street Global Advisers.
The ETF is accessible to investors in several European countries, including Austria, Denmark, and Finland, as well as France, Germany, and Italy. It is also available in Luxembourg, the Netherlands, and Norway, as well as Spain, Sweden, and the UK.
State Street Global Advisers, the asset management business of State Street Corp., has served governments, institutions, and financial advisers for over four decades, managing $4.73 trillion in assets.
The SPDR ETF range spans international and domestic asset classes, providing investors with flexible options aligned to diverse strategies.
Closing Bell: Saudi main index slides to close at 12,088
RIYADH: Saudi Arabia’s Tadawul All Share Index edged lower on Wednesday, dropping by 24.55 points, or 0.20 percent, to close at 12,088.74. The benchmark index saw a trading turnover of SR7 billion ($1.86 billion), with 127 stocks advancing and 112 declining.
The Kingdom’s parallel market, Nomu, also experienced a slight decline, falling by 32.97 points, or 0.11 percent, to settle at 30,776.15. Of the stocks listed on Nomu, 41 advanced while 42 retreated.
The MSCI Tadawul Index dropped 7.53 points, or 0.50 percent, to close at 1,506.86.
Among the top performers of the day was Nice One Beauty Digital Marketing Co., which made its debut on the main market on Jan. 8. The company’s share price surged by 30 percent, reaching SR45.50.
Other notable gainers included Al-Mawarid Manpower Co., which saw its stock rise 7.82 percent to SR135.20, and Al-Baha Investment and Development Co., which saw its share price climb 6.98 percent.
On the downside, National Co. for Learning and Education recorded the largest drop, falling 4.24 percent to SR185.20. Almoosa Health Co. also saw a decline of 3.84 percent, ending the session at SR140.40, while Alinma Retail REIT Fund Yanbu saw a 3.45 percent drop to SR4.76.
On the announcements front, Nice One Beauty Digital Marketing Co. revealed it is offering 34.65 million shares at SR35 each. SNB Capital is serving as the lead manager for the offering.
United Electronics Co. announced its estimated financial results for the year ending Dec. 31, 2024. The company reported a net profit of SR534.53 million, marking a 36.8 percent increase compared to 2023. The growth was driven by higher revenues and improved gross profits, thanks to a better sales mix and expansion in the consumer finance sector, despite an increase in selling, distribution, and administrative expenses. Extra’s stock ended the day at SR95.60, up 2.13 percent.
United International Holding Co. also posted its financial results for the period ending Dec. 31, 2024. The company recorded a net profit of SR222.38 million, a 4.8 percent increase over the previous year. This growth was attributed to higher credit loss provisions and increased selling, general, and administrative expenses. The company’s shares closed at SR187.80, down 2.60 percent.
Meanwhile, the Kingdom’s Capital Market Authority announced that Rawasi Albina Investment Co. is planning to issue up to SR500 million in debt instruments. The company's stock finished the session at SR4.35, down 1.15 percent.
Saudi Arabia dominates MENA VC landscape, securing $750m in 2024
RIYADH: Saudi Arabia has retained its position as the top destination for venture capital funding in the Middle East and North Africa region, raising $750 million in 2024, according to a new report.
This marks the second consecutive year the Kingdom has topped the regional VC rankings.
Data from regional venture platform MAGNiTT showed that Saudi Arabia accounted for 40 percent of the total VC capital deployed in MENA in 2024, with a 16 percent year-on-year increase in deal flow.
The Kingdom closed 178 deals, the most of any MENA nation, reflecting strong investor confidence and a thriving startup ecosystem.
The largest deal in the region was secured by Saudi-based e-commerce enablement platform Salla, which raised $130 million.
The UAE ranked second in regional funding with $613 million raised, while leading in deal volume with 188 transactions and 12 exits.
Emerging venture markets snapshot
MENA startups collectively raised $1.9 billion in 2024, reflecting a 29 percent decline compared to 2023.
Despite the drop, MAGNiTT noted that “funding levels in 2024 were still higher than 2020 levels, prior to the 2021 and 2022 boom years, signaling continued growth in the venture space.”
The Middle East accounted for $1.5 billion of the funding, spread across 461 deals — a 10 percent annual increase. Total investor participation in the region grew by 14 percent, reaching 392 investors, while exits totaled 24.
Venture capital performance in emerging venture markets — which include the Middle East, Africa, Southeast Asia, Pakistan, and Turkiye — slowed significantly in 2024.
Total VC funding in these regions fell by 40 percent, with deal volumes dropping 20 percent compared to 2023. Both metrics also dipped below 2020 levels.
Southeast Asia led among EVMs with $5.6 billion raised across 564 deals, while Africa recorded the weakest performance, raising $1.07 billion through 294 deals.
Mega deals and early-stage activity
Global VC trends, such as reduced late-stage funding, were reflected in EVMs. Mega deals — valued at $100 million or more — declined for the third consecutive year, falling 56 percent compared to 2023.
The first quarter of 2024 saw the lowest mega deal funding since the fourth quarter of 2019, with late-stage investments hardest hit.
However, early-stage activity showed resilience. The focus on seed and pre-series A funding increased, with $1 million to $5 million ticket sizes rising by 5 percentage points year on year.
According to MAGNiTT, this emphasis on early-stage investments is critical for sustaining future deal flow growth.
Philip Bahoshy, CEO of MAGNiTT, highlighted a potential recovery in the venture market. “In 2024, we witnessed a decline in funding across EVMs driven by reduced late-stage investment activity. However, the positive development is that 2024 also saw a gradual decline in interest rates, both in mature markets like the US and Emerging Markets,” he said.
“We anticipate these rate cuts to begin boosting capital availability within the next 6-9 months, paving the way for a stronger funding environment in 2025,” Bahoshy added.
The Middle East increased its share of deal transactions across EVMs to 35 percent in 2024, an 8-percentage-point rise.
Southeast Asia captured the largest share at 43 percent, while Africa’s share dropped to its lowest level in five years, at 22 percent.