BEIRUT: Lebanon has yet to give the IMF its estimate of losses in the financial system as discussions on the issue continue, but is working hard to sign a memorandum of understanding with the Fund by year-end, governor Riad Salameh told Reuters on Tuesday.
Disagreements in Lebanon over the size of the losses and how they should be distributed torpedoed IMF talks last year. The central bank, banks and political elite rejected figures set out in a government plan that was endorsed by the IMF at the time.
The issue has obstructed attempts to chart a way out of the crisis that has devastated Lebanon since 2019, sinking the currency by more than 90 percent, causing poverty to skyrocket and leading many Lebanese to emigrate.
Speaking in an interview for the upcoming Reuters Next conference, Salameh also said the bank had $14 billion of available liquidity in its reserves, and reiterated denials of wrongdoing as judicial authorities in France and Switzerland investigate money laundering allegations against him.
Salameh said an IMF program was essential for Lebanon to exit the crisis, noting the external financing it would unlock and discipline that would impose reforms.
Therefore the central bank would accept the figures for the losses as decided by the government, he said.
“We are, at this stage, still in the process of gathering the data that is requested by the IMF and the issue of the losses — the number of these losses — are not going to be a hurdle for these negotiations, at least from the side of the central bank,” he said.
Asked whether there was agreement yet on who will bear the burden of the losses — such as depositors, bank shareholders, the government and the central bank itself — Salameh said no decision had been taken “because we don’t have yet the final figures that are agreed with the IMF for the total losses.”
Last year, several sources said Salameh dug in his heels over the losses which the previous government’s plan suggested were in the $70 billion range, although higher figures have been cited. Ruling parties and commercial banks also objected to the figures, saying they were too big.
Asked when the figure would be ready, Salameh said Prime Minister Najib Mikati had set a deadline for signing the IMF memorandum of understanding by the end of 2021, which the government and central bank were working “very hard to achieve.”
Salameh became Banque du Liban (BDL) governor in 1993 and managed a pegged exchange rate that underpinned the import-dependent economy from 1997 until the meltdown.
As Lebanon’s currency sunk, the reserves were depleted as BDL provided dollars at heavily subsidised exchange rates to finance imports including fuel, food and medicine.
Salameh noted that this policy had now been largely phased out — the only imports for which dollars are being provided at subsidised rates today are medicines for some chronic illnesses and wheat, while BDL sells dollars for gasoline imports at a small discount to the market exchange rate.
“Our expectation is that if we stay on this model, for the next 12 months ... the BDL will have to fund $2.5 billion,” he said. BDL might recoup $300-$500 million from its foreign exchange platform, Sayrafa, in that timeframe, he said.
The reserves were recently boosted by the sale of over $1 billion of IMF Special Drawing Rights.
Salameh is being investigated by authorities in four European countries, including the Swiss inquiry over alleged “aggravated money laundering” at BDL involving $300 million in gains by a company owned by his brother, Raja Salameh.
Last week, he said he had ordered an audit of transactions and investments that had been the focus of media reports and this had shown no public funds were used to pay fees and commissions to the company owned by his brother. Raja Salameh has not publicly commented on the accusation.
Salameh gave the prime minister a copy of the audit last week but declined to provide Reuters with one. “In this report, it is clear that there was no embezzlement or money laundering on my side or under my guidance at the central bank,” he said.
Lebanon has yet to give IMF figure for financial losses, central bank governor says
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Lebanon has yet to give IMF figure for financial losses, central bank governor says
- Disagreements in Lebanon over the size of the losses and how they should be distributed torpedoed IMF talks last year
- Salameh reiterated denials of wrongdoing as judicial authorities in France and Switzerland investigate money laundering allegations against him
Saudi Arabia’s JEDCO, Tarshid partner to boost energy efficiency at King Abdulaziz Int’l Airport
- Tarshid will conduct on-site surveys and technical studies of KAIA’s targeted buildings and facilities
JEDDAH: Saudi Arabia’s King Abdulaziz International Airport is set to enhance energy efficiency and reduce emissions through a strategic partnership with the country’s National Energy Services Co., or Tarshid.
The pact between Jeddah Airports Co., or JEDCO, the airport’s operating company, and Tarshid, a Public Investment Fund company, aims to deliver sustainable energy efficiency solutions for the airport’s facilities. The partnership is facilitated through a Tarshid subsidiary and aligns with the Kingdom’s Vision 2030 and the Saudi Green Initiative.
The agreement was signed in the presence of Prince Abdulaziz bin Salman, minister of energy and chairman of Tarshid’s board of directors, according to the Saudi Press Agency.
The deal, which aims to launch innovative energy-saving initiatives and promote environmental responsibility, supports Saudi Arabia’s Civil Aviation Environmental Sustainability Program and contributes to achieving the goals of the Saudi Green Initiative and Vision 2030, which seek to improve energy efficiency and implement sustainable solutions across public and private sector facilities in the Kingdom.
The Kingdom has been developing the Civil Aviation Environmental Sustainability Plan, which seeks to mitigate the environmental impact associated with the expected growth of the country’s civil aviation sector.
The plan is crafted to align with global commitments outlined in the Paris Climate Agreement and the emission reduction targets set by the International Civil Aviation Organization.
The country has made several national-level achievements over the past years in the pursuit of it net-zero emissions goal, set for 2060. It is also pursuing new technologies to improve fuel efficiency and decarbonize the aviation sector.
Ranked among the top 100 airports globally, KAIA holds the distinction of being the third-best airport in the Middle East, according to Skytrax rankings.
Under the agreement, Tarshid will conduct on-site surveys and technical studies of KAIA’s targeted buildings and facilities, recommending optimal solutions to enhance energy efficiency and reduce consumption within the project’s scope.
Waled Abdullah Al-Ghreri, CEO of Tarshid and board member said that they are dedicated to realizing Vision 2030’s objectives of enhancing energy efficiency and sustainability in Saudi Arabia.
“Tarshid continues to strengthen its partnerships with both public and private sectors, and our collaboration with Jeddah Airports Co. is a pivotal step toward establishing new energy efficiency benchmarks in the aviation sector, reflecting a future that merges operational excellence with environmental responsibility.”
Mazen bin Mohammed Johar, CEO of JEDCO, expressed his enthusiasm for the collaboration, emphasizing that the agreement is a significant step in advancing the company’s efforts to enhance the operational efficiency of airport facilities.
Johar emphasized that the agreement aligns with the National Aviation Strategy’s goal of operating a world-class, sustainable airport with high energy efficiency standards, consistent with Vision 2030.
He highlighted KAIA’s achievements in environmental preservation, including sustainability projects such as a recycling initiative that reduces carbon emissions and achieves net-zero targets, electricity and water conservation projects utilizing solar panels and smart technologies, and air quality monitoring in collaboration with the National Center for Environmental Compliance.
He said that the airport has increased green spaces to mitigate carbon emissions.
Established in 2017, Tarshid specializes in retrofitting buildings and facilities to improve energy efficiency and sustainability across government and private sectors. The KAIA project is among its key initiatives with the private sector, aiming to encourage the aviation industry to adopt sustainable practices.
By the end of the third quarter of 2024, the company had achieved annual energy savings of 7.3 terawatt-hours across various projects, equivalent to conserving over 11.7 million barrels of oil equivalent and avoiding approximately 4.2 million metric tons of harmful emissions. These efforts equate to the environmental impact of planting more than 69.4 million seedlings annually, as per SPA.
Tarshid has recently signed a similar agreement with SAL Logistics Services, underscoring its role in advancing energy efficiency and sustainability across both governmental and private sectors.
Saudi non-profit sector revenues surge 33% to $14.4bn in 2023
RIYADH: Saudi Arabia’s non-profit sector recorded revenues of SR54.4 billion ($14.4 billion) in 2023, marking a 33 percent year-on-year increase, according to data from the Saudi General Authority for Statistics.
The sector’s total expenditures also rose by 33 percent, reaching SR47 billion, while employee compensation climbed 17 percent to SR21.7 billion.
The health sector led the revenue surge with a 70 percent increase compared to the previous year. Education and research activities followed, growing 53 percent, while volunteer intermediary and enhancement activities rose 36 percent. Together, these areas were the largest contributors to the sector’s growth.
Saudi Arabia’s non-profit sector has seen rapid growth, aligning with the objectives of Vision 2030. As of March 2024, the Kingdom had 4,721 registered non-profit organizations — a 182 percent increase since 2018.
On the spending front, the health sector led with a 74 percent year-on-year rise in expenditures in 2023, followed by education and research activities with a 55 percent increase, and environmental activities, which grew by 34 percent. These categories contributed the most to the sector's overall spending.
Employee compensation reflected similar trends, with education and research activities seeing the sharpest growth at 84 percent. Environmental activities recorded a 38 percent rise, while volunteer-related activities saw a 29 percent increase in compensation.
In terms of workforce distribution, cultural and recreational sectors emerged as the largest employers, accounting for 27.6 percent of total employment in the non-profit sector. Social services followed at 27.2 percent, with development and housing activities comprising 12.4 percent. Health-related roles accounted for 11.5 percent, and education and research activities contributed 7.5 percent, while other non-profit activities made up the remaining 13.8 percent.
This distribution marked a shift from 2022, where social services led at 29.7 percent, followed by cultural and recreational activities at 25.4 percent.
This growth in the non-profit sector has raised its contribution to the gross domestic product to 0.87 percent, exceeding the 2023 target of 0.51 percent and aiming for an ambitious 5 percent by 2030.
Additionally, the Kingdom has surpassed its target of 1 million volunteers six years ahead of schedule, achieving this milestone by the end of 2024.
Dubai sees 7.4% surge in international visitors through August 2024
RIYADH: Dubai recorded a 7.4 percent year-on-year increase in international visitors from January to August 2024, reaching a total of 11.93 million, according to recent data from the Dubai Department of Economy and Tourism.
The report highlights that Western Europe, South Asia, and the Gulf Cooperation Council remain the top three source markets for the emirate, collectively accounting for more than 50 percent of all international visitors.
This growth in tourism mirrors Dubai’s strong market performance, with both the average daily rate and revenue per available room seeing year-on-year increases of 2.5 percent and 2.7 percent, respectively, between January and September.
Meanwhile, according to the latest JLL report, Dubai’s hotel inventory grew by 240 rooms in the third quarter, bringing the total to approximately 155,400 rooms. The report also anticipates an additional 4,800 rooms will be added by the end of 2024, mainly in the four- and five-star categories.
Major projects like Marsa Al-Arab, The Island by Wasl, and Dubai Islands are expected to set new benchmarks for luxury beachfront real estate, further driving growth in the hospitality sector.
However, the JLL report also noted an emerging trend of price sensitivity within the luxury hotel segment. Increased competition from other regional and global tourist destinations has led to a shift in the spending behavior of high-end travelers.
In response, luxury hotel operators are adjusting their ADR to maintain higher occupancy levels, a strategy that is also being adopted by mid-scale and budget hotels.
As competition in the hospitality market intensifies, hotel operators are focusing on improving guest experiences, food and beverage offerings, and overall service quality to attract visitors and stay competitive. Price fluctuations in the luxury segment are expected as operators align rates with changing demand patterns.
In another sign of Dubai’s growing global appeal, Dubai International Airport reported a record 44.9 million passengers in the first half of 2024. CEO Paul Griffiths emphasized the airport’s strategic importance as a global aviation hub and reiterated Dubai’s position as a leading destination for business, tourism, and talent. With these strong indicators of growth, Dubai is well on track to solidify its place as one of the world’s top travel and tourism destinations.
Saudi Arabia’s logistics centers surge 267% amid Vision 2030 push
RIYADH: Saudi Arabia’s logistics sector has seen notable growth, with the number of facilities increasing by 267 percent since 2021, according to a report by the General Authority for Statistics.
In 2023, the Kingdom had 22 hubs spanning over 34 million sq. meters, underscoring the nation’s push to become a regional logistics leader under its Vision 2030 plan.
The Eastern Region topped the list in terms of the number of logistics centers, with six hubs covering an area of 6.3 million sq. meters.
However, the Makkah Region occupied the highest total area, with five centers spanning 20 million sq. meters, followed by Riyadh with five centers covering 4.9 million sq. meters.
The report also highlighted that the Kingdom had 12,451 warehouses in 2023, covering a total area of 22.8 million sq. meters.
Riyadh accounted for 52.9 percent, occupying 10.6 million sq. meters, followed by Makkah with 17.9 percent, the Eastern Province with 14.3 percent, and other regions making up the remaining 14.9 percent.
According to the report, general warehouse licenses were the most prevalent, totaling 6,923 and making up 55.6 percent of all licenses. Humidity-controlled warehouses followed with 2,115 licenses, representing 17 percent of the total, while refrigerated warehouses accounted for 16 percent with 2,006 licenses.
The maritime sector dominated cargo transport by quantity with 308.7 million tonnes, followed by 24.9 million tonnes transported via land, 14.3 million tonnes by rail, and 918,000 tonnes via air.
The report also revealed that the goods transport segment registered 7,963 valid licenses, with Riyadh region leading the way with 1,996 active licenses.
Saudi Arabia’s warehousing and logistics sector is undergoing a transformative surge, driven by Vision 2030 and supported by significant government and private investments.
According to a November report by Maersk, a leader in integrated logistics, the Kingdom is poised to become a global trade and logistics powerhouse. The market is projected to reach $38.8 billion by 2026, growing at a compound annual growth rate of 5.85 percent.
This growth reflects Saudi Arabia’s strategic positioning as a regional logistics hub, supported by its $106.6 billion commitment to expanding land, air, and sea cargo capacities.
The Saudi Ports Authority’s $4.5 billion investment into maritime logistics in 2023 is a testament to this vision. Coupled with giga-projects like NEOM and the National Industrial Development and Logistics Program, the country aims to capture 55 percent of the Gulf Cooperation Council’s logistics market while exponentially increasing non-oil exports.
According to Knight Frank’s Industrial and Logistics Market Review for the first half of 2024, warehouse occupancy in Saudi Arabia reached a record 97 percent nationally in mid-2024, underscoring strong demand for storage and light industrial facilities.
Riyadh and Jeddah have emerged as focal points, with high lease rates and increasing global interest from firms like Maersk, DB Schenker, and DP World.
Additionally, the rise of e-commerce and digital logistics solutions has catalyzed innovation and competition, positioning Saudi Arabia at the forefront of logistics advancements in the region.
Digital transformation
According to the report, the postal and parcel sector in Saudi Arabia handled over 140 million items in 2023, supported by 1,300 sales outlets, with an average delivery time of just 2.45 days — highlighting the sector’s growing efficiency.
Meanwhile, customs and digital transport advancements continue to reshape the logistics landscape. Customs clearance activity licenses totaled 170 in 2023, with airports accounting for 47 licenses.
Additionally, 37 delivery app companies were licensed for freight transport, signaling a significant shift toward digital innovation in the sector.
Egypt pays off $38.7bn in debts in 2024
RIYADH: Egypt has successfully repaid $38.7 billion in debts during 2024, including $7 billion in November and December, demonstrating its commitment to meeting financial obligations despite significant economic challenges.
The announcement was made by Egyptian Prime Minister Mostafa Madbouly during a Cabinet meeting, where he emphasized the government’s efforts to manage debt repayments in the face of a volatile global economic environment.
As Egypt continues to tackle its economic difficulties, the country is also set to receive around $1.2 billion from the International Monetary Fund under a staff-level agreement for the Extended Fund Facility program. The agreement, which is pending approval from the IMF’s executive board, aims to provide crucial financial support to stabilize Egypt’s economy.
This funding is part of Egypt’s broader strategy to stabilize its economy amid soaring inflation and lower-than-expected revenues, including a significant drop in earnings from the Suez Canal.
“The Egyptian authorities have consistently implemented key policies to maintain macroeconomic stability, despite the ongoing regional tensions and the sharp decline in Suez Canal receipts,” said Ivanna Vladkova Hollar, who led the IMF mission to Egypt.
Egypt’s Foreign Minister Badr Abdelatty revealed last month that the country had lost $8 billion in Suez Canal revenues, underscoring the broader economic challenges.
In response, the IMF and Egyptian authorities have agreed to revise the country’s fiscal consolidation strategy, allowing for crucial social programs aimed at supporting vulnerable groups and the middle class, while ensuring long-term debt sustainability.
“Special attention will be required to manage fiscal risks related to state-owned enterprises in the energy sector, and to enforce the strict implementation of the public investment ceiling, which includes capital expenditures from public entities operating outside the general government budget,” added Hollar.
The reduction in external debt is a significant achievement, reflecting the Egyptian government’s commitment to managing its financial obligations despite the ongoing global economic turbulence.
Despite economic hurdles like rising inflation and fiscal deficits, Egypt has worked to balance addressing external debt with fostering sustainable growth. This reduction in debt is expected to improve Egypt’s creditworthiness, sending a positive signal to international markets and potentially attracting more global investment.
In an effort to stimulate further economic growth, Madbouly also announced plans to privatize several airports and banks, with the aim of boosting private sector involvement in the economy.
