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Will Saudi’s Oil-Drenched Economy Slip from the Hands of MbS?

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Saudi Arabia crown prince Mohammed bin Salman

Saudi Arabia’s long-planned journey towards diversification appeared a great initiative, when Crown Prince Mohammed bin Salman (MbS) announced the Vision 2030 plan in April 2016. However, nearly two years down the line, the prominent transition began buffeting the Saudis and their businesses.

As per the statistics, the Kingdom depends on its oil reserves for 87 per cent of the revenue. The government officials avowed that their policies have resulted in economic pain. However, the country is now on a trail of fixing the deep-rooted economic problems, which have been remained hidden behind petroleum revenues.

In an interview, the Saudi economy minister Mohammed al-Tuwaijri said, “We are trying to strike a balance here to make sure our market is sustainably growing.” He explained the “transformation journey”, under which the country is striving to ensure a friendly investment environment with real opportunities and a legal framework based on best practices.

Under its comprehensive plan, the world’s largest oil exporter has been taking several measures to set off its non-oil economy, including introduction of new taxes, rising gasoline and electricity prices, and pressing the foreign workers to leave the country to create opportunities for the Saudi citizens.

However, the outcome has been far from what the Crown Prince and his people expected. A new domestic challenge emanated for Mohammed bin Salman (MbS), while he has been trying to reform the over-conventional culture of his Kingdom. Certain initiatives taken last year were aimed in the same direction, such as permitting cinema, giving women the driving rights and allowing them to enter sports stadiums.

But, where the culture issues are being resolved, the economic program is not proving true to the vision.

ECONOMIC PLAN OR PAIN?

The sweeping economic plan announced by the Saudi government has not been able to impress the citizens, yet. According to reports, some natives have decried that the program has been dissatisfactory for them.

A Jeddah resident complained, “As citizens, we’re not really benefiting from any of it.”

Moreover, certain business firms — Almarai Co. and Fawaz Abdulaziz Alhokair & Co. — also reported of inadequate earnings in 2018, where some also blamed the Saudi government. The new 5 per cent value-added tax and higher energy costs were some reform measures of the Crown Prince that were blamed for the adverse effects on business profits.

ISSUE: FOREIGN WORKERS OR THEIR EXIT?

The amendment policy of the Kingdom imposed new levies on companies hiring foreign workers, along with the introduction of new fees for their families to stay. Over one million expat workers — recorded 7.4 million two years ago — left the country following the policy shifts. The economic decent is also a result of an exodus of the working-class immigrants.

In January, Saudi Arabia entered deflation, as only few people were spending money. Statistics reveal that in February, the consumer prices fell by 22 per cent in contrast to with the same month last year. Saudi central bank claimed that the drop is recorded as the steepest since a 2017 recession.

THE VIOLATIONS AND THE VISION

While the Vision 2030 plan was having a negative impact on the economy, Saudi Arabia’s human rights records were also going against its interests. Moreover, the country had to deal with international reprimand for its role in the brutal assassination of Saudi journalist Jamal Khashoggi, as well as the ruthless destruction of Yemen.

It has resulted in disinclination from the foreign investors to commit, relatively lower oil prices, and rebuffs from the international businesses and institutions; the issues that the Kingdom Prince MbS is contending. Foreign direct investment of $2.4 billion through three quarters of 2018 was up from 2017 — 14-year low of $1.4 billion — but far below historic averages and 2016 annual figure of $7.4 billion.

THE UNEMPLOYED YOUTH

The Kingdom’s imbalanced working population is also a crucial area that needs attention, which the officials claim the policies are addressing. Holding one of the largest youth populations in the G-20, it accounts for nearly 60 per cent of the citizens under 30, most of whom are unemployed. A major portion of the non-oil workforce comprises of low-paid expat workers, marking the official Saudi unemployment rate at 25 per cent.

Economists believe that these economic problems are short term, and that the objectives of Crown Prince MbS would bring favourable results in the long term. However, no such signs are visible, even when the program is about to enter the third year.

HSBC economists Razan Nasser highlighted that the 2019 budget came with an increase of 7 per cent in state spending, where most investments are still state-led rather than private sector. Besides, the Saudi economy has become more reliant on oil revenues, and not less.

Saudi Arabia and its issues have been revolving around the extensive oil reserves, it discovered over the years. The country has spent several years by relying on the sole source of its wealth. However, as so far it has been moving without any future planning, the Kingdom is at a stage of experiencing severe economic crisis, which prompted a sudden need of diversification.

As the Crown Prince Mohammed bin Salman (MbS) is now taking several initiatives, will he be able to save the sinking economy of Saudi Arabia?

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Wild Animal Markets Jeopardizing Human Lives as Coronavirus Spreads

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Wild Animal Markets Jeopardizing Human Lives as Coronavirus Spreads

Beginning their new year, people in China were expected to carry on their usual get together and celebrations until coronavirus outbreak kicked in and claimed more than 40 lives.

Known as 2019-nCoV, the pneumonia-like coronavirus has spread its roots from Wuhan to other Chinese provinces. And now in order to curb the crisis, wild animal markets have been called for ban by experts, both in and outside China.

The group of experts have argued that the sale of endangered species for human consumption have given rise to outbreaks like coronavirus. The Huanan seafood market in Wuhan, which has been shut following claims that it was the source of infection, is home to a wide variety of animals both live and slaughtered.

The list of animals at the Da Zhong domestic include, live wolf pups, golden, cicadas, scorpions, bamboo rats, squirrels, foxes, civets, hedgehogs, salamanders, turtles and crocodiles.

Back in 2002-03, after Sars – the severe acute respiratory syndrome similar to coronavirus – got spread, there was a partial cease on the wild animal markets. Chinese scientists at that time wrote papers to spread awareness on perils of permitting people to eat and trade wild meat.

However, the markets are operating again and are catering to large number of people across China, Vietnam and other parts of south-east Asia, said Prof Diana Bell from the University of East Anglia’s School of Biological Sciences.

Evolution has been central to human being’s survival, but it feels uncanny to state how will they adapt to new viruses, when proper vaccination is unavailable to a number of past diseases.

Ironically, when Ebola came from monkeys who were infected by bats and eaten in the African bush, its possible explanation was poverty. But in China, eating wild meat is a luxury.

“These have now become luxury items,” said Bell. “It’s a perfect storm. There is a shift from subsistence hunting to feed your family – that might make your family sick but it doesn’t go anywhere else. Now, these animals are being sold into a multibillion pound illegal trade, right up there with drugs. They cost more than livestock,” she added.

Although reports have highlighted that the coronaviruses behind both Sars and Mers (Middle East respiratory syndrome) were traced and linked to bats, it is still not necessary that other wild rodents cannot be blamed for the chaos.

The issue with eating wildlife meat is menacing and not luxury, where human beings have become transmitters of dangerous viruses. The Wildlife Conservative Society is also calling for the closure of live animal markets that sell wildlife for human consumption. Currently, it is not known how long will it take to control coronavirus outbreak, but the first major step must be to shut all markets that are jeopardizing existence of human lives.

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Davos 2020: Greta, Trump Open Debate of Economy and Sustainability

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Davos 2020: Greta, Trump Open Debate of Economy and Sustainability

Davos 2020 brings silent rivals, Greta and Trump, together!

Globe’s biggest elite businessmen gathering, the World Economic Forum is back in Davos, Switzerland. The 50th annual meet up in the Swiss Alps convened the honchos of politics and business on January 21, to enlighten the panel on the theme “Stakeholders for a Cohesive and Sustainable World”.

The opening day of Davos 2020 passed under the dominance of cold rivals — the US President Donald Trump and the climate activist Greta Thunberg. The teenage activist gave a grim message stating that everybody is talking about climate change, but no one is taking any action.

However, President Trump attacked her climate crisis warnings, stating that the world should stop listening to “prophets of doom”. Like never before, the two didn’t meet face-to-face at the WEF too, leaving the global business leaders in a dilemma about who they were referring to.

The annual gathering was largely seen as a billionaires’ stadium, where the rich debated. However, Greta Thunberg’s appearance on the first day of Davos 2020 signalled relevance of global warming in business circles, but only few leaders from the chiefly responsible industries were present at the panel.

Although corporate executives boast of their increasing concerns about the environment, Thunberg stated that none of it is enough. “The climate and environment is a hot topic right now, thanks to young people pushing,” the 17-year-old said at the Swiss ski resort on Tuesday. “Pretty much nothing has been done, since the global emissions of CO2 have not reduced.”

Politicians from the left, the right and the centre, all have failed in striving sustainability, she said. “No political ideology or economic structure has managed to tackle the climate and environmental emergency and create a cohesive and sustainable world.”

The Swedish environmental activist also mocked the US President’s claim that his concern for environment could be seen as he supported the initiative of planting 1tn trees. “Planting trees is good, of course, but it’s nowhere near enough, and it cannot replace real mitigation and re-wilding nature. We don’t need to lower emissions. Emissions need to stop,” she argued.

Greta Thunberg’s alarming words at Davos 2020 shouted of the climate crisis and demanded immediate resolutions. “We don’t want it done in 2050, 2030, or even 2021, we want it done now,” she stated.

However, Donald Trump said that it is “a time for optimism” and “not a time for pessimism”. As Greta watched from the audience, Trump continued, “We must reject the perennial prophets of doom and their predictions of the apocalypse. They are the heirs of yesterday’s foolish fortune tellers.”

The Greta-Trump visible and unspoken clash first came to light, when the teenage activist was filmed staring furiously at Trump in September 2019 at the United Nations.

Besides, shortly after Greta was named person of the year by Time magazine in December, Trump tweeted, “Greta must work on her anger management problem, then go to a good old fashioned movie with a friend! Chill Greta, Chill!”

In response, the Swedish activist changed her Twitter biography to, “A teenager working on her anger management problem.”

While Davos 2020 saw steaming debates over climate issue on the very first day, a lot is due to come on the three-day annual gathering. After Greta, hundreds of other climate activists are due to arrive on foot at the ski resort. The activists, who “are tired of empty promises”, will reportedly stage a demonstration calling for the end of the World Economic Forum.

It’s another year of the businessmen and politicians get together, where the debates and networking is the key agenda of the leaders. The President of world’s one of the most influential countries, Trump was seen boasting of America’s growth record.

On its 50th anniversary, Davos certainly is expected to see a transformation, where the youth fighting for climate will be launching endless questions at the leaders.

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Coronavirus Introduces its Latest Version in China Creating Havoc

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Coronavirus

Last updated on January 24th, 2020

China will soon be entering a new year, but with an unfamiliar coronavirus spreading amongst people. With the Lunar New Year holiday approaching, the period of the largest global annual migration of people is being accompanied this time by a threat of sickness and deaths.

Known as 2019-nCoV, the pneumonia-like coronavirus has spread from Wuhan to several Chinese provinces, as well as the US, Hong Kong, Thailand, Japan, Taiwan, the Philippines, Macau and South Korea. Besides, a total of 570 sickened people have been confirmed, while 17 died.

Citing the outbreak, Chinese authorities earlier urged people to avoid travelling in and out of the city with a population of 11 million, Wuhan. “Basically, do not go to Wuhan. And those in Wuhan please do not leave the city,” said National Health Commission vice-minister Li Bin.

Transportation, including all flights and passenger train services out of Wuhan would be stopped from Thursday, said officials. While bus, subway and ferry services would also be shut down. A special command centre in Wuhan said that the move was meant to “resolutely contain the momentum of the epidemic spreading”.

This week, Beijing reported that human-to-human transmission of the virus had taken place. It is understood to be a latest in line of coronavirus, which has never been identified in humans. The signs of infections have been reported to include fever, cough, respiratory symptoms, shortness of breath and breathing difficulties.

The authorities admitted that the country was now at the “most critical stage” of prevention and control. However, the World Health Organization (WHO) on Wednesday announced that it will not yet declare the outbreak a “global emergency”.

Global emergency declaration by the WHO is the highest level of alarm, which has previously been tagged with swine flu, Zika virus and Ebola. After a day of discussions in Geneva, Director General Dr. Tedros Ghebreyesus stated that the declaration would be required about the spread of the coronavirus.

According to the reports, the committee of health experts is scheduled to meet again on Thursday.

The outbreak has become a greater challenge because of the Lunar New Year, a week long holiday to begin on January 25. The Chinese government had estimated that the country’s people would be making around three billion trips during the holiday period. The huge flux of travel is expected to make it more difficult for the country to contain this unknown version of coronavirus.

Despite the difficulties, the authorities — not alone in China but also in other countries — are striving their best to control the consequences and their spread. Several nations have put checkpoints at airports to examine travellers from China. While the virus is still unfamiliar, people are only being requested to be extra careful.

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Qatar’s migrant labor issues do not appear changing anytime soon

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Qatar’s migrant labor issues not ending sooner

Qatar, on January 16, removed exit restrictions for mostly all migrant workers in a move to avoid exploitation upbraid before the 2022 FIFA World Cup.

Earlier migrants, majorly from India, Nepal and the Philippines, sought exit permit from their employers before leaving Qatar, which was largely seen as a right abuse.

The new reform has been hailed by the expatriate population in Qatar as they believe it is a significant step towards abolishing the infamous Kafala System in the country.

The Gulf nation is expecting a major boost in its economy and infrastructure during the 2022 FIFA World Cup, hence the authorities are going all out to create a modern setup that protects expats working across different sectors.

Previously, Qatar exempted a number of foreign migrant workers, falling under specific categories, from exit visas. The country’s working-class population, including domestic workers, the oil and gas sector, agriculture sector, government and public institution staff, and personnel employed at sea were not entitled to the reform.

However, the obligation to obtain exit permit is applicable to members of the armed forces, and for a handful of workers holding higher position in companies.

Under the new policy, Qatar migrant workers are required to inform their employers at least 72 hours prior to leaving the country.

Rothna Begum, women’s rights researcher at Human Rights Watch said, “Qatar has taken an important step to eliminate a tool of control that employers sometimes used to exploit workers and keep them entrapped in abusive situations.”

According to a government statement, “Employers have the right to identify a maximum of 5% of their workforce whose exit from Qatar will continue to require prior approval.”

The HRW raised a concern that if domestic workers were required to inform employers about their plan to leave might prove problematical for workers trying to escape abusive or exploitative situations.

The government has also listed penalties for foreign domestic workers, such as, imposing a four-year ban on re-entering Qatar and a deprivation of wages, in case they fail to inform their employers before leaving.

Right workers from Amnesty International have expressed dilemma over Qatar’s new reform as the call to relieve the worker of their duties still remains with the employer. The new reform looks promising but is not enough to ensure the welfare of workers as it has other implications that subdue its real impact.

After Qatar‘s announcement to abolish exit permit system, Saudi Arabia remains the only Gulf nation to still enforce the obligation on its migrant workers.

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Avidity of World Leaders for Oil Export Brings Forth Libyan Ceasefire

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Libyan ceasefire

As the situations in Libya grew intense, the world leaders from nearly 11 countries united in Germany, on Sunday, to reach an agreement. Pushing for Libyan ceasefire, while simultaneously enforcing the arms embargo on the warring parties, became a major goal of the meeting.

The Berlin summit became a means to discuss over the increased violence in Libya, a result of the power struggle between the political parties. In addition, Libyan territory and oil became the two major factors that over the time have played an important role in the rival conflicts.

As known, the initial Libyan conflict started with the death of the deposed Libyan leader Muammar Gaddafi, who was captured by National Transitional Council forces in 2011 and killed afterwards. The forces claimed that he died from the injuries sustained in a firefight when loyalist forces attempted to free him, but a graphic video of his last moments portrayed a different scenario.

Gaddafi’s death led to a political crisis in Libya, which was followed by the power struggle between the House of Representatives government also known as the Tobruk government, elected in 2014, and the rival General National Congress government based in the capital Tripoli. Even with the influx of foreign arms and fighters, the crisis is yet not resolved.

The government headed by Prime Minister Fayez Sarraj in Tripoli is highly recognized by the UN and backed by Turkey, Qatar and Italy, while the eastern government run by Gen. Khalifa Haftar is recognized by Russia, Egypt, France and the United Arab Emirates. The fact that different countries are supporting different governments has only given way to additional tensions in Libya.

On Friday, several tribal groups loyal to Haftar seized large oil export terminals along Libya’s eastern coast as well as southern oil fields, challenging the Tripoli government. The move reflects the severity of the situations in Libya. It together called upon the need of the world leaders to unite in the Berlin summit, bringing in the negotiations to end the conflict.  

In the four-hour discussion, the world countries consisting of US State Secretary Mike Pompeo, Russian President Vladimir Putin, Turkish President Recep Tayyip Erdoğan, French President Emmanuel Macron, Italian Premier Giuseppe Conte and British Prime Minister Boris Johnson argued upon the ways to alleviate the Libyan conflict.

The leaders together decided to respect the arms embargo by strongly controlling it. Ceasing the operations by halting support to the warring side was altogether a step towards bringing in the Libyan ceasefire deal.

Voicing the success of the summit, German Chancellor Angela Merkel said, “We had to succeed in getting all the parties that connected in any way with the Libya conflict to speak with one voice… We achieved this result here.”

Meanwhile, both the disputed Libyan leaders have named five military representatives for committee talks on a permanent cease-fire to be held in Geneva. Though the present agreement did not cite specific punishments for the ones violating the Libyan ceasefire, it would definitely put pressure on the parties to reach a full ceasefire deal.  

Johnson called Libyan crisis a huge “disgrace” at the Berlin Summit. He added that the UK could send peacekeepers if a real ceasefire emerges. He even asked the Russian and Turkish Presidents to stop the practice of backing different governments and instead together support the process of attaining Libyan ceasefire.

Since, oil is one of the major factors in Libya, most of the conflicts have generally arisen through the rivals seizing oil export terminals. In the same manner, lack of oil export is another factor that has bounded the world countries to resolve the ongoing civil war in Libya. Had it not been for the oil exports that could be suppressed due to the ongoing Libyan conflicts, the world countries would have stuck around and carefully watched the entire scenario, rather than actively pushing for the Libyan ceasefire.

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