Saudi Arabia and Thailand forge strategic partnership for economic growth
Updated 14 December 2023
Mahmoud Shukri
RIYADH: Saudi Arabia and Thailand are collaborating to enhance innovation and entrepreneurship, strengthening their bilateral ties, said Saudi Commerce Minister Majid Al-Qasabi.
Speaking at the Thailand Mega Fair in Riyadh, Al-Qasabi emphasized the joint efforts to boost growth opportunities, stating, “We look forward to continuing our joint efforts to facilitate trade and investment and to stimulate innovation and entrepreneurship to develop cooperation between both of our countries.”
Highlighting the potential for economic growth and shared opportunities, he added, “The two countries have high potential to grow their economies and a wide range of wonderful opportunities they can share between their private sectors.”
The bilateral trade relationship has seen an uptick, with Riyadh hosting a four-day trade show in August featuring over 100 manufacturers and entrepreneurs from Thailand showcasing various products across sectors.
“The recent visit by Thailand’s Prime Minister to Saudi Arabia has laid the groundwork for a three-year economic plan focused on trade and investment,” said Deputy Prime Minister Parnpree Bahiddha-nukara in his opening remarks at the event
He added: “Thailand is embarking on the economic diplomacy journey toward achieving a sustainable new growth path aligning with the changing dynamics of our world. This path revolves around three key dimensions: green growth, innovation-driven growth and community-based growth.”
He outlined Thailand’s commitment to supporting Saudi Vision 2030 in areas such as agriculture, food and security, wellness, medicine, tourism services, and hospitality.
Bahiddha-nukara highlighted Saudi Arabia’s role in supporting and facilitating the green hydrogen project in Thailand.
Moreover, the establishment of the Saudi-Thai Business Council in August last year led to the signing of two crucial agreements on free trade and facilitating commercial procedures between the two nations.
“Our delegation’s participation in the Saudi-Thai Joint Business Council meeting and the Saudi-Thai Business Forum has been pivotal,” said Thai Chamber of Commerce Chairman Sanan Angubolkul.
It led to fruitful cooperation, agreeing to focus on 10 key sectors, including building materials and construction, food and beverage, tourism and services and energy.
“We’re dedicated to enhancing our economic relations by aiming to increase our trade volume by 20 percent, reaching a target of $12 billion in 2024,” said Angubolkul.
Global leaders rally for urgent climate action as COP29 opens in Baku
Updated 1 min 2 sec ago
Nirmal Narayanan
RIYADH: Global leaders called for increased funding, more carbon markets, and greater international cooperation to address the escalating environmental crisis, as the 29th UN Climate Summit officially began in Azerbaijan.
During the opening day of COP29, Azerbaijan’s Minister of Ecology and Natural Resources, Mukhtar Babayev, took over the presidency from Sultan Ahmed Al-Jaber, who led the previous summit in Dubai last year.
In his address at the gathering in Baku, Babayev stated that the world is already experiencing the negative impacts of climate change and stressed the importance of international collaboration to combat these challenges.
He emphasized that the primary goal of the COP29 presidency is to agree on a fair, ambitious, and collective climate finance target that is both effective and sufficient to address the scale and urgency of the crisis.
“We understand the political and financial constraints. These numbers may sound big, but they are nothing compared to the cost of inaction. These investments pay off,” he said.
Azerbaijan’s Minister of Ecology and Natural Resources, Mukhtar Babayev. UN Climate Change
Babayev also highlighted the importance of finalizing Article 6 of the 2015 Paris Agreement, which focuses on the development of carbon markets where countries, companies and individuals can trade greenhouse gas emissions credits.
That deal called for limiting the global temperature increase to 1.5 degrees Celsius above pre-industrial levels.
“We are determined to get Article 6 in high-integrity carbon markets over the line. Article 6 is long overdue, and it will help protect the planet by matching buyers and sellers efficiently. We need to get this right, and we need to get this done on time, including transitioning away from fossil fuels in a just and orderly manner,” added the COP29 president.
Babayev also underscored the critical need for increased funding for climate efforts, urging governments, the private sector, and multilateral financial institutions to collaborate to meet the Paris Agreement’s goals.
“COP29 is a moment of truth for the Paris Agreement. It will test our commitment to the multilateral climate system. We must now demonstrate that we are prepared to meet the goals we have set for ourselves,” said Babayev.
He added that the world should accelerate investments in the energy sector today to save tomorrow.
“We are on a road to ruin. But these are not future problems. Climate change is already here. Whether you see it or not, people are suffering in the shadows. They are dying in the dark, and they need more than compassion, more than prayers, and more than paperwork. They are crying out for leadership and action,” said Babayev.
He added: “No single country or initiative can solve this crisis. This is everyone’s conference. Success or failure will be collective. Azerbaijan can build a bridge, but you all need to walk across it. In fact, we need to start running. Let us move forward in solidarity for a green world.”
Babayev took over the presidency from the UAE’s Sultan Ahmed Al-Jaber. UN Climate Change
Impacts of climate change
During the opening ceremony, Simon Stiell, executive secretary of the UN Framework Convention on Climate Change, warned that global warming is affecting every aspect of human life, urging immediate action to mitigate further damage.
“Do you want your grocery and energy bills to go up even more? Do you want your country to become economically uncompetitive? Do you really want even further global instability, costing precious lives? This crisis is affecting every single individual in the world in one way or another,” said Stiell.
He added: “We must agree on a new global climate finance goal. If at least two-thirds of the world’s nations cannot afford to cut emissions quickly, then every nation pays a brutal price.”
Stiell emphasized that climate finance is not charity but a matter of self-interest for every nation, including the wealthiest.
“We must work harder to reform the global financial system, giving countries the fiscal space they so desperately need,” he said.
Stiell also highlighted the importance of finalizing Article 6 and said that international carbon markets will play a crucial role in accelerating the energy transition journey.
“We need to move forward on mitigation, so targets from Dubai are realized. We mustn’t let 1.5 degrees Celsius slip out of reach. And even as temperatures rise, the implementation of our agreements must claw them back,” said Stiell.
He noted that clean energy infrastructure investments are expected to reach $2 trillion in 2024, nearly double that of fossil fuels.
Stiell also emphasized the global responsibility to accelerate the transition to renewable energy and ensure that the benefits are shared by all countries and people.
“We must agree on adaptation indicators. You can’t manage what you don’t measure. We need to know if we’re on a pathway to increasing resilience. We must continue to improve the new mechanisms for financial and technical support on loss and damage,” he said.
Simon Stiell, executive secretary of the UN Framework Convention on Climate Change. UN Climate Change
Stiell also stressed the importance of transparency to meet climate goals, with Biennial Transparency Reports, due this year, expected to provide a clearer picture of progress in the climate action journey.
Stiell added: “Now is the time to show that global cooperation is not down for the count. It’s rising to this moment. So, let’s rise together.”
Journey since COP28
In a brief address during the opening ceremony, Sultan Al-Jaber, president of COP28, reflected on the successes of last year’s summit, noting the momentum gained through climate initiatives launched in Dubai.
“By delivering the historic, comprehensive, balanced, and groundbreaking UAE Consensus, we accomplished what many thought was impossible. In the months since COP28, the initiatives we launched have gathered real momentum and pace,” said Al-Jaber.
He added that the world is set to break another record on renewable energy growth this year, adding over 500 gigawatts to global capacity.
“Fifty-five companies have now joined the oil and gas decarbonization charter, committing to zero methane emissions by 2030, and net zero by or before 2050,” said Al-Jaber.
During COP28, nearly 200 countries agreed to work toward an ambitious set of global energy objectives as part of the outcome known as the UAE Consensus, pledging to achieve net zero emissions from the global energy sector by 2050.
The promise also includes transitioning away from fossil fuels, tripling renewable energy capacity, and doubling the rate of energy efficiency improvements by the end of this decade.
Al-Jaber, who is also the UAE Minister of Industry and Advanced Technology, stressed the importance of cross-sector cooperation to meet climate goals.
“Earlier this month in Abu Dhabi, we convened experts in climate, energy, artificial intelligence, finance, and investment in an integrated effort to drive low-carbon growth. When sectors work together, we can lift economies and lower emissions. We can make climate and socio-economic progress together at the same time,” he said.
Al-Jaber also highlighted the progress of Alterra, the world’s largest global catalytic climate fund, which has already allocated $6.5 billion of its $30 billion fund.
“We have also made progress on the loss and damage fund. $853 million has been pledged to date. The consensus we achieved in Dubai was truly historic. History will judge us by our actions, not by our words,” said Al-Jaber.
“Let positivity prevail and let it power the process. Let actions speak louder than words. Let results outlast the rhetoric. We are what we do, not what we say,” he added.
Jeddah to host 52 ready-built factories in Saudi-Omani deal
Updated 11 November 2024
MOHAMMED AL-KINANI
JEDDAH: A total of 52 ready-built factories will be developed in Jeddah through a private sector partnership between the Saudi Authority for Industrial Cities and Technology Zones and Oman’s Osara Corp.
The Saudi organization, known as MODON, signed an agreement with Osara Real Estate Development to construct an industrial park spanning over 45,000 sq. meters in Jeddah’s Second Industrial City.
The project aligns with MODON’s goals of attracting foreign direct investment, fostering strategic partnerships, and supporting the National Industrial Strategy and the Kingdom’s Vision 2030, according to the Saudi Press Agency.
The Kingdom aims to triple its manufacturing gross domestic product by 2030 and raise the value of industrial exports to SR557 billion ($148.34 billion.) The country also aims to raise total investments in the sector to SR1.3 trillion, increase exports of advanced technology products by six times, and generate tens of thousands of high-quality jobs.
The agreement between MODON and the Omani company contributes to empowering entrepreneurs and small and medium-sized enterprises. It represents a significant step toward plans to grant the private sector a larger role in industrial development.
In a statement, MODON highlighted that this agreement coincides with the launch of several innovative services and products aimed at meeting the needs and aspirations of its beneficiaries.
These include a ready-made factory solution that offers access to over 1,500 facilities, as well as the development of the “Motamim” initiative, which allows plants and companies to operate within established sites and receive support for their manufacturing operations.
In 2024, MODON completed several new development projects, including the construction of 20 factories, each spanning 450 sq. meters, and 12 production sites, each covering 900 sq. meters, in the MODON Oasis in Jeddah.
Additionally, 24 facilities, each covering 225 sq. meters, were built in the First Industrial City in Jeddah, along with 20 plants, in the industrial city of Taif.
The developments also included 40 supporting units in the MODON Oasis in Al-Ahsa and 32 ready-made factories with supporting units in the industrial city of Waad Al-Shamal.
The authority emphasized that these projects are in line with its vision to become the preferred destination for investment growth and a leading partner in the industrial and technological ecosystem.
Since its inception in 2001, MODON has developed and managed prominent industrial cities and technology zones in partnership with the public and private sectors.
The total developed land area across 37 industrial cities has grown to over 215 million sq. meters, with the number of industrial establishments reaching about 6,882, making a significant contribution to Saudi Arabia’s economic development.
Expat inflows to keep demand high for residential real estate in Riyadh and Jeddah: S&P Global
Updated 11 November 2024
REEM WALID
RIYADH: The demand for residential real estate in Riyadh and Jeddah is projected to remain high due to the growing population, according to a new report.
Released by capital market economy firm S&P Global, the study said that expat inflows are one of the reasons for an average expected growth of 3.3 percent a year between 2024 and 2027.
Rental yields also remain high, with year-on-year growth in the first of half of 2024 coming it at 9 percent in Riyadh and 4 percent in Jeddah, the report underlined.
Saudi Arabia’s real estate is a vital element of the country’s economy, contributing around 7 percent of gross domestic product and supporting numerous additional sectors.
“We recently revised the outlook on our sovereign ratings on Saudi Arabia to positive from stable to reflect our view of the country’s strong outlook for non-oil growth and its economic resilience to volatile oil prices,” the S&P report said.
“Vision 2030 targets a 70 percent homeownership rate by 2030, and the country is on track to achieve this, with the rate hitting 63.7 percent at the end of 2023, according to the Ministry of Municipal and Rural Affairs,” the release added.
The analysis further showed that new residential units and mortgages will continue to rise in 2024, keeping with the country’s homeownership target.
It also highlighted that visa policy reforms and regulatory changes could boost direct foreign investment in the property sector.
However, the report said that private real estate developers face significant challenges, including mounting construction costs and competition for financing from other Vision 2030 projects.
Mining industry accelerates decarbonization with AI and tech investments: KPMG report
43% identify artificial intelligence as a crucial tool for addressing strategic challenges
Companies are increasingly adopting key performance indicators to monitor carbon reduction efforts
Updated 11 November 2024
MIGUEL HADCHITY
RIYADH: The metals and mining sector is accelerating decarbonization, digital transformation, and resilience, with 55 percent of executives prioritizing emissions reduction, according to a new survey report.
KPMG’s 2024 Global Metals and Mining Outlook revealed that nearly half — 47 percent — of mining executives view technology investments as essential to transforming carbon footprints over the next five years.
The report, based on insights from over 450 C-level executives, including Bob Wilt, CEO of Saudi Arabia’s national mining company Ma’aden, highlighted shifts driven by sustainability, technological advancements, and supply chain strategies.
Sammy Ahmed, partner and head of energy and natural resources at KPMG for Europe, Middle East and Africa said: “The metals and mining sector stands at a pivotal crossroads, where decarbonization, geopolitical shifts, and technology, including AI, are reshaping the path to resilience and growth.”
He added that integrating sustainable practices with operational transformation is essential for achieving a net-zero future, offering a strategic advantage for long-term success.
The global consulting network revealed that 43 percent identify artificial intelligence as a crucial tool for addressing strategic challenges, including optimizing production and reducing emissions.
According to Wilt, as quoted in the report: “The time it takes from exploration to commissioning a mine has been cut from sixteen years to nine years, thanks to AI and advanced analytics.”
The report said that as companies strive to reduce emissions and improve operational efficiency, initiatives like mining machinery electrification and operational redesign are central, offering significant environmental and economic benefits.
It added that companies are increasingly adopting key performance indicators to monitor carbon reduction efforts, with 43 percent already implementing systems to track carbon footprints.
“We note that companies are adapting by strengthening compliance through AI and scenario planning,” said Farhan Muhammad, director of metals and mining at KPMG in Saudi Arabia.
“Global trends, like the use of AI and innovation for decarbonization, sustainability, operational efficiency and business continuity are increasingly being implemented in Saudi Arabia as well, with promising outcomes so far,” he added.
Despite challenges from price volatility and supply chain disruptions, the report highlighted that the outlook remains optimistic. KPMG noted that 66 percent of executives reported increased output price volatility due to geopolitical instability and surging demand for minerals like lithium, copper, and nickel.
However, 61 percent expressed confidence in their companies’ growth potential over the next two years, with 58 percent investing in new markets and partnerships to strengthen supply chains.
The industry is also facing a workforce gap in tech skills, with 47 percent of executives noting shortages in skilled talent. Companies are addressing this through upskilling initiatives and partnerships with educational institutions to attract talent from technology and renewable energy sectors.
On regulatory issues, 33 percent of executives identify Scope 1 and 2 emissions as significant regulatory risks, while 30 percent cite Scope 3 emissions as an area of concern. AI is increasingly utilized to predict regulatory changes and manage compliance, with 56 percent of executives noting its role in mitigating regulatory risks.
Oil Updates – prices little changed as US storm threat abates, China stimulus disappoints
Updated 11 November 2024
Reuters
SINGAPORE: Oil prices were little changed on Monday as the threat of supply disruptions from a US storm eased and after China’s stimulus plan disappointed investors seeking fuel demand growth in the world’s No. 2 oil consumer.
Brent crude futures rose 4 cents to $73.91 a barrel by 10:14 a.m. Saudi time, while US West Texas Intermediate crude futures were at $70.31 a barrel, down 7 cents.
Both benchmarks fell more than 2 percent on Friday.
Beijing’s latest stimulus package announced at the National People’s Congress (NPC) standing committee meeting on Friday fell short of market expectations, IG market analyst Tony Sycamore said in a note, adding that its murky forward guidance hinted at only modest stimulus for housing and consumption.
ANZ analysts said the lack of direct fiscal stimulus implied that Chinese policymakers have left room for assessing the impact of policies the next US administration will introduce.
“The market will now shift focus to the Politburo meeting and Central Economic Work Conference in December, where we expect more pro-consumption countercyclical measures to be announced,” they added in a note.
Oil consumption in China, the world’s driver of global demand growth for years, has barely grown in 2024 as its economic growth has slowed, gasoline use has declined with the rapid growth of electric vehicles and liquefied natural gas has replaced diesel as a truck fuel.
Oil prices have also eased after concerns about potential supply disruptions from storm Rafael in the US Gulf of Mexico subsided.
More than a quarter of US Gulf of Mexico oil and 16 percent of natural gas output remained offline on Sunday, according to the offshore energy regulator.
Shell and Chevron each said on Sunday they would start redeploying personnel to their Gulf of Mexico platforms to resume operations.
Looking ahead, there were also concerns that US oil and gas output could rise under the new Trump administration although analysts say 2025’s production forecast is unlikely to change.
“We think producers may think twice about turbo-charging US supply in an era when OPEC+ has already staked out plans to gradually raise production targets over the course of 2025,” Tim Evans of Evans Energy said in a note.
Trump’s election promise of hiking import tariffs to boost the US economy have clouded the global economic outlook although expectations that he could tighten sanctions on OPEC producers Iran and Venezuela and cut oil supply to global markets partly caused oil prices to gain more than 1 percent last week.
Oil markets are also being supported by firm demand from US refiners who are expected to run their plants at above 90 percent of their crude processing capacity on low inventories and improving demand for gasoline and diesel, executives and industry experts said.
