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World Economic Forum annual meeting kicks off in Davos against a backdrop of geopolitical fractures

Special World Economic Forum annual meeting kicks off in Davos against a backdrop of geopolitical fractures
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Employees of a mosaic workshop work on panels, main, in a town in the war-ravaged Syrian province of Idlib. Low-income nations are likely to face further isolation from technologies and the associated job market. (AFP/File)
Special World Economic Forum annual meeting kicks off in Davos against a backdrop of geopolitical fractures
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​ Millions more people lost their livelihoods and became dependent on humanitarian aid in 2023 owing to eruption of war in Sudan. (AFP/File) ​
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Updated 15 January 2024
Tarek Ali Ahmad & Anan Tello
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World Economic Forum annual meeting kicks off in Davos against a backdrop of geopolitical fractures

World Economic Forum annual meeting kicks off in Davos against a backdrop of geopolitical fractures
  • Reports produced by Switzerland-based group identify key support strategies as MENA region faces a testing time
  • Even the most promising economies seen facing challenges that prevent a stronger balanced growth performance
Updated 15 January 2024
Tarek Ali Ahmad & Anan Tello
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DAVOS/LONDON:  Uncertainty surrounding the Israel-Hamas war in Palestine’s Gaza Strip has contributed to a slight weakening of economic growth expectations for 2024 in the wider Middle East and North Africa region, according to a new survey of chief economists by the World Economic Forum.

The January 2024 Chief Economists Outlook, published on Monday, noted that although the outlook has weakened since September last year, 61 percent of survey respondents continued to foresee moderate or stronger economic growth in the MENA region over the next year.




Palestinians storm a UN-run aid supply center ion in Deir al-Balah on October 28, 2023, following Israel's call for more than one million residents in northern Gaza to move south for their safety, amid the ongoing battles between Israel and the Palestinian group Hamas. (AFP/File)

However, growth forecasts for the region remain susceptible to the increased risk of shocks, partly stemming from expanding geopolitical rifts due to the persistence of old conflicts and the eruption of new ones.

The growth outlook is also clouded by reduced oil demand and a substantial decline in tourism.

These factors, particularly the current geopolitical climate, are expected to contribute to the deepening global economic uncertainty in 2024, as 56 percent of experts anticipate further decline in most regions.




A aid worker from the humanitarian agency Premiere Urgence assists Sudanese refugees who crossed into Chad in Koufroun, near Echbara, on May 1, 2023. (AFP)/File)

There seems to be strong consensus among the chief economists this year that recent geopolitical developments will increase localization and strengthen geo-economic blocs, which, in turn, may deepen inequalities and widen the North-South divide in the next three years.

WEF 2024 MEETING THEMES

• Achieving security and cooperation in a fractured world.

• Creating growth and jobs for a new era.

• Artificial intelligence as a driving force for the economy and society.

• A long-term strategy for climate, nature and energy.

Against this backdrop, the WEF’s separate Future of Growth Report 2024 says the economic repercussions of the Middle East conflict are aggravating a range of interconnected global challenges, such as the climate crisis and a weakening social contract. Collectively, these issues are undoing the progress made in global development.

The Future of Growth Report evaluates the quality of growth across four pillars: Innovativeness, Inclusiveness, Sustainability and Resilience.

“Reigniting global growth will be essential to addressing key challenges, yet growth alone is not enough,” Saadia Zahidi, WEF managing director, said in a statement on Monday.




An Iraqi-Kurdish electrical engineer gives a briefing on solar energy in Sulaimaniyah in northern Iraq's autonomous Kurdish region on September 20, 2023. Despite its vast oil wealth, Iraq struggles to provide enough electricity to its 43 million people after decades of conflict and sanctions, as well as rampant corruption and crumbling infrastructure. (AFP/File)

“The report proposes a new way for assessing economic growth that balances efficiency with long-term sustainability, resilience and equity, as well as innovation for the future, aligning with both global and national priorities.”

In the Chief Economists Outlook, experts are optimistic that the potential of generative artificial intelligence could be part of the remedy.

The chief economists zeroed in on two key phenomena impacting the global economy — geopolitical developments and advancements in generative AI. The outlook found that the rapid advances in AI positioned it at the forefront of both business and policy agendas in 2024.

The survey respondents, however, were more optimistic about AI-enabled benefits in high-income economies than in developing nations. In high-income economies, AI is expected to significantly increase productivity gains and innovation over the next five years.




The Saudi Data and Artificial Intelligence Authority aims to raise awareness of the importance of generative artificial intelligence as it contributes to enhancing the building of a bright future for the Kingdom. (SDAIA illustration) 

Conversely, low-income nations, especially those susceptible to conflict and the effects of climate change, are expected to face further isolation from technologies, investment and the associated job market due to barriers to economic mobility.

But another WEF report released on Jan. 10, ahead of the organization’s annual meeting in Davos, suggested that the growing role of AI in the generation and dissemination of fake news was likely to fuel social unrest, especially during elections, in several major economies over the next two years.

The WEF’s Global Risks Report ranked both AI-driven false information and societal polarization among the greatest global risks in 2024.

Despite that, the perspectives of the chief economists were somewhat split regarding the likelihood of generative AI leading to a decline in trust within both high-income and low-income economies this year.

ANNUAL GDP PER CAPITA GROWTH (2018-2023)

• 1.01% High-income economies.

• 1.32% Upper-middle-income economies.

• 1.95% Lower-middle-income economies.

• 0.22% Low-income economies.

Source: World Economic Forum

The Chief Economists Outlook stated that although technological advances may revitalize global productivity, it is essential to implement policies that promote high-quality growth, rekindling global momentum and ensuring a balanced impact across income groups.

The survey respondents identified five key strategies to support developing economies in the current context.

These are “laying a sound institutional framework for long-term growth, improving integration into global value chains, tapping into green transition opportunities, strengthening innovation capacity, digital infrastructure and a sound investment climate, and investing in human capital and basic services.”

Escalating conflicts globally and a weakened commitment to peace and security cooperation have led to a 2 percent dip in global cooperation from 2020 to 2023, according to the WEF’s Global Cooperation Barometer 2024, released earlier this month.




A Houthi military helicopter flies over the Galaxy Leader cargo ship in the Red Sea in this photo released November 20, 2023. Prolonged disruption of shipping across the Red Sea is expected to result in higher inflation globally. (Houthi handout via REUTERS/File Photo) 

This increase in conflicts, including prolonged disruption in the Red Sea as well as rising climate volatility, are also expected to have an impact on inflation rates.

The Cooperation Barometer also recognized areas of strong cooperation, including climate and natural capital, trade and capital flows, and innovation and technology.

Climate-related threats were found to be the greatest long-term concern, according to the Global Risks Report, which highlighted that environmental risks were among the top 10 threats facing the world over the next decade.

 

 

 

Topics: Davos 2024 Editor’s Choice

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Afghanistan bets on ‘red gold’ for global market presence

Afghanistan bets on ‘red gold’ for global market presence
Updated 23 November 2024
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Afghanistan bets on ‘red gold’ for global market presence

Afghanistan bets on ‘red gold’ for global market presence
  • Afghanistan is the world’s second-largest saffron producer, after Iran
  • Afghan saffron has been for years recognized as the world’s best
Updated 23 November 2024
MODASER ISLAMI

Kabul: As the saffron harvest season is underway in Afghanistan, traders are expecting better yields than in previous years, sparking hopes that exports of the precious crop, known locally as “red gold,” will help uplift the country’s battered economy and livelihoods.
Afghanistan is the world’s second-largest saffron producer, after Iran, but it ranks first in terms of quality. In June, the Belgium-based International Taste Institute for the ninth consecutive year recognized Afghan saffron as the world’s best.
Saffron is the world’s most expensive spice, selling for about $2,000 per kilogram. Its exports provide critical foreign currency to Afghanistan, where US-imposed sanctions have severely affected the fragile economy since the Taliban took control in 2021.

With this year’s production expected to exceed 50 tons — about double that of the 2023 and 2022 seasons — the government and the Afghanistan National Saffron Union are trying to boost exports abroad.
“The harvest of saffron this year is good. During the first nine months (of 2024), Afghanistan exported around 46 tons of saffron to different countries,” Abdulsalam Jawad Akhundzada, spokesperson at the Ministry of Industry and Commerce, told Arab News.
“Everywhere our traders want to export saffron, we support them in any part of the world through air corridors and facilitating the participation of Afghan traders in national and international exhibitions.”
Known to have been cultivated for at least 2,000 years, saffron is well suited to Afghanistan’s dry climate, especially in Herat, where 90 percent of it is produced. Most of the spice’s trade is also centered in the province, which last weekend inaugurated its International Saffron Trade Center to facilitate exports.
“The new international saffron trade center is established with global standards and will bring major processing and trade companies to one place providing a single venue for farmers to trade their products with the best possible conditions,” Mohammad Ibrahim Adil, head of the Afghanistan National Saffron Union, told Arab News.

The union’s main export market is India, where saffron is a common ingredient in food, followed by Gulf countries — especially Saudi Arabia and the UAE.
“Saffron exports bring the much-needed foreign currency to Afghanistan contributing significantly to stabilization of the financial cycle in the country,” said Qudratullah Rahmati, the saffron union’s deputy head.
The union estimates that saffron contributes about $100 million to the Afghan economy a year.
Most, or 95 percent, of the workers are women, according to the saffron union.
“Saffron production is supporting many families, especially women, during the harvest and processing phase through short-term and long-term employment opportunities. There are around 80-85 registered small and big saffron companies in Herat and the small ones employ four to five people while the bigger ones have up to 80 permanent staff,” said Qudratullah Rahmati, the saffron union’s deputy head.
Harvesting the little purple saffron crocus flowers is heavily labor intensive, as each of them needs to be picked by hand. Once the flowers are picked, their tiny orange stigmas are separated for drying. About 440,000 stigmas are needed to produce one kilogram of the fragrant spice.
The harvest season usually begins between October and November are lasts just a few weeks before the flowers wilt.

Pressure ramps up at UN talks to reach a deal for cash to curb and adapt to climate change

Pressure ramps up at UN talks to reach a deal for cash to curb and adapt to climate change
Updated 23 November 2024
AP
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Pressure ramps up at UN talks to reach a deal for cash to curb and adapt to climate change

Pressure ramps up at UN talks to reach a deal for cash to curb and adapt to climate change
  • The rough draft of a new proposal circulating in that room was getting soundly rejected, especially by African nations and small island states
  • The “current deal is unacceptable for us. We need to speak to other developing countries and decide what to do,” Evans Njewa, the chair of the LDC group, said
Updated 23 November 2024
AP

BAKU: As nerves frayed and the clock ticked, negotiators from rich and poor nations were huddled in one room Saturday during overtime United Nations climate talks to try to hash out an elusive deal on money for developing countries to curb and adapt to climate change.
But the rough draft of a new proposal circulating in that room was getting soundly rejected, especially by African nations and small island states, according to messages relayed from inside. Then a group of negotiators from the Least Developed Countries bloc and the Alliance of Small Island States walked out because they didn’t want to engage with the rough draft.
The “current deal is unacceptable for us. We need to speak to other developing countries and decide what to do,” Evans Njewa, the chair of the LDC group, said.
When asked if the walkout was a protest, Colombia environment minister Susana Mohamed told The Associated Press: “I would call this dissatisfaction, (we are) highly dissatisfied.”
The last official draft on Friday pledged $250 billion annually by 2035, more than double the previous goal of $100 billion set 15 years ago but far short of the annual $1 trillion-plus that experts say is needed. The rough draft discussed on Saturday was for $300 billion, sources told AP.
Accusations of a war of attrition
Developing countries accused the rich of trying to get their way — and a small financial aid package — via a war of attrition. And small island nations, particularly vulnerable to climate change’s worsening impacts, accused the host country presidency of ignoring them for the entire two weeks.
After bidding one of his suitcase-lugging delegation colleagues goodbye and watching the contingent of about 20 enter the room for the European Union, Panama chief negotiator Juan Carlos Monterrey Gomez had enough.
“Every minute that passes we are going to just keep getting weaker and weaker and weaker. They don’t have that issue. They have massive delegations,” Gomez said. “This is what they always do. They break us at the last minute. You know, they push it and push it and push it until our negotiators leave. Until we’re tired, until we’re delusional from not eating, from not sleeping.”
With developing nations’ ministers and delegation chiefs having to catch flights home, desperation sets in, said Power Shift Africa’s Mohamed Adow. “The risk is if developing countries don’t hold the line, they will likely be forced to compromise and accept a goal that doesn’t add up to get the job done,” he said.
Cedric Schuster, the Samoan chairman of the Alliance of Small Island States issued a statement saying they “were not part of the discussion that gave rise to these imbalanced texts” and asked the COP29 presidency to listen to them.
A climate cash deal is still elusive
Wealthy nations are obligated to help vulnerable countries under an agreement reached at these talks in Paris in 2015. Developing nations are seeking $1.3 trillion to help adapt to droughts, floods, rising seas and extreme heat, pay for losses and damages caused by extreme weather, and transition their energy systems away from planet-warming fossil fuels and toward clean energy.
For Panama’s negotiator Juan Carlos Monterrey Gomez even a higher $300 billion figure is “still crumbs.”
“How do you go from the request of $1.3 trillion to $300 billion? I mean, is that even half of what we put forth?” he asked.
On Saturday morning, Irish environment minister Eamon Ryan said that there’ll likely be a new number for climate finance in the next draft. “But it’s not just that number — it’s how do you get to $1.3 trillion,” he said.
Ryan said that any number reached at the COP will have to be supplemented with other sources of finance, for example through a market for carbon emissions where polluters would pay to offset the carbon they spew.
The amount in any deal reached at COP negotiations — often considered a “core” — will then be mobilized or leveraged for greater climate spending. But much of that means loans for countries drowning in debt.
Teresa Anderson, the global lead on climate justice at Action Aid, said that in order to get a deal, “the presidency has to put something far better on the table.”
“The US in particular, and rich countries, need to do far more to to show that they’re willing for real money to come forward,” she said. “And if they don’t, then LDCs (Least Developed Countries) are unlikely to find that there’s anything here for them.”
Anger and frustration over state of negotiations
Alden Meyer of the climate think tank E3G said it’s still up in the air whether a deal on finance will come out of Baku at all.
“It is still not out of the question that there could be an inability to close the gap on the finance issue,” he said. “That obviously is not an ideal scenario.”
Jiwoh Emmanuel Abdulai, the Sierra-Leone environment minister, echoed that sentiment, saying “a bad deal may be worse than no deal for us.”
Nations were also angry at potential backsliding on commitments to slash fossil fuels. German foreign minister Annalena Baerbock called out rich fossil fuel emitters who she said have “ripped off” climate vulnerable states.
“We are in the midst of a geopolitical power play by a few fossil fuel states,” Baerbock said. “We have to do everything to come toward the 1.5 degree (Celsius, 2.7 Fahrenheit) pathway” of keeping warming below that temperature limit since preindustrial times, she said.
But despite the fractures between nations, some still held out hopes for the talks.
“We remain optimistic,” said Nabeel Munir of Pakistan, who chairs one of the talks standing negotiating committees.
When asked how, COP29 climate champion Nigar Arpadarai chimed in. “We have no choice,” she said, as the harms of climate change continue to worsen.

Topics: COP29 Baku UN climate

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Ukraine has lost over 40 percent of the land it held in Russia’s Kursk region, senior Kyiv military source says

Ukraine has lost over 40 percent of the land it held in Russia’s Kursk region, senior Kyiv military source says
Updated 23 November 2024
Reuters
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Ukraine has lost over 40 percent of the land it held in Russia’s Kursk region, senior Kyiv military source says

Ukraine has lost over 40 percent of the land it held in Russia’s Kursk region, senior Kyiv military source says
  • “At most, we controlled about 1,376 square kilometers, now of course this territory is smaller,” the source said
  • “Now we control approximately 800 square kilometers“
Updated 23 November 2024
Reuters

KYIV: Ukraine has lost over 40 percent of the territory in Russia’s Kursk region that it rapidly seized in a surprise incursion in August as Russian forces have mounted waves of counter-assaults, a senior Ukrainian military source said.
The source, who is on Ukraine’s General Staff, said Russia had deployed some 59,000 troops to the Kursk region since Kyiv’s forces swept in and advanced swiftly, catching Moscow unprepared 2-1/2 years into its full-scale invasion of Ukraine.
“At most, we controlled about 1,376 square kilometers (531 square miles), now of course this territory is smaller. The enemy is increasing its counterattacks,” the source said.
“Now we control approximately 800 square kilometers (309 square miles). We will hold this territory for as long as is militarily appropriate.”
The Kursk offensive was the first ground invasion of Russia by a foreign power since World War Two and caught Moscow unprepared.
With the thrust into Kursk, Kyiv aimed to stem Russian attacks in eastern and northeastern Ukraine, force Russia to pull back forces gradually advancing in the east and give Kyiv extra leverage in any future peace negotiations.
But Russian forces are still steadily advancing in Ukraine’s eastern Donetsk region.
The Ukrainian General Staff source reiterated that about 11,000 North Korean troops had arrived in the Kursk region in support of Russia, but that the bulk of their forces was still finalizing their training.
The Russian Defense Ministry did not immediately respond to a Reuters request for comment on Kyiv’s freshest assessment of the state of play in the Kursk region. Reuters could not independently verify the figures or descriptions given.
Moscow has neither confirmed nor denied the presence of North Korean forces in Kursk.
Ukraine’s armed forces chief said on Nov. 11 that its beleaguered forces were not just battling crack Russian reinforcements in Kursk but also scrambling to reinforce two besieged fronts in eastern Ukraine and bracing for an infantry assault in the south.

THREATENING RUSSIAN ADVANCE IN EASTERN UKRAINE
The General Staff source said the Kurakhove region was the most threatening for Kyiv now as Russian forces were advancing there at 200-300 meters (yards) a day and had managed to break through in some areas with armored vehicles backed by anti-drone defenses.
The town of Kurakhove is a stepping stone toward the critical logistical hub of Pokrovsk in the Donetsk region.
Overall Russia has about 575,000 troops fighting in Ukraine at the moment, the Ukrainian General Staff source said, and is aiming to increase its forces up to around 690,000.
Russia does not disclose numbers involved in its fighting, and Reuters could not independently verify those figures.
As Ukraine fights a bigger and better-equipped enemy, Kyiv has sought to disrupt Russian logistics and supply chains by hitting Russian weapons and ammunition depots, airfields, and other military targets well inside Russia.
Ukraine gained a freer hand to do so earlier this month after, according to sources familiar with the matter, President Joe Biden dropped his opposition to Kyiv firing US-supplied missiles at targets deep inside Russia in response to North Korea’s entry into the war. Last week Ukraine fired US ATACMS and British Storm Shadow
cruise missiles into Russia. One of the ATACMS targets was an arms depot about 110 km (70 miles) inside Russia. Moscow vowed to respond to what it sees as an escalation by Ukraine’s Western supporters. On Thursday, Russia launched a new medium-range ballistic missile into the Ukrainian city of Dnipro, in a likely warning to NATO.
Ukrainian officials are holding talks with the United States and Britain regarding new air defense systems capable of protecting Ukrainian cities and civilians from the new longer-range aerial threats.
The Ukrainian General Staff source said the military had also implemented measures to bolster air defenses over the capital Kyiv and planned similar steps for the city of Sumy in the north and Kharkiv in the northeast, both near front lines. Russia now occupies a fifth of Ukraine and President Vladimir Putin has said he wants Kyiv to drop ambitions to join the NATO military alliance and retreat from four Ukrainian regions that he partially holds, demands Kyiv has rejected as tantamount to capitulation.

Topics: Russia-Ukraine Conflict Kursk Region Ukrainian military

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UK police carry out controlled explosion near London Euston station

UK police carry out controlled explosion near London Euston station
Updated 23 November 2024
Reuters
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UK police carry out controlled explosion near London Euston station

UK police carry out controlled explosion near London Euston station
  • LBC News reported earlier that the station had been evacuated
Updated 23 November 2024
Reuters

LONDON: British police carried out a controlled explosion near Euston railway station in central London after investigating a suspect package, they said on Saturday.
“A controlled explosion has been carried out by specialist officers and the police cordons have now been lifted,” the capital’s Metropolitan Police said on social media platform X.


LBC News reported earlier that the station had been evacuated.
In a previous statement, the police said they were aware of reports online about an incident “in the vicinity of Euston Station” and that cordons were in place as a precaution.
Those cordons have now been removed, they said in an update.

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Afghanistan bets on ‘red gold’ for global market presence

Afghanistan bets on ‘red gold’ for global market presence
Updated 23 November 2024
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Afghanistan bets on ‘red gold’ for global market presence

Afghanistan bets on ‘red gold’ for global market presence
  • Afghanistan is the world’s second-largest saffron producer
  • Afghan saffron considered world’s best by International Taste Institute
Updated 23 November 2024
MODASER ISLAMI

KABUL: With the saffron harvest season underway in Afghanistan, local traders are expecting better yields than in previous years, sparking hopes that exports of the precious crop, known locally as “red gold,” will help improve the country’s battered economy.

Afghanistan is the world’s second-largest saffron producer, after Iran. In June, the Belgium-based International Taste Institute named Afghan saffron as the world’s best for the ninth consecutive year.

Saffron is the world’s most expensive spice, selling for around $2,000 per kilogram. Its exports provide critical foreign currency to Afghanistan, where US-imposed sanctions have severely affected the economy since the Taliban took control in 2021.

With this year’s saffron yield expected to exceed 50 tons — roughly double that of the 2023 and 2022 seasons — the government and the Afghanistan National Saffron Union are looking to boost exports.

“The harvest of saffron this year is good. During the first nine months (of 2024), Afghanistan exported around 46 tons of saffron to different countries,” Abdulsalam Jawad Akhundzada, spokesperson at the Ministry of Industry and Commerce, told Arab News. “Everywhere our traders want to export saffron we support them through air corridors and facilitating the participation of Afghan traders in national and international exhibitions.”

Known to have been cultivated for at least 2,000 years, saffron is well suited to Afghanistan’s dry climate, especially in Herat, where 90 percent of Afghan saffron is produced. Most saffron trading is also centered in the province, which last weekend inaugurated its International Saffron Trade Center to facilitate exports.

“The new center has been established in accordance with global standards and will bring major processing and trade companies to one place, providing a single venue for farmers to trade their products in the best possible conditions,” Mohammad Ibrahim Adil, head of the Afghanistan National Saffron Union, told Arab News.

The union’s main export market is India, where saffron is a common ingredient in food, followed by the GCC — especially Saudi Arabia and the UAE.

“Saffron exports bring much-needed foreign currency to Afghanistan, contributing significantly to stabilization of the financial cycle in the country,” said Qudratullah Rahmati, the saffron union’s deputy head.

The union estimates that saffron contributes about $100 million to the Afghan economy a year.

Around 95 percent of the workers in the saffron industry are women, according to the union.

“Saffron production is supporting many families, especially women, during the harvest and processing phase through short- and long-term employment opportunities. There are around 80-85 registered saffron companies in Herat. The small ones employ four to five people while the bigger ones have up to 80 permanent staff,” Rahmati explained.

Harvesting saffron is difficult and time-consuming work. The flowers are handpicked, and their tiny orange stigmas are separated for drying. Roughly 440,000 stigmas are needed to produce one kilogram of the fragrant spice.

The harvest season usually begins sometime in October or November and lasts just a few weeks.

Topics: Afghanistan saffron Agriculture

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