Posted in Construction, on July 5, 2020, Further cuts to MENA construction sector expected for 2020 as the region appearing to be hit with a triple whammy, per GlobalData, would sound in our opinion as a realistic assessment at this conjecture of the construction industry in the MENA.
The Middle East and North Africa (MENA) construction sector is expected to be bit by the triple whammy of lower oil production, low oil prices and contracting non-oil sectors. Leading data and analytics company GlobalData has further cut its construction output growth forecast for the region for 2020 to -2.4%, down from the previous forecast of 1.4%, in light of continued spread of COVID-19.
Yasmine Ghozzi, Economist at GlobalData, comments: “Construction activity for the remainder of 2020 is set to see poor performance. While there is usually weak construction activity in the holy month of Ramadan and during the hot summer months of June, July and August, this is usually compensated by strong performance at the beginning and end of the year. However, this will not be the case this year due to the strict lockdown policies that extended until the end of May.
“The sector is expected to face headwinds in 2021 with a slow recovery, but the pace of this will be uneven across countries in the region. Fiscal deficits and public debt levels will be substantially higher in 2021. Fiscal consolidation will hinder non-oil growth across the region, where governments still play a considerable role in spurring domestic demand.
“In addition, public investment is likely to be moderate, which will translate into fewer prospects for private sector businesses to grow – especially within sectors such as infrastructure. Expected increase in taxes, selected subsidy cuts and the introduction of several public sector service charges will influence households’ purchasing power, having a knock-on effect on future commercial investments.”
Amid the worsening situation with regards to the COVID-19 outbreak and the decline in oil prices, GlobalData has further cut its forecast for construction output growth in Saudi Arabia to -1.8% from its previous forecast of 2.9% in 2020 and expects a recovery in the sector of 3.3% in 2021. The government’s decision to host limited annual ten-day Hajj entails a possible loss of estimated revenue at more than US$10bn, adding more pressure on the Kingdom’s economy.
Ghozzi adds: “GlobalData has estimated a contraction of 2.1% in construction output growth in the UAE but expects a rebound in 2021 of 3.1%. In one of the largest global energy infrastructure transactions, Abu Dhabi National Oil Company (ADNOC) raised US$10bn by leasing a 49% stake in its gas pipelines for 20 years. This landmark deal is important especially during the prevailing industry downturn in order to keep profitability.
“GlobalData has also cut further the growth rates for Qatar, Kuwait and Oman in 2020 to -3.4%, -7.8% and -8.1%, respectively. Qatar’s economy this year will be affected by decline in tourist arrivals, low consumer spending and low oil prices. Nevertheless, strong fiscal stimulus and spending on infrastructure projects should provide support.
“The negative outlook for Kuwait is weighed down by lower oil prices and the prospect of a higher fiscal deficit, possibly compromising the government’s capital spending on construction and infrastructure. Business unfriendliness constitutes a barrier to reforms in the Kuwaiti economy; the extensions in tenders’ deadlines compounded by an inflexible bureaucratic procurement setup that slows decision-making will delay progress for several Kuwaiti megaprojects.”
Egypt’s construction sector is set to continue performing well despite poor performance of the non-oil sector in April. GlobalData expects construction to grow at 7.7% in 2020, slowing from 9.5% in 2019, given a short-term slow down due to the pandemic and 8.9% in 2021, and to continue maintaining a positive trend throughout the forecast period. In the Arab Maghreb, GlobalData has further cut forecasts for construction growth in Tunisia, Morocco and Algeria to -3%, -2.1%, and -2.5%, respectively, in 2020 and 0.7%, 1.2% and 1.9%, respectively, in 2021.
GlobalData has a bleak view of Iran’s construction sector throughout the forecast period. A slowdown in economic activity caused by the virus outbreak and a possible wave of further US sanctions (in the event Trump wins a second term) will continue to wreak havoc on its economy, and drastically affecting construction activities.
Randy Rivera, Executive Director of FinTEx, a member-led community focused on promoting innovation and collaboration within Fintech in Qatar and the MENA region, has said that his organization continues to work with international financial services industry participants.
During a June 23, 2020 virtual panel discussion (hosted by the US-Qatar Business Council) on “Qatar’s Growing Fintech Sector & Business Opportunities,” Rivera stated:
“We [aim to] … match talent with opportunity and what is going on in Qatar fits as an attractive platform not just for the Fintechs involved but for the Qatari market and the Middle East overall.”
“The design of these programs reflects thoughtfulness, broad participation and commitment of the right mix of leaders who can affect change and attract the talent to make that change uniquely impactful, not just to the market, but to the regional fintech community as well.”
Qatar is now a major financial hub in the Middle East. The country’s human development index (HDI) value is around 0.85, which puts it in the “very high” human development (and quality of life) category.
Qatar is ranked at 41 out of 189 countries and territories. Its HDI value has increased from around 0.75 to 0.85 in the past two decades – which indicates that the living standards of its residents may have improved significantly due to its booming economy.
As mentioned in a release shared with CI, Qatar aims to further support and develop a strong business community and a competitive environment that will help local SMEs while also attracting foreign SMEs.
The release revealed:
“Qatar has advanced 18 spots in the national level of entrepreneurial activity, securing the 15th rank globally and the 2nd in the MENA region for the Total Early-Stage Entrepreneurial Activity (TEA) index, according to the Global Entrepreneurship Monitor (GEM) Report 2019/2020.”
Amy Nauiokas, founder and CEO at Anthemis, a VC investment platform with over 100 portfolio firms, believes Qatar provides “a promising environment and set of opportunities for Fintech growth.”
Nauiokas, whose company supports an ecosystem of over 10,000 investors, incumbents, and high-potential Fintech firms, globally, stated:
“We look forward to solidifying some key relationships in Qatar as Anthemis further builds our MENA strategy.”
Mohammed Barakat, MD of US Qatar Business Council, who also attended the webinar, said:
“Considering Qatar’s large payment processing and remittance market and its strategy to become a regional gateway for a huge market, I foresee rapid growth in Qatar’s FinTech sector.”
The US-Qatar Business Council aims to support trade and investment between the two nations and to also build strategic business relationships.
As noted in the release, there are over 120 wholly-owned US firms operating in Qatar, and over 700 U.S.-Qatar joint projects currently active in the Middle Eastern nation.
As reported recently, the Qatar Financial Center will launch “Fintech Circle,” a co-workspace for qualifying financial technology firms free of charge for a year.
We asked our 2020 intake of Technology Pioneers for their views on how technology will change the world in the next five years.
From quantum computers and 5G in action to managing cancer chronically, here are their predictions for our near-term future.
1. AI-optimized manufacturing
Paper and pencil tracking, luck, significant global travel and opaque supply chains are part of today’s status quo, resulting in large amounts of wasted energy, materials and time. Accelerated in part by the long-term shutdown of international and regional travel by COVID-19, companies that design and build products will rapidly adopt cloud-based technologies to aggregate, intelligently transform, and contextually present product and process data from manufacturing lines throughout their supply chains. By 2025, this ubiquitous stream of data and the intelligent algorithms crunching it will enable manufacturing lines to continuously optimize towards higher levels of output and product quality – reducing overall waste in manufacturing by up to 50%. As a result, we will enjoy higher quality products, produced faster, at lower cost to our pocketbooks and the environment.
In 2025, carbon footprints will be viewed as socially unacceptable, much like drink driving is today. The COVID-19 pandemic will have focused the public’s attention on the need to take action to deal with threats to our way of life, our health and our future. Public attention will drive government policy and behavioural changes, with carbon footprints becoming a subject of worldwide scrutiny. Individuals, companies and countries will seek the quickest and most affordable ways to achieve net-zero – the elimination of their carbon footprint. The creation of a sustainable, net-zero future will be built through a far-reaching energy transformation that significantly reduces the world’s carbon emissions, and through the emergence of a massive carbon management industry that captures, utilizes and eliminates carbon dioxide. We’ll see a diversity of new technologies aimed at both reducing and removing the world’s emissions – unleashing a wave of innovation to compare with the industrial and digital Revolutions of the past.
By 2025, quantum computing will have outgrown its infancy, and a first generation of commercial devices will be able tackle meaningful, real-world problems. One major application of this new kind of computer will be the simulation of complex chemical reactions, a powerful tool that opens up new avenues in drug development. Quantum chemistry calculations will also aid the design of novel materials with desired properties, for instance better catalysts for the automotive industry that curb emissions and help fight climate change. Right now, the development of pharmaceuticals and performance materials relies massively on trial and error, which means it is an iterative, time-consuming and terribly expensive process. Quantum computers may soon be able to change this. They will significantly shorten product development cycles and reduce the costs for R&D.
4. Healthcare paradigm shift to prevention through diet
By 2025, healthcare systems will adopt more preventative health approaches based on the developing science behind the health benefits of plant-rich, nutrient-dense diets. This trend will be enabled by AI-powered and systems biology-based technology that exponentially grows our knowledge of the role of specific dietary phytonutrients in specific human health and functional outcomes. After the pandemic of 2020, consumers will be more aware of the importance of their underlying health and will increasingly demand healthier food to help support their natural defences. Armed with a much deeper understanding of nutrition, the global food industry can respond by offering a broader range of product options to support optimal health outcomes. The healthcare industry can respond by promoting earth’s plant intelligence for more resilient lives and to incentivize people to take care of themselves in an effort to reduce unsustainable costs.
5. 5G will enhance the global economy and save lives
Overnight, we’ve experienced a sharp increase in delivery services with a need for “day-of” goods from providers like Amazon and Instacart – but it has been limited. With 5G networks in place, tied directly into autonomous bots, goods would be delivered safely within hours.
Wifi can’t scale to meet higher capacity demands. Sheltering-in-place has moved businesses and classrooms to video conferencing, highlighting poor-quality networks. Low latency 5G networks would resolve this lack of network reliability and even allow for more high-capacity services like telehealth, telesurgery and ER services. Businesses can offset the high cost of mobility with economy-boosting activities including smart factories, real-time monitoring, and content-intensive, real-time edge-compute services. 5G private networks make this possible and changes the mobile services economy.
The roll-out of 5G creates markets that we only imagine – like self-driving bots, along with a mobility-as-a-service economy – and others we can’t imagine, enabling next generations to invent thriving markets and prosperous causes.
Technology drives data, data catalyzes knowledge, and knowledge enables empowerment. In tomorrow’s world, cancer will be managed like any chronic health condition —we will be able to precisely identify what we may be facing and be empowered to overcome it.
In other words, a new normal will emerge in how we can manage cancer. We will see more early and proactive screening with improved diagnostics innovation, such as in better genome sequencing technology or in liquid biopsy, that promises higher ease of testing, higher accuracy and ideally at an affordable cost. Early detection and intervention in common cancer types will not only save lives but reduce the financial and emotional burden of late discovery.
We will also see a revolution in treatment propelled by technology. Gene editing and immunotherapy that bring fewer side effects will have made greater headway. With advances in early screening and treatment going hand in hand, cancer will no longer be the cursed ‘C’ word that inspires such fear among people.
Historically, robotics has turned around many industries, while a few select sectors – such as grocery retail – have remained largely untouched . With the use of a new robotics application called ‘microfulfillment’, Grocery retailing will no longer look the same. The use of robotics downstream at a ‘hyper local’ level (as opposed to the traditional upstream application in the supply chain) will disrupt this 100-year-old, $5 trillion industry and all its stakeholders will experience significant change. Retailers will operate at a higher order of magnitude on productivity, which will in turn result in positive and enticing returns in the online grocery business (unheard of at the moment). This technology also unlocks broader access to food and a better customer proposition to consumers at large: speed, product availability and cost. Microfulfillment centers are located in existing (and typically less productive) real estate at the store level and can operate 5-10% more cheaply than a brick and mortar store. We predict that value will be equally captured by retailers and consumers as online.
One thing the current pandemic has shown us is how important technology is for maintaining and facilitating communication – not simply for work purposes, but for building real emotional connections. In the next few years we can expect to see this progress accelerate, with AI technology built to connect people at a human level and drive them closer to each other, even when physically they’re apart. The line between physical space and virtual will forever be blurred. We’ll start to see capabilities for global events – from SXSW to the Glastonbury Festival – to provide fully digitalized alternatives, beyond simple live streaming into full experiences. However, it’s not as simple as just providing these services – data privacy will have to be prioritised in order to create confidence among consumers. At the beginning of the COVID-19 pandemic we saw a lot in the news about concerns over the security of video conferencing companies. These concerns aren’t going anywhere and as digital connectivity increases, brands simply can’t afford to give users anything less than full transparency and control over their data.
9. Putting individuals – not institutions – at the heart of healthcare
By 2025, the lines separating culture, information technology and health will be blurred. Engineering biology, machine learning and the sharing economy will establish a framework for decentralising the healthcare continuum, moving it from institutions to the individual. Propelling this forward are advances in artificial intelligence and new supply chain delivery mechanisms, which require the real-time biological data that engineering biology will deliver as simple, low-cost diagnostic tests to individuals in every corner of the globe. As a result, morbidity, mortality and costs will decrease in acute conditions, such as infectious diseases, because only the most severe cases will need additional care. Fewer infected people will leave their homes, dramatically altering disease epidemiology while decreasing the burden on healthcare systems. A corresponding decrease in costs and increase in the quality of care follows, as inexpensive diagnostics move expenses and power to the individual, simultaneously increasing the cost-efficiency of care. Inextricable links between health, socio-economic status and quality of life will begin to loosen, and tensions that exist by equating health with access to healthcare institutions will dissipate. From daily care to pandemics, these converging technologies will alter economic and social factors to relieve many pressures on the global human condition.
Construction will become a synchronized sequence of manufacturing processes, delivering control, change and production at scale. It will be a safer, faster and more cost-effective way to build the homes, offices, factories and other structures we need to thrive in cities and beyond. As rich datasets are created across the construction industry through the internet of things, AI and image capture, to name a few, this vision is already coming to life. Using data to deeply understand industry processes is profoundly enhancing the ability of field professionals to trust their instincts in real-time decision making, enabling learning and progress while gaining trust and adoption.
Actionable data sheds light where we could not see before, empowering leaders to manage projects proactively rather than reactively. Precision in planning and execution enables construction professionals to control the environment, instead of it controlling them, and creates repeatable processes that are easier to control, automate, and teach.
That’s the future of construction. And it’s already begun.
11. Gigaton-scale CO2 removal will help to reverse climate change
A scale up of negative emission technologies, such as carbon dioxide removal, will remove climate-relevant amounts of CO2 from the air. This will be necessary in order to limit global warming to 1.5°C. While humanity will do everything possible to stop emitting more carbon into the atmosphere, it will also do everything it can in order to remove historic CO2 from the air permanently. By becoming widely accessible, the demand for CO2 removal will increase and costs will fall. CO2 removal will be scaled up to the gigaton-level, and will become the responsible option for removing unavoidable emissions from the air. It will empower individuals to have a direct and climate-positive impact on the level of CO2 in the atmosphere. It will ultimately help to prevent global warming from reaching dangerous levels and give humanity the potential to reverse climate change.
Jan Wurzbacher, Co-Founder and co-CEO of Climeworks
12. A new era in medicine
Medicine has always been on a quest to gather more knowledge and understanding of human biology for better clinical decision-making. AI is that new tool that will enable us to extract more insights at an unprecedented level from all the medical ‘big data’ that has never really been fully taken advantage of in the past. It will shift the world of medicine and how it is practiced.
Improvements in AI will finally put access to wealth creation within reach of the masses. Financial advisors, who are knowledge workers, have been the mainstay of wealth management: using customized strategies to grow a small nest egg into a larger one. Since knowledge workers are expensive, access to wealth management has often meant you already need to be wealthy to preserve and grow your wealth. As a result, historically, wealth management has been out of reach of those who needed it most. Artificial intelligence is improving at such a speed that the strategies employed by these financial advisors will be accessible via technology, and therefore affordable for the masses. Just like you don’t need to know how near-field communication works to use ApplePay, tens of millions of people won’t have to know modern portfolio theory to be able to have their money work for them.
14. A clean energy revolution supported by digital twins
Over the next five years, the energy transition will reach a tipping point. The cost of new-build renewable energy will be lower than the marginal cost of fossil fuels. A global innovation ecosystem will have provided an environment in which problems can be addressed collectively, and allowed for the deployment of innovation to be scaled rapidly. As a result, we will have seen an astounding increase in offshore wind capacity. We will have achieved this through an unwavering commitment to digitalization, which will have gathered a pace that aligns with Moore’s law to mirror solar’s innovation curve. The rapid development of digital twins – virtual replicas of physical devices – will support a systems-level transformation of the energy sector. The scientific machine learning that combines physics-based models with big data will lead to leaner designs, lower operating costs and ultimately clean, affordable energy for all. The ability to monitor structural health in real-time and fix things before they break will result in safer, more resilient infrastructure and everything from wind farms to bridges and unmanned aerial vehicles being protected by a real-time digital twin.
15. Understanding the microscopic secrets hidden on surfaces
Every surface on Earth carries hidden information that will prove essential for avoiding pandemic-related crises, both now and in the future. The built environment, where humans spend 90% of their lives, is laden with naturally occurring microbiomes comprised of bacterial, fungal and viral ecosystems. Technology that accelerates our ability to rapidly sample, digitalize and interpret microbiome data will transform our understanding of how pathogens spread. Exposing this invisible microbiome data layer will identify genetic signatures that can predict when and where people and groups are shedding pathogens, which surfaces and environments present the highest transmission risk, and how these risks are impacted by our actions and change over time. We are just scratching the surface of what microbiome data insights offer and will see this accelerate over the next five years. These insights will not only help us avoid and respond to pandemics, but will influence how we design, operate and clean environments like buildings, cars, subways and planes, in addition to how we support economic activity without sacrificing public health.
16. Machine learning and AI expedite decarbonization in carbon-heavy industries
Over the next five years, carbon-heavy industries will use machine learning and AI technology to dramatically reduce their carbon footprint. Traditionally, industries like manufacturing and oil and gas have been slow to implement decarbonization efforts as they struggle to maintain productivity and profitability while doing so. However, climate change, as well as regulatory pressure and market volatility, are pushing these industries to adjust. For example, oil and gas and industrial manufacturing organizations are feeling the pinch of regulators, who want them to significantly reduce CO2 emissions within the next few years. Technology-enabled initiatives were vital to boosting decarbonizing efforts in sectors like transportation and buildings – and heavy industries will follow a similar approach. Indeed, as a result of increasing digital transformation, carbon-heavy sectors will be able to utilize advanced technologies, like AI and machine learning, using real-time, high-fidelity data from billions of connected devices to efficiently and proactively reduce harmful emissions and decrease carbon footprints.
Despite the accelerating regulatory environments we’ve seen surface in recent years, we are now just seeing the tip of the privacy iceberg, both from a regulatory and consumer standpoint. Five years from now, privacy and data-centric security will have reached commodity status – and the ability for consumers to protect and control sensitive data assets will be viewed as the rule rather than the exception. As awareness and understanding continue to build, so will the prevalence of privacy preserving and enhancing capabilities, namely privacy-enhancing technologies (PET). By 2025, PET as a technology category will become mainstream. They will be a foundational element of enterprise privacy and security strategies rather than an added-on component integrated only meet a minimum compliance threshold. While the world will still lack a global privacy standard, organizations will embrace a data-centric approach to security that provides the flexibility necessary to adapt to regional regulations and consumer expectations. These efforts will be led by cross-functional teams representing the data, privacy and security interests within an organization.
How will technology change the world in the next five years?
It is very exciting to see the pace and transformative potential of today’s innovative technologies being applied to solve the world’s most pressing problems, such as feeding a global and growing population; improving access to and quality of healthcare; and significantly reducing carbon emissions to arrest the negative effects of climate change. The next five years will see profound improvements in addressing these challenges as entrepreneurs, the investment community and the world’s largest enterprise R&D organizations focus on developing and deploying solutions that will deliver tangible results.
While the COVID-19 pandemic has provided a difficult lesson in just how susceptible our world is today to human and economic turmoil, it has also – perhaps for the first time in history – necessitated global collaboration, data transparency and speed at the highest levels of government in order to minimize an immediate threat to human life. History will be our judge, but despite the heroic resolve and resiliency on a country by country basis, as a world we have underperformed. As a global community and through platforms like the World Economic Forum, we must continue to bring visibility to these issues while recognizing and supporting the opportunities for technology and innovation that can best and most rapidly address them.
Imagine a clean alternative to fossil fuels, one that leaves no greenhouse gas residues and even, unlike solar and wind renewables, can be used at any moment of the day or night, whatever the weather conditions.
Imagine that using it instead of fossil fuels sharply reins in the harmful emissions raising global temperatures, helping the world to solve the climate crisis.
This is not a fairy story. This gas exists. It’s called green hydrogen, and is made by using clean electricity from renewable energy technologies to electrolyse water (H2O), separating the hydrogen atom within it from its molecular twin oxygen.
The catch has always been that the cost of making green hydrogen prices it out of competition with fossil fuels, because, even if it is carbon-free, it is energy-intensive. But that is changing, because, for the past two years, improvements in renewable energy technology have seen renewable electricity costs plummet.
Now, as the world plans economic recovery efforts after the coronavirus pandemic, and trillions of dollars and euro are readied to invest in build-back-better approaches, an increasing number of scientists and policymakers are saying green hydrogen’s time has come to be brought fully into the energy mix of the future.
They’re advocating investing in stimulating production, both to tackle the economic fallout of this year’s pandemic and to build a future without fear of climate cataclysm.
“Important emerging elements of clean energy progress – hydrogen electrolysers and lithium-ion batteries – are on the verge of becoming the decade’s breakout technologies. These technologies should play a key role in bolstering Europe’s transport and industry as the continent emerges from the crisis and looks to develop new advanced manufacturing for export,” the International Energy Agency’s executive director Fatih Birol and Frans Timmermans, executive vice-president of the European Commission, wrote in May.
“If the EU seizes this opportunity, it will give itself a cutting edge on global markets,” Birol and Timmerman concluded.
Their editorial – as well as reported comments by Birol that green hydrogen technology was “ready for the big time” and that governments should channel investments into the field – came as the European Union prepared to publish its own hydrogen strategy while implementing the European Green Deal plan to reduce net emissions to zero by 2050.
The pace of discussion on green hydrogen has picked up, especially since the outbreak of coronavirus.
Governments including those of Germany, Britain, Australia and Japan are working on or have announced hydrogen strategies. Australia has set aside A$300 million ($191 million) to jumpstart hydrogen projects. Portugal plans a new solar-powered hydrogen plant which will produce hydrogen by electrolysis by 2023. The Netherlands unveiled a hydrogen strategy in late March, outlining plans for 500 megawatts (MW) of green electrolyser capacity by 2025.
“We could use these circumstances, where loads of public money are going to be needed into the energy system, to jump forward towards a hydrogen economy,” said Diederik Samsom, who heads the European Commission’s climate cabinet. This could result in hydrogen use scaling up faster than was expected before the pandemic, he was quoted by Reuters as saying.
Most of the hydrogen produced today is not green. The gas is colour-coded according to the way it is produced, says the EBRD’s Christian Carraretto.
“The hydrogen that the world uses today is made from either coal or natural gas. This hydrogen is carbon-intensive, it’s not a green fuel. It’s called grey hydrogen if it comes from gas, while the hydrogen produced from coal is called black. Then there is blue hydrogen, an upgrade of the grey, where the CO2 emitted is captured upstream, so the system doesn’t emit CO2 in the atmosphere.”
The European Commission has earmarked clean hydrogen – a loose term which can include gas-based hydrogen, if fitted with technology to capture the resulting emissions, as well as green hydrogen – as a “priority area” for industry in its Green Deal.
If clean hydrogen does start to play a bigger part in the world’s energy mix, incorporating it will be technically relatively easy, Mr Carraretto said, as the infrastructure already built to carry natural gas can also carry hydrogen.
He said a recent study had shown 70 per cent of Italy’s gas network would be hydrogen-ready if there were enough hydrogen being produced to be carried down its pipes. It could be used in both homes and industry without radical change.
“Clean hydrogen is what the EU think is the solution to deliver on decarbonised fuels. And the reason why it’s important is that not all economic activities can move to renewables only. There are some sectors that are typically hard to decarbonise – sectors like steel, or chemical industries, or to some extent aviation – which will still use fuels in their systems.
“So either they are stuck with the cleanest of the fossil fuels or they switch to decarbonised fuels like hydrogen or biogas. Biogas is a mainstream technology and it hasn’t really picked up a lot because there is an issue with availability of organic wastes. So hydrogen is what we see as the most promising option at this moment.”
There remains the question of prices. Today, hydrogen made from fossil fuels costs between $1-$1.8/kg. Green hydrogen can cost around $3-$6/kg, making it significantly more expensive than the fossil fuel alternatives.
However, increased demand could reduce the cost of electrolysis. Coupled with falling renewable energy costs, green hydrogen could fall to $1.5/kg by 2050 and possibly sub-$1/kg, making it competitive with natural gas. Higher carbon prices would also encourage the shift.
Mr Carraretto said: “Here we are probably in the same situation as we were a decade or two ago with renewable energy, where this solution is still more expensive than the alternatives. But even today it’s only two or three times more expensive, it’s not 100 times more expensive, so if things keep going and if there is policy push going forward, our expectation that it will become really cost-competitive soon.
“And that’s why we see a lot of big players looking at it, pilot projects happening everywhere.”
“What is also exciting is that with the recent dramatic fall in renewable energy prices – particularly in the southern and eastern Mediterranean countries where we work, and potentially with offshore wind being developed in countries from Turkey to Poland and Greece, too – these countries could become sources of production of green hydrogen, with projects we could consider investing in, within a few years,” Mr Carraretto added. “This is really on the edge of becoming a game-changer”.
The image above is of the Mongu-Kalabo Road crossing the Barotse Floodplain in western Zambia. Charis Enns, Author provided
Kenyan President Uhuru Kenyatta fumed at construction delays on the Lamu Port-South Sudan-Ethiopia Transport Corridor in 2019 – a US$22 billion (£18 billion) transport network that includes a 32-berth port, highways, railways and pipelines. But these delays, caused by financing gaps, afforded fishers, pastoral farmers and conservationists time to challenge the project in court, and push for amended plans that better protect local habitats and migratory routes used by people, livestock and wildlife.
While major road and rail projects often break up wilderness and grazing lands, a sudden pause in construction can offer a lifeline to people fighting to protect these areas.
Lockdown restrictions and the uncertainty caused by COVID-19 have made sourcing labour and materials more difficult, increasing construction costs. The result is that infrastructure building has slowed globally, creating a unique opportunity to redesign road and rail projects around the world so that they benefit the people and environments they share the landscape with.
Barriers to travel
Dozens of new roads, railways and pipelines are under construction in sub-Saharan Africa due to a surge in investment in recent years. Although they are promised to bolster economic growth, our research shows that many of these new mega-highways and high-speed rail lines were approved without meaningful consultation between planners and local people. As a result, they tend to become new barriers that are difficult and dangerous to traverse, forcing people to travel long distances to reach safe crossing points.
In dry regions, this can make it difficult to reach vital water sources. Amid farmland and forests, construction can push people from their land or force them to travel further to reach it. Deforestation usually comes before construction too, which encourages people to migrate further into woodland, building new settlements that drive more forest clearing.
Poorly designed roads and rail lines can take a heavy toll on human and animal life. During our research between 2017 and 2019, we found too few safe crossing points, inadequate signage and lax speed enforcement along new highways and railways in Kenya and Tanzania, resulting in numerous road accidents.
Conservationists are particularly worried by growing roadkill sightings along a new highway in northern Kenya. Endemic and endangered species like the Grevy’s zebra are often killed in collisions with cars and lorries after wandering onto roads that now criss-cross their range. As one pastoral farmer living alongside the new highway exclaimed
How many animals have died? Uncountable.
Fortunately, there are lots of proven strategies for preventing transport projects from fragmenting habitats, such as building passages across new highways and railways that migratory species can use. Repairing environmental damage caused by construction, by filling in quarries that produce construction materials, for example, can also help restore grazing land for livestock and wildlife.
The Mongu-Kalabo road constructed over the Barotse floodplain in western Zambia shows these ideas in action. Completed in 2016, the road was built with 26 bridges over the floodplains and regular culverts between bridges, allowing water and wildlife to move across the floodplain without impeding road traffic and trade, even during seasonal floods.
The road was also planned with local cultures in mind. Wetland livelihoods, such as fishing and floodplain farming, aren’t affected by the road since the regular movement of fish and water remains largely undisturbed. By maintaining these flows across the floodplain, cultural traditions have been protected. The annual Kuomboka ceremony that takes place at the end of the rainy season can continue, when the Litunda (king of the Lozi people) moves from his compound in the Barotse floodplain to higher ground.
There is no single blueprint for building roads and railways that allow humans and nature to thrive. Wherever construction is planned, public participation is vital. Gathering the knowledge local people have of their environment can improve the design of these projects, but this insight cannot come from rushed consultations or impact assessments conducted from a distance. Only meaningful and ongoing engagement with local communities and environmental authorities will do.
Major infrastructure investment will likely be key to pulling the global economy out of recession. The opportunity to mould upcoming projects won’t last forever, so let’s ensure any new road and rail project is designed with respect to the rights of people and nature.
Business Maverick tells us the Expats are leaving Dubai and that’s bad news for the economy
It’s a choice facing millions of foreigners across the Gulf as the fallout from the pandemic and a plunge in energy prices forces economic adjustments.
“Dubai is home for me,” said Sissons, who owned a small cafe and worked as a freelance human resources consultant. But “it’s expensive here and there’s no safety for expats. If I take the same money to Australia and we run out of everything, at least we’ll have medical insurance and free schooling.”It’s a choice facing millions of foreigners across the Gulf as the fallout from the pandemic and a plunge in energy prices forces economic adjustments. Wealthy Gulf Arab monarchies have, for decades, depended on foreign workers to transform sleepy villages into cosmopolitan cities. Many grew up or raised families here, but with no formal route to citizenship or permanent residency and no benefits to bridge the hard times, it’s a precarious existence.
The impact is starkest in Dubai, whose economic model is built on the presence of foreign residents who comprise about 90% of the population.
Oxford Economics estimates the United Arab Emirates, of which Dubai is a part, could lose 900,000 jobs — eye-watering for a country of 9.6 million — and see 10% of its residents uproot. Newspapers are filled with reports of Indian, Pakistani and Afghan blue-collar workers leaving on repatriation flights, but it’s the loss of higher earners that will have painful knock-on effects on an emirate geared toward continuous growth.
“An exodus of middle-class residents could create a death spiral for the economy,” said Ryan Bohl, a Middle East analyst at Stratfor. “Sectors that relied on those professionals and their families such as restaurants, luxury goods, schools and clinics will all suffer as people leave. Without government support, those services could then lay off people who would then leave the country and create more waves of exodus.”
With the global economy in turmoil, the decision to leave isn’t straightforward. Dubai residents who can scrape by will likely stay rather than compete with the newly unemployed back home. The International Labor Organization says more than 1 billion workers globally are at high risk of pay cuts or job losses because of the coronavirus.
Some Gulf leaders, like Kuwait’s prime minister, are encouraging foreigners to leave as they fret about providing new jobs for locals. But the calculation for Dubai, whose economy depends on its role as a global trade, tourism and business hub, is different.
The crisis will likely accelerate the UAE’s efforts to allow residents to remain permanently, balanced against the status of citizens accustomed to receiving extensive benefits since the discovery of oil. For now, the UAE is granting automatic extensions to people with expiring residence permits and has suspended work-permit fees and some fines. It’s encouraging local recruitment from the pool of recently unemployed and has pushed banks to provide interest-free loans and repayment breaks to struggling families and businesses.
A Dubai government spokesperson said authorities were studying more help for the private sector: “Dubai is considered home to many individuals and will always strive to do the necessary to welcome them back.”
Dubai’s main challenge is affordability. The city that built its reputation as a free-wheeling tax haven has become an increasingly costly base for businesses and residents. In 2013, Dubai ranked as the 90th most expensive place for expatriates, according to New York-based consultant Mercer. It’s now 23rd, making it the priciest city in the Middle East, though it slipped from 21st place in 2019 as rents declined due to oversupply.
Education is emerging as a deciding factor for families, especially as more employers phase out packages that cover tuition. Though there’s now a wider choice of schools at different price points, Dubai had the region’s highest median school cost last year at $11,402, according to the International Schools Database.
That will likely lead parents to switch to cheaper schools and prompt cuts in fees, according to Mahdi Mattar, managing partner at MMK Capital, an advisory firm to private equity funds and Dubai school investors. He estimates enrollments may drop 10%-15%.
Sarah Azba, a teacher, lost her job when social distancing measures forced schools online. That deprived her of an important benefit; a free education for her son. So she and the children are returning to the U.S., where her 14-year-old son will go to public school and her daughter to college. Her husband will stay and move to a smaller, cheaper home.“Separating our family wasn’t an easy decision but we had to make this compromise,” Azba said.
For decades, Dubai has thought big, building some of the world’s most expansive malls and tallest buildings. From the desert sprang neighborhoods lined with villas designed for expat families lured by sun and turbo-boosted, tax-free salaries. New entertainment strips popped up and world-class chefs catered to an international crowd. But the stress was building long before 2020. Malls were busy but shoppers weren’t spending as much. Residential properties were being built but there were fewer buyers. New restaurants seemed to cannibalize business from old.
The economy never returned to the frenetic pace it enjoyed before the 2008 global credit crunch prompted the last bout of expatriate departures. Then, just as it turned a corner, the 2014 plunge in oil prices set growth back again. The Expo 2020, a six-month exhibition expected to attract 25 million visitors, was supposed to be a reset; it’s now been delayed due to Covid-19.
Weak demand means recovery will take time. Unlike some Middle Eastern countries, the UAE isn’t seeing a resurgence in Covid-19 infections as it reopens, but its reliance on international flows of people and goods means it’s vulnerable to global disruptions.
Emirates Group, the world’s largest long-haul carrier, is laying off employees as it weighs slashing some 30,000 jobs, one of the deepest culls in an industry that was forced into near-hibernation. Dubai hotels will likely cut 30% of staff. Developers of Dubai’s man-made islands and tallest tower have reduced pay. Uber’s Middle East ride-hailing unit Careem eliminated nearly a third of jobs in May but said this week business was recovering.
Dubai-based Move it Cargo and Packaging said it’s receiving around seven calls a day from residents wanting to ship their belongings abroad. That compares with two or three a week this time last year. Back then, the same number of people were moving in too. Now, it’s all outward bound.
Marc Halabi, 42, spent the past week reluctantly sorting belongings accumulated over 11 years in Dubai. Boxes line the rooms as he, his wife and two daughters decide what to ship back to Canada. An advertising executive, Halabi lost his job in March. He’s been looking for work that would allow the family to remain but says he can’t afford to hold out any longer.
“I’m upset we’re leaving,” Halabi said. “Dubai feels like home and has given me many opportunities, but when you fall on hard times, there isn’t much help and all you’re left with is a month or two to pick up and move.”
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