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MENA outlook promises to be ‘fascinating’ for investors in this decade

MENA outlook promises to be ‘fascinating’ for investors in this decade

GULF TIMES, Qatar top-selling English daily newspaper in its BUSINESS section posted on January 28, 2020, this article on MENA outlook promises to be ‘fascinating’ for investors in this decade, says HSBC.

“A multi-faceted investment strategy is needed to achieve the three objectives of income, growth and stability,” points out Willem Sels, chief market strategist, HSBC Private Banking.

MENA outlook promises to be ‘fascinating’ for investors in this decade
Willem Sels

The outlook for the Middle East and North Africa (Mena) region for the new decade is a “fascinating” one, full of continued economic reforms, transformation and market liberalisation, according to HSBC.
“With these developments, opportunities are expected to be widespread, across multiple industries and across the region. The combination of supportive monetary policy and responsive central banks are a few of the additional supportive variables for the region,” it said in a release yesterday.


The new decade will not be as kind to investors as the last and this will mean a new path for investments, said HSBC Private Banking in its first quarter’s investment outlook.
“We will most likely see a US recession at some point in the next ten years, and while central banks’ policies should remain accommodative, it is clear that the new decade will mean a new path for investments,” says HSBC Private Banking in its investment outlook for the first quarter of 2020.
“A multi-faceted investment strategy is needed to achieve the three objectives of income, growth and stability,” pointed out Willem Sels, chief market strategist, HSBC Private Banking.
In a low growth and low interest rate environment, returns are unlikely to be as high as they were in the past decade, and in an environment where broad-based market upside is lower than in the past, and political risks remain high, HSBC Private Banking believes diversifying risk exposures will be especially important.
HSBC Private Banking says portfolios should avoid excessive cash balances as well as the lowest rated end of high yield.  It favours dollar investment grade, emerging markets’ local and hard currency debt, complemented with dividend stocks, real estate and private debt instruments to generate further income.
It also sees opportunities to boost the return potential of portfolios by focusing on quality companies with sustained earnings growth and, where appropriate, it believes some leverage can help boost the net income of portfolios. It can also make sense selectively to look to hedge funds and private equity to capture growth opportunities and private equity to look through short-term market volatility.
“It’s a new path for investments, but sometimes, new paths lead you to the most interesting sights” Sels noted.
In 2020-21, HSBC Private Banking says investors can expect interesting opportunities for long term growth in sectors, geographies or themes related to the ‘Fourth Industrial Revolution’ or ‘sustainability’.
It is also optimistic that the ageing, urban, digital, mobile, sharing-based, knowledge-based, circular, fast-paced and increasingly Asian global economy provides companies and investors with plenty of opportunities.

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UAE remains least corrupt country in MENA region

UAE remains least corrupt country in MENA region

Khaleej Times of the UAE in an article by Waheed Abbas/Dubai dated January 23, 2020, informs that the UAE remains least corrupt country in MENA region per the latest Corruption Perceptions Index by Transparency International in its CPI 2019: Middle East and North Africa.

It shows a score of 39, the same as last year. There seems to be little progress in improving control of corruption in the Middle East and North Africa region generally but the massive protests currently thronging the streets in mostly the republics types of states of the MENA could be taken as seeking for improvement. Excerpts of the Khaleej Times follow.


With a score of 71, the United Arab Emirates is the best regional performer, followed by Qatar (62). At the bottom of the region, Syria scores 13, followed by Yemen with a score of 15. Both countries are significant decliners on the CPI, with Yemen dropping eight points since 2012 and Syria dropping 13 points during the same period.

Lack of political integrity

The region faces significant corruption challenges that highlight a lack of political integrity. According to our recent report, Global Corruption Barometer — Middle East and North Africa, nearly one in two people in Lebanon is offered bribes in exchange for their votes, while more than one in four receives threats if they don’t vote a certain way.

In a region where fair and democratic elections are the exception, state capture is commonplace. Powerful individuals routinely divert public funds to their own pockets at the expense of ordinary citizens. Separation of powers is another challenge: independent judiciaries with the potential to act as a check on the executive branch are rare or non-existent.

To improve citizens’ trust in government, countries must build transparent and accountable institutions and prosecute wrongdoing. They should also hold free and fair elections and allow for citizen engagement and participation in decision-making.

Image: Shutterstock / Hiba Al Kallas

For any press enquiries please contact press@transparency.org

UAE remains least corrupt country in MENA region

(Supplied)

The UAE has been rated least corrupt country, yet again, in the Middle East and North Africa by the Berlin-based Transparency International’s Corruption Perception Index (CPI) 2019.

Globally also, the country retained its 21st ranking, scoring 71 points.

At the bottom of the region, Syria scores 13, followed by Yemen with a score of 15. Both countries are significant decliners on the CPI, with Yemen dropping eight points since 2012 and Syria dropping 13 points during the same period.

“The region faces significant corruption challenges that highlight a lack of political integrity. According to our recent report, Global Corruption Barometer – Middle East and North Africa, nearly one in two people in Lebanon is offered bribes in exchange for their votes, while more than one in four receives threats if they don’t vote a certain way,” said Transparency International said in the report released on Thursday.

“To improve citizens’ trust in government, countries must build transparent and accountable institutions and prosecute wrongdoing. They should also hold free and fair elections and allow for citizen engagement and participation in decision-making,” it said.

With a score of 53, Saudi Arabia improved by four points since last year. In 2017, the Saudi Crown Prince Mohammad Bin Salman carried out an “anti-corruption” purge as part of his reform of the country.

Regionally, the UAE is followed by Qatar, Saudi Arabia, Oman, Jordan, Bahrain and Kuwait.

Globally, the top countries are New Zealand and Denmark, with scores of 87 each, followed by Finland (86), Singapore (85), Sweden (85) and Switzerland (85).

More than two-thirds of countries score below 50 on this year’s CPI, with an average score of just 43. Similar to previous years, the data shows that despite some progress, a majority of countries are still failing to tackle public sector corruption effectively.

“Governments must urgently address the corrupting role of big money in political party financing and the undue influence it exerts on our political systems,” said Delia Ferreira Rubio Chair Transparency International.

waheedabbas@khaleejtimes.com

Gulf economies to pick up this year following spending spree: Reuters poll

Gulf economies to pick up this year following spending spree: Reuters poll

Reuters’ BUSINESS NEWS today January 22, 2020, claims that Gulf economies to pick up this year following spending spree: Reuters poll is written by Yousef Saba and Nafisa Eltahir.

DUBAI (Reuters) – Economic growth in the Gulf will pick up this year and next, helped by Saudi Arabia’s investment program and Expo 2020 in Dubai, although the region will continue to feel the impact of oil output cuts, a Reuters poll showed on Wednesday.

The above picture is a FILE PHOTO: A car drives past a construction site of Riyadh Metro and the King Abdullah Financial District in Riyadh, Saudi Arabia, November 12, 2017. REUTERS/Faisal Al Nasser

OPEC and non-OPEC allies agreed in December to deepen output cuts, coming in addition to previously agreed curbs of 1.2 million bpd, and will represent about 1.7% of global oil output.

Saudi Arabia’s economy grew 0.3% in 2019, and is expected to grow 2.0% in 2020 and 2.2% in 2021, the poll of 26 economists, conducted Jan. 7-21, projected. A similar poll three months ago gave the same forecasts for 2020 and 2021 but estimated 0.7% growth in 2019.

“Saudi Arabia’s third-quarter GDP data, showing a fall of 0.5% year-on-year, was broadly as expected, with OPEC+ cuts constraining the contribution of the oil sector to economic growth,” Oxford Economics wrote in a research note. But diversification efforts “show signs of feedthrough”, it said.

Monica Malik, chief economist at Abu Dhabi Commercial Bank, said a stronger non-oil sector would help Saudi Arabia.

“Real GDP growth in Saudi should benefit from stronger non-oil activity as the investment program gains momentum. The drag from the oil sector should moderate in 2020 following a sharp reduction in oil output in 2019,” she said.

Median forecasts for growth in Oman, a relatively small Gulf crude producer, were significantly slashed. Analysts saw 1.0% growth in 2019, 1.7% in 2020 and 2.3% in 2021. Three months ago, Oman’s GDP was seen growing 1.3% in 2019, 3.2% in 2020 and 3.0% in 2021.

Oman’s ruler of 50 years, Sultan Qaboos bin Said, died earlier this month.

Maya Senussi, senior economist at Oxford Economics, said deeper oil production cuts agreed by OPEC and allies in December, and prospects for non-oil activity remaining weak, have weighed on Oman’s outlook.

Analysts forecast growth of 1.7% in 2019 for the United Arab Emirates, down from 2.2% in the poll three months ago. Its 2020 and 2021 estimates were unchanged.

The governments of Dubai and Abu Dhabi, the country’s two main emirates, have boosted spending to provide stimulus to their economies.

Dubai, which will host Expo 2020 this year, announced a record budget of around $18 billion this year, a 17% increase year on year, while Abu Dhabi announced in 2018 a three-year package of $13.6 billion.

Kuwait, which said last week it expects a budget deficit of 9.2 billion dinars ($30.3 billion) in the fiscal year starting on April 1, was forecast to see 0.5% economic growth in 2019, down from the 1% expected three months ago.

Kuwait’s GDP growth was revised down to 1.9% in 2020 from 2.2% three months earlier. Expectations for its 2021 growth, however, have risen to 2.6% from 2.3%.

GDP growth for Qatar, the world’s largest exporter of liquefied natural gas, was revised down to 0.9% in 2019 from 2.0% three months ago. Its 2020 forecast was cut to 2.1% from 2.4%, while its 2021 estimate was lifted to 2.5% from 2.3%.

Polling by Md Manzer Hussain; Writing by Yousef Saba and Nafisa Eltahir; Editing by Susan FentonOur Standards:

The Thomson Reuters Trust Principles.

UAE to accelerate space tech startups

UAE to accelerate space tech startups

Adelle Geronimo informs that despite all the hoo-hah in the Middle East, the UAE to accelerate space tech startups is no extraordinary youth employment programme. This follows the UAE launching in October 2018, its first satellite built entirely by Emirati engineers in the UAE and after sending an Emirati astronaut to the International Space Station. The UAE plans also to establish a self-sustaining habitable settlement on Mars by 2117.


space sciences

The UAE Space Agency has announced its collaboration with the Abu Dhabi-based global innovation hub, Krypto Labs, to launch the UAE NewSpace Innovation Programme, which aims to maximise the growth of space technology start-ups with NewSpace, the rising private spaceflight industry.

The programme falls under the purview of the National Space Investment Promotion Plan, which aims to heighten the role of the space industry in contributing to the economy of the UAE.

It is also in line with an MoU signed between the UAE Space Agency and Krypto Labs, which aims to increase innovation and investment in the space sector, drive a diversified UAE economy, and promote awareness through specialised initiatives that support space technology entrepreneurship.

Dr. Mohammed Nasser Al Ahbabi, Director-General of the UAE Space Agency, said, “The UAE NewSpace Innovation Programme invites students, entrepreneurs and start-ups to share their ground-breaking ideas and transform them into viable commercial products. This supports developing space technology as part of the UAE’s private spaceflight NewSpace sector, which aims to make space more accessible, affordable and commercial.”

Selected applicants will take part in a three-month incubation programme at the headquarters of Krypto Labs in Abu Dhabi, with access to the hub’s facilities. They will also have access to the innovation hub’s local and global network of investors, be mentored by global space experts, and develop their skills in business creation, marketing, and sales, among others.

Applicants will also have the opportunity to secure funds to ensure their start-ups are prepared to enter the market.

Eligible applicants must present an innovative and original idea with a clear technical approach, which generates a feasible and scalable product. The teams must have at least one Emirati team member.

Dr. Saleh Al Hashemi, Managing Director of Krypto Labs, noted, “By supporting innovators and young entrepreneurs, we aim to foster a spirit of originality and zest within start-ups to solve global challenges that keep the UAE on the frontier of the innovation map and elevate its position as a leader for innovation-focused businesses.”

Middle East saw surge in capital inflows: IMF

Middle East saw surge in capital inflows: IMF

From the ANBA’s Newsroom, we learnt that the Middle East saw surge in capital inflows: IMF and indeed:

MENA accounted for 20% of total portfolio flows to emerging financial markets from 2016-2018.

 Oriente Médio e Norte da África são destaques na atração de capitais, diz FMIKarim Sahib/AFP

São Paulo – The Middle East and North Africa (MENA) have stood out in capital flows in the last years, according to article published this Wednesday (15) on the International Monetary Fund Blog.

Written by Jihad Azoud, director of the Middle East and Central Asia Department at the IMF, and Ling Zhu, an economist at the same department, the article reads that since the global financial crisis of 2008, emerging countries have experienced a surge in capital flows and that this flow to the MENA nations have remained high compared to other emerging markets, but their composition has changed significantly.

The change includes a surge in portfolio flows – foreign investment in the financial and capital markets – and a simultaneous decline in foreign direct investment – those non-linked to the production sector, real estate acquisition etc. Portfolio and bank inflows to the region reached USD 155 billion over 2016–2018, which accounted for nearly 20% of total portfolio flows to emerging economies during those two years. The value was about three times the volume of flows to MENA over the previous eight years.

The IMF analysts find that most of the portfolio flows increase can be attributed to a more favorable global risk sentiment that is below its historical average. “Portfolio inflows are mostly driven by global ‘push’ factors, such as financial market risk sentiment,” the article reads that about two-thirds of the increase can be attributed to that.

Other factors are the fiscal and external deficits resulting from increased spending in such countries as Egypt, Jordan, Lebanon, and Tunisia, as well as lower revenue in oil exporters such as Bahrain and Oman after 2014. “Capital inflows have helped governments finance these deficits,” the IMF blog stresses. Moreover, the recent inclusion of Gulf Cooperation Council (GCC) countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates — in global bond and equity indices has also contributed to the rise in portfolio flows to the region.

Risks

However, the article warns that with global economic risks now on the rise, the region’s countries would be particularly vulnerable if global risk sentiment shifts — especially those with significant fiscal deficits, high debt burdens, and limited buffers. The blog goes on to say that the region is twice as sensitive to changes in global risk sentiment as compared with other emerging economie, which most likely stems from the higher perceived overall risk of the region, reflecting factors such as geopolitical uncertainties, volatile oil prices, and global trade tensions.

To strengthen their resilience to volatile flows, the blog reccomends improved policy frameworks not only in attracting but also in preserving flows, while helping mitigate the risk of outflows. As examples, the text mentions that Egypt has established inflation targeting and that Morocco has made progress in allowing more flexible exchange rates. As usual, IMF urges that reducing fiscal deficits are critical.

The article also stresses the need for structural reforms to strengthen financial system and macroeconomic steps to reduce the regional economies’ vulnerabilities.

Translated by Guilherme Miranda

Moody's negative rating outlook for the 2020 GCC sovereigns

Moody's negative rating outlook for the 2020 GCC sovereigns

This Moody’s negative rating outlook for the 2020 GCC sovereigns was published after it issued a little earlier, a similar downgrade for GCC corporates. But before we start wondering how relevant and whether, in this day and age, it applies to the MENA region and particularly to the Gulf sub-region, let us see who and what is behind Moody’s. It has by the way in 2018, citing as always, the still on-going and potentially worsening geopolitical event risks that play a crucial role in defining sovereign credit quality, come up with a particular set of ratings.  Moody’s Corporation is the holding company that owns both Moody’s Investor Services, which rates fixed-income debt securities, and Moody’s Analytics, which provides software and research for economic analysis and risk management. Moody’s assigns ratings based on assessed risk and the borrower’s ability to make interest payments, and many investors closely watch its ratings.

ZAWYA GCC on January 9, 2020, posted the following articles.

The image above is used for illustrative purpose. A screen displays Moody’s ticker information as traders work on the floor of the New York Stock Exchange January 20, 2015. REUTERS/Brendan McDermid

GCC sovereigns’ 2020 outlook is negative, says Moody’s

By Gerard Aoun

Negative outlook reflects slow progress on fiscal reforms, weak growth and higher geopolitical risks.

Moody's negative rating outlook for the 2020 GCC sovereigns
Various currency notes from Saudi, UAE, Kuwait and Oman. Image for illustrative purpose.

Moody’s Investors Service said in a report that the outlook for sovereign creditworthiness in the Gulf Cooperation Council (GCC) in 2020 is negative.

The negative outlook reflects slow progress on fiscal reforms at a time of moderate oil prices, weak growth and higher geopolitical risk, the ratings agency said.

“The pace of fiscal consolidation will remain slow in the GCC in 2020 and fiscal strength will continue to erode in the absence of significant new fiscal measures and reforms,” said Alexander Perjessy, a Moody’s Vice President – Senior Analyst.

“This will be exacerbated by existing commitments to limit oil production, which will reduce government revenue,” Perjessy added.

The ratings agency expects a further gradual erosion in GCC credit metrics as oil prices remain moderate over the medium-term. It also pointed that lower oil revenue available to fund government spending will constrain growth in the non-oil sector which will, in turn, discourage governments from undertaking more fiscal tightening.

Moody’s sees the region’s geopolitical risk as higher and broader in nature than in the past, amid ongoing tensions between the United States and Iran.

gerard.aoun@refinitiv.com

Moody’s: 3 factors behind GCC sovereigns’ 2020 negative outlook

GCC’s geopolitical risk is higher in nature than in the past.

By Staff Writer, Mubasher

Moody’s Investors Service explained the factors which led to the negative outlook for sovereign creditworthiness in the Gulf area for the year 2020.

A recent report by Moody’s showed that the slowdown in the development of fiscal reforms at a time of reasonable oil prices contributed to the outlook, along with weak growth and higher geopolitical risk.

Further gradual erosion in GCC credit metrics is expected by Moody’s which relied in their outlook on the moderate oil prices over the medium-term.

Moody’s vice president – senior analyst, Alexander Perjessy, highlighted: “The pace of fiscal consolidation will remain slow in the GCC in 2020 and fiscal strength will continue to erode in the absence of significant new fiscal measures and reforms.”

Perjessy added, “This will be exacerbated by existing commitments to limit oil production, which will reduce government revenue.”

Growth in the non-oil sector will be constrained by lower oil revenue available to fund government spending; this will discourage governments from undertaking additional fiscal tightening.

Moody’s noted that “the region’s geopolitical risk is higher and broader in nature than in the past amid ongoing tensions between the US and Iran.”

A Century Ago, the Modern Middle East Was Born

A Century Ago, the Modern Middle East Was Born

The New York Times Ted Widmer’s Opinion is that A Century Ago, the Modern Middle East Was Born. Lots could object to that statement but reading his Christmas Day article republished here with our thanks, could be as enlightening as perhaps the Messiah’s birth anniversary.


At the end of 1919, Woodrow Wilson still wanted the region to decide its future. Britain and France had other ideas.

A Century Ago, the Modern Middle East Was Born
A caricature of Woodrow Wilson in Punch magazine, May 1919.Credit…Getty Images

As 1919 came to a close, people around the world were celebrating the holidays, grateful for the return of peace on earth after the convulsions of the Great War. “Peace on earth” was a relative concept; there was still fighting in Russia. But for the most part, the soldiers were home, and their families were looking forward to a new decade, free of conflict.

In Paris, there were long lines outside of restaurants, as the French celebrated the holiday with gastronomic exuberance. In BerlinVienna and Budapest there was less Christmas cheer, thanks to food shortages and inflation, but the people flocked to cafes and did their best to revive the old holiday traditions. In Washington, there was no snow, but Woodrow Wilson issued a flurry of proclamations, including one on Christmas Eve that relinquished federal control of the railroads, a wartime measure that was no longer necessary.

But for all the Christmas cheer, there was a general restlessness as the long year 1919 drew to a close, without the clarity that so many hoped would follow the war’s end. An elaborate treaty was signed at Versailles on June 28, ending hostilities between the principal powers, but creating a host of new problems. Germans were furious when they realized the scale of the reparations imposed on them. New and dangerous political actors were quick to seize upon the public’s hunger to find scapegoats as the political mood turned dark.

Wilson’s thoughts must have been conflicted this Christmas season. As the son of a Southern Presbyterian minister, he had many reasons to rejoice at the arrival of Christmas, including the fact that he was sometimes compared to Jesus, with his “sermonettes” about the new era that was approaching. As a young man, he had written an essay on “Christ’s Army,” and it must have felt at times that he was in charge of this organization, with all of his schemes for human betterment. But as the year progressed, the comparisons to Jesus began to turn sardonic, as Wilson’s perfectionism grated on his allies.



A year earlier, Wilson strode the world like a colossus. On Christmas Eve 1918, he was in Paris, enjoying the last night of his first visit to France, where he received a tumultuous welcome as the embodiment of the people’s hopes. A year later, he was significantly diminished, by the flawed treaty, by the Senate’s refusal to approve the League of Nations, and by the stroke that had crippled him in October, as he brought his case to the American people.

He never lost his religiosity, and for that reason, the arrival of another Christmas may have felt reassuring. But the year had taken a severe toll. He said, “If I were not a Christian I think I should go mad, but my faith in God holds me to the belief that he is in some way working out his own plans through human perversities and mistakes.”

Mistakes were plentiful as the world’s leaders contemplated missed opportunities in the great reshuffling of 1919. Three enormous empires — the Russian, German and Austro-Hungarian — had folded within the last two years, sweeping away centuries of dynastic privilege, but leaving a gaping void.

Then there was the Ottoman Empire, reeling from a series of catastrophes, but not quite defunct. From their palaces in Constantinople, sultans had once exercised sway over huge stretches of the lands stretching in all directions from Asia Minor. Even further afield, they commanded the loyalties of hundreds of millions of Muslims around the world as the caliphs of Islam.

But in recent years, sultans were struggling to maintain control of their own administrators. The Ottomans had backed the losing side in the war, then horrified the world with a genocidal campaign against the Armenian people. They were also losing credibility in other ways. In the years before the war, European powers had gobbled up nearly half a million square miles of former Ottoman territory. Then, during the war, an Arab revolt stoked by the British had removed large portions of what we would now call the Middle East.



With Christmas approaching, the English and French were negotiating over the fate of what remained. Earlier in the year, they had dutifully nodded as Wilson articulated his idea of a new diplomacy that would show respect to small countries, and affirm the rights of all peoples to something called “self-determination.” There would be fewer colonies, although some “mandates” would be allowed to exist, in which Western powers would act as benevolent caretakers for peoples who were “not yet ready” for self-determination. So idealistic did the word sound that Wilson even contemplated an American mandate over Armenia, the Dardanelles and the Bosporus.

But there had been a number of shocks to his idealistic vision. One came on March 20, 1919, when Wilson learned that his French and English allies had secretly agreed to carve up the Ottoman Empire as soon as the war ended, and were continuing to scheme both with and against each other. That seemed very much like the old diplomacy. A 1916 understanding, the Sykes-Picot Agreement, promised to give each side what it wanted in the region, with little regard for anyone’s right to self-determination.

For the British, that meant Palestine and a region that they were calling “Mesopotamia,” including the Ottoman provinces of Baghdad, Mosul and Basra. For the French, it was a generous slice of the eastern Mediterranean, around the city of Beirut, and an internal corridor stretching to Damascus, Aleppo and beyond.

Neither of these zones were natural countries. The Ottomans had considered Mosul a different region from Baghdad, but the British coveted the oil that was beginning to spurt out of the earth. Eventually, this awkward assemblage of provinces would receive a new name, Iraq, when the British succeeded in placing an Arab ally on its throne. In Arabic, the word means “deeply rooted,” but the new country was anything but that. The French went along, in return for some of the oil, and an agreement from the British to let them pursue their own intrigues in Lebanon and Syria.

Wilson responded by piously expressing his belief in “the consent of the governed,” and his hope that the wishes of local peoples would be taken into consideration as the European powers prepared to carve up the Middle East. He also proposed that a commission be created for that purpose, to earnestly inquire what form of government the locals wanted.

The French and British immediately shelved his quaint idea, but Wilson stuck with it, and appointed two commissioners, Henry Churchill King, the former president of Oberlin College, and Charles R. Crane, the scion of a family that had made a fortune from plumbing parts. They worked quickly and made a tour of the region, spending 42 days in what would later be Lebanon, Israel, the West Bank, Jordan and Syria. On Aug. 28, they submitted a report that confirmed Wilson’s sense that no one in the region wanted European powers to come in and colonize them. It may have been the first time anyone asked local Arabs what they wanted.

But events were happening quickly on the ground, and the old diplomacy refused to give up the ghost. Throughout the spring and summer, the French and British continued to divide up the Middle East as if they were shopping at a spice bazaar.

In his Fourteen Points, Wilson had tried to assure the peoples of the region that they would be free to pursue “autonomous development.” But that was a confusing concept as the victors made overlapping promises to Greeks, Italians, Armenians, Lebanese Christians, Arabs, Kurds and an increasingly vocal group of Zionists, mostly from Eastern Europe. As they clamored for their pieces of the Ottoman Empire, these disparate populations remembered a great deal of history. The Crusades, Constantine and the Roman Empire, the Greek wars against Persia, the Babylonian Captivity — all of it could be summoned in an instant to justify a historic claim to an attractive parcel of land. That didn’t sound like new diplomacy at all.



Wilson might have done more to push back against the land grab, but he was having problems of his own. After he returned to the United States, he received a hard lesson in self-determination when the Senate killed his vision in November. In a sense, his defeat was shared by the peoples of the Middle East, still looking for a champion.

But in the Ottoman lands, a curious version of self-determination was beginning to take place, without permission from Wilson, the allied leaders, or even the Ottomans. As the sultan, Mehmed VI, conceded point after point to the Allies, an angry Turkish soldier began to take matters into his own hands. Mustafa Kemal Pasha had already shown a great military aptitude during the war, particularly during the Turkish victory at Gallipoli. Throughout 1919, Kemal (later to be known as Ataturk) traveled across Anatolia, organizing Turkish resistance to the dismemberment of his country. Increasingly, it became clear that he was creating a new country — Turkey — that would no longer be headed by the sultans.

In other ways, as well, the victors discovered that the lines on the map were not as easy to redraw as they had first thought. In some places, like Palestine and Israel, a state of near-constant violence has persisted among peoples who wish to exercise self-determination at the same time, in the same place. In other places, too, we see how much we still live with the decisions made at the negotiating table in 1919. Russia continues to seethe against its limits and its neighbors, and is pressing up close against the old Ottoman borderlands. Certain boundaries in the Middle East appear to be in flux again — most recently, the southern border of Turkey. Self-appointed “Caliphs” continue to appear and disappear, suggesting that a void remains unfilled since the last sultan occupied that role. In retrospect, the new maps of 1919 were something of a palimpsest.

But at least it was quiet in one place as night descended on Christmas Eve a century ago. Bethlehem was a small town in what had been the Ottoman province of Palestine, but its future was uncertain as the armies of different powers ranged closer, and the cartographers kept redrawing the maps in Paris. Still, it had endured a very long time by showing the right level of respect to the old diplomacy, even as the new diplomacy was coming in. Chapter Two of the Book of Luke records that Jesus was born there because of a census, ordered by the Roman Empire, requiring heads of families to return to their native villages. Diligent administrators, the Romans believed that “all the world should be registered.” As Woodrow Wilson learned, that was harder than it looked.

Sources: Ray Stannard Baker, “Woodrow Wilson and World Settlement”; Harry N. Howard, “Turkey, the Straits and U.S. Policy”; Margaret Macmillan, “Paris 1919: Six Months that Changed the World.”

Ted Widmer is a distinguished lecturer at the Macaulay Honors College of the City University of New York and a fellow of the Carnegie Council for Ethics in International Affairs.

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Corruption costs developing countries $1.26 trillion

Corruption costs developing countries $1.26 trillion


The World Economic Forum ( WEF) in this article by Sean Fleming finds that Corruption costs developing countries $1.26 trillion every year – yet half of EMEA think it’s acceptable.

Costs of Corruption running deep in the MENA (refer to the above chart) are not clearly indicated whereas these seem to be fairly high.


Corruption leaves many people far worse off and feeling marginalized.
Corruption leaves many people far worse off and feeling marginalized. Image: Unsplash/Vitaly Taranov
  • Corruption is a global problem.
  • It costs both money and lives.
  • International collaboration is the only way to defeat it.

Corruption takes many forms. It is often thought of as a problem that mostly affects developing countries. But while the harm it does is magnified in poorer nations, corruption does not concern itself with national boundaries – it can be unearthed anywhere.

Have you read?

At the 50th World Economic Forum Annual Meeting in Davos next month, Founder and Executive Chairman Klaus Schwab will launch the Forum’s Davos Manifesto. It will state the need to adopt a new economic model, “stakeholder capitalism”. And at its heart is a call to fight corruption. That fight has been central to the World Economic Forum’s work for many years, and in 2004 it established the Partnering Against Corruption Initiative (PACI).

Corruption costs developing countries $1.26 trillion
Corruption takes a toll all over the world

To mark International Anti-Corruption Day 2019, here are seven shocking and damaging recent examples of corruption around the world, as identified by Transparency International.

1. Across the EMEA region (that’s Europe, the Middle East, and Africa) and India almost half of all workers think bribery and corruption are acceptable if there is an economic downturn.

2. Corruption, bribery, theft and tax evasion, and other illicit financial flows cost developing countries $1.26 trillion per year. That’s roughly the combined size of the economies of Switzerland, South Africa and Belgium, and enough money to lift the 1.4 billion people who get by on less than $1.25 a day above the poverty threshold and keep them there for at least six years.

3. The Transparency International Corruption Perceptions Index scores 178 countries on their degree of corruption – 10 is the cleanest possible, and 0 indicates endemic corruption. In 2010, around three-quarters of all 178 scored lower than five.

4. As much as $132 billion is lost to corruption every year throughout the European Union’s member states, according to the EU Commissioner for Home Affairs.

What’s the World Economic Forum doing about corruption?

It hosts the Partnering Against Corruption Initiative (PACI), the largest global CEO-led anti-corruption initiative.

Realizing that corruption hampers growth and innovation, and increases social inequality, PACI aims to shape the global anti-corruption agenda.

Founded in 2004, it brings together top CEOs, governments and international organizations who develop collective action on corruption, transparency and emerging-marking risks.

PACI uses technology to boost transparency and accountability through its platform, Tech for Integrity. Show

5. Bangladesh is one of the world’s poorer countries. Around one-third of the population say they have been the victims of corruption, and an astonishing 84% of those households who had interacted with different public and private service institutions have been victims of corruption.

6. In war-torn Afghanistan, of the $8 billion donated in recent years, as much as $1 billion has been lost to corruption. Integrity Watch Afghanistan estimates bribe payments — for everything from enrolling in elementary school to getting a permit — exceed $1 billion a year.

7. In one Russian province, if you want to become a police officer you will probably have to pay around $3,000. To get a place in medical school, you will need to part with around $10,000. One consequence of this, according to the International Crisis Group, has been that some people have grown so disaffected that they have become drawn to Islamic extremism.

Second Great Recession highly unlikely: Report

Second Great Recession highly unlikely: Report


At its December 2019 12th edition in Dubai, the Arab Strategy Forum affirmed that a Second Great Recession highly unlikely: Report. This gathering run under the theme of ‘Forecasting the Next Decade 2020-2030’ concluded that after all, it’s business as usual with no ad-hoc surprises at all.


DUBAI — The global economy is not likely to witness another Great Recession-style collapse, despite several indicators to the contrary in recent months, according to a newly-published report by the Arab Strategy Forum in partnership with Good Judgement Inc., the world’s leading geopolitical and economic forecasting institution.

Global Growth



Titled ‘11 Questions for the Next Decade’, the wide-ranging and far-reaching findings and themes of the report, will be discussed in depth by former ministers, decision-makers and politico-economic thought leaders, including former US Vice President Dick Cheney, at the 12th edition of the annual Arab Strategy Forum in Dubai on Dec. 9 at the Ritz Carlton, Dubai International Financial Centre.

The ‘state of the world’ style report– tackles 11 vital mega-trends and questions that will define the global social, political and economic landscape in the 10 years ahead. Unlike previous editions, this year’s report looks to predict the future leading up to 2030 – a crucial time for many Middle Eastern economies whose visions are set to come to fruition by that year.

‘11 Questions for the Next Decade’ analyses 11 major political and macro-economic situations – or ‘mega-trends’ as the report terms them – and their likely consequences to determine where the world is headed, come 2030. Topics covered range from the global recession to the fragmentation of superpowers and Brexit to the Iranian regime and America’s anticipated fall from dominance, to the emerging US-China tech war and the prospective ‘splinternet’, water scarcity in the region and the growing crop of gas fields in the East Mediterranean region.

Qualitative and quantitative feedback and data was garnered for the report’s 11 sections following rounds of discussions on Good Judgement’s online platform, with a series of ‘ignition questions’ posed to ‘Superforecasters’ – 150 experts from diverse backgrounds, such as political scientists, economics researchers, scholars, and subject-matter experts in professions ranging from finance to intelligence, to management and medicine. The ignition questions for each topic seek answers to the issues at the heart of major economic change in the years ahead. The Superforecasters’ answers serve as indicators and monitors of predicted change based on the outlined global mega-trends.

Mohammad Abdullah Al Gergawi, President of the Arab Strategy Forum, said: “The report provides answers to the most pressing questions today, these outcomes will have a significant impact on regional and global policies. It explores a range of scenarios that will support the decision-makers of today and tomorrow to guide progress and prosperity for generations to come.

“Unlike previous years, this year’s reports predict the future of the region and the world over the next decade in the context of the current events that will have a major impact. They provide an up-to-date analysis of the increasing need for decision-makers to understand future scenarios on which to base their plans.”

As the world’s first platform for forecasting geopolitical and economic events, both regionally and globally, and targeting the most influential leaders and decision-makers in the Arab world and beyond, the Arab Strategy Forum will provide invaluable insights from the world’s foremost thought leaders on the crucial topics addressed in the report and elsewhere. Below is a list of the mega-trends, their related ignition questions, and a brief summary of the findings from the ‘11 Questions for the Next Decade’ report.

• Will the world avoid another Great Recession through 2030?

Based on current global economic performance records and data from the last 100 years of economic cycles, the report sought to find out whether the next recession will be a repeat of the Global Financial Crisis / Great Recession (2007-2009) or whether we are likely to see a return to an earlier pattern of a brief economic downturn followed by resurgent and steady growth.

The report’s Superforecasters said there is a 76 per cent chance that the world will not undergo another global financial crisis similar to the one in 2007 in the next decade, citing central banks’ improved technological ability to adapt and steer skidding economies out of difficulty. In their analysis of the last 100 years’ of business cycles, the Superforecasters concluded that the Great Recession was an outlier rather than the expected norm.

• Will China, Russia, or a G7 country leave the World Trade Organization by 2030?

Considering the emerging tendency of two, or a group of countries, setting out to establish new regional trading systems, such as the US-backed Trans-Pacific Partnership or the Russian-backed European-Asian Economic Union, the report noted that such new trading entities pose a populist threat to long-established global trading systems.

It goes on to rule out the possibility of China, Russia or one of the G7 countries withdrawing from the World Trade Organization by 2030, as doing so would cost more than the gains are likely to be worth in the long run. However, considering the relentless pressure on the WTO in the face of populism, the post-World War II trading body faces a big challenge in maintaining its status and platform in the next 10 years.

• Will China, Russia, the US, or the EU lose 0.5% or more of its territory or population before 2030?

After the fall of empires in the 20th century, the question lingers over whether countries and blocs will fragment in the 21st century. The Superforecasters anticipate a 5% likelihood that the EU will lose 0.5% or more of its territory or population before 2030, a 2% likelihood that Russia or China will, and 1% likelihood that the United States will. Though the uncertainties and problems hanging over the United Kingdom are mainly considered ‘peaceful’, market volatility and decreased consumer confidence could have an impact on the EU’s territory and population in the next decade. The Superforecasters also said that a split or fragmentation in China or Russia, will only occur through a violent disruption.

• Will the US economy be ranked 1st, 2nd or 3rd in 2030?

Despite being the largest economy in the world since the beginning of the 20th century, the US’s position as the world’s number one is under threat from the formation of a multipolar system and the emergence of several countries and regions that contribute today to the international community.

The report claims that there is a 65 per cent chance that the US will still be the world’s largest economy a decade from now, and a 33 per cent likelihood it will be second, after China.

The most prominent countries competing with the United States, in terms of nominal GDP, the report adds, are China, the European Union bloc, and India. And, as the US economy shrinks to the size of other countries, it will be less able to influence other nations of the world.

• Will OPEC’s share of global crude oil production remain above 33% in 2030?

The Organization of Petroleum Exporting Countries (OPEC) currently holds a share of about 40 per cent of the world’s crude oil production. But the future of the organization and its domination is likely to be called into question, with the emergence of hydraulic fracturing and new oil discoveries outside the Middle East and North Africa.

There is a 90 per cent chance that OPEC will supply more than a third of the world’s crude oil supply in 2030. However, its fiscal revenue is likely to result in a decline in its production. Given its resilience and adaptation to multiple challenges in past decades, including wars, revolutions and global recessions, the organization is viable in a carbon-free world, but new and innovative adaptation measures are needed later, the report pointed out.

Cyberattacks

• Will a cyberattack shut down a major infrastructure system in a G7 country for 1+ days before 2030?

The Superforecasters see a 66 per cent likelihood of a cyberattack shutting down a major infrastructure system in a G7 country for at least one day before 2030. Outside of the G7, there are countries perhaps more vulnerable. “It will be worth monitoring these situations as harbingers of larger-scale attacks elsewhere. For instance, in the Philippines, government hearings recently raised concerns that China could remotely ‘turn off power’ in the country,” the report noted.

• Will Lebanon be involved in a major military conflict by 2030?

After the discovery of the East Mediterranean gas fields off the coast of Cyprus, Lebanon and Egypt, questions have arisen over whether the East Mediterranean gas fields will enhance the stability of the region or pose a security risk. The report said there’s a risk that offshore gas fields could escalate tensions between nations over disputed drilling rights, but potential energy revenues are worthwhile, and will lead to a strengthening of the region’s economic stability, as well as the internal stability of the concerned countries and reduce risks of war.

• Will water scarcity cause a deadly conflict between Jordan & Israel, Egypt & Ethiopia, or Turkey & Iraq before 2030?

Water scarcity is unlikely to drive any regional conflict in the MENA region over the next decade, the report stated. There is a small, 1 per cent chance of a conflict on the flow of water between Jordan and Israel, according to the Superforecasters. Meanwhile, the chance of a conflict between Egypt and Ethiopia or Turkey and Iraq during the next decade will reach 3per cent.

• China-US tech war and peace

Will a ‘splinternet’ – with one Internet led by the US and one led by China – be avoided as of 2030?

The Superforecasters offer an 80 per cent chance that a ‘splinternet’ – one Internet led by the United States and one led by China — will not be in place by 2030. “Information will continue to flow across global networks, even as other types of political or ideological information will be blocked,” the report pointed out.

MENA has $100bln of clean energy projects in pipeline

MENA has $100bln of clean energy projects in pipeline

ZAWYA through its ALTERNATIVE ENERGY‘s post dated December 11, 2019, informs that MENA has $100bln of clean energy projects in pipeline and that a Total investment in clean energy is forecasted to exceed $300bln by 2050.


Image for illustrative purpose. Solar rooftops in Dubai.
Image for illustrative purpose. Solar rooftops in Dubai.

The MENA region has $100 billion worth of clean energy projects currently in the pipeline, according to a report by Energy & Utilities.

The report estimates total investment in clean energy to exceed $300 bn by 2050 if the region’s utilities are to meet their ambitious targets.

Middle East Energy said that the sharp drop in the cost of solar and wind power technologies is driving clean energy, with the cost of installing photovoltaic (PV) solar and wind having fallen by 73 percent and 80 per cent respectively since 2010.

The commissioning of the world’s largest single-site photovoltaic (PV) solar plant in 2019, the 1.17GW Sweihan independent power project (IPP) in Abu Dhabi, is one of the milestones reached this year in the push for clean energy, the report noted.

Dubai also reached financial close for a $4.3 billion concentrated solar power (CSP) project, Noor Energy 1, which is the largest single-site power investment project in the world.

The report estimates that installed power generation capacity will be required to increase 35 percent by 2025 just to meet rising demand in the Middle East. Rapid population growth combined with ambitious industrial and economic expansion programmes is resulting in the growing need for power, as demand for electricity is expected to triple by 2050.

“Driven by well-designed auctions, favourable financing conditions and declining technology costs, renewables are being brought into the mainstream. Based on the renewables targets already in place, the region, led by the UAE, could save 354 million barrels of oil which is equivalent to a 23 per cent reduction, cut the power sector’s carbon dioxide emissions by 22 percent, and slash water withdrawal in the power sector by 17 percent by 2030,” Gareth Rapley, Group Director, Industrial, at Informa Markets said.

The report was published as a preview to an event in Dubai, The Middle East Energy 2020, which will be organised by Informa Markets in March 2020.

(Writing by Gerard Aoun; Editing by Seban Scaria)

gerard.aoun@refinitiv.com