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MENA Construction Output Growth Forecast

MENA Construction Output Growth Forecast

The Region is wrestling with oil demand slowdown but construction recovery is predicted for 2021 and 2022, GlobalData report as per Dominic Ellis of Construction Global who elaborates on the MENA construction output growth forecast sees 4.5% drop.


18 December 2020

Region wrestling with oil demand slowdown but construction recovery predicted for 2021 and 2022, GlobalData report says

The construction output growth forecast for the Middle East and North Africa (MENA) region for 2020 predicts a contraction of 4.5 percent this year, before a recovery with growth of 1.9 percent in 2021, and 4.1 percent in 2022, according to GlobalData.

The region is wrestling with two distinct but related issues: climate change, and the slowdown in oil demand.

The data and analytics company reports that the 2020 contraction reflects the severe impact of COVID-19 lockdowns, as well as other restrictions on construction activity. Much will depend on its ability to embrace digital transformation. 

Yasmine Ghozzi, economist at GlobalData, said: “The construction sector will face headwinds in 2021 with a slow recovery, but the pace of recovery will be uneven across countries in the region. Throughout 2020, and running to 2021, spending on real estate megaprojects, especially in the GCC, is likely to take a backseat as a result of budget revisions. 

“However, large-scale projects in the oil, gas, power and water sectors have gained traction against the downturn in market conditions this year, and this is likely to continue. As a result, some local contractors are pursuing development in these sectors to replace the loss of real estate work. 

“There is also a push towards decoupling power and water production across the region to reduce energy consumption continuing to provide the impetus for Independent Water Projects (IWP) implementation and in the future, there will be a lot of contract awards in that respect as the region pushes its renewable energy programme, particularly solar photovoltaic and wind.” 

Saudi Arabia

GlobalData has slightly revised up its forecast for Saudi Arabia’s construction output to -1.9 percent from -2.8 percent and expects a recovery for the sector of 3.3 percent in 2021. This revision reflects an improvement in economic performance and the Kingdom ending a nationwide curfew at the end of September, lifting restrictions on businesses after three months of stringent curbs and a notable decrease in infection rate. 

Recovery is also underlined by the crown prince’s announcement in mid-November that the Public Investment Fund (PIF) is to invest £29.5 billion (5% of GDP per annum) in the economy in 2021-22. 

Nearly half of the construction of the five minarets of the Grand Mosque in Makkah is now complete. 

The UAE

GlobalData still maintains its forecast for construction output growth in the UAE of -4.8 percent, with a rebound in 2021 of 3.1 percent and a promising medium-term outlook. 

Ghozzi adds: “The recent approval of a new Dubai Building Code is a positive development for the UAE. The new code outlines a revised set of construction rules and standards and seeks to reduce construction costs by streamlining building rules.” 

The UAE is proceeding with plans to expand its production capacity with Abu Dhabi National Oil Company (ADNOC) announcing its five-year investment plan worth £90.1 billion.

Qatar, Kuwait, and Oman

GlobalData has not changed its estimated growth rates for Qatar and Kuwait in 2020, at -4.5 percent and -9.5 percent, respectively. However, it has further cut the growth forecast for Oman to -10.3 percent from an earlier estimate of -8.1 percent, as the construction industry struggles with the challenges presented by the outbreak of COVID-19, low oil prices and the impact of sovereign credit rating downgrades. 

Ghozzi adds: “The new fiscal plan launched by the Omani Government to wean itself off its dependence on crude revenues through a series of projects and tax reforms is a good step which will aid the construction sector recovery in the medium term”.

Egypt

GlobalData expects construction in Egypt to grow at 7.7 percent in 2020, slowing from 9.5 percent in 2019 – given a short-term slow down due to the pandemic – and 8.9 percent in 2021. The industry is also expected to continue to maintain a positive trend throughout the forecast period. 

Ghozzi continues: “Egypt has become the first sovereign nation in the MENA region to issue green bonds with a £553.9 million issuance. Bonds’ earnings will be used to fund projects that meet Egypt’s commitment to the UN goals for sustainable development.”

Egypt’s comprehensive development plan provides varied opportunities for construction companies, such as the national project to develop the countryside which targets 1,000 villages nationwide. 

Israel

GlobalData expects Israel’s construction industry to contract by 8.9 percent in 2020, reflecting the significant fallout from the pandemic, with growth expected to resume at a modest pace in 2021. 

Ghozzi said containing a second wave of the virus, while trying to revive the economy and approve budgets for 2020 and 2021, are the government’s top priorities. “However, difficult decisions will be postponed, with the deadline to pass the 2020 budget being pushed to the end of 2020,” he said.

Arab Maghreb

In the Arab Maghreb, GlobalData maintained its forecasts for construction growth in 2020 for Morocco and Algeria to -5.5, and -3.4 percent, respectively. 

Ghozzi adds: “Amid a second wave of COVID-19 with restrictions placed on public mobility along with increasing public sector doubt about economic prospects and social tensions continuing to cause shutdowns at oil and phosphate-manufacturing facilities, GlobalData has further cut its forecast for Tunisia to -13.3 percent from an earlier estimate of -12.5 percent. 

“Recovery in the sector is expected to be very slow and expectation of an early legislative election is likely in 2021 but is unlikely to reduce political volatility.”

Boosting the Privatisation Process in Algeria

Boosting the Privatisation Process in Algeria

Conditions for boosting the privatisation process via the Algiers Stock Exchange are reviewed by University professor and international expert, Dr Abderrahmane MEBTOUL.

The aims of the privatisation, whether partial or total of the Algerian economy do not come to be questioned. The process is a must, however, it needs to be addressed as a matter of urgency. Proposals of strategies are made, notably through my experience as Chairman of the National Council of Privatizations between 1996/1999 complemented by numerous tours in the USA, helping to formulate the conditions for the success of the privatisation process via the Algiers Stock Exchange, to imply clarity in the objectives and means of implementation.

Boosting the Privatisation Process in Algeria
The Algerian Stock market in Algeria. (Photo by Monique Jaques/Corbis via Getty Images)
The urgency of a strategic vision

At a time of the coronavirus pandemic and the world going through new socio-economic changes in technological and organisational models including shock waves that according to the IMF, the World Bank, and the OECD, global growth will not be felt before the end of 2021. Furthermore, subject to the control of the epidemic, all domestic companies using the State’s handouts for their survival and all of the state-owned enterprises suffer from a structural deficit. Indebted to banks, some whose production techniques, are obsolete and do not meet new technologies and international standards, it is mentioned in this particular context to address the large budget deficit. The observation is the lack of dynamism of the public sector, the consolidation supported by the public treasury having far exceeded 100 billion dollars at constant prices between 2000/2020. The cost of the numerous restructurings between 1980/1999 and the ensuing remediation period of 2000/2020, resulted in more than 95% of the domestic companies returned to their inception status. Whereas with this, capital-money, it would have been more sensible to create a whole new and performing economic fabric. These are only announcements because, being an eminently political process, any decision on such a sensitive and complicated subject must first have the approval of the Council of Ministers certainly after consultation with the Security Council because it commits national security. Privatisation should not be confused with complementary de-monopolisation, both eminently political, moving towards the disengagement of the State from the economic sphere so that it devotes itself to its role as a strategic regulator in a market economy. Privatisation is a transfer of ownership from existing units to the private sector, and de-monopolisation is about fostering new private investment. The objective of de-monopolisation and privatisation must reinforce the systemic transformation of the transition from an administered economy to a competitive market economy. A legal text is not enough (this is only a means) and becomes a decoy if there are no coherent objectives clearly defined with pragmatism and a return to trust

Privatisation can only be successful if it is part of a coherent and visible global socio-economic policy and if it is accompanied by a competitive universal and sustained dialogue between the social partners. It should be aimed at putting an end to perpetual legal instability. The renovation of the Ministry of Finance through digitisation of all systems of taxation, banks, land and customs duties would surely put an end to the central and local bureaucracy that as a significant constraint of an administered economy would be best be accompanied by the overhaul of the socio-political system. Also, the decentralisation around large four to five regional poles, not deconcentration would help.

Moreover, the impacts of all trade agreements between Algeria and the European Union, Africa and the Arab world, as well as all international ones would be of a win-win type only if Algeria has public or private companies that are competitive in terms of cost/quality. In any case, all of these agreements have domestically economic, social and political implications.

The four conditions for boosting the privatisation process

Are our managers aware that there is a global privatisation market where competition is perennial, and the determining factor is a demand for goodwill and not just supply? The success of this process to prevent certain predators from being interested only in the real estate of these companies and not in the production tool involving five conditions? 

The first condition, its impact on the reduction of the budget deficit where according to the Finance Law of 2021 more than $21.75 billion in 2021, against the 2020 close of $18.60 billion and an overall projected treasury deficit of $28.26 billion, artificially, which is in principle filled by higher production and domestic productivity; to boost non-hydrocarbon exports and contribute to the establishment of a competitive market economy far from any monopoly, whether public or private. 

The State, as a regulator and guarantor of social cohesion, especially at a time of budgetary and tensions domestic and at our borders should enforce the contract between employers and employees so that the logic of profit does not undermine the dignity of workers. Nevertheless, never forget that the most incredible moral devaluation in any society is being unemployed or assisted. The important thing is not to work in the national, international or state-private sector, the critical thing for our children is to find a sustainable job within the framework of social protection.  

The second condition was a good preparation of a company X for privatisation, assuming transparent communication, as some executives and workers had heard the news in the press, which increased social tensions. Transparency is a fundamental condition for the acceptance of both the population and workers in the spirit of reforms linked to profound democratisation of society. The takeover of companies for executives and workers requires the creation of a risk bank to accompany them because they possess the technological, organisational and commercial know-how a hardcore of skills must constitute the basis of any reliable unit.  

The third condition will be to avoid filialisations that were not operating in the past—sticking with bureaucratic power, being the basis for the success of both the partial opening of capital and total privatisation, the wealth in the accounts being often undefining. Lack of an updated land registry poses the problem of the non-existence of reliable title deeds without which no transfer of ownership can be carried out. As there is an urgent need to have transparent real-time accountings of public, private companies, that meet international standards, all measures will be ineffective especially for stock market valuation the actual sale price varies from time to time.  

The fourth condition, time overlap of different institutions between selection, evaluations, tender notices, transfer to the stakeholders, then to the Government for the issuance of the final title of ownership would best be not arduous. It may discourage any takeover because mobile capital is invested only where economic and political obstacles are minimal. In this context, it is imperative that long bureaucratic circuits avoid a clearly defined synchronisation and that the current conflicting legal texts should be reviewed, which can lead to endless conflicts, hence the urgent need for their harmonisation with international law. Empowerment will need to be specified where it is necessary to determine who has it to request the undertaking of a privatisation operation. It is vital to prepare the transaction, to organise the selection of the purchaser, to authorise the conclusion of the transaction, to sign the relevant agreements and finally, to ensure that they are carried out correctly.

The four conditions for boosting the Algiers Stock Exchange 

In lethargy since its inception, the ASE was built up like a stadium without players through administrative injunctions, like all the loss-making state-owned enterprises.  

However, the revitalisation of the stock market implies three conditions

First,  the lifting of environmental constraints gives bureaucratic obstacles that cannot be a reliable purse without competition, avoiding legal instability referring to the rule of law.

Second, a stock exchange must be based on a renovated banking system. However, the Algerian financial system for decades has been the place par excellence for the distribution of the hydrocarbon rent and therefore a considerable challenge of power, and therefore the revitalisation of the stock market necessarily requires the overhaul of the financial system. Indeed, despite the number of private operators, we have a public economy with managed management, all activities whatever their nature feeding on budget flows, i.e. the very essence of financing is linked to the actual or supposed capacity of treasure. It can be considered that the banks in Algeria operate not from local market savings but by the recurrent advances from the Central Bank of Algeria that is refinanced by the public treasury in the form of reorganisation not only for the recent period but having to count the costs of restructuring between 1980/1990. This transformation is not in the scope of the company. However, it moves into the institutional field (distribution of the annuity hydrocarbons), and in this relationship, the Algerian financial system is passive. Bread 90% of these companies its returned to the starting box showing that it is not a question of capital money, real wealth can only assume the transformation of currency stock into capital stock, and there is the whole development problem. 

Thirdly, there can be no stock exchange without the resolution of all deeds circulating shares or bonds. The urgency of the integration of the informal sphere cannot be underestimated. Issuing title deeds is vital as there can be no reliable stock exchange without clear and transparent accounting modelled on international standards by generalising audits and analytical accounting in order to determine the cost centres for shareholders. This raises the problem of adapting a socio-educational system, which does not exist as financial engineering. The balance-of-payments services item with foreign exchange outflows between 2010/2019 is between $9/11 billion per year, in addition to foreign exchange outflows from import goods. There are a few rare exceptions; it turns out that accounts Algerian public and private companies from the most important to the simplest in the State that would not pass the most basic audits due diligence. For example, SONATRACH needs new strategic management like the majority of Algerian companies, with clear accounts in order to determine costs by sections, where we are witnessing the opacity of its management which is limited to delivering consolidated global accounts covering the essentials without distinguishing whether the surplus accumulated is due to exogenous factors, international prices or good internal management. As a primer, we propose partial privatisation of a few profitable national champions to initiate the movement to enable the establishment of a stock market index consisting of volume and quality, acting as incubators of companies eligible for the stock exchange and attracting investors looking for financing and know-how. 

The fourth condition is monetary stability and legal and monetary stability and the resolution of bad debts and debts, with state-owned banks crumbling under the weight of bad debts and the majority of state-owned enterprises in structural deficits, especially for the currency-denominated part involving transparent mechanisms in the event of exchange rate fluctuations. The simultaneous depreciation of the dinar against the Dollar, the main currency of exchange, does not respond to real values because their quotations are inversely proportional, has the essential aim of artificially filling the budget deficit, akin to an indirect tax. Indeed, on October 15, 2020, on the Stock Exchange, the Dollar is quoted at 1.2144 Euro, against 1.16 in June 2020, a depreciation of 5%, allowing a rise in the price of Brent by 5%. In reference to the June 2020 quote, the price of Brent quoted on December 15 at $50 would be $47.5 at constant prices, thus not having experienced a real increase in terms of purchasing power parity against the Euro and thus an increase in the import bill in euros in the same proportions. Thus, the current Government projecting for 2023 about 185 Dinar one Euro and 156 Dinars per Dollar and taking a 50% deviation from the parallel market we will have about 300 Dinars a minimum Euro in 2023 subject to the control of inflation otherwise the gap would be larger. They were compared to more than 200 Dinars in mid-December 2020 with a projection of 240/250 Euros at the end of 2021 in as to open borders and the inevitable increase in interest rates of the banks’ priorities to avoid their bankruptcies. In this case, it is illusory both to attract the savings of emigration via the banks that one wants to install with foreign exchange costs, as to capture the money capital via the informal sphere via Islamic finance. How do you want a trader with this monetary instability to appear on the stock exchange knowing that the value of the dinar will fall by at least 30% if not more in two to three years, depreciating its assets?.

In summary

The partial or total privatisation can be the process, with economic, social and political recompositions of power for a controlled liberalisation in order to avoid the squandering of public assets for the benefit of speculators interested mainly in real estate assets. It involves the transparency of specific objectives, the removal of bureaucratic obstacles, land, banks, the informal sphere, taxation, legal and monetary stability, essential criteria for any national investor.   

ademmebtoul@gmail.com

Energy from North Africa: H2 or HVDC?

Energy from North Africa: H2 or HVDC?

It has, in the recent past, been question of supplying Electricity from North Africa with notably the quickly miscarried project of Desertec. Could there be a revived or rebirth of the same or potentially the inception of the same? Would this explain the long and quiet convalescence of the Algerian president in Germany? In the meantime, kinimod in his WP page, wonders whether Energy from North Africa: h2 or hvdc?

(Image: BarneyElo, Pixabay)

The German energy demand is currently only covered to 17 % from renewable sources, albeit with an increasing tendency of half a percent per year (statista.de).

So 83 % are still missing for a complete decarbonization. The majority of this, namely 71 % of the total requirement, is currently covered by imports (weltenergierat.de). To do this, writes pv-magazine.de, we have to increase our photovoltaic area tenfold and our wind energy generation four times – a goal that many consider unattainable due to the acceptance problems of Germans.

One way out might be to import electricity and hydrogen on a large scale in the future instead of oil and gas. Then the gigantic solar fields would not cover German meadows, but Spanish, North African or Saudi Arabian desert areas, a win-win solution. Another advantage are supposedly the costs: since the capacity factor in Germany is only around 0.1, i.e. a 1 kW system only produces as much electricity in 10 hours as it would produce with one hour of full power, this factor in North Africa is 0.2 or higher (globalsolaratlas.com). For the same annual amount of energy, only half as much solar panel space is required, which is why solar power produced there costs only about half – or less. The countries there would have a slight additional income (which of course would increase the energy price again a little) and we would be rid of some of our energy worries.

There are roughly two paths for this solution:

  • Electrolytically produced hydrogen, that is either liquefied directly or converted to ammonia with atmospheric nitrogen and then liquefied – which requires slightly less complex transport ships. It can also be transported by pipeline.
  • Direct transmission of the solar power, perhaps buffered with storage for the hours after sunset, via HVDC lines.

What about the costs?

Renewable electricity is considerably cheaper in the MENA region (Middle East, North Africa) and southern Europe than here. In Portugal, solar power projects for 1.12 euro cents / kWh were agreed this year. In 2030, solar electricity costs are likely to be well below 1 c / kWh. In Germany, the electricity production costs for solar power are already below 4 c / kWh (solarify.de). In its position paper, the Federal Association of the New Energy Industry expects solar power production costs in Germany to be around 2.5 c / kWh, with storage adding another 1 ± 0.5 c.

Electricity can be transmitted with high voltage direct current (HVDC) lines over thousands of kilometers with little loss. In China there are some very long connections that bring wind power from the west to the industrial zones in the east. Starting in 2027, Singapore will receive a fifth of its electricity from a gigantic Australian solar field via the Suncable project – via a 3700 km long HVDC submarine cable. This electricity is supposed to cost 3.4 UScent / kWh. A storage facility in Australia will then still provide electricity in the evening hours (Forbes).

Generally, a 3000 km line adds 1.5 – 2.5 c / kWh to the electricity price (EIA study).

This means that the transport costs for MENA electricity are higher than the corresponding doubling of the German solar area (in 2030).

The cost of hydrogen consists of the cost of electricity, the cost of the electrolysis, which is mainly determined by the high investment for the electrolysers, and the transport costs.

For 2030 we can estimate electricity costs of 1 c / kWh for the south and 2.5 c / kWh for Germany. Storage costs of 1 c / kWh that may be reasonable are incurred everywhere.

The electrolyser costs in 2030 are given by Prognos as 2 – 8 c / kWh, in the EWI study with 1.5 – 2.4 c / kWh. They should be the same for all manufacturing regions.

According to the EWI study, the transport method is crucial for transport costs. If an existing pipeline can be rededicated and used for hydrogen, as is the case for southern Spain, they are low at around 0.4 c / kWh. However, if a ship has to be used, they rise to around 3 c / kWh because of the liquefaction required for this – or the conversion into ammonia and the subsequent liquefaction and the use of specialized ships.


With a little optimism we will end up with a hydrogen price of around 5 c/kWh for local production, around 4 c/kWh for southern Spain (pipeline transport) and around 6 c/kW for MENA production.

Electricity via HVDC would cost around 3.5 c/kWh, similar to the Sunline project, which roughly corresponds to the price for locally generated electricity.

Facit: Electricity from the south is not cheaper for us than local electricity because the electricity transport eats up the cost advantage. For H2 we can save a small cost advantage with pipeline transport if the pipeline already exists and only needs to be rededicated. In the case of ship transport, however, the hydrogen becomes considerably more expensive.

Since we will need a lot of electricity and also hydrogen for the decarbonisation of the economy, it may be necessary to obtain electricity, hydrogen or both from the south due to competition for land. Here, southern Spain is the cheapest export region, as both electricity and hydrogen transport infrastructure already exist. Electricity from North Africa would best be transported to Europe via HVDC and only converted into hydrogen there, because the transport costs for hydrogen by ship would be higher.

Globalisation may be decreasing . . .

Globalisation may be decreasing . . .

The first large-scale study of the risks that countries face from dependence on water, energy and land resources has found that globalisation may be decreasing, rather than increasing, the security of global supply chains. Here is the latest on the effects of the pandemic, in perhaps its most important aspect:

Globalized economy making water, energy and land insecurity worse: study

By the University of Cambridge.

globalisation
Credit: Pixabay/CC0 Public Domain

Countries meet their needs for goods and services through domestic production and international trade. As a result, countries place pressures on natural resources both within and beyond their borders.

Researchers from the University of Cambridge used macroeconomic data to quantify these pressures. They found that the vast majority of countries and industrial sectors are highly exposed both directly, via domestic production, and indirectly, via imports, to over-exploited and insecure water, energy and land resources. However, the researchers found that the greatest resource risk is due to international trade, mainly from remote countries.

The researchers are calling for an urgent enquiry into the scale and source of consumed goods and services, both in individual countries and globally, as economies seek to rebuild in the wake of COVID-19. Their study, published in the journal Global Environmental Change, also invites critical reflection on whether globalisation is compatible with achieving sustainable and resilient supply chains.

Over the past several decades, the worldwide economy has become highly interconnected through globalisation: it is now not uncommon for each component of a particular product to originate from a different country. Globalisation allows companies to make their products almost anywhere in the world in order to keep costs down.

Many mainstream economists argue this offers countries a source of competitive advantage and growth potential. However, many nations impose demands on already stressed resources in other countries in order to satisfy their own high levels of consumption.

This interconnectedness also increases the amount of risk at each step of a global supply chain. For example, the UK imports 50% of its food. A drought, flood or any severe weather event in another country puts these food imports at risk.

Now, the researchers have quantified the global water, land and energy use of189 countries and shown that countries which are highly dependent on trade are potentially more at risk from resource insecurity, especially as climate change continues to accelerate and severe weather events such as droughts and floods become more common.

“There has been plenty of research comparing countries in terms of their water, energy and land footprints, but what hasn’t been studied is the scale and source of their risks,” said Dr. Oliver Taherzadeh from Cambridge’s Department of Geography. “We found that the role of trade has been massively underplayed as a source of resource insecurity—it’s actually a bigger source of risk than domestic production.”

To date, resource use studies have been limited to certain regions or sectors, which prevents a systematic overview of resource pressures and their source. This study offers a flexible approach to examining pressures across the system at various geographical and sectoral scales.

“This type of analysis hasn’t been carried out for a large number of countries before,” said Taherzadeh. “By quantifying the pressures that our consumption places on water, energy and land resources in far-off corners of the world, we can also determine how much risk is built into our interconnected world.”

The authors of the study linked indices designed to capture insecure water, energy, and land resource use, to a global trade model in order to examine the scale and sources of national resource insecurity from domestic production and imports.

Countries with large economies, such as the US, China and Japan, are highly exposed to water shortages outside their borders due to their volume of international trade. However, many countries in sub-Saharan Africa, such as Kenya, actually face far less risk as they are not as heavily networked in the global economy and are relatively self-sufficient in food production.

In addition to country-level data, the researchers also examined the risks associated with specific sectors. Surprisingly, one of the sectors identified in Taherzadeh’s wider research that had the most high-risk water and land use—among the top 1% of nearly 15,000 sectors analysed—was dog and cat food manufacturing in the U.S., due to its high demand for animal products.

“COVID-19 has shown just how poorly-prepared governments and businesses are for a global crisis,” said Taherzadeh. “But however bad the direct and indirect consequences of COVID-19 have been, climate breakdown, biodiversity collapse and resource insecurity are far less predictable problems to manage—and the potential consequences are far more severe. If the ‘green economic recovery’ is to respond to these challenges, we need radically rethink the scale and source of consumption.”


Explore further Researchers examine food supply chain resiliency in the Pacific during COVID-19 pandemic

More information: Global Environmental ChangeDOI: 10.1016/j.gloenvcha.2020.102158

Provided by University of Cambridge 

United Arab Emirates to launch spacecraft to moon in 2024

United Arab Emirates to launch spacecraft to moon in 2024

AP — DUBAI reports that A top official in the United Arab Emirates said Tuesday his country plans to send an unmanned spacecraft to the moon in 2024. A successful mission to the moon would be a major step for the oil-dependent economy seeking a future in space. It sent its first astronaut to the International Space Station last year. The UAE also has set a goal to build a human colony on Mars by 2117. And there is a plan for The United Arab Emirates to launch spacecraft to moon in 2024.

___

Stars in its eyes, UAE celebrates its first astronaut in space

by Shatha Yaish

The picture above is that of A boy waves the Emirati flag in front of a picture of an astronaut outside Mohammed Bin Rashid Space Centre in Dubai ahead of the launch of a Soyuz MS-15 spacecraft in Kazakhstan carrying the first Arab astronaut to the ISS.

A crowd in Dubai erupted in cheers and applause Wednesday as the first astronaut from the United Arab Emirates launched towards the International Space Station, dubbing him a national hero.

Emiratis and school children gathered at the Mohammed Bin Rashid Space Centre as Hazzaa al-Mansoori, 35, blasted into space accompanied by Russia’s Oleg Skripochka and NASA astronaut Jessica Meir onboard a Soyuz rocket from Baikonur in Kazakhstan.

A former pilot in the UAE armed forces, he will be the first Emirati astronaut and the first Arab on the orbiting laboratory, but not the first Muslim.

Some people gathered at the Dubai centre carried UAE flags, while others were dressed in blue jumpsuits spelling out: “Future astronaut”.

Badriya al-Hamadi, 38, said she was so proud of the historical moment, adding: “I feel like I am the one going to space.”

According to Amer Al-Ghafri, of the Mohammed Bin Rashid Space Centre, Mansoori’s launch is only just the beginning of the UAE’s dreams of space exploration.

“There are a lot of ambitions and a lot more work,” he said.

Mansoori received support from around the world before lifting off on what he described as his “dream” mission.

He will spend eight days on the ISS, where he plans to conduct experiments.

The United Arab Emirates to launch spacecraft to moon in 2024
And there is a plan for The United Arab Emirates to launch spacecraft to moon in 2024Cheers erupted as the crowd in Dubai watched the Soyuz MS-15 spacecraft lift off from Baikonur Cosmodrome in Kazakhstan carrying 35-year-old Emirati astronaut Hazzaa al-Mansoori to spend eight days aboard the International Space Station
‘Next stop Mars’

Writing on Twitter before the launch, Mansoori said he was “filled with this indescribable feeling of glory and awe”.

“Today I carry the dreams and ambition of my country to a whole new dimension. May Allah grant me success in this mission,” he said.

A Koran, a UAE flag, pictures of his family, and a book by Ruler of Dubai Sheikh Mohammed bin Rashid Al-Maktoum were among the few things he was allowed to pack for his space adventure.

Dubai’s iconic Burj Khalifa, the world’s tallest skyscraper, lit up the moment of blast-off at 5:57pm local time (1357 GMT).

Sheikh Mohammed, also the UAE’s vice president and prime minister, vowed in 2017 to send four Emirati astronauts to the space station within five years.

“The arrival of Hazzaa al-Mansoori to space is a message to the Arab youth… that we can progress and move forward,” Sheikh Mohammed said on Twitter on Wednesday.

“Our next stop is Mars.”

The United Arab Emirates to launch spacecraft to moon in 2024
The UAE aims to become the first Arab nation to send an unmanned probe to orbit Mars by 2021, naming it ‘Hope’
Talent in the UAE

The astronaut programme would make the UAE one of only a handful of states in the Middle East to have sent a person into space, as it looks to make good on a pledge to become a global leader in space exploration.

The first Arab in outer space was Saudi Arabia’s Sultan bin Salman Al-Saud, who flew on a US shuttle mission in 1985.

Two years later, Syrian air force pilot Muhammed Faris spent a week aboard the Soviet Union’s Mir space station.

As part of its space plans, the UAE has also announced its aim to become the first Arab country to send an unmanned probe to orbit Mars by 2021, naming it “Hope”.

In the long-term, it says it is planning to build a “Science City” to replicate life on Mars and aims to create the first human settlement on the red planet by 2117.

But already, Emiratis believe they have shown the world what they can do.

“We have talent here in the UAE, and now the world will see that,” said Fatima Al-Ghurair at the Mohammed Bin Rashid Centre.