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Mideast vehicle sales

Mideast vehicle sales

The Middle East generally and the GCC in particular have diverse populations of nationals and residents with ratios spanning from 11% of Nationals for the UAE to Saudi Arabia’s 68%.   All these populations totalling about 50 million, or a good percent of them use cars for business and / or leisure and a plethora of makes and models is offered in response by the world’s automotive industry.  Mideast vehicle sales would according to the following article of TradeArabia be bound to reach in the near future heights unknown before.  Meanwhile, Best Selling Cars blog could shed some light on the range of preferences for each country. 

Toyota-Land-Cruiser-Bahrain-April-2016

Toyota  Land Cruiser Bahrain April 2016

Mideast vehicle sales ‘to hit 4.4m by 2020’

Total light Mideast vehicle sales in the region is likely to reach 4.4 million by 2020 as compared to the 2015 total of 3.2 million, said the organisers of an upcoming automotive aftermarket exhibition in Dubai, UAE, citing a report.

At the same time, the number of vehicles in operation on the region’s roads will rise from 34.8 million in 2015 to 44.5 million in 2020, according to an analysis from Frost & Sullivan, a growth partnership company.

This burgeoning growth is expected to drive up demand for parts and accessories, for which sales in 2020 is expected to reach $17.2 billion as compared to the 2015 total of $12.98 billion. This represents a projected pan-regional CAGR of 5.9 per cent.

Organised by Messe Frankfurt Middle East , Automechanika Dubai 2016, the Middle East and Africa’s largest automotive aftermarket exhibition, will run from May 7 to 9 at Dubai World Trade Centre.

The event will offer a platform business deal making and networking as well as a series of product launches.

The 14th edition of the trade and networking mega event that draws in the who’s who of the automotive industry from around the wider region and its hinterland, featured as many as 2,017 exhibitors from 58 countries, and attracted 30,018 visitors from 119 countries.

The robust participation by the international trade underlines the continued high interest in the region from global automotive players, who see the region as a key driver in their future business plans.

Targeting the fast-growing regional markets were a majority of the world’s leading brands who showcased their innovative automotive technologies across six product groups of Parts & Components; Electronics & Systems; Repair & Maintenance; Tyres & Batteries; Accessories & Tuning; and Service Station & Car Wash.

“The Middle East is now one of the world’s most significant automotive markets, thanks to higher income levels and a penchant for quality automobiles,” said Ahmed Pauwels, CEO of Messe Frankfurt Middle East.

“The advantages of maintaining a base in the region give companies the ability to better access and meet the needs of their regional customers.”

As the automotive aftermarket in the Middle East and Africa continues to post impressive growth rates, international auto aftermarket players are keen to be a part of this growth by increasing their footprint across the region.

A considerable number of leading aftermarket brands are either in the process of establishing their presence in the region or are considering doing so, thanks to the extremely positive business prospects emanating from the region, the organisers said.

– TradeArabia News Service

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Bridging global infrastructure gaps

Bridging global infrastructure gaps

The MENA is made of Oil and Gas (O&G) big exporting countries such as the GCC, non O&G exporters of the Mashrek and the small to medium exporters of the Maghreb.  Development of infrastructure has generally had a late start in all countries of the MENA until a decade ago where it is frantically gaining ground.  Especially in the GCC, where point in case, is the UAE, from roads, Railways to airports, to telecommunications, it has become home to world class facilities that have supported economic growth. Bridging global infrastructure gaps is one of the numerous handicaps that the MENA countries have first to live with and eventually cope with.

Here is a very short summary of the Status of the GCC’s.

An official person of the UAE was quoted as saying :

“If you want to have a strong economy, you have to have strong infrastructure.”

Dubai Metro

 

  • Roads

In effect, the UAE’s extensive road network not only connects all seven emirates but also links the UAE with neighbouring Oman. Qatar and Saudi Arabia.

  • Railways

Railways up until September 9, 2009 were inexistent in the GCC.

Dubai Metro was inaugurated ion that date and is the first urban train network in the GCC. Doha and Riyadh will soon have a network of their own.

The Etihad Rail project is set to bring rail transport to the entire country spearheading the whole of the GCC in deploying a network from Kuwait City to Muscat with a couple of loops midway of the track.   One is for Riyadh and the other for Doha via Manama.

  • Aviation

Aviation was one of the earliest drivers of non-oil economic growth in the UAE.  Today, the UAE is a global aviation hub.  Doha, Riyadh, Bahrain and Kuwait

  • Ports

The UAE’s unique location has favoured maritime activity to be centred at Dubai.  Port facilities all along the shores of the country, catering for general cargo, container shipping are of international standards.

The other countries of the MENA however are not in such luck but are not that behind the GCC.  The proposed article published today by McKinsey and Company give a fairly good summary of todate infrastructure development worldwide.  Here it is :

Bridging global infrastructure gaps

By Jonathan Woetzel, Nicklas Garemo, Jan Mischke, Martin Hjerpe, and Robert Palter

Global infrastructure systems are straining to meet demand, and the spending trajectory will lead to worsening gaps. But there are solutions to unlock financing and make the sector more productive.

The world today invests some $2.5 trillion a year on transportation, power, water, and telecommunications systems. Yet it’s not enough—and needs are only growing steeper. In a follow-up to its comprehensive 2013 report Infrastructure productivity: How to save $1 trillion a year, the McKinsey Global Institute finds that the world needs to invest an average of $3.3 trillion annually just to support currently expected rates of growth (exhibit). Emerging economies will account for some 60 percent of that need.

Despite glaring gaps and years of debate about the importance of shoring up backbone systems, infrastructure investment has actually declined as a share of GDP in 11 of the G20 economies since the global financial crisis. Cutbacks have occurred in the European Union, the United States, Russia, and Mexico. By contrast, Canada, Turkey, and South Africa increased investment.

If the current trajectory of underinvestment continues, the world will fall short by roughly 11 percent, or $350 billion a year. The size of the gap triples if the additional investment required to meet the new UN Sustainable Development Goals is included.

Would you like to learn more about the McKinsey Global Institute?

Years of chronic underinvestment in critical areas such as transportation, water treatment, and power grids are now catching up with countries around the world. If these gaps continue to grow, they could erode future growth potential and productivity. It is therefore critical to get finance flowing into urgently needed projects.

A great deal of attention has focused on connecting institutional investors with projects that need their capital as well as creating an expanded role for public-private partnerships. But the vast majority of infrastructure will likely continue to be financed by the public and corporate sectors.

Even in the face of fiscal concerns, there is substantial scope to increase public infrastructure investment. Governments can increase funding streams by raising user charges, capturing property value, or selling existing assets and recycling the proceeds for new infrastructure. In addition, public accounting standards could be brought in line with corporate accounting so infrastructure assets are depreciated over their life cycle rather than immediately adding to deficits during construction. This change could reduce pro-cyclical public investment behavior.

Corporate finance makes up about three-quarters of private finance. Unleashing investment in privatized sectors requires regulatory certainty and the ability to charge prices that produce an acceptable risk-adjusted return, as well as enablers like spectrum or land access, permits, and approvals.

 

 

Le Qatar et l’Algérie se rapprochent

Le Qatar et l’Algérie se rapprochent

Le Qatar et l’Algérie se rapprochent comme l’Observatoire du Qatar rapporte que “Le ministre algérien de l’Industrie et des Mines, Abdesselam Bouchouareb, a effectué une visite à Doha, les 24 et 25 mai 2016, à l’invitation du ministre qatari de l’Energie et de l’Industrie, Mohamed Bensalah Al-Sada.  Cette visite a permis de faire le point sur les différents projets industriels Qataris en Algérie mais aussi de discuter des perspectives de partenariat à long terme.

Q & DZ meet

Cette rencontre économique entre Algérie & le Qatar s’inscrit dans le cadre de la redynamisation des relations de coopération entre les deux pays, principalement dans le domaine de l’énergie et de l’industrie.

Un temps ralenti par des considérations politiques antagonistes, notamment au début des Printemps Arabes qu’Alger regardait avec suspicion, ce partenariat semble aujourd’hui résolument relancé.

A titre d’illustration de ce renouveau, on peut citer le complexe sidérurgique de Bellara, ce projet dont la première pierre de réalisation avait été déposée en mars 2015 avec un coût de réalisation de 2 milliards de dollars, est le plus important projet d’investissement commun entre l’Algérie et le Qatar. Il va permettre la création de plus de 1 500 emplois directs et 15 000 indirects et répondre aux besoins croissants du marché national en matière de sidérurgie. Le capital social de ce complexe est détenu à hauteur de 51% par l’entreprise publique Sider et le Fonds national d’investissement (FNI), et à 49% par Qatar international (joint-venture entre Qatar Steel et Qatar mining). Le projet devrait à l’horizon 2019 produire 5 millions de tonnes d’acier par an. L’objectif est de faire face à une demande nationale en constante augmentation en produits sidérurgiques.

Ce complexe contribuera à la réduction de la facture d’importation des produits d’aciérie qui est estimée à 10 milliards de dollars par an, soit 20% du total des importations algériennes. Son intérêt stratégique est important puisque la réduction de la dépendance de l’étranger pour des produits de nécessité est un des objectifs centraux des décideurs à Alger.

L’entente entre les deux pays ne s’arrête pas à ce secteur. Ils sont en effet liés par divers accords commerciaux dont unmémorandum d’entente portant sur des investissements dans l’immobilier et le tourisme. Celui-ci avait été signé en 2015 entre l’Agence nationale de développement du tourisme (ANDT) et le groupe qatari Diar.

Bien que l’Algérie et le Qatar entretiennent une vision opposée sur certains dossiers sensibles en matière de politique étrangère (notamment sur la Libye et la Syrie), il est désormais clair que le pragmatisme économique adopté de part et d’autre l’a emporté sur les considérations diplomatiques. L’Algérie, malgré sa fragilité sociale et sa crise de gouvernance mais présentant de solides atouts comme un positionnement économique idéal, est en passe de devenir une destination de choix des investissements qataris.”

Challenges and opportunities for the Middle East of 2016

Challenges and opportunities for the Middle East of 2016

Economic Outlook for the Middle East

The Economic Commentary  of the Qatar National Bank dated May 1st 2016 deals with the Challenges and opportunities for the Middle East of 2016. The piece is here reproduced integrally:

“The International Monetary Fund (IMF) released its economic outlook for the Middle East on April 25. Overall, the IMF expects growth in the region to accelerate to 3.1% in 2016 from 2.5% in 2015. But the aggregate number hides some underlying disparities. While the IMF expects growth among oil exporters to rise, this mostly reflects higher oil production from Iran and Iraq. Excluding this, growth in oil exporting countries is projected to slow due to lower oil prices. Meanwhile, the IMF forecasts growth in oil importing countries to fall as the negative effects of fiscal consolidation offset the positive impact of lower oil prices.

Real GDP growth in the Middle East (% year-on-year) Sources: IMF forecasts The Middle East oil exporting countries are expected to grow by 2.9% in 2016, up from 1.9% in 2015, according to the IMF. The acceleration is mostly due to higher oil production in Iran (following the lifting of sanctions) and Iraq. Within this group of countries, the IMF projects growth in the Gulf Cooperation Council (GCC) countries to slow to 1.8% in 2016 from 3.3% in 2015. This is a result of the sharp decline in oil prices, which are hitting government revenues. As a result, the IMF expects the total fiscal deficit among oil exporters to reach 11.6% of GDP in 2016. The deterioration of fiscal balances is leading to spending cuts, which in turn leads to slower growth. The fall in oil prices has triggered policy measures among oil exporters to maintain fiscal sustainability.

  • First, spending cuts have taken place across a number of countries. In some countries capital spending has been shielded and the rationalisation of expenditure has focused more on current spending.
  • Second, subsidies have been reduced with further reductions expected in the coming years.
  • Third, initiatives to generate new sources of revenue away from hydrocarbons have taken place in some countries. In particular, the GCC is planning to introduce a value-added tax in the coming years.
  • Fourth, plans to privatise some state-owned companies could generate revenues for governments and increase transparency and efficiency of these companies.

For oil-importing countries, the IMF expects growth to slow to 3.5% in 2016 from 3.8% in 2015. The slowdown is expected to occur despite lower oil prices, which should benefit these countries by reducing the cost of their imports and freeing up some income for consumers to spend on other items. But the pass-through of lower international oil prices to consumers has not been full as parts of the benefits have been saved by the government through energy subsidy removals. This has limited the upside from the fall in oil prices. In addition, the fiscal consolidation taking place in most of these countries is expected to be a drag on growth. Indeed, the IMF expects the overall fiscal deficit among oil importers to decline from 7.3% of GDP in 2015 to 6.6% in 2016.

Oil importing countries also face a set of medium-term challenges.

  • First, public debt ratios are quite high (in excess of 90% of GDP in some countries) and could threaten fiscal sustainability.
  • Second, oil importers still have significant external imbalances to correct. The overall current account deficit is expected to be around 4.5% of GDP in the medium term, posing devaluation risks and consequently higher inflation.
  • Third, some oil-importing countries face the spill-overs from regional conflicts, including an influx of refugees, which have put a strain on their public services.
  • Finally, lower oil prices—while generally positive for these countries—can have their downside too, as they reduce potential support and remittances from oil exporters. Overall, the whole region is facing a number of common challenges.

Fiscal consolidation is required across the board, but needs to be phased in appropriately to minimise the adverse impact on growth. Innovative policies to generate growth and create jobs for a generally young and growing population are also needed. But these challenges present opportunities to create a more sustainable model of growth in the future, based on innovation and productivity improvement.”

 

 

GCC’s Expatriates Remittances Tax

GCC’s Expatriates Remittances Tax

Representatives to discuss tax on expat remittances . . .

Arab News 2016  reported that the Consultative (Shoura) Council of Saudi Arabia was expected to have a discussion last Sunday on a proposed tax on expatriate remittances.  The proposal from the Council’s finance committee had been drafted by a member of the committee, according to the above mentioned local media.  This comes in the wake of discussion in all GCC’s Expatriates Remittances Tax.

According to a Gulf Research Centre report released earlier this year, GCC countries are critical sources of global remittances, transferring billions of Dollars to mostly Asian countries.

The GCC countries were about 23% of the world’s $400 billion remittances in 2013 coming from the GCC region, representing nearly $90 billion, making Saudi Arabia the leading remitter not only in the GCC but also in the world.

This comes in the wake of discussions held in all GCC countries on this issue with some GCC countries are actively considering some taxation on expatriates remittances.

A GCC-wide VAT could be in place soon after the 6 countries have adopted a draft framework.  In the meantime, the UAE has already announced a 5% VAT as of 2018 with other GCC countries following shortly.

In the wake of the global oil price fall, all GCC countries are experiencing a decline in state revenues that they are trying to mitigate through finding other sources of income.

This week, Saudi Arabia unveiled its ‘Vision 2030’ plan that includes exploring new revenue streams with a view to breaking its dependency on hydrocarbon semi-annuity type of economy.  It is planning to adopt the path-breaking ‘Green Card’ but only in 5 years’ time.

Other topics that are being debated in Saudi Arabia include the annual performance reports of a number of government agencies.  Also under discussion will be other topics that include topics on water, agriculture, and environment particularly concerning the new water and power tariff.

The council’s health committee’s report on regulations concerning pharmaceutical facilities, private health facilities, and health care professions were on the agenda with a particular look at those reports to be scrutinized as included in the Human Resources Development Fund submitted by the committee on management and human resources; the report of the committee on transportation, telecommunications, and information technology on the General Authority for Civil, and the committee on economy and energy report on the Ministry of Petroleum and Minerals.  We shall report on the outcome as soon as it is available.

 

 

FIFA enquête sur les travailleurs migrants du Qatar

FIFA enquête sur les travailleurs migrants du Qatar

Ultimatum de 12 mois au Qatar . . .

La FIFA enquête sur les travailleurs migrants du Qatar et pourrait remettre en question l’organisation de la Coupe du Monde 2022 au Qatar si son dossier sur le traitement des travailleurs migrants ne s’améliore pas dans un délai de 12 mois. L’Observatoire du Qatar rapporte que John Ruggie, professeur à l’université d’Harvard, a rédigé un rapport indépendant commandé par l’organe du football mondial qui présente les réformes de grande ampleur en matière de droits humains auxquelles l’émirat doit se soumettre.

La publication de ce rapport de 42 pages met en lumière de graves déficits sur la politique et les pratiques de la FIFA en matière de gouvernance mais aussi son indifférence face aux atteintes des droits de l’homme au Qatar. Il indique que la FIFA a « un long chemin à parcourir » pour que soit respecté son « engagement initial en matière de droits humains ».

Ce rapport rappelle que l’Organisation internationale du Travail (OIT) a récemment donné au Qatar un délai de 12 mois pour mettre fin à l’exploitation des travailleurs migrants. Faute de quoi, le pays fera l’objet d’une commission d’enquête en mars 2017. Près d’un siècle après la naissance de l’OIT, cette procédure n’a été appliquée que 13 fois et dans des cas de manquements graves aux droits des travailleurs.  

Amnesty International a de son côté réagi au rapport Ruggie en ces termes : « les travailleurs migrants au Qatar ne peuvent plus attendre. Ils ont besoin maintenant d’une protection de leurs droits humains ». L’organisation de défense des droits de l’homme ajoute que « la FIFA pratique la politique de l’autruche en ce qui concerne les abus commis au Qatar depuis plus de cinq ans. Elle préfère déclarer à la face du monde que les autorités qatariennes vont régler les problèmes. Il n’en est rien, et à présent seule une action concertée de la FIFA visant à empêcher les abus sur les sites de la Coupe du monde permettra de sauver l’âme de la Coupe du monde Qatar 2022 ».

Le 31 mars dernier, Amnesty International a rendu public un rapport exposant des abus commis contre des ouvriers des chantiers de construction du Khalifa international stadium à Doha.  La FIFA a réagi avec une certaine indifférence face à ces abus, qui, dans certains cas, relevaient « du travail forcé». Le rapport est basé sur des entretiens réalisés entre février 2015 et février 2016 auprès de 234 travailleurs migrants venus principalement du Bangladesh, d’Inde et du Népal qui constituent les plus gros contingents de la force ouvrière nationale. Le rapport révèle que 228 personnes ont assuré que leurs salaires étaient inférieurs à ce qu’on leur avait promis avant de partir dans l’émirat et que d’autres ouvriers ont pâti de retard de paiement de leurs salaires de plusieurs mois. La plupart des travailleurs ont en outre vu leurs passeports confisqués et ce, en violation de la loi qatarie, précise encore Amnesty.

Devant l’émoi suscité auprès des médias internationaux suite à ces nouvelles révélations, le travail de l’ONG est susceptible de provoquer encore plus de controverses et de critiques envers le Qatar et de mettre la pression sur la FIFA. En conclusion de leur propos, les rédacteurs accusent en effet l’organisation gérante du football mondial d’un« manque d’action significative ».