The UAE, Saudi Arabia, Bahrain and Egypt have agreed to fully restore ties with Qatar. The four countries signed an accord with Qatar during the 41st Summit of GCC Leaders, bringing an end to the regional impasse.
Budgets for 2021 were revealed across UAE’s Emirates: Dubai unveiled this year’s budget with spending at AED 57.1bn (with salary and wage allowances accounting for 35% of total and security, justice and safety at 22%) and revenues at AED 52.31bn (tax revenues at 31% of total). Sharjah announced AED 33.6bn budget for this year, up 12% versus 2020, with 43% of the budget allocated for developing and improving infrastructure in the Emirate. Ajman revealed a zero-deficit AED 2.066bn budget with economic affairs accounting for 40% and public services for 22%.
Economic growth in Dubai declined by 10.8% in H1 2020 and is estimated to contract by 6.2% for the full year, according to the Dubai Statistics Centre. This year, growth is forecast to rebound to 4%. Population in Dubai meanwhile inched up by 1.6% YoY and 0.23% MoM to 3.411mn by the end of Q4 2020.
Remittances from the UAE fell by 7.7% YoY to AED 40.1bn in Q3 2020, with India (30.8%), Pakistan (11%) and Egypt (6.5%) the top three destinations. In YoY terms, remittances to India dropped by 27.8% while those to Pakistan and Egypt inched up by 1.6% and 1.4% respectively.
Fuel prices in the UAE remain unchanged for the 10th consecutive month in January.
Registered companies in the Abu Dhabi Global Market increased by 43% YoY to 3211 by the end of 2020.
UAE’s Etihad Credit Insurance and India’s Export Credit Guarantee Corporation signed an agreement to promote bilateral trade: facilitating market access for SMEs and exploring insurance, reinsurance and co-insurance services for the export of goods in a 3rd country some of the opportunities being explored.
Dubai, which rolled out the Pfizer-BioNTech’s COVID-19 vaccine from 23rd December, expects to inoculate 70% of its population by the end of 2021.
An estimated 545k passengers are expected to use the Dubai International Airport between 1st to 7th January, with 2nd to 3rd January likely to see 78k departing passengers.
Egypt’s Minister of Petroleum stated that nine new oil and gas exploration agreements worth USD 1bn (for drilling 17 wells) were signed with local and international companies. Separately, the Ministry revealed that total consumption of oil and gas declined by 5.9% YoY to 71.3mn tonnes of oil equivalent in 2020, with the electricity sector accounting for 60.4% of total natural gas consumption.
Egypt is expected to receive the final tranche of financial assistance from a group of Chinese banks to fund the New Administrative Capital’s business district: while the size and timeline of the credit facility remain undisclosed, the second tranche signed last year stood at USD 3bn.
Self-sufficiency & food security: Egypt achieved self-sufficiency in rice in 2020 with the production of 6.5mn tonnes and plans to reach self-sufficiency in sugar production by the end of 2021; the country also has strategic wheat reserves sufficient for 5.5 months.
Given arrears of over USD 6bn, Iran’s state gas company stated earlier last week that it had reduced supplies to neighbouring Iraq from 50mn cubic meters per day (cm/d) to 5mn cm/d, threatening electricity shortages in the latter. Later in the week, an agreement led to resumption of Iranian gas pumping: part of the energy debt will be paid in the form of goods and Iran will use money from energy exports to Iraq to buy COVID-19 vaccine from Europe.
Kuwait resumed its commercial flight operations from Saturday (2nd January) while continuing its travel ban on 32 high-risk countries. Arriving passengers need to present a 96-hour prior negative test and self-isolate for 14 days. Separately, Kuwait aims to vaccinate 80% of its population by September 2021 after an inoculation campaign started in the second-last week of December.
In its latest reform move, Oman removed the requirement to obtain a NOC (No Objection Certificate) while changing jobs. An expatriate on a resident visa may be transferred from one employer to another by providing evidence of either expiry of the contract or termination of the employment contract.
The expatriate population in Oman fell by nearly 16% (by more than 270k from the end of 2019) to 1.44mn as of the end of November. About 340k had left in 2010, in the aftermath of the financial crisis.
Saudi Arabia announced the discovery of 4 oil and gas fields: this includes 4,452 barrels of unconventional Arab extra light sweet oil and 3.2mn standard cubic feet of gas at a well in Al Reesh oil field, a well test showing a daily production rate of 3,850 barrels per day at Al Ajramiyah, in addition to non-conventional gas at the Al Minahhaz and al-Sahbaa well.
Saudi Arabia’s PIF established a company named National Security Services Co (SAFE) to develop and expand the private security sector. The company will focus on providing security consulting services, integrated security solutions, training and development programs as well as command and control centers. Separately, Saudi Arabian Military Industries (a PIF subsidiary) announced Saudi Arabia’s largest ever private military industry deal, purchasing the Advanced Electronics Company (expected to be completed in Q1 2020 after regulatory approvals) – a defense, energy, ICT, and security services company.
Saudi Arabia launched a digital economy policy focusing on 7 guiding principles: access encompassing digital infrastructure, data and platforms, technology adoption, innovation, human capital, social prosperity and inclusion, trust in the digital ecosystem, and open markets.
Saudi Arabia aims to import over 3mn doses of the Pfizer COVID-19 vaccine by the end of May, with 1mn doses arriving by the end of February.
US equities closed on a high note last year (S&P 500 up more than 16% and Nasdaq more than 40%), as did China (+27% gain), while not surprisingly, UK’s FTSE 100 index had the worst annual performance since 2008. Regional markets were mixed: Saudi and Qatar equity markets posted modest annual gains while Egypt declined the most (-22.3%). Among currencies, dollar fell almost 7% versus a basket of currencies – the biggest drop since 2017 – while the pound, euro and yen gained. Oil rebounded to USD 51 last week, though ended almost 20% lower vis-à-vis 2019 while gold price was up more than 24% – the best annual performance since 2010.
2020 ended on a brighter note with the COVID-19 vaccines being rolled out across the globe, but inoculations are happening at a faster pace in some nations than the rest. This is happening alongside a surge in COVID-19 cases (given the new variants and holiday season) and extensions of restrictions/ lockdowns: seems a probable scenario till herd immunity is achieved with widespread vaccinations.
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