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Ed Webb

Black Box: Military Budgets in the Arab World - POMED - 0 views

pomed.org/tary-budgets-in-the-arab-world

Arabs ArabWorld military spending economy budget transparency

shared by Ed Webb on 13 May 20 - Cached
  • As the double whammy of the pandemic and the collapse in oil prices slams Middle Eastern economies, the International Monetary Fund (IMF) and the World Bank are already providing several Arab governments with billions of dollars in emergency financing and anticipate requests from others. Many Arab states are especially vulnerable to such external shocks because of long-standing economic mismanagement, often exacerbated by exorbitant military spending.
  • The Stockholm International Peace Research Institute (SIPRI) laments that many Arab governments lack any semblance of transparency in their military budgets, making it impossible to know or even estimate the region’s defense expenditures. Among other problems, this opacity makes it difficult for international financial institutions (IFIs) to factor Arab defense budgets into the requirements for adjusting public spending that normally accompany their support.
  • only four Arab countries—Jordan, Kuwait, Morocco, and Tunisia—have made all of their military spending data public over the past five years. While it is expected that war-ravaged countries such as Yemen or Libya would have trouble producing a full accounting, other states have the capacity but simply choose not to release the information.
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  • While we may not know exactly how much Arab regimes spend on their militaries, we do know that they are among the world’s leading importers of arms—an industry rife with corruption—and the largest recipients of military aid. As SIPRI has documented, six of the top 10 importers of major arms were Arab countries, totaling nearly one-third of all global imports ($146 billion) between 2015 and 2019. In 2017—the last year for which full data are available—four of the top 10 purchasers of U.S. arms were Arab countries, and nearly one-third of all U.S. weapons sales ($36.6 billion), along with roughly $5 billion in U.S. security aid, went to Arab regimes.
  • When IFIs provide assistance, even emergency aid, to Arab governments, they should condition the funds on transparent budgets, including a full accounting of military expenditures
Ed Webb

Is Oman's model of governance about to shift? - 0 views

www.al-monitor.com/...ft-oil-prices-coronavirus.html

Oman economy GCC rentierism reform pandemics oil energy policy

shared by Ed Webb on 10 Apr 20 - Cached
  • Like other Gulf states, Oman does not grant citizens freedom of expression or the right to choose their leader, but it does provide citizens a range of material advantages: public sector jobs, subsidies, free health care and education, a free plot of land, a pension and no income tax.
  • Oman’s public debt has skyrocketed since oil prices declined in 2014, going from less than 5% of Oman's gross domestic product to nearly 60% last year. Until 2023, annual budgets were already expected to be in the red. But the 2020 fiscal deficit is expected to be four times higher than previously forecasted because of the double shock of the COVID-19 pandemic and plunging oil prices, credit rating agency Fitch estimated.
  • the cash-strapped Omani government is expected to cut down on public expenditures and impose austerity measures. But such a move would revamp the model of governance that has prevailed since the late Qaboos bin Said ascended to the throne in 1970
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  • Public taxation is also increasing. A sin tax was implemented in June 2019 on products like sugary carbonated drinks and tobacco, and a serially delayed 5% value-added tax is expected in 2021. According to Salmi, electricity and water subsidies could soon be slashed and, in the long term, Omanis could see an income tax.
  • Above all, reforming the labor market — an unpopular move — would be the cornerstone of a post-Qaboos welfare state. About 43% of Omanis work for public entities. Abousleiman recommended economic diversification to foster private sector job creation and to further "relieve the expectations on the government to provide employment."
  • Following a field visit to Oman in 2019, the International Monetary Fund (IMF) suggested that the wages and benefits of the private sector need to align more closely with the public sector to make employment in the former more appealing.
  • Omanis who talked to Al-Monitor, as well as Mukhaini, believe any upcoming austerity measures "should not make the poor poorer and the rich richer," Mukhaini said.
  • According to rating firm S&P, the new ruler will face “a difficult trade-off” in the coming months to address high unemployment among youths, weak growth, and fiscal and funding pressures
  • Defense and security expenses account for over a quarter of Oman's annual budge
  • Oman — rated junk by the three major rating agencies — has several other options to fund its short-term ballooning deficit: Go further into debt; deplete its sovereign wealth fund; sell state assets; devalue its currency; and seek assistance from neighboring countries or international organizations.
  • Analysts believe Oman should build a model of governance tailored to the post-oil era. Along with a more stringent budget environment, the new leadership pledged to implement structural reforms to diversify the rentier economy and foster private sector-led growth.
  • To ensure political and social stability, Sultan Qaboos avoided controversial measures that could have triggered short-term political unrest
  • In 2011, at the height of the Arab uprisings, Sultan Qaboos promised to create 50,000 jobs and institute unemployment benefits in an attempt to defuse unprecedented nationwide protests.
  • the lack of economic reforms did not stop Omanis from loving the monarch, who built a modern state out of a medieval-like society he inherited in the early 1970s
  • Sultan Haitham bin Tariq "is already planting the seeds by cutting the royal expenditures tremendously,"
  • The relationship between state and society that Omanis have known for decades will likely never be the same
Ed Webb

IRGC media producers open new front against Rouhani - 0 views

www.al-monitor.com/...ducers-landscape-avant-tv.html

Iran politics media propaganda IRGC

shared by Ed Webb on 05 Jan 18 - No Cached
  • The Avant TV video, released on social media five days after protests erupted in Iran, which have thus far spread to dozens of cities and almost every province, carefully stitches together an emotional array of interviews of people unhappy with the economic situation and President Hassan Rouhani’s policies. With scarce public information available about Avant TV, and with the great pains its producers have taken to present it as an independent station, the video is intended to appear to be transparent, a true representation of the will of the Iranian people. Glaringly absent from the video are any criticism of the political establishment as a whole, which has been one of the main themes of the current demonstrations. Avant TV is in fact not independent at all. Al-Monitor has not been able to contact it, but two pro-regime media producers confirmed that it is only the latest example of a new media outlet backed by the Islamic Revolutionary Guard Corps (IRGC) seeking to reinforce the narrative of the supreme leader above the politics of Iran.
  • Avant TV stems from the media wars at the heart of political factionalism both inside and outside Iran
  • The tactic that producers developed was to move away from content solely made for state television — which potential audiences almost automatically consider regime propaganda — to creating small production studios that develop content not easily identifiable as pro-regime. These ad hoc production studios receive funding from the IRGC and the government's cultural budget, but they remain small and unidentifiable on purpose.
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  • In revealing new details of his budget bill, Rouhani named, for the first time, the variety of state institutions, including cultural centers, that have received enormous funds and unconditional support from the regime. He attributed the move to a desire for transparency and an attempt to curtail corrupt use of state funds. The reaction on Iranian social media and in the local press was quick and harsh. People began attacking conservative and hard-line centers and clerics for taking so much from government coffers. “We couldn’t allow him to cut off our lifeline,” a producer at the regime production studios said after Rouhani revealed his new budget. “He and his supporters want to silence us by taking away our funding. But we will not be silenced. We will show him that people don’t agree with him.”
  • The protests that began on Dec. 28 in Mashhad were a response to Rouhani from hard-liners for his remarks on the budget as well as his other attempts to curtail hard-line forces. Much of the analysis on the reasons behind the sudden outpouring of protests points to its origin in hard-liners' attempts to organize anti-Rouhani rallies in the lead-up to the annual pro-regime 9 Dey rally, established by the supreme leader in 2009 to celebrate the suppression of the Green Movement. Indeed, Mashhad is notably home to two of Rouhani’s main rivals in the 2017 presidential elections, Ebrahim Raisi and Mohammad Bagher Ghalibaf. The intent was for the protests to culminate in a large 9 Dey rally, but despite the hard-liners’ intentions, once people went into the streets, they eventually began to chant slogans against the supreme leader and the regime as a whole.
  • Regime production studios have thus begun to create videos that highlight economic anxieties and attack Rouhani’s handling of the government. These slick new productions are meant to look critical, but in the end, they reinforce a belief in the virtues and the leadership of the supreme leader, Ayatollah Ali Khamenei. Avant TV is only the latest example of the ways in which factionalism within the Islamic Republic and opposition to the regime play out in the media landscape.
Ed Webb

International Report Shows Poor Budget Transparency in Tunisia - Tunisia Live : Tunisia... - 1 views

www.tunisia-live.net/...budget-transparency-in-tunisia

Tunisia budget economy transparency

shared by Ed Webb on 04 Feb 13 - No Cached
  • Ed Webb on 04 Feb 13
     
    Patrimonialism dies hard, it appears.
Ed Webb

ANALYSIS: Egypt's military-economic empire - 0 views

www.middleeasteye.net/...itary-economic-empire-35257665

Egypt military military-industrial_complex economy business analysis corruption

shared by Ed Webb on 27 Mar 16 - No Cached
  • The roots of the military’s commercial empire go back to the 1980s, when a combination of a peace dividend after Egypt’s 1979 peace treaty with Israel and a fiscal crisis led the country to pare back its defence budget. Defence spending as a proportion of GDP fell from 6.5 percent in 1988 to 1.8 percent in 2012, according to World Bank indicators. The armed forces had to find new sources of revenue.
  • forced labour, in the form of conscripts, is almost certainly used in army-run factories. Quite apart from the ethical ramifications of this, it allows the military to undercut its competitors, since conscripts don’t have to be paid full wages
  • Businesses controlled by the military are widely dispersed. Some may come under a number of umbrella organisations, including the Arab Organisation for Industrialisation, the National Services Projects Organisation (NSPO) and the Ministry of Military Production. In addition, the EAF holds majority or minority stakes in many other semi-public or private companies, especially in the fields of infrastructure and subcontracting. EAF influence also extends to “sensitive” but nominally civilian infrastructure. Senior positions at a number of airports have for some years been reserved for retired army officers, as a sort of unofficial “pension programme.”
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  • the EAF is able, through the use of land designations and other means, to control much of the public lands (desert, agricultural and urban) that comprise 94 percent of Egypt’s area, through the use of land designations, the ability to auction such lands and to receive compensation from the state treasury when military zones are rezoned to civilian purposes. The army also controls the coastline (officially classed as border territory) and is thus able to profit from tourist developments. As such, the EAF wields enormous influence over the real estate market and the country’s development structure
  • Estimates as to how much of the total economy is controlled by the EAF range from 40 percent, according to telecoms billionaire Naguib Sawiris (in comments to local media last March) to somewhere between 45 percent and 60 percent, according to Transparency International
  • the consensus among those asked by Middle East Eye as to the size of the military-economic complex is that the EAF’s reach extends into virtually every economic sector, from foodstuffs like tomato paste and olive oil, to consumer electronics to real estate, construction, transport and services
  • since the military’s budget - and by extension, its economic fiefdom – is kept secret, EAF-controlled businesses can benefit from subsidies that are kept off the books, as well as having more freedom of manoeuvre amid the lack of oversight.  One example was the decision under the Supreme Council of the Armed Forces to slash fuel subsidies for industrialists. Since the military’s budget (and therefore, its energy costs) are off the books, the rising energy prices disproportionately affected EAF competitors, but not the forces themselves
  • military involvement in the political economy generally leads to worse performance. Within the region, the examples of Iran and Algeria point to this, while China has taken steps to reduce its armed forces’ commercial exposure over the past few years precisely for this reason
  • A further effect of the EAF’s economic dominance is a lack of growth opportunities for SMEs, since only favoured insiders can win lucrative contracts and deal with the permit system. In turn, this leads to a large informal economy of insiders, leaving many Egyptians outside, in poverty
  • While patronage is nothing new in Egyptian politics, since President Abdel Fattah el-Sisi came to power the top brass has expanded intra-military patronage to the extent that they are crowding out other economic actors and failing to bring in key constituencies such as opposition groups, the private sector bourgeoisie and the urban poor. The EAF has expanded its reach so fast that now it has to defend its empire against these groups, sowing seeds of further strife in future.
Ed Webb

Poverty in Iraq grows as budgets squeezed by war with IS | Middle East Eye - 0 views

www.middleeasteye.net/...aq-promised-reforms-1887217637

Iraq economy corruption ISIS war

shared by Ed Webb on 25 Sep 15 - No Cached
  • The paralysis of the Iraqi economy, the sharp decline in oil prices, the unlimited spending on the war against IS, in addition to the absence of strategic planning and the rampant financial and administrative corruption since 2003, has left the Iraqi treasury nearly empty. The county, officials say, has poverty levels that are unseen since a poverty reduction plan was put in place five years ago
  • On a weekly basis, demonstrators have protested to highlight not only the serious lack of the basic services in the country, but also the financial and administrative corruption widespread across government departments and ministries which they believe has caused the problems.
  • The impact of the oil prices' falling will affect the 2016 annual budget and the government plans to cover the country’s operational budget only, stopping all investments and spending on infrastructure projects
Ed Webb

Egypt's army controls much of the economy. Is this wise? | Middle East Eye - 0 views

www.middleeasteye.net/...tary-controls-countrys-economy

Egypt military economy Sisi infrastructure

shared by Ed Webb on 02 Dec 19 - Cached
  • the Egyptian military has been allowed to engage in economic activities as a way of reducing the official defence budget. The military economy also allows senior officers to be compensated for low pay and pensions, by giving them the opportunity to acquire extra income and fringe benefits. The overall volume of such economic activities was relatively modest until 2011, when former President Hosni Mubarak was forced out of power.
  • Abdel Fattah al-Sisi, a former general who became president in 2014, has relied on the military to take over major management roles in the civilian economy
  • this approach overlooks the real structural problems in the Egyptian economy, including low productivity, low investment in all sectors except for energy and real estate, and low value-added, especially in technology-dependent sectors
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  • The military started by working on land reclamation - turning deserts into arable land. In the late 1970s, the army led the way in reconstructing cities and infrastructure along the Suez Canal that had been damaged severely during the war with Israel.
  • The military now manages approximately a quarter of total government spending in housing and public infrastructure
  • the problem here is that the military’s powerful political position means it doesn’t really have to account for genuine cost-effectiveness; the real problems are being kicked down the road.
  • He doesn’t understand how the economy works, how to get it going, how to generate jobs and growth, or how to increase revenue in a sustainable way. But the military is following orders. If he tells them to go build a new city in the sand somewhere, that is what happens.
  • The economic consequences are increasingly negative, because Egypt is borrowing heavily to fund these projects.
  • The military’s main advantage is political influence. It has officers placed throughout the state apparatus who help get contracts. These officers also dominate the government’s main audit agency, which is instructed to inspect civilians to prevent corruption.
  • Until the 2013 takeover, the military’s economic activities functioned to keep the senior officer corps happy and loyal to the president, by allowing them perks. Sisi, however, has made a different calculation. He is looking to reinforce the political legitimacy of his regime domestically, and to show Western governments and foreign investors that Egypt means business. He wants to demonstrate credibility. He’s shown his contempt openly for the civilian agencies of his own state. He feels he can only trust the military to do the job on time, within budget.
  • Egyptian military accounts are not shared with anyone either inside or outside Egypt. This includes the official budget, in addition to the financial books of the various military agencies involved in economic and commercial activities.
  • the military pays no taxes on any of its activities, and no customs duties on the goods it imports for these purposes
  • All officers who perform duties on behalf of military agencies undertaking economic activities get paid extra allowances and benefits for each task they undertake, and often get an extra salary if they run a military factory or a military farm. And then there’s a share of profits - or of incomes before profits are calculated, because there’s not always a profit; a certain share of these are distributed to senior officers as well. 
Ed Webb

Kuwait Muddles through Its Confusing Politics | Arab Center Washington DC - 0 views

arabcenterdc.org/...through-its-confusing-politics

Kuwait politics economy parliament analysis KSA Qatar Saudi generations

shared by Ed Webb on 01 Aug 21 - Cached
  • the major issues that have dominated the first year of Emir Nawaf Al-Ahmad Al-Jaber Al Sabah’s leadership and the prospects for Kuwaiti politics, which is once again in a state of ferment with no clear resolution in sight
  • Sheikh Sabah’s time as ruler was marked by an initial period of political deadlock that saw six parliamentary elections and more than a dozen cabinets come and go between 2006 and 2013, and then a calmer spell that culminated in the election of the National Assembly in November 2016, which became the first in nearly 20 years to serve its full four-year term.
  • relations between the government and the National Assembly have deteriorated in recent months to the point that, now, there is barely a working relationship at all
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  • fallout from the corruption cases overshadowed much of the final year of Emir Sabah’s life and has continued to loom over the opening months of the rule of Emir Nawaf al-Ahmad Al Sabah. The allegations, including one linked to the explosive fallout from the 1Malaysia Development Berhad (1MDB) scandal and another over $789 million said to have gone missing from the Army Fund, have implicated members of the ruling family and senior officials and further sapped public trust. In a move unprecedented for Kuwait, the former prime minister, Sheikh Jaber Al-Mubarak, was detained in April 2021, as was Sheikh Khalid al-Jarrah Al Sabah, a former Defense (2013-17) and Interior (2017-19) minister. A leaked court document also indicated that Sheikh Jaber had repaid $180.7 million in funds that prosecutors had accused him of misappropriating
  • the fact that the Al Sabah quickly cohered around the choice of Sheikh Mishaal as crown prince in 2020 has only delayed the moment when the ruling family must identify a next generation of leadership to eventually take over from Emir Nawaf, who is 84, and Crown Prince Mishaal, who is 80
  • only transitioned from one generation to another twice in the past century, in 1921 and again in 1977
  • Sheikh Mishaal has become important, creating a National Security Council, under his leadership, in March 2021 and visiting Saudi Arabia at the end of May. Ties between Saudi Arabia and Kuwait had been strained by the prolonged shutdown of two oil fields in the Neutral Zone along their border and by a visit by Crown Prince Mohammed bin Salman to Kuwait in September 2018. This visit was cut short over disagreements that included Kuwait’s preference for a diplomatic resolution of the Qatar blockade
  • The fact that Kuwaiti politics was less stormy between 2013 and about 2019 did not, however, denote that any of the contentious underlying issues had been resolved, such as the relationship between the mostly appointed cabinet and the elected (and strongly populist) MPs
  • 38 MPs backed a motion to question the prime minister, Sheikh Sabah al-Khalid Al Sabah, over claims of constitutional irregularities in forming the government, leading ultimately to the cabinet submitting its resignation in January 2021
  • the replacement of four cabinet ministers, including the Minister of Interior, Anas al-Saleh—who had become a lightning rod for opposition criticism—failed to significantly placate opposition MPs, who sought unsuccessfully to block the swearing in of the new cabinet in April and criticized a decision to postpone all parliamentary questioning of the prime minister until 2022.
  • the political opposition in the National Assembly lacks consensus of its own on policy objectives and the degree to which it should negotiate with the government on specific issues. So long as there are no changes to Kuwait’s electoral law or to procedural (and constitutional) aspects of the way politics is conducted, and the government and parliament coexist, little in practice is likely to change. The populist streak that has long been such a characteristic feature of Kuwaiti politics continues to complicate efforts by the Kuwaiti authorities to respond to public policy challenges caused by the COVID-19 pandemic and the oil price collapse of 2020 that, itself, followed years of growing budget deficits
  • Kuwait has not run a budget surplus since 2014 when the long oil price boom that began in 2002 ended, and fiscal deficits have risen sharply. Whereas officials in other Gulf states responded to revenue declines by scaling back subsidies and introducing a variety of new taxes and fees on their citizen and resident populations, the maneuverability of Kuwaiti authorities was constrained by the difficulty of securing National Assembly support for such measures
  • almost 72 percent of spending in the budget proposed in June 2021 will go to salaries and other entitlements
  • While Kuwait remains one of the wealthiest countries in the world, the authorities have had to resort to short-term measures, such as withdrawals from its General Reserve Fund, to plug spending gaps, actions that are poor substitutes for a long-term solution
Ed Webb

Archaeology Turns Political to Benefit a Trio of Middle East Strongmen - New Lines Maga... - 0 views

newlinesmag.com/...-trio-of-middle-east-strongmen

history memory heritage archaeology propaganda ideology identity Syria Iraq Libya

shared by Ed Webb on 12 Dec 21 - Cached
  • Going back 10 years to the Arab Spring and eight years before that to the invasion of Iraq, much of the region has experienced terrible loss not only on a human scale, but also of its archaeological heritage. The culmination of both came in 2015 with the brutal murder of the 82-year-old archaeologist Khaled al-Asaad — who had been in charge of the Syrian UNESCO World Heritage site of Palmyra for 40 years — and the destruction of part of the 2,000-year-old site by the Islamic State group
  • Three countries — Iraq, Syria and Libya — have an extraordinary heritage of ancient archaeological sites, many of them now endangered, and had in common long-standing dictators, (although in the case of Syria, of course, the Assad regime continues), all of whom used their cultural heritage in various ways to define how they saw their nation
  • That dictators draw inspiration from ancient history to shape their nations is nothing new — Mussolini looked back to the Roman empire, while Hitler and the Nazi party developed their mythical, ancient “Aryan” race. The last shah of Iran, Mohammad Reza Pahlavi, threw one of the most lavish parties in history at Persepolis in 1971 during national celebrations to illustrate the grandeur of the 2,500-year-old Persian empire founded by Cyrus the Great in the sixth century B.C.
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  • In the years after the Baath party came to power, writes Abdi, the budget for the Department of Antiquities increased by 80% and the number of excavations mushroomed, as did the renovation and reconstruction of historical sites
  • In Syria, too, Assad’s promotion of archaeology was, as the late journalist Patrick Seale described it, part of his exercise in nation building. Stéphane Valter, a French political scientist who specializes in Arab culture and civilization, studied Assad’s relationship to Syria’s archaeology in his 2002 book, “La construction nationale syrienne” (“The Syrian national construction”). He writes that because of the fragility of a social cohesion in Syria due to its varied ethnic and religious communities, it was important for Assad to establish a territorial and historical identity in which all minorities could find a legitimate place. The archaeological richness of Syria doubtless helped build a national identity based on a culture that was promoted as authentically Syrian.
  • Iraq was flooded with propaganda posters, murals and sculpted reliefs in the style of ancient artworks, all depicting Saddam superposed with Mesopotamian rulers or symbols
  • when Gadhafi saw that the museum staff had named some of the rooms “Greek” or “Roman,” his face fell, said Fakroun, “and he made us change the names to ‘Greek colonization’ or ‘Byzantine colonization.’ ”
  • “We couldn’t talk about our Amazigh heritage. Or objects that were Tuareg, we had to say they were Arab. We wanted to be scientific, but we couldn’t, because the only ethnicity that existed for him was Arab,”
  • Gadhafi’s view of Libya’s heritage was selective, but like the other dictators, it aligned with the message he wanted to transmit.“Libya links east to west, and north to south, and there are examples of all the cultures that were around us,” said Fakroun.But Gadhafi largely favored Islamic archaeology, in keeping with his Pan-Arab ideological preference at the time (vis-a-vis Pan-Africanism, which he embraced in later years), and after that, prehistory because it was far enough into the past to be relatively uncontested. In contrast, British archaeologist Graeme Barker, who spent many years in Libya, explained that “the country’s fabulous Greek and Roman archaeology represented to him simply the precursor of the hated Italian colonization of the 20th century.”
  • the Baath regime in Iraq sought to “connect modern-day Iraq with its glorious Mesopotamian past, leaving aside any possible Sunni-Shia division or ethnic divide. Instead, it stressed that Iraq was one nation unified in a shared Mesopotamian-inspired culture.”
  • Saddam rebuilt the site shoddily, most professionals agree, and built a palace for himself on top of it. He used new materials and inscribed his name on the bricks, as Nebuchadnezzar had done over 2,000 years before him. Moreover, said Almamori, “he dug three or four lakes, which damaged and removed part of the Persian cemetery near the northern lake. Many layers of different civilizations were removed. He constructed artificial mounds and built his palace on one of them. Archaeologists with high positions were afraid to say anything.”
  • “When Nebuchadnezzar II took over from his father, Nabopolassar, he ruled from the same palace which he rebuilt. The Baath party related to this — we have a long history, a strong civilization, that needs a strong army. Nationalists in other countries think the same way.”
  • the Umayyad period of history was useful to the party because of its multiethnic nature. The Umayyad Mosque in Damascus was one of the best symbols for the party, writes Valter, because of its specifically Syrian cultural traits — first an Aramean and then a Roman temple, then a church and finally a mosque. The mosque figured on Syria’s most valuable banknote at the time, behind an image of Assad. Banknotes included images of Aleppo’s Citadel, the Roman amphitheater of Bosra and Queen Zenobia of Palmyra, and clearly showed the regime’s wish to conflate ethnocultural Arab references with nationalist pride and a pinch of Islam
  • one of the most important ancient sites for Assad was Ugarit, near the Mediterranean city of Latakia. With five layers of cultures going back to the Neolithic period, not only is it famous for its clay tablets with an alphabet in cuneiform script, but Ugarit is also just north of Qardaha, where Assad was born and is buried.
  • Unlike in Saddam’s Iraq or Assad’s Syria, in Gadhafi’s Libya, the Department of Antiquities suffered from constant underfunding. “Our budget was next to nothing,” recalled Fakroun. “Once they forgot about the Department of Antiquities when they were drawing up the country’s budget. We had no salary for six months. We’re talking about a country with tons of money from petrol, and they gave us pennies. And we have five World Heritage sites.
  • outstanding archaeological sites in all three countries suffered looting, vandalism, neglect, or at the hands of the Islamic State or, in the case of Ancient Babylon, from U.S. and Polish troops building their military base on top of the ruins in 2003
Ed Webb

Cutting Subsidies to Rein in a Budget Deficit: A Necessary Trade-Off? - Tunisia Live : ... - 0 views

www.tunisia-live.net/...tting-subsidies-necessary-evil

Tunisia economy subsidies prices

shared by Ed Webb on 18 Mar 13 - No Cached
  • the continuing costs of inflation since the revolution of January 2011
  • the current government is only a transitional body and that according to constitutional bylaws, it is not allowed to make any crucial decisions that have direct effects on consumers and the country’s economy. Zarouk went on to explain that the decision will harm consumers; The cost of household consumption has already increased by 5.9% between January 2012 and January 2013. Fuel is also vital to various segments of the economy, averaging 13% of general production costs in areas such as clothes and food. It also accounts for 50% to 60% of total expenses in the production of cement and bricks, which represent an important element of the country’s economy. “So it [the rise in fuels prices] harms such sectors,” he said. “And they are crucial in our economy.”
  • savings rates are insignificant in Tunisia – 17% – and decreasing, according to Zarouk. “People can no longer afford to save,”
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  • Though economics professor Mohsen Hassen echoed Zarouk’s assertion that increasing fuel prices will negatively affect consumers, he said the government’s decision was justified in order to salvage the country’s economy. Hassen told Tunisia Live that the budget deficit grew by 12.6% since the revolution; in 2012, alone it rose by 6.6%. “It is extremely dangerous that the deficit keeps growing,” Hassen said. “That’s why better management of subsidies funding is crucial.” Goods are generally subsidized in order to preserve consumer purchasing power, especially for citizens with low incomes. “Only 12% of the poor are benefiting from the fund…” he stated, adding that a larger proportion of Tunisians with high incomes are the ones gaining the most from subsidies. “Subsidies are serving those who don’t need them most,” Hassen said. “That’s the dilemma that was unveiled by the revolution thanks to transparency in statistics.”
Ed Webb

Egypt's media bill may bring demise of small, online outlets - The Washington Post - 0 views

www.washingtonpost.com/...6-82c2-a7dcb313287d_story.html

Egypt media journalists expression online internet repression regulation

shared by Ed Webb on 01 Jun 16 - No Cached
  • Ed Webb on 01 Jun 16
     
    Egyptian journalists said Wednesday that a new draft bill regulating the media would likely bring the demise of dozens of low-budget, online media outlets serving as a refuge for young writers and liberal activists escaping government restrictions on freedom of expression.
Ed Webb

Will Saudi Arabia's private sector be able to hold up during a pandemic? - Atlantic Cou... - 0 views

atlanticcouncil.org/...e-to-hold-up-during-a-pandemic

authoritarianism politics economy analysis opinion KSA Saudi pandemics

shared by Ed Webb on 05 May 20 - No Cached
  • Due to the lockdown and curfew implemented since March 25, most businesses in Saudi Arabia are either suspended or have reduced their activities. As a result, employees have become a heavy burden for companies, as most cannot afford to pay them wages while they stay home. Several companies announced the closure of their branches, entirely, including Taiba Investments, Saudi Airlines Catering, and Al-Andalus Property Company SJSC.
  • The Saudi government announced the consequences of coronavirus as a force majeure. And, on April 3, the government issued a royal decree allocating $2.4 billion to compensate Saudi citizens who work in the private sector in facilities affected by the pandemic. However, such bounteous support might only reduce the problem, not solve it.
  • the question is how long this generous support from the Saudi government will continue. Oil prices are still lower than what the Saudis need to support Vision 2030, which is expected to have a budget of no less than $54 billion. Oil prices are currently affected because of the decline in demand due to the pandemic and the oil war with Russia, which ended on April 12, after OPEC agreed to an output cut of 9.7 million barrels per day.
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  • analysts expect oil prices to remain below $40 for the foreseeable future, while the national budget balance requires $80-85 a barrel. The future of the oil market is getting worse, since the June contracts collapsed by more than 45 percent.
  • oil war is urging the Saudi government to limit or, even, cancel its excess spending and yet, the government chooses to increase public spending to support its citizens and residences.
  • the coronavirus might serve as a vehicle of legitimacy for the absolute monarchy that takes responsibility for its citizens as democracies are struggling to help their own.
Ed Webb

Crisis of Governance: Local Edition | Foreign Policy - 0 views

foreignpolicy.com/...is-of-governance-local-edition

Tunisia politics transition governance local centralization

shared by Ed Webb on 28 Sep 17 - Cached
  • , democratic Tunisia remains just as centralized as it was before the revolution
  • well into the sixth year of Tunisia’s revolution, a vast gap remains between government and citizens. And nowhere is that relationship more strained than in Kasserine
  • it turns out that it’s easier to replace the top level of politicians, and to design and implant a constitution, than it is to remake an entire national administration from top to bottom
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  • The Interior Ministry, which still nominally controls all local government, came up with an interim fix: a special committee representing various local interests — activists, doctors, the unemployed. The committee picked one of their number, the teacher Abbassi, as vice mayor. He served in that capacity for four years until the mayor resigned; Abbassi was then picked to replace him
  • The 2014 constitution explicitly stipulates the devolution of power to provincial and local governments, but actually putting those reforms into place has proven a challenge
  • Pre-revolutionary Tunisia was rigidly centralized, concentrating virtually all power in the national capital. The central government appointed all regional and municipal officials: They were little more than placeholders. They had minimal control over their own finances, and depended on the national government to allocate funds to them whenever it saw fit to do so
  • “We’re a poor municipality that lives on aid,” says Abbassi, who can only really increase his budget, he notes, by attracting money from international development institutions and nongovernmental organizations. “Citizens don’t pay [taxes]. The citizens that talk about corruption and ‘my money’ — well, it’s not their money.” The city gets most of its budget from the Interior Ministry in Tunis, and financing is hardly generous. While income tax payments are automatically deducted from the pay of public employees in Tunisia, tax avoidance is rampant among the rest of the population — especially since around half of the economy, according to estimates, operates in the unofficial sector
  • Life expectancy in the province is only 70, a full seven years less than in Tunis. Unemployment is 26.2 percent, almost 9 percent higher than the national average. The infant mortality rate is 23.6 percent, nearly 6 percent greater than the national rate. The local paper factory churns out mercury and chlorine byproducts that are polluting land and water resources, contributing to widespread health issues like cancer and neurological diseases
  • Khadraoui and his fellow protesters want the government to solve the problem by giving out public jobs to all applicants with university degrees. The old regime used to hand out state jobs as a way of tamping down public dissatisfaction, and their post-revolutionary successors have continued the practice (if not expanding it). This has predictably resulted in bloated public-sector employment rolls and painfully inefficient public services. It is, perhaps, no coincidence that one rarely encounters Tunisians who expect their jobs to come from the private sector
  • expectations gap is deeply corrosive
  • The current administration is doing little to advance the city’s development — and officials and citizens have entirely divergent ideas of the reasons for it
Ed Webb

There will be pain - With oil cheap, Arab states cannot balance their books | Leaders |... - 0 views

www-economist-com.envoy.dickinson.edu/...tes-cannot-balance-their-books

opinion MENA oil energy economy GCC Algeria KSA Saudi Oman Jordan Lebanon Egypt

shared by Ed Webb on 17 Jul 20 - Cached
  • Peak demand for oil may still be years away, but covid-19 has given the Middle East and north Africa a taste of the future. Prices of the black stuff plummeted as countries went into lockdown. The region’s energy exporters are expected to earn about half as much oil revenue this year as they did in 2019; the IMF reckons their economies will shrink by 7.3%. Even when the virus recedes, a glut of supply will probably keep prices down. Faced with budgets that no longer add up, Arab states must adapt.
  • in May the Algerian government said it would cut its budget by half. Things are no better in Iraq, a big oil exporter, which is nearly broke. Even stable producers such as Oman and Kuwait are living beyond their means. Saudi Arabia, the world’s biggest oil exporter, has been burning through its cash reserves for months. Money that was meant to smooth the kingdom’s transition to a less oily economy is now propping up the old petrostate.
  • Egypt exports little oil, but over 2.5m of its citizens work in oil-rich countries. Remittances are worth 9% of its GDP. As oil revenues fall and some of those jobs disappear, Egypt will suffer, too. The same is true of Jordan, Lebanon and the Palestinian territories, which have long relied on the Gulf to absorb their jobless masses.
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  • Around a third of exports from Jordan and Lebanon go to oil-rich states, which send back wealthy tourists. Kuwaitis, Saudis and Emiratis account for about a third of tourist spending in Lebanon.
  • The bad news is that these states are moving too slowly. Some have cut their bloated bureaucracies and pared back subsidies. Saudi Arabia recently tripled its value-added tax. But the public sector is still the region’s main employer. Despite talk of diversification, the Gulf’s economies continue to revolve around oil
  • these reforms will be painful and are harder in bad times
  • The plans put forward by leaders like Saudi Arabia’s Muhammad bin Salman are tearing up the social contract. Saudis wonder why he doesn’t sell his $550m yacht instead of raising taxes. Anger is growing across the region. For the past century Arabs have been ruled by abusive leaders who hoarded their country’s wealth. Now these leaders are asking their people to make sacrifices and giving them little say in the matter. That is a recipe for continuing unrest and brutal suppression. If Arab rulers want citizens to pay their way, they will need to start earning their consent.
Ed Webb

The Coronavirus Oil Shock Is Just Getting Started - 0 views

foreignpolicy.com/...-shock-is-just-getting-started

energy oil economy pandemics Russia China US USA KSA Saudi Iran Iraq Algeria Angola Nigeria markets climate

shared by Ed Webb on 05 Jul 20 - No Cached
  • People in the West tend to think about oil shocks from the perspective of the consumer. They notice when prices go up. The price spikes in 1973 and 1979 triggered by boycotts by oil producers are etched in their collective consciousness, as price controls left Americans lining up for gas and European governments imposed weekend driving bans. This was more than an economic shock. The balance of power in the world economy seemed to be shifting from the developed to the developing world.
  • If a surge in fossil fuel prices rearranges the world economy, the effect also operates in reverse. For the vast majority of countries in the world, the decline in oil prices is a boon. Among emerging markets, Indonesia, Philippines, India, Argentina, Turkey, and South Africa all benefit, as imported fuel is a big part of their import bill. Cheaper energy will cushion the pain of the COVID-19 recession. But at the same time, and by the same token, plunging oil prices deliver a concentrated and devastating shock to the producers. By comparison with the diffuse benefit enjoyed by consumers, the producers suffer immediate immiseration.
  • In inflation-adjusted terms, oil prices are similar to those last seen in the 1950s, when the Persian Gulf states were little more than clients of the oil majors, the United States and the British Empire
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  • In February, even before the coronavirus hit, the International Monetary Fund was warning Saudi Arabia and the United Arab Emirates that by 2034 they would be net debtors to the rest of the world. That prediction was based on a 2020 price of $55 per barrel. At a price of $30, that timeline will shorten. And even in the Gulf there are weak links. Bahrain avoids financial crisis only through the financial patronage of Saudi Arabia. Oman is in even worse shape. Its government debt is so heavily discounted that it may soon slip into the distressed debt category
  • The economic profile of the Gulf states is not, however, typical of most oil-producing states. Most have a much lower ratio of oil reserves to population. Many large oil exporters have large and rapidly growing populations that are hungry for consumption, social spending, subsidies, and investment
  • Fiscal crises caused by falling prices limit governments’ room for domestic maneuver and force painful political choices
  • Ecuador is the second Latin American country after Argentina to enter technical default this year.
  • Populous middle-income countries that depend critically on oil are uniquely vulnerable. Iran is a special case because of the punitive sanctions regime imposed by the United States. But its neighbor Iraq, with a population of 38 million and a government budget that is 90 percent dependent on oil, will struggle to keep civil servants paid.
  • Algeria—with a population of 44 million and an official unemployment rate of 15 percent—depends on oil and gas imports for 85 percent of its foreign exchange revenue
  • The oil and gas boom of the early 2000s provided the financial foundation for the subsequent pacification of Algerian society under National Liberation Front President Abdelaziz Bouteflika. Algeria’s giant military, the basic pillar of the regime, was the chief beneficiaries of this largesse, along with its Russian arms suppliers. The country’s foreign currency reserves peaked at $200 billion in 2012. Spending this windfall on assistance programs and subsidies allowed Bouteflika’s government to survive the initial wave of protests during the Arab Spring. But with oil prices trending down, this was not a sustainable long-run course. By 2018 the government’s oil stabilization fund, which once held reserves worth more than one-third of GDP, had been depleted. Given Algeria’s yawning trade deficit, the IMF expects reserves to fall below $13 billion in 2021. A strict COVID-19 lockdown is containing popular protest for now, but given that the fragile government in Algiers is now bracing for budget cuts of 30 percent, do not expect that calm to last.
  • Before last month’s price collapse, Angola was already spending between one fifth and one third of its export revenues on debt service. That burden is now bound to increase significantly. Ten-year Angolan bonds were this week trading at 44 cents on the dollar. Having been downgraded to a lowly CCC+, it is now widely considered to be at imminent risk of default. Because servicing its debts requires a share of public spending six times larger than that which Angola spends on the health of its citizens, the case for doing so in the face of the COVID-19 crisis is unarguable.
  • Faced with the price collapse of 2020, Finance Minister Zainab Ahmed has declared that Nigeria is now in “crisis.” In March, the rating agency Standard & Poor’s lowered Nigeria’s sovereign debt rating to B-. This will raise the cost of borrowing and slow economic growth in a country in which more than 86 million people, 47 percent of the population, live in extreme poverty—the largest number in the world. Furthermore, with 65 percent of government revenues devoted to servicing existing debt, the government may have to resort to printing money to pay civil servants, further spurring an already high inflation rate caused by food supply shortages
  • The price surge of the 1970s and the nationalization of the Middle East oil industry announced the definitive end of the imperial era. The 1980s saw the creation of a market-based global energy economy. The early 2000s seemed to open the door on a new age of state capitalism, in which China was the main driver of demand and titans like Saudi Aramco and Rosneft managed supply
  • The giants such as Saudi Arabia and Russia will exploit their muscle to survive the crisis. But the same cannot so easily be said for the weaker producers. For states such as Iraq, Algeria, and Angola, the threat is nothing short of existential.
  • Beijing has so far shown little interest in exploiting the crisis for debt-book diplomacy. It has signaled its willingness to cooperate with the other members of the G-20 in supporting a debt moratorium.
  • In a century that will be marked by climate change, how useful is it to restore profits and prosperity based on fossil fuel extraction?
  • The shock of the coronavirus is offering a glimpse of the future and it is harsh. The COVID-19 crisis drives home that high-cost producers are on a dangerously unsustainable path that can’t be resolved by states propping up their uncompetitive oil sectors. Even more important is the need to diversify the economies of the truly vulnerable producers in the Middle East, North Africa, sub-Saharan Africa, and Latin America.
Ed Webb

Egypt's government: designed for dictatorship - Opinion - Al Jazeera English - 0 views

www.aljazeera.com/...20111018844746229.html

governance government Cairo Egypt cities transition local

shared by Ed Webb on 15 Jan 13 - No Cached
  • 18 Oct 2011 11:27
  • A total informal way of life pervades that includes schooling, healthcare, food supply and social services. People here are friendly and welcoming and they know what needs to be done to better their community, but there are no channels for them to officially take part in civil society and government. Although this area is part of the capital and is reached by metro, it is at the periphery of the regime’s concerns. In Mounib, nothing has improved since Hosni Mubarak passed his presidential powers to the Supreme Council of Armed Forces (SCAF)
  • Egypt’s government is designed for a dictatorship: It is extremely centralised and tightly controlled by national policy, and local councils are void of power. Although Cairo’s three governorates have separate budgets and various departments, they largely depend on the country’s ministries, led by presidentially appointed ministers, to care for essential elements of the urban environment: housing, schooling, transport, parks, healthcare, etc.
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  • The NDP’s controversial Cairo2050 plan, which calls for the dislocation of millions of inhabitants in the name of neoliberal development for the rich, has resurfaced after months of speculation over its fate.
  • Dominating public discourse have been voices from the Islamist side of the spectrum, who have insisted on keeping the conversation on issues of identity. The everyday concerns of citizens and inhabitants of Cairo such as transport, housing and waste have been conspicuously absent. When I last visited Mounib, residents were not concerned with national identity, the dichotomy between liberals and Islamists, the threat of a military regime or American interests in the region. They were concerned with the polluted canal, the uncollected waste, the mosquitoes infesting the area and the lack of official response.
Ed Webb

The Jordanian State Buys Itself Time | Middle East Research and Information Project - 0 views

www.merip.org/...mero021213

Jordan election monarchy reform authoritarianism

shared by Ed Webb on 13 Mar 13 - No Cached
  • the elections have afforded the regime room to breathe
  • For the moment, the state seems confident that it commands the loyalty of the silent majority. For years, polls have found that most Jordanians are politically conservative, holding positive impressions of the king and royal family and darker views of political parties -- including the Islamists. Jordan has long been regarded as an oasis of stability compared to its neighbors who have faced invasion, foreign occupation and insurrection. Polls and interviews indicate that Jordanians put a high premium on a sense of security, the maintenance of which is of course a mainstay of regime rhetoric.
  • The opposition, on the other hand, draws its strength primarily from concerns about the economy and complaints about corruption in the cabinet and Parliament. Many in the opposition also note the state’s well-documented history of using “political reform” as a sop to critics. [3] In tough times, the regime pledges to open up the political system, but then offers changes that do little to alter the established power structure.
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  • holding an election that is pronounced clean and successful may be of less value to the state than is now apparent. As the year progresses, the public is likely to evaluate the new parliament and government by their ability to address popular concerns
  • High turnout and good reviews of election day are the foundations of the state’s claim to have a new mandate. But election monitors in Jordan have made the same point time and time again: An election is much more than the casting of ballots, and a successful poll does not equate to the advent of democracy.
  • monitors were also unanimous in their assessment that the system underpinning the vote falls considerably short of ideal. Their criticism centers on the distorted representation inherent in the election law and the political culture that gerrymandering promotes. Jordan’s voting system boosts the fortunes of candidates whose support base lies in large tribes or localities, while handicapping political parties and unaffiliated candidates who have national agendas. In Jordan’s last five parliamentary elections, most of the seats have gone to such independent or “tribal” candidates. Once elected, the MPs have little ability to shape national policy in any event, since the king appoints all other branches of government.
  • The incentives created are perverse. Voters may feel pushed to back the candidate who returns home bearing spoils from the treasury, rather than the one who represents their vision for the nation. Indeed, deputies in past assemblies have been lambasted for passing out rewards to supporters while ignoring national issues -- one voter, on election day, derided previous parliaments as “service departments.” Polls have found that large portions of the public see parliamentarians as highly corrupt. It is easy to see how this system becomes self-reinforcing. Voters feel that their vote means little on the national stage, while candidates for office seek to become local patrons while feathering their own nests. The result can be vote buying and coercive campaigning.
  • the “tribal” bias of the election system boosts turnout, since the groups that benefit directly from the parliamentary spoils system show up to keep the spoils coming
  • ambient mistrust
  • According to a July 2012 poll by the International Republican Institute, more Jordanians think the country is going in the wrong direction than the right one and many feel deep discontent with the weak economy and perceived government corruption. The same poll found Jordanians taking a dim view of politicians in general, and parliamentarians in particular, who despite being elected appear less popular than royally appointed officials. And in a September 2012 CSS survey, a big portion of the public said the state's reforms had been insufficient -- though large majorities still said it was better to change the system through political action than through street protest.
  • There are indications that the new parliament is more representative -- or at least more diverse -- than the old one. Candidates from al-Wasat al-Islami, a centrist Islamist party, came away with 16 seats, a substantial increase in their representation. Leftists also picked up around a dozen seats (depending on who is counting). Whether either of these groups will be credible to the protesters in the streets is an open question: In the past, many leftist and Islamist MPs have been characterized as “safe,” regime-aligned candidates rather than a genuine opposition. Palestinian Jordanians likewise seem to have gained ground, now holding roughly 35 seats as opposed to 20 or so in the last parliament. Women’s representation also increased slightly, with women taking two national list seats and two district seats, in addition to 15 seats from the 10 percent quota they are allotted under the election law.
  • If Parliament is unable to make serious progress toward improving the economy, an item which usually tops the list of the public’s grievances, that will also have consequences. The first challenge the new deputies will face, the yearly budget, will be doubly critical, establishing both the MPs’ economic credentials and their ability to have a serious debate
  • What the state has won is time, which it may use to carry out a reform program, to appease its core constituents or to do a bit of both. In the past, Jordan’s electoral exercises have generally been preludes to consolidations of regime power. But history is not destiny. The state may travel down the path of reform it has laid out, toward parliamentary government and constitutional monarchy, even at the cost of upsetting its traditional clients. Or it may attempt to delay reform again, using the same bait-and-switch it has employed for decades
  • The unfolding disaster in neighboring Syria will likely keep security high on the local agenda; on the other hand, the state faces another moment of potential crisis, as sometime early in 2013, probably April, conditions of Jordan's IMF loan agreements will require the state to engage in another round of subsidy removal like the one that triggered the November 2012 unrest
Ed Webb

BBC News - Sporting events shine spotlight on Qatar's human rights - 1 views

www.bbc.co.uk/...world-middle-east-21202067

Qatar rights censorship sport

shared by Ed Webb on 27 Jan 13 - No Cached
  • sentenced to life in prison on charges of "inciting to overthrow the ruling system" and "insulting the emir"
  • One of our fundamental demands is to provide us with transparency on the national budget
  • It has been widely assumed that most Qataris are delighted at the prospect of hosting the World Cup and other major sports tournaments. But even here, Mr Kuwari raises an eyebrow. "I can't say for sure if the people welcome it, because nobody asks the Qataris their opinion about this matter. Decision are are taken out of the blue and we have to accept them,"
Ed Webb

OPEC Is in its Death Throes | Foreign Policy - 0 views

foreignpolicy.com/...arabia-united-states-oil-shale

Saudi KSA economy economics OPEC oil energy Russia Iran Iraq Venezuela Kuwait UAE

shared by Ed Webb on 21 Oct 16 - No Cached
  • In February, OPEC called for an oil production “freeze” to raise crude prices in conjunction with Russia. But this effort collapsed at a meeting in Doha, Qatar, in April when Iran refused to join any freeze in order to regain the pre-2012 production levels of close to 4 mbpd it enjoyed before U.S. and European Union nuclear sanctions were imposed, following the removal of certain sanctions after the 2015 nuclear deal. A similar proposal failed at the OPEC meeting in June, again following Iran’s refusal, despite outreach by the Qataris.
  • OPEC again called for a form of output cut on Sept. 28 at an extraordinary meeting in Algiers. Markets bit on the news, with Brent prices rising sharply by about 15 percent in the following week, from $46 to $52 per barrel.
  • Can action by the cartel sustain higher crude prices over the long term? Probably not. Like a desert mirage, the image of an OPEC resurrection vanishes when approached.
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  • The massive fall in oil prices from over $100 per barrel in early 2014 to under $30 by January 2016 was caused primarily by then-Saudi Minister of Petroleum Ali al-Naimi’s strategy to gain market share for the kingdom and hurt the U.S. tight oil (or “shale”) industry by allowing the market, not OPEC interventions, to set prices.
  • While Riyadh has cranked up its production from mid-2014 to today by over a million barrels a day (to a peak of 10.7 mbpd in August this year), its fiscal position has taken a serious blow, with the budget deficit rising from 3 percent of GDP to 16 percent in 2015
  • The resilience of U.S. shale makes the argument that OPEC has experienced a resurrection a fragile claim. The cartel can probably raise prices in the short term through an output cut, but it will only be so long, perhaps already by mid-2017, before the U.S. shale industry revives and grabs any market share conceded by OPEC in a higher price environment. This will ultimately bring prices lower again, all else being equal.
  • Within OPEC, while other Gulf Co-Operation states, namely Kuwait and the United Arab Emirates, may be prepared to make a small cut to their production, key producers like Iraq and Venezuela are in too difficult a fiscal position to agree to any major cut.
  • Outside OPEC, Russia reached a production record of 11.1 mbpd in August, eclipsing Soviet levels. Being so close to the maximum anyway, Russia has little to lose by supporting the OPEC output cut and agreeing not to raise production further. Yet the Kremlin is unlikely to impose actual cuts on the range of oil companies that operate in the country.
  • In the short term, it seems Riyadh’s fiscal position was under such pressure from low oil prices that something had to give. While the kingdom has eased the fiscal pressure by starting to issue sovereign debt, the burn rate through its foreign reserves has been relentless (from about $740 billion in mid-2014 to $550 billion today) as it has attempted to defend the currency in the face of substantial capital flight from the country since the oil price crash in 2014.
  • Climate change will plainly be a major problem of the 21st century, and the world is moving away from fossil fuels: game over for an unreformed Saudi Arabia.
  • Saudi Arabia will face hard years ahead as the oil market increasingly looks to U.S. shale, not OPEC, as a handrail to oil prices on the supply side. However, this might well be the jolt that Salman needs to push through painful but necessary reforms
Ed Webb

Turkey moves billions in state assets to wealth fund for megaprojects | Middle East Eye - 0 views

www.middleeasteye.net/...unding-megaprojects-2015330453

Turkey economy SWF funds Erdogan infrastructure

shared by Ed Webb on 07 Feb 17 - No Cached
  • The Turkish government has ordered the transfer of billions of dollars in state assets to a sovereign wealth fund, in a huge shake-up of holdings aimed at financing ambitious infrastructure projects championed by President Recep Tayyip Erdogan.The assets being transferred to the sovereign wealth fund range from wholly state-owned Ziraat Bank, the government's minority shareholding in flag carrier Turkish Airlines, as well as smaller firms like the state tea-making company.Ozgur Altug, economist at BGC Capital in Istanbul, said in a note to clients he estimated the value of the transferred assets to be $33 billion and the wealth fund would enjoy the dividends rather than the budget.
  • When the fund was founded in August, the state-run Anadolu news agency said it would be used to finance "mega projects" such as the planned Istanbul shipping canal and a new three-level tunnel under the Bosphorus.
  • But the plan did not meet universal approval, with the spokeswoman of the opposition Republican People's Party (CHP) Selin Sayek Boke calling it a "palace mortgage fund" in reference to Erdogan's presidential complex.CHP MP Faik Oztrak meanwhile compared it to the excesses of 19th century Ottoman bureaucracy.
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  • Turkey is following in the steps of several countries in putting key national assets into a sovereign wealth fund, which can be used for major projects, maintaining pensions and national welfare programmes, or in times of crisis.But Ankara's fund is so far well behind the biggest sovereign wealth funds in energy-rich Norway and the Gulf as well as China.Norway's sovereign wealth fund is the world's largest, worth $892 billion and holding stakes in around 9,000 companies worldwide.
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