With Saudi Arabia announcing plans to raise $55bn through its privatisation programme, other Gulf countries are similarly stepping up efforts to stimulate private investment in public assets and projects, with a view to strengthening state finances, spurring diversification and driving their respective Covid-19 recoveries.
In March this year Saudi Arabia’s Council of Ministers approved the long-awaited Private Sector Participation Law, which aims to increase both the privatisation of public sector assets and private sector participation in infrastructure projects.
The law will enter into force in July. Targeting 16 sectors, it will advance one of the core goals of the Kingdom’s Vision 2030 economic development plan, namely an increase in the private sector’s contribution to GDP, from 40% to 65%.
The new law addresses various areas which have traditionally generated a degree of trepidation among potential investors, particularly foreign entities.
For example, among the principles it enshrines are that of a level playing field between foreign and national investors; the freedom of private sector entities to collect revenues; and a more streamlined process for obtaining permits and approvals. The law also exempts privatisation projects from meeting Saudisation quotas.
This willingness to engage with the concerns of foreign investors can be read as a reflection of the post-Covid-19 panorama, in which Gulf countries are in a more fiscally constrained position and hence likely to be more conciliatory than they may have been in the past.
At the same time as the approval of the law, Saudi Arabia’s National Centre for Privatisation – which was founded in 2017 – announced the launch of a Registry of Privatisation Projects, a central database of information related to projects targeted for privatisation.
Hopes are high that the new law will provide a significant boost to privatisation.
At the end of May Mohammed Al Jadaan, the minister of finance, told the Financial Times that Saudi Arabia was expecting to raise $38bn through asset sales and a further $16.5bn through public-private partnerships by 2025.
A Gulf-wide acceleration
The Saudi Arabian government is among a number in the region that are expanding their respective privatisation strategies.
As OBG has explored in depth, the Covid-19 crisis prompted many Gulf states to accelerate their ongoing attempts at diversification, with increased private sector involvement a key element of many such projects.
In Oman, for example, local media recently reported that the government was looking into selling its 54% stake in the Oman Cement Company.
The country has a pre-coronavirus track record of championing privatisation. Its first major sale was of a 49% stake in Oman Electricity Transmission to the State Grid Corporation of China, at the end of 2019.
On a related note, it has recently been reported that Abu Dhabi is considering the sale of a 10%, $4bn stake in the Abu Dhabi National Energy Company, known as Taqa, which is the emirate’s largest utility.
It is thought that Taqa’s ongoing shift towards renewable energy – it plans to increase the contribution of solar and wind to 30% of production over the next decade – could enhance its attractiveness to international investors.
Last year the company announced that foreign investors, who had previously been banned, would be allowed to buy stock in future sales.
Any potential sale of the company’s assets would represent the latest step in an ongoing privatisation campaign by the emirate, which in recent years has attracted more than $20bn in foreign investment into the operations of state-owned oil company Adnoc.
Meanwhile, in March Bahrain held the Bahrain Metro Market Consultation, an initiative designed to find private companies with which to form a public-private partnership to develop its metro system. The launch of international tendering for the project is expected later this year.
It is estimated that the project will cost more than $1bn, and potentially as much as $2bn.
Bahrain has long been a regional leader in courting private sector investment. For instance, within the MENA region Bahrain was ranked second only to the UAE on the World Bank’s most recent ease of doing business index, and 43rd overall.
As Gulf governments seek to bolster the resilience of their economies and public finances in the wake of the pandemic, there are concrete reasons to anticipate that privatisation will play a significant role both in their immediate Covid-19 recovery strategies and in their longer-term diversification efforts.
Afghanistan: 500,000 jobs lost since Taliban takeover
More than half a million people have lost or been pushed out of their jobs in Afghanistan since the Taliban takeover, the UN International Labour Organization (ILO) said on Wednesday.
In a warning that the economy has been “paralyzed” since the de facto authorities took control last August, ILO said that there have been huge losses in jobs and working hours.
Women have been hit especially hard.
By the middle of this year, it’s expected that job losses will increase to nearly 700,000 – with direst predictions topping 900,000 – as a result of the crisis in Afghanistan and “restrictions on women’s participation in the workplace”.
Women’s employment levels are already extremely low by global standards, but ILO said that they are estimated to have decreased by 16 per cent in the third quarter of 2021, and they could fall by between 21 per cent and 28 per cent by mid-2022.
“The situation in Afghanistan is critical and immediate support for stabilization and recovery is required,” said Ramin Behzad, Senior Coordinator of the International Labour Organization (ILO) for Afghanistan. “While the priority is to meet immediate humanitarian needs, lasting and inclusive recovery will depend on people and communities having access to decent employment, livelihoods and basic services.”
Hundreds of thousands of job losses have been seen in several key sectors which have been “devastated” since the takeover, ILO said.
These include agriculture and the civil service, where workers have either been let go or left unpaid. In construction, the sector’s 538,000 workers – of which 99 per cent are men – have suffered too, as major infrastructure projects have stalled.
The Taliban takeover has also led to “hundreds of thousands” of Afghan security force members losing their job, said ILO, noting that teachers and health workers have been deeply impacted by the lack of cash in the economy, amid falling international donor support.
As the crisis continues to unfold, ILO explained that the Taliban capture of Kabul on 15 August, threatened hard-fought development gains achieved over the past two decades.
Domestic markets have been “widely disrupted”, the UN agency said, while productive economic activity has dropped, which has in turn driven up production costs.
At the same time, because Afghanistan’s reported $9.5 billion in assets have been frozen, “foreign aid, trade and investment…have been severely impacted”, ILO continued, pointing to cash shortages and restrictions on bank withdrawals, causing misery for businesses, workers and households.
Kids pay price
The lack of work also threatens to worsen child labour levels in Afghanistan, where only 40 per cent of children aged five to 17 years old attend school.
In absolute numbers, ILO noted that there are more than 770,000 boys and about 300,000 girls involved in child labour.
The problem is worst in rural areas – where 9.9 per cent, or 839,000 children – are much more likely to be in child labour compared to those in urban areas (2.9 per cent or 80,000).
To support the Afghan people this year, the UN’s top priorities are to provide lifesaving assistance, sustain essential services and preserve social investments and community-level systems which are essential to meeting basic human needs.
In support of this strategy, the ILO has pledged to work with employers and trade unions to promote productive employment and decent work.
The organisation’s focus is in four key areas: emergency employment services, employment-intensive investment, enterprise promotion and skills development, while respecting labour rights, gender equality, social dialogue, social protection,elimination of child labour and disability inclusion.
Construction PPE: What and when to use
Personal protective equipment is essential for construction sites. Every workplace has hazards – from offices to classrooms. However, a construction site has far more hazards than most, and extra caution must be applied. PPE can help keep everyone safe and secure, even when close to a hazard factor. Your employer should provide high-quality PPE to everyone on site. When selecting equipment, use a construction PPE supplier that is CE marked.
How to use PPE
Personal protective equipment is designed to protect you from potential hazards. For example, face masks and eye goggles are worn around toxic chemicals or contaminated air. PPE must fit correctly to be as efficient and safe as possible. A loose-fitting face mask could allow dust particles to squeeze through the gaps. Or ill-fitting thermal trousers could get caught/snag on edges or trail along the ground and cause the worker to fall over. Your PPE needs to be in good condition as well – If there are holes, rips and signs of wear on your PPE, it should be immediately replaced. It is your employer’s responsibility to provide adequate PPE.
PPE is a last resort
PPE is not the only safety measure that needs to be taken. Your employer should reduce the risks on site where possible. For example, a hazardous area should be signposted, and every employee should be trained properly. Every employee should go through health and safety training alongside frequent refresher courses. All employees should be trained in using the machinery on site before they begin operating it. PPE cannot protect someone who does not know how to act safely on site.
What types of PPE are used on-site?
Protective gloves should be worn when handling heavy machinery and sharp tools. The gloves need to allow enough mobility and flexibility so the individual can continue to work. Gloves can also help you grip heavy items and protect you from cold winter conditions.
A tool lanyard is useful for when you are working at a height. The lanyard connects to your wrist so you can carry lightweight tools. For heavier tools, you can use a stronger tether point, like your waist.
High – visibility clothing should be mandatory when working, especially at night. Everyone should wear high visibility clothing on-site, so they are noticeable by moving vehicles. Depending on the weather, you could go for a vest or thick coat.
Stay safe and wear personal protective equipment on construction sites.
Croatia Has Potential to Become a Blue Economy Champion in the EU
Croatia’s coast and sea are key national assets that contribute significantly to the country’s economy and give Croatia a competitive edge as an attractive tourism destination. The tourism sector alone contributed with 20 percent to Croatia’s GDP. Yet, as a semi-enclosed sea, the Adriatic is becoming increasingly vulnerable to impacts from economic activities, including a rapidly growing environmental footprint from the tourism industry. Climate change is likely to further exacerbate these effects.
To help Croatia foster sustainable and green economic growth while addressing environmental and climate impacts and protect its coastal and marine natural capital, the Ministry of Economy and Sustainable Development of the Republic of Croatia and the World Bank, convened leading national and international development and environment experts and stakeholders in a virtual workshop – Investing in a Sustainable Blue Economy in Croatia. The event contributed to strengthening the national dialogue on the Blue Economy and provided an added focus for considering Croatia’s coastal and marine natural capital in the country’s Blue Economy and Green Growth Development Strategy, as well in its climate adaptation and mitigation responses.
“Aware of the environmental pressure that tourism, with its unquestionable benefits for the economy, put on on water and the sea as key components of the environment, we are grateful to the World Bank for encouraging the discussion on the importance of the blue economy for Croatia, the opportunities for funding of certain segments of the blue economy and possible further steps. To reduce this pressure, the Ministry of Economy and Sustainable Development is implementing a number of water supply and sanitation projects. So far, within the Competitiveness and Cohesion 2014-2020 Operational Programme, a total of 60 water supply and sanitation projects worth HRK 25.78 billion including VAT have been financed, of which eligible costs amount to HRK 20.5 billion, while EU funds amount to HRK 14.36 billion. A significant part of these funds relates to projects in the Adriatic part of Croatia, taking into account the sustainability of Croatian tourism,” highlighted Elizabeta Kos Director, Ministry of Economy and Sustainable Development of Croatia, Directorate for Water Management and Sea Protection.
A Blue Economy model involves sustainable use of maritime resources for economic growth and improved livelihoods and jobs, while preserving the natural capital of the oceans, seas, and coasts. The Blue Economy model is at the forefront of the sustainability agenda globally and part of the European Green Deal (EGD), aimed at helping European Union members meet their economic needs while addressing their sustainability goals, including climate change adaptation.
“The World Bank is committed to supporting the Government of Croatia’s efforts to protect the country’s natural capital, address climate vulnerabilities, and reduce the energy intensity of the economy,” said Jehan Arulpragasam, World Bank Country Manager for Croatia. Croatia has the potential to become a Blue Economy champion in the EU, where it has the highest relative contribution of the blue economy to the national gross value added and employment, and the World Bank stands ready to support Croatia with its global knowledge to achieve this goal.”
To assess the challenges Croatia faces, a recent World Bank report on the cost of environmental degradation (CoED) in Croatia estimates economic and social costs of environmental degradation of Croatia’s marine and coastal assets due to loss of ecosystem services, inadequate waste and wastewater management, marine litter, air pollution, and the environmental impacts of tourism. For example, the loss of ecosystem services, which provide vital services and are the foundation for economic growth, including for the tourism industry, is estimated at EUR 90 million annually. Marine litter causes additional costs to port operations estimated at EUR 20 million or more annually, while insufficient treatment of waste and water pollution from the tourism sector is estimated to cost EUR 55 million per year.
“Oceans, seas, and coasts offer great opportunities for sustainable and inclusive economic growth in fisheries, aquaculture, mariculture, coastal tourism, marine biotechnology, and renewable energy,” noted Kseniya Lvovsky, Practice Manager, World Bank Environment, Natural Resources, and Blue Economy for Europe and Central Asia. “They also play a critical role in reducing greenhouse gas emissions by absorbing carbon from the atmosphere and in enhancing climate resilience of coastal areas. Sustainable management of marine and coastal resources requires collaboration across industries, public and private sectors, and nations.”
The virtual workshop gathered key stakeholders from the Ministry of Economy and Sustainable Development, Ministry of Sea, Transport and Infrastructure, Ministry of Physical Planning, Construction And State Assets, Ministry of Agriculture, Ministry of Tourism and Sport and other government agencies, institutes, development partners, the private sector, civil society, and leading national and international development and environment experts.
Afghanistan: 500,000 jobs lost since Taliban takeover
More than half a million people have lost or been pushed out of their jobs in Afghanistan since the Taliban...
World Economic Forum Annual Meeting rescheduled to 22-26 May
The World Economic Forum is pleased to announce that it will hold its Annual Meeting 2022 in Davos-Klosters, Switzerland, from...
COVID-19: WHO expresses hope worst of Omicron wave is over
Omicron continues to sweep the world, but cases seem to have peaked in some countries, which gives the head of...
In 2022, military rivalry between powers will be increasingly intense
“Each state pursues its own interest’s, however defined, in ways it judges best. Force is a means of achieving the...
Choosing the Best Engine Hoist for your Garage
An engine hoist is an extremely valuable piece of equipment. It will allow you to remove an engine from a...
Latin America Leaders See Opportunities for Economic and Social Growth in 2022
Despite the impact of the COVID-19 pandemic, Latin American leaders, speaking on the third day of the World Economic Forum’s...
Unrest in Kazakhstan Only Solidifies China-Russia Ties
The Russian-led military operation in Kazakhstan has presented an important test for Moscow’s ties with Beijing. In early January, Kazakhstan...
South Asia3 days ago
India’s open invitation to a nuclear Armageddon
Finance4 days ago
China: $1.9 Trillion Boost and 88M Jobs by 2030 Possible with Nature-Positive Solutions
Americas3 days ago
Sino-American confrontation and the Re-binarized world
East Asia3 days ago
The role of CPC in supporting leadership schools in democratic countries
Science & Technology2 days ago
Closing the Cyber Gap: Business and Security Leaders at Crossroads as Cybercrime Spikes
East Asia2 days ago
The Spirit of the Olympic Games and the Rise of China
Reports3 days ago
Nearly half of City GDP at Risk of Disruption from Nature Loss
Crypto Insights2 days ago
Metaverse Leading the Gaming Revolution: Are NFTs Truly the Future of the Industry?