In a strategic move to spur more investment, Bahrain, known as the Arabian Gulf’s most petite oil producer, recently granted golden licences to five companies that have committed over $1.4 billion to extensive investment projects within the kingdom.
This initiative is a part of Bahrain’s larger strategy to shift its economic focus from oil and promote business expansion. The past few years have seen Bahrain rolling out several plans to foster growth. In 2021, a significant economic reform plan was set in motion, pledging around $30 billion towards pivotal projects intended to fuel post-pandemic growth, heighten job opportunities for locals, and magnetise foreign direct investments.
Following this ambitious plan, the government proposed cost-saving measures with an end goal of generating over 20,000 jobs for its citizens by the upcoming year. The efficacy of these efforts is evident. Bahrain’s economy bolstered by 4.9% the previous year, marking the most commendable growth rate since 2013, predominantly driven by the country’s non-oil sectors.
Initiated in April, the golden licence scheme extends a host of benefits to both local and international corporations. These perks range from priority in land allocation for investments and expedited access to governmental services like building permit approvals to financial support avenues through the Bahrain Development Bank and the labour fund, Tamkeen.
Furthermore, beneficiaries can anticipate an enhanced collaboration with diverse governmental departments, a dedicated account manager courtesy of Bahrain’s Economic Development Board, and a potential revision of standing laws or regulations as deemed necessary.
The principal objective behind this enticing scheme is clear: to pull in investments from both domestic and international shores, thereby facilitating economic progression and local job creation.
To qualify for this golden ticket, companies must either propose major investment initiatives that promise to introduce more than 500 jobs within Bahrain or commit to an investment exceeding $50 million. The pioneer beneficiaries of this scheme comprise notable names such as Citi, Eagle Hills Diyar, Infracorp, Saudi Telecom, and the Whampoa Group, all of which have been greenlit by the government to initiate or enhance their operations within the kingdom.
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In a bid to invigorate its economy, Oman‘s Sultan Haitham has decreed the establishment of the Khazaen Economic City, complete with two free economic zones, as confirmed by the Oman News Agency on Monday. Located within the South Al Batina Governorate, the new city will be administered by the Public Authority for Special Economic Zones and Free Zones.
These pioneering initiatives will come to life under the management of Oman Logistics Company, tasked with operating both Khazaen Economic City and its two embedded free zones. The responsibility for developing these economic areas falls to the Khazaen Economic City Company.
This ambitious move comes as Oman intensifies its economic diversification strategy, buoyed by favourable oil prices, prudent fiscal reforms, and the containment of inflation, as reported by the International Monetary Fund last month.
Despite anticipating a budget deficit of 1.3 billion rials in 2023, accounting for 3% of its economy, Oman enjoyed a surplus of 1.14 billion rials the previous year, according to the nation’s Ministry of Finance.
To galvanise the country’s economic rebound from the COVID-19-induced slowdown, Oman launched a three-year fiscal stability programme last October. This scheme is designed to spur the Sultanate’s financial sector and facilitate national economic recovery.
Further bolstering its economy, Oman has recently signed several agreements with its Gulf Cooperation Council (GCC) counterparts. These include a $3 billion railway project linking the Sultanate with the United Arab Emirates and a $320 million infrastructure development endeavour, backed by the Saudi Fund for Development.
Oman’s efforts have not gone unnoticed by international observers. In April, Fitch Ratings revised its outlook for the country from stable to positive, maintaining its “BB” rating. The agency cited a surge in oil revenue and a reduction in public debt as key contributors to this positive trajectory, reflecting the government’s commitment to fiscal consolidation.
Underneath the sheen of an unprecedented collaboration between Aston Martin, the preferred automaker of fictional British spy James Bond, and Californian electric vehicle prodigy, Lucid Motors, lies a compelling subplot—the omnipresent hand of Saudi Arabia, a leading exporter of oil and gas on the planet.
Last month’s partnership, far from being merely an alliance of tradition and innovation, also features the Public Investment Fund (PIF)—Saudi Arabia’s sovereign wealth fund. While the PIF’s role in channelling immense quantities of fossil fuel-generated wealth into projects and enterprises worldwide is well-known, its significant stakes in both Aston Martin and Lucid Motors might raise a few eyebrows.
Estimated to oversee assets exceeding £500 billion, the PIF is chaired by Saudi Arabia’s de facto ruler and Prime Minister, Crown Prince Mohammed bin Salman (MBS), a scion of the Al Saud dynasty. The PIF holds an 18% stake in Aston Martin, valued at approximately £450 million, exemplifying the ultra-conservative kingdom’s ambition to extend its economic reach in Britain, akin to the approaches of other Gulf countries such as Qatar.
Beyond Aston Martin, the PIF’s portfolio also comprises holdings in Carnival, a renowned cruise ship company, and several controversial forays into the realm of sports. In 2021, it attracted global attention following its purchase of Premier League football team Newcastle United from the former owner, retail tycoon Mike Ashley. Despite the charges of “sportswashing” surrounding this takeover—due to allegations of regimes with dubious human rights records leveraging professional sports to improve their images—supporters compared the backlash to the response to similar acquisitions by other Middle Eastern entities.
Moreover, the kingdom’s growing clout in the sports sector was further underscored last month amidst uproar over a proposed merger between the Saudi-backed LIV Golf tour and the US PGA Tour. Simultaneously, Saudi Arabia has committed to a ten-year Formula One hosting deal, with speculation also swirling about its plans to host the 2030 football World Cup.
The dive into professional sports is perceived by many as Saudi Arabia’s attempt to ‘cleanse’ its international reputation, particularly given its notorious human rights record and stringent laws, which include capital punishment for same-sex activity and severely restricted women’s rights.
“The Saudi authorities’ use of their sovereign wealth fund reveals that it is not merely a vehicle for state investment—it’s also a tool for state-level image management,” Peter Frankental, Economic Affairs Director at Amnesty International UK, noted. He added that Saudi’s acquisition of Newcastle United and partnership with Aston Martin could be seen as another step in this ‘sportswashing’ direction.
However, opponents of Saudi Arabia’s growing influence must reckon with one undeniable truth: the PIF’s extensive resources offer the potential to fund the kind of long-term investments that the UK sorely requires. Infrastructure endeavours such as the Sizewell C nuclear power plant are expected to be financed in part by sovereign wealth funds.
The future influx of Saudi investment seems unlikely to slow down, particularly given the boon of recent global oil price surges following Russia’s invasion of Ukraine.
The British Government recognises Saudi Arabia as its largest trading partner in the Middle East. With shared interests and a potential free-trade agreement with the Gulf Cooperation Council on the horizon, the UK aims to stimulate its economy, bolster employment, and increase wages.
Additionally, private Saudi investors, like their peers in countries such as Qatar and the United Arab Emirates, are increasingly captivated by the UK’s profitable property market. The ninth son of Saudi King Salman bin Abdulaziz, Turki bin Salman Al Saud, reportedly owns around 20 properties in London via Moncrieff Holdings, a firm headquartered in the British Virgin Islands.
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As part of an ambitious drive to transform its economy under the Vision 2030 economic plan, Saudi Arabia is set to intensify its relations with Hong Kong, viewing the city as a bridge to the ‘world-class’ digital prowess of mainland China. The minister responsible for the Kingdom’s digital infrastructure, Abdullah Al-Swaha, unveiled these plans.
The Minister of Communications and Information Technology in Saudi Arabia pointed out areas of mutual interest with Hong Kong that include fintech, technological entrepreneurship and strategies to draw venture capitalist investment. Al-Swaha expressed interest in partnering on aspects such as health sciences, biotechnology, environmental issues, cloud computing, generative artificial intelligence (AI), and the development of smart cities.
Commenting on the future prospects, Al-Swaha noted, “Both Saudi Arabia and Hong Kong are going through very promising transformations, being financial hubs in their respective regions. We have a unique chance to build an innovation bridge, enabling us to leapfrog into the future with an innovation-based economy.”
Al-Swaha, who has been the Minister since 2017, chose Hong Kong as the first stop on his extensive tour through China, where the exponential growth and dissemination of information and communication technology (ICT) have left a remarkable impression on him. ICT progression necessitates robust digital infrastructure, such as 5G networks, which Saudi Arabia is eager to acquire from Chinese companies despite the current US sanctions on firms like Huawei Technologies and ZTE.
“Saudi Arabia is pro-partnership and pro-openness,” said the Minister, stressing the Kingdom’s willingness to collaborate with any entity that can meet its security and regulatory prerequisites. He is set to visit the Shenzhen-based tech giant, Huawei, after Hong Kong.
Saudi Arabia is eager to learn from and build partnerships with the “world-class” transformation of ICT in mainland China and Hong Kong. Chief Executive of Hong Kong, John Lee Ka-chiu, highlighted the city’s plan to bolster relations with Saudi Arabia and the Middle East. A Belt and Road Summit, including a dedicated Middle East session, is planned in Hong Kong in September.
Encouraged by the warming of China-Middle East relations, private-sector entrepreneurs are capitalising on these opportunities. Following a visit by Chinese President Xi Jinping to Riyadh in December 2022, the Saudi Arabia-China Entrepreneurs Association plans to set up its headquarters in Hong Kong.
Al-Swaha, an electrical engineer by training, is also tasked with cultivating Saudi Arabia’s digital workforce and talent infrastructure. He recognised China as a key partner in skilling and upskilling the Kingdom’s burgeoning technology workforce of 340,000, aiming to double this number in the next five years.
Saudi Arabia aims to harmonise its Vision 2030 with China’s Belt and Road Initiative, aligning development strategies and digital talent cooperation. In turn, Saudi Arabia continues to invest in Chinese stocks listed on the Nasdaq and in Hong Kong, bolstering the symbiotic relationship between these two economic powerhouses.
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France has indicted Marianne Hoayek, a former assistant to Riad Salameh, the embattled governor of Lebanon’s central bank, on charges of money laundering. Hoayek, 43, refutes these charges, asserting that her funds primarily originated from her late father, a wealthy businessman. Her lawyer, Mario Stasi, relayed this stance to AFP.
Riad Salameh, in office for nearly three decades, is under investigation both domestically and internationally, accused of amassing a substantial fortune during his tenure. Salameh, whose term concludes this July, was once lauded as the protector of Lebanon’s financial stability. However, in the aftermath of the country’s fiscal collapse, he’s facing increasing blame, with many critics suggesting he played a significant role in precipitating the crisis.
French, German, and Luxembourg authorities seized assets worth 120 million euros ($130 million) tied to Salameh in March 2022. The 72-year-old governor rejects all accusations of misconduct and maintains that he accumulated his wealth during his tenure at the U.S. investment bank Merrill Lynch before assuming his position at Lebanon’s central bank in 1993.
Salameh has become a person of interest in the French and German judicial systems, leading to the issuance of international arrest warrants for accusations including money laundering and fraud. As a result, Interpol followed suit by issuing Red Notices, although these do not equate to international arrest warrants. Rather, they request global authorities to provisionally detain individuals, potentially leading to extradition or other legal actions.
Post the Red Notices, a local judge in Lebanon interrogated Salameh, confiscated his French and Lebanese passports, and implemented a travel ban while leaving him free pending further investigation. As Lebanon does not extradite its nationals, it’s feasible that Salameh could face trial domestically, depending on the local judicial authorities’ verdict on the accusations levelled against him.
Authorities have also interrogated other figures, including Marianne Hoayek, Salameh’s brother Raja, and central bank audit firms, in Beirut as part of the European investigations.
This ongoing investigation highlights the serious allegations surrounding Salameh and his former assistant, Marianne Hoayek, painting a distressing picture of Lebanon’s financial instability. The implications of this investigation may have far-reaching effects on Lebanon’s future economic stability, putting Marianne Hoayek in the spotlight.
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