Saudi sovereign fund PIF to invest in Investcorp-Aberdeen infrastructure fund

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Saudi Arabia’s sovereign wealth fund PIF will become an anchor investor in an infrastructure fund being launched by Bahrain’s Investcorp and Aberdeen Standard Investments.

Aberdeen Standard Investcorp Infrastructure Partners (ASIIP) received a capital commitment from the $430 billion PIF for up to 20% of the total size of the fund ahead of its anticipated first closing, Investcorp said in a statement on Thursday.

The statement did not give the size of the fund, but the Financial Times reported on Wednesday it could be as much as $800 million and its first close will be $250 million.

The new fund has also received board approval from the Asian Infrastructure Investment Bank to commit $90 million, the statement said.

It could be joined by other global institutional investors including pension funds, insurance companies, endowments, family offices and private clients, the fund said.

ASIIP aims to participate in the post-COVID-19 economic recovery and reform in countries across the countries of the Gulf Cooperation Council and the wider Middle East and North A ..

Investcorp is a global alternative investment manager with around $35.4 billion in assets under management.


UAE launches Sinopharm vaccine trial for children under 18


Some members of Abu Dhabi’s ruling family are participating in a trial administering China’s Sinopharm COVID-19 vaccine to children aged 3-17, the emirate’s media office said.

The trial will monitor the immune response of 900 children “in preparation to vaccinate children in the near future”, Abu Dhabi Media Office said in a Twitter post on Wednesday.

Sheikh Theyab bin Mohammed, a son of the United Arab Emirate’s de facto ruler and Abu Dhabi’s crown prince Sheikh Mohammed bin Zayed Al Nahyan, accompanied his children, nieces and nephews to participate in the immune bridge study, it said.

The UAE in May approved the Pfizer-BioNTech vaccine for emergency use in children aged 12-15. Dubai, the second-largest member of the UAE federation, started inoculating that age group this month.

The UAE, which has among the world’s highest immunisation rates, on Wednesday registered 2,011 new coronavirus infections to take its total to 603,961 cases with 1,738 deaths. It does not provide a breakdown for each of its seven emirates.

The Gulf state led Phase III clinical trials of the vaccine produced by China’s state-owned drugmaker Sinopharm and has started manufacturing it under a joint venture between Sinopharm and Abu Dhabi-based technology company Group 42.


Dubai airport targets 28 million passengers this year

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Dubai’s state airport operator is hoping for a “flood” of travelers as the coronavirus pandemic eases, targeting passenger traffic through Dubai International Airport to grow 8% to 28 million this year as demand rebuilds.

Terminal 1 is reopening this Thursday after a 15-month closure. Operations were consolidated through Terminals 2 and 3 last year as the pandemic took hold.

“People think it will trickle back. I don’t believe that. I believe it will be an absolute flood of demand when people get the confidence to travel again,” Dubai Airports Chief Executive Paul Griffiths told Reuters on Sunday.

The airport, one of the world’s busiest, could see over 40 million passengers this year if it was “really, really lucky,” Griffiths said, though it was likely to be somewhere between 24.7 million and 34.3 million.

“We’re comfortable with that mid-range of about 28 (million).”

Terminal 1 has an annual passenger capacity of 18 million, while the entire airport can handle up to 100 million.

Griffiths estimated the terminal’s reopening would result in 3,500 additional jobs at the airport, including those working in retail, hospitality, security and immigration.

By the autumn, 90% of the 260 destinations served from Dubai airport prior to the pandemic could be restored, Griffiths said, up from 63% today.

Dubai announced on Saturday some restrictions on passengers flying from India, South Africa and Nigeria would ease from Wednesday.

The airport handled 5.75 million passengers in the first quarter, a 67.8% fall compared to the same quarter in 2020 before the pandemic halted traffic.

In 2020, passenger traffic plummeted 70% to 25.9 million from 86.4 million in 2019. The airport is the base of state carriers Emirates and flydubai whose entire operations are international flights.

Over a two-week period starting Thursday, 66 foreign airlines will move from Terminal 2 and 3 to Terminal 1.

Terminal 3, where Emirates operates from, will continue to operate with two of its three concourses for the time being.

Dubai’s second airport, Al Maktoum International, will also remain closed to commercial passenger flights.


Bahrain tops global financial attractiveness rankings for 3rd consecutive year

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Bahrain has topped the globally-recognised AIRINC Global 150 Cities Index financial attractiveness ranking for the third straight year, leading impressive rankings for MENA capitals – with seven leading MENA cities in the top 16 places. Aside from the capital of Bahrain in first place, others cities ranked included Riyadh, Kuwait City, Amman and Abu Dhabi.

The rankings evaluate the salary levels, cost of living, and taxes in a particular market in order to create an overall score for financial attractiveness.

The news of Bahrain’s win follows its recent success in the InterNations Expat Insider 2021 survey, where the country led the GCC across different indicators that included quality of medical care, political stability, ease of settling in and job satisfaction. The country was ranked fifth globally for ease of settling in, and a high number of respondents in Bahrain said they had no immediate or future plansto return home despite the pressures of the pandemic.

The Government of Bahrain was one of the first in the region to develop an economic diversification strategy away from hydrocarbons, successfully creating an economy where more than 80% of its GDP comes from non-oil sectors, providing a broad range of opportunities for Bahrainis and expats working in the country. Bahrain has since become known for its great regional connectivity, regulatory innovation, and best-value operating costs.

AIRINC describes itself as ‘the leading authority on international mobility data since 1954’ and supports multi-national corporations and others with the workforce globalisation strategies. The rankings are put together by an in-house team at AIRINC who ‘continuously research the costs and living conditions of many cities around the world to evaluate international mobility’.


Manama listed in the top 5 globally for FDI strategy in latest fDi Magazine ranking

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The Kingdom of Bahrain’s capital Manama has been named as the fifth globally amongst all-sized cities and first amongst small and mid-sized cities for FDI strategy in the 2021 Global cities of the Future index produced by the Financial Times’ fDi Magazine. Both Abu Dhabi and Dubai similarly ranked in the top 10, with Abu Dhabi placing sixth and Dubai placing eighth.

Commenting on the latest rankings, the Bahrain Economic Development Board’s Chief Executive, His Excellency Khalid Humaidan said: “In 2019, FDI stock made up 80% of our nominal GDP which is double the world average. We are very proud of this achievement and for being recognised for our FDI strategy. What is more promising is that three GCC cities have ranked in the top ten, highlighting the clear attraction for FDI in the region.

“This independent recognition is further confirmation that our board has set the right strategy for us to go forward and they continue to be supportive of our agenda.”

The Kingdom’s FDI strategy is pinned on a diverse multi-sectoral approach which is showing results and gaining recognition, as evidenced by Bahrain’s leading performance in the survey.

In addition to the Kingdom’s ranking in FDI Strategy, Bahrain was also ranked highly in cost-effectiveness and business friendliness, being 6th globally and third in MENA, and seventh globally and second in MENA respectively for small and mid-sized cities.

Bahrain has undertaken an ambitious and comprehensive programme of economic reform, which has been further recognised by other independent studies and surveys. The 2020 World Bank Doing Business Report named Bahrain the fourth most improved country in the world, and research by KPMG in a Cost of Doing Business Report highlighted that Bahrain is between 20-30 percent more cost-effective than some of its neighbors across multiple industries.


Bahrain real estate sector deals valued at US$ 1.9 billion in 2020


The real estate market in the Kingdom of Bahrain is gaining pace despite the challenges faced by the pandemic, with a series of major projects and initiatives driving sector growth. The rebound of Bahrain’s real estate sector fuelled a 14% and 20% rise in real estate deals in the third and fourth quarter of 2020 respectively, with the total value of real estate transactions in Bahrain reaching $1.9 billion (BD 717.4 million) in 2020.

Bahrain’s National Real Estate plan for 2021-2024 is set to further increase the sector’s contribution to the national economy as part of continued economic diversification efforts. The plan includes five initiatives and 17 projects, including laws and regulations, long-term plans and operational initiatives for developing the real estate sector.

Mixed-use major real estate projects in the Kingdom set to exceed US$ 12 billion which includes Eagle Hills Marassi Al Bahrain, Diyar Al Muharraq, Dilmunia and Bahrain Bay, which are creating prosperity through attractive and unique real estate destinations. Bahrain is a multidimensional marketplace that enables investment in a diverse range of properties that focus on addressing the growing consumer demand in Bahrain and the region for integrated communities that offer opportunities for the live, work, play lifestyle.

Commenting on the latest real estate developments, Ali Al Mudaifa, Executive Director – Investment Origination at Bahrain Economic Development Board said, “Bahrain’s bounce back in the real estate sector is testament to the Kingdom’s dedication towards economic growth.”

“Seeing these projects come to life has been a rewarding experience and we are confident that Bahrain’s real estate sector will continue to grow in the coming years.”

In addition to delivering a total of 30,000 homes over the past five years, Bahrain’s housing ministry is currently in the process of digitising their services to improve their offering. During 2020, the ministry completed around 45,000 transactions online, increasing efficiency and resulting in a 75% reduction in congestion time for housing service applications.


Unit of Bahrain’s GFH sells UK logistics hub for $123m

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Bahrain-based GFH Financial Group has announced that its subsidiary, Roebuck Asset Management, has concluded the off-market sale of a UK logistics centre for $123 million.

The sale of Accolade Park to Tritax Big Box REIT marks the end of a successful hold period for Roebuck, who acquired the asset for $84 million in May 2017 on behalf of a consortium of institutional Korean investors.

Accolade Park is a prime logistics centre comprising of 875,000 sq ft located in Avonmouth which is the principal logistics and manufacturing area for the South West of the country, centred around the Port of Bristol.

During the hold period, Roebuck has completed a number of acquisitions with Korean and other Asian institutional investors investing into mainly mission critical logistics assets across Europe including Tesco’s Avonmouth Distribution Centre, in the UK, which was acquired for about $102 million.

GFH acquired a majority stake in Roebuck, which continues to operate independently, in December. With GFH’s backing, Roebuck said it is set to execute on significant growth plans for 2021.

Together, GFH and Roebuck are working on over €1 billion of new third party mandates, a statement said.

Nael Mustafa, board member at Roebuck Asset Management and co- chief investment officer at GFH, said: “We’re pleased to announce this important exit by Roebuck of one of the prime logistics assets in the portfolio. The strategy to sell Accolade Park is in line with the Roebuck’s plans. Mainly, to acquire core and core plus logistics assets, add value through execution of asset management initiatives and to exit within a medium term.

“We look forward to announcing new transactions in this space and offering investors the opportunity to benefit from positive trends in the UK and European logistics, a segment of the market showing solid fundamentals and continued prospects for growth.”


Humam Miscone: Reflections on Iraq’s Manufacturing Industry

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By Humam Miscone, for The Iraqi Economists Network (IEN). Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

World Bank’s Assessment Is Flawed – Manufacturing Is Viable in Iraq. Additional Reflections on Iraq’s Industry.

These additional reflections are prompted the article of Dr. Amer Hirmis entitled “World Bank’s Assessment Is Flawed: Manufacturing Is Viable in Iraq… Preliminary Brief Comments!” (Hirmis, 2021), which provided critical assessment and comments and challenged some of the analyses and recommendations provided in a recent WBG document entitled “Breaking Out of Fragility A Country Economic Memorandum for Diversification and Growth in Iraq” (WBG Memorandum) (October 2020).

Initially, I would like to recognize and record my general agreement with the arguments and comments of Hirmis (2021).

The WBG Memorandum’s envisaged a vision for Iraq’s economic diversification and growth that, while concentrated on agriculture and agroindustry, completely ignored the manufacturing industry that flourished in Iraq in the 1960s – 1980s.

Instead, the WBG Memorandum vision actually brings Iraq’s economy back 70 years ago, to the early 1950s, when Iraq used to be net exporter of crude oil, wheat and dates and had nascent industrial sector, limited to textile and some construction material industries.

These additional reflections are intended to support the arguments on Hirmis (2021) regarding the manufacturing industry and to provide information and evidence that manufacturing industry, particularly mining, mineral and chemical industries, could be of equal importance to agriculture, agroindustry and even oil industry and could ensure the aspired economic diversification, growth, job creation as well as integrated and balanced territorial development.


Emirates A380 premium economy debut is well timed, say experts

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Emirates airline’s recent introduction of ‘premium economy’ seats is indicative of shrewd long-term decision making, according to experts.

The Dubai-owned airline announced on January 3 that it would deploy its latest flagship A380 aircraft featuring new premium economy seats and enhancements across all cabins to London Heathrow.

While the seats are not yet bookable, passengers flying on the daily EK003/004 flight can experience the new-look premium economy as a discretionary upgrade until more seats are rolled out commercially and at scale.

According to Tobias Rueckerl, president and CEO, Advanced Aviation Consulting Limited (AACL), Emirates would likely have had the plan in the offing for “three to four years” but now is a “good time” to roll out the Middle East’s first premium economy offering.

“This is might seem a strange time to launch this product but it’s not a bad move,” said Rueckerl.

“The pandemic has acted as a catalyst for [aviation] developments that have been coming to pass for years. More and more global airlines have decided to remove first-class products, upgrade business class products and install premium economy,” he said.

Global trends such as business teleconferencing and scaling back luxury corporate travel have been on the rise since the onset of the financial crisis in 2008, the aviation consultant said.

“After the crisis, many western companies changed their travel policies permitting employees to travel in economy only,” ” said Rueckerl. “First class was often filled with mile-collecting upgraders. In this context, it makes sense to re-think the cabins. In the coming years, business travel will become less important and leisure travel will become more popular.”

The AACL expert predicted that business and first-class cabins could be eradicated entirely in the coming years, making space for more low-cost airlines and products offering economy and premium economy.

Fascinating move
Andrew Charlton, managing director at Switzerland-based Aviation Advocacy, said the introduction of premium economy seats by Emirates represents a “fascinating” move.

“There is no doubt that post-pandemic business travel volumes will drop and travel budgets will be tightened, so a value-offer like premium economy may help,” he said. “After the pandemic, many people will want to visit their families or treat their relatives to special flights, so a reasonable upgrade offer might be a good call.”

Charlton predicts that in the coming years business travellers will take occasional longer, consolidated business trips rather than frequent trips.

Stealing a march on competitors
Saj Ahmad, chief analyst at London-based aviation consultants StratAero, said Emirate’s use of a solitary A380 to roll out its premium economy offering highlights that limited scheduling is an issue amid pandemic times.

“Until more airplanes with this cabin are made available for use, it is at Emirates’ discretion regarding who uses premium seats,” he said.

“At the same time, it does allow customers to get a first look at a new product: Emirates is the only GCC airline that has a premium economy suite and so the novelty factor will definitely be an eye-catcher for regular travellers.”

Ahmad added that Emirates has “stolen a march” on its Gulf rivals with its new offering.

“Once we’re through this pandemic, Emirates will have yet another string to its bow for engaging and enticing customers,” he said. “You have to wonder how Gulf competitors will sit on the sidelines before they develop and introduce their own versions.”

Major route
The heavily trafficked route between London airports and Dubai has been a growing battleground for global carriers in recent years.

The London Heathrow-Dubai route alone was the fourth busiest route in the world and attracted 3.4 million passengers in 2017, according to a RoutesOnline study.

The UK capital has historically been a leading aviation hub, providing convenient connections for Emirates passengers to the rest of the UK and wider Europe.

Last week, Sir Tim Clark, president Emirates, said: “The Emirates A380 is already one of the most sought-after travel experiences in the skies, and now we’ve made it even better. While others cut back, Emirates is working hard to restore the products and services that we’ve had to suspend or adjust due to pandemic precautions, and introduce new offerings and enhancements.”

The airline received its newest A380 aircraft from Airbus in December and its remaining order of five A380s will also be delivered with premium economy cabins over 2021 and 2022.

What’s in Emirates premium economy?
The premium economy cabin will have 56 seats in a 2-4-2 cabin layout.
With a pitch of up to 40-inches, Emirates’ premium economy seat is 19.5 inches wide, and reclines eight inches into a comfortable cradle position with ample room to stretch out.
Each seat has a 13.3″ screen, one of the largest in its class as well as easily accessible in-seat charging points, a wide dining table and side cocktail table.
Emirates premium economy is located at the front of the main deck, with two lavatories dedicated to customers.

UAE, Saudi Arabia progress with common digital currency for central banks

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The central banks of the UAE (CBUAE) and Saudi Arabia (SAMA) have officially launched a project for a common digital currency.

A final report on the Aber project follows ongoing experiments and research into the initiative which is considered one of the first of its kind internationally at the level of central banks.

It aims to provide proof of concept for the feasibility of issuing a digital currency for central banks called the Wholesale CBDC, with a view of developing cross-border payment systems and reducing transfer times and costs between banks, CBUAE and SAMA said in a joint statement.

It will also experiment with the direct use and application of technologies such as distributed ledgers.

During the trial period, the Wholesale CBDC was only used by the central banks and banks participating in the initiative as a settlement unit for domestic as well as cross-border commercial bank transactions between the UAE and Saudi Arabia, the statement added.

Over the course of one year, usage solutions were designed, implemented, and managed… These results showed that the distributed ledger technology would enable central banks to develop payment systems at both local and cross-border levels,” the statement said.

CBUAE and SAMA both expressed satisfaction with the achieved results, which they described as being “beneficial to the central bank community and the financial system in general”.

“The project results are expected to contribute to developing clear perceptions of the potential of this technology and its applications on the financial sector,” they added.

Plans to develop the Aber project were first announced in early 2019 to transact financial settlements between Saudi Arabia and the UAE through Blockchain and distributed ledgers technologies.

It was devised as one of seven initiatives agreed by the Executive Committee of the Saudi-Emirati Coordination Council at its first meeting in Abu Dhabi last year.