Saudi Finance Minister to chair IMFC

Saudi Finance Minister, Mohammed Al-Jadaan has been chosen to chair the International Monetary and Financial Committee (IMFC) for a period of three years effective January 4, 2024.

Al-Jadaan will succeed Nadia Calviño, Spain’s first vice president and minister for economic affairs and digital transformation, who has chaired the IMFC since January 3, 2022. IMFC is the primary policy advisory body of the Board of Governors of the International Monetary Fund (IMF).

The IMF has announced that members of the IMFC appointed Al-Jadaan to chair the IMFC, which provides support to the IMF Board of Governors on the supervision and management of the international monetary and financial system. The IMFC deliberates on the matters concerning the growth and stability of the global economy, and has become a key instrument for providing strategic direction to the work and policies of the IMF.

Reacting to the prestigious appointment and honor to Saudi Arabia, Al-Jadaan said that the chairmanship of the IMFC for 2024-27 reflects the trust of the international community in the Kingdom’s leadership globally and regionally, and the pivotal role it plays in promoting international multilateral efforts.

“I thank the Former Chair of the IMFC, Nadia Calvino for her accomplishments during her term, and I look forward to working with the IMFC members and the IMF management to promote the stability and effectiveness of the international monetary and financial system," he said.

The IMFC deliberates on the principal policy issues facing the IMF. The Committee has 24 members, comprising finance ministers and central bank governors and operates by consensus, including on the selection of its Chair. The committee is a reflection of the composition of the IMF Executive Board. Each member country or group of countries that elects an executive director also appoints a member of the committee.

The IMFC normally meets twice a year—in the spring and during the IMF/World Bank Annual Meetings in the fall. Its next meeting is scheduled to be held in April 2024 in Washington DC.

It was pointed out that Saudi Arabia’s chairmanship of the IMFC reaffirms its strong commitment to promoting multilateralism, and reflects the leading role it plays towards supporting regional and global economic growth.

 

Saudi Arabia improves score in UNCTAD Liner Shipping Connectivity Index

In a significant development that aligns with the objectives of the National Transport and Logistics Strategy (NTLS), Saudi Arabia has solidified its competitiveness and global standing.

The Saudi Ports Authority (Mawani) attained its highest improvement in UNCTAD's Liner Shipping Connectivity Index (LSCI) for Q4 2023, securing a remarkable score of 79.01 points. This achievement adds to the recent major records, including a score of 77.66 during Q3.

Several factors contributed to this accomplishment. In 2023, 28 new cargo services were added in collaboration with leading shipping liners.

The Kingdom also made significant progress in container handling, rising from the 24th position to the 16th position in the Lloyd's List One Hundred Ports rankings.

Saudi Arabia jumped 17 places in the World Bank's Logistics Performance Index (LPI) to secure the 38th position out of 160 countries.

Mawani's success can be attributed to its continuous infrastructure upgrades and modernization efforts. The optimization of operations, implementation of initiatives to automate port operations, and deployment of cutting-edge equipment align with their mission to adopt smart technologies.

Furthermore, Mawani's commitment to facilitating import and export procedures has promoted national exports and fostered global maritime trade, ultimately reducing the cost of port operations.

The Liner Shipping Connectivity Index (LSCI) aims to enhance global port connectivity and increase the number of shipping lines.

It achieves this by considering various sub-indicators such as the frequency of scheduled vessel visits per week, standardized ship capacity, and the availability of regular service routes provided by shipping lines for inbound and outbound transportation. These indicators evaluate the level of connectivity between ports across different countries and their associated shipping line networks.

 

 

Israel still far from toppling Hamas in Gaza

While Israel’s political echelon wants to portray Hamas is on the brink of collapse, experts say complex urban warfare will lengthen the war and make victory much less clear.

The clock is ticking on Israel’s military operation against Hamas in the Gaza Strip, as it is unclear how much progress the Israel Defense Forces (IDF) has made in eliminating the terrorist organization.

According to Israeli officials, approximately 1,200 Israelis were killed in the attack and 251 people were abducted by Hamas on October 07. To date, 114 of the hostages, some of them foreign nationals, have been released. The rest remain in Gaza, and the Israeli government has promised to secure their release.

According to the Hamas-run Health Ministry in the Gaza Strip, more than 18,000 Palestinians have been killed as a result of Israel’s retaliation on Gaza, with another 50,000 injured.

After over two months, there is increasing international pressure to end the war. Over the weekend, the US vetoed a UN Security Council resolution that called for an immediate cease-fire. While the Biden Administration has maintained that Israel will be the one to determine the end of the war, there have also been American insinuations that Israel’s credit is limited.

“We have seen extensive damage,” said Dr. Michael Milstein, head of the Palestinian Studies Forum at the Moshe Dayan Center for Middle Eastern and African Studies. “But Israel is still far from toppling Hamas. The majority of its fighters are still alive; it still possesses rockets.”

“Hamas doesn’t need this to keep up its fight,” he added. “For Hamas, resistance is much more important than governance. As long as it has weapons and fighters, it doesn’t care whether it can govern Gaza or hand out humanitarian aid.”

“There is a gap between what is being described by the political level as Hamas being on the verge of collapse, but the countdown to the end of Hamas is premature,” said Milstein.

Iranian ship stuck in Turkey gets ready to sail

Stuck in a Turkish port for three years, an Iranian container ship is a rusty reality check on the reach of economic sanctions.

Blacklisted by the US since 2020, the 187-meter-long (614 feet) vessel Shamim has been moored at Istanbul’s state-run port of Haydarpasa since unloading there in January 2021. She suffered engine problems near Spain in late 2020 and was tugged some 2,200 miles — probably shunned by western shipyards it passed along the way.

During its Turkish hiatus, Shamim became part of the backdrop for commuters ferrying between the city’s European and Asian sides. It’s been there so long a dedicated page appeared on a local social media website where users shared theories about what kept it there.

A poem was penned in its honor. Others suspected it was a curse.

“The day this ship leaves Haydarpasa port, the dark clouds in my life will be lifted,” someone wrote.

But the bonding with the marooned ship may soon be over. Shamim performed tests throughout Monday and Tuesday ahead of an expected departure, Bloomberg News reported.

Washington sanctioned the Iran-flagged ship using measures designed to crimp the Iranian economy and hinder its development of nuclear technology. Iran says its atomic program is for peaceful purposes and not for nuclear weapons.

Shipping in the region has turned even dicier since Russia’s invasion of Ukraine.

US Treasury Under Secretary Brian Nelson last month asked Istanbul shipping companies for their cooperation in stopping what he described as an uptick in US-sanctioned Russian vessels using Turkish ports.

Despite the risks, Turkey remains an attractive place to do business for many Iranians thanks to its proximity, visa-free travel and connections to the global financial system.

After years of decline, trade between the countries has been rising since 2020, making Turkey the Islamic Republic’s second-biggest export market, according to data compiled by Bloomberg.

 

Israel faces worst diplomatic isolation

Israel announced its worst combat losses for more than a month on Wednesday after an ambush in the ruins of Gaza City, and faced growing diplomatic isolation as civilian deaths mounted and a humanitarian catastrophe worsened.

Intense fighting was under way simultaneously in the north and south of the enclave, a day after the United Nations demanded an immediate humanitarian ceasefire.

US President Joe Biden said Israel's indiscriminate bombing of civilians was costing international support.

Warplanes again bombed the length of Gaza and aid officials said the arrival of rainy winter weather worsened the conditions for hundreds of thousands of families sleeping rough in makeshift tents. The vast majority of Gaza's 2.3 million people have already been made homeless.

Israel reported ten of its soldiers killed in the past 24 hours, including a full colonel commanding a forward base and a lieutenant-colonel commanding a regiment. It was the worst one-day loss since 15 were killed on October 31.

Most of the deaths came in the Shejaiya district of Gaza City in the north, where troops were ambushed trying to rescue another group of soldiers who had attacked fighters in a building, the military said.

Hamas said the incident showed that Israeli forces could never subdue Gaza. "The longer you stay there, the greater the bill of your deaths and losses will be, and you will emerge from it carrying the tail of disappointment and loss, God willing."

In the south, Israeli forces storming Khan Younis advanced in recent days to city centre. Residents said there was heavy fighting there but no further attempts to advance in the last 24 hours.

“The Israeli tanks have not moved further from the centre of the city. They are facing fierce resistance and we hear the exchanges of fire, explosions too,” Abu Abdallah, a father of five who lives 2 km away, told Reuters.

The Israelis had brought bulldozers and were destroying the road near the Khan Younis home of the Hamas leader in Gaza, Yahya Al-Sinwar, Abu Abdallah said.

International agencies say the limited aid reaching Gaza is being distributed only in parts of Rafah near the Egyptian border. Even there, the situation has become far more extreme this week.

Gemma Connell, based in Rafah as Gaza team leader for the UN humanitarian office OCHA, told Reuters in a message. Heavy rains and winds overnight are awful for all of these people in makeshift shelters.

Israel says it has been encouraging increased aid to Gaza through Egypt's border, and is announcing daily four-hour pauses in operations near Rafah to help civilians reach it. The UN says cumbersome inspections and insecurity have slowed aid to a trickle.

The UN General Assembly vote demanding a ceasefire has no legal force but was the strongest sign yet of eroding international support for Israel's actions. Three-quarters of the 193 member states voted in favour and only eight countries joined the United States and Israel in voting against.

Before the vote, Biden said Israel still has support from "most of the world" for its fight against Hamas.

"But they're starting to lose that support by indiscriminate bombing that takes place," he told a campaign donor event.

In the most public sign of division between the US and Israeli leaders so far, Biden said Prime Minister Benjamin Netanyahu needed to change his hardliner government, and that ultimately Israel can't say no to an independent Palestinian state, opposed by far-right members of the Israeli cabinet.

Israel and US cannot wipe out Hamas

Iranian Foreign Minister Hossein Amirabdollahian said on Tuesday that Israel and the United States will never be able to wipe out Hamas and that Israel could only secure the release of hostages held in Gaza with a political solution to the conflict.

In a speech at the United Nations in Geneva in which he described the Islamist group as a freedom movement, Amirabdollahian said, "Israel and the United States will never be able to eliminate Hamas."

He added that Israel, which has vowed to wipe out Hamas, could only achieve the return of hostages taken by Hamas on October 07 by a political solution.

Amirabdollahian was speaking at a meeting alongside counterparts from other Middle Eastern countries.

"All the ministers agree that the strikes by the criminal Israeli regime and the genocide it is committing has to stop immediately," Amirabdollahian said following the meeting.

"The Rafah border crossing has to be open, humanitarian aid has to reach every part of Gaza and the forced displacement of the people of Gaza must stop," he added, referring to the crossing into Egypt used to bring humanitarian aid into the enclave.

Israel's assault on Gaza to root out Hamas has killed at least 18,205 Palestinians and wounded nearly 50,000 since October 07, according to the Gaza health ministry.

Iran's Supreme Leader Ayatollah Ali Khamenei appealed last month to Muslim states with political ties with Israel to at least cut them for a limited time. He had previously called for an Islamic oil and food embargo on Israel.

 

Saudi Aramco acquires stake in Pakistani company

Reportedly, Saudi Aramco has acquired a 40% stake in Gas & Oil Pakistan (GO Petroleum). This is the second major development in Pakistan’s oil marketing space this year - both led by Saudi Arabia - with Wafi Energy earlier entering into a share purchase agreement to buy Shell Pakistan (SHEL PA).

Incorporated in 2015, GO Petroleum retails fuels and lubricants, backed by about 1,100 outlets and a storage capacity of 200,000 tons. It is the 2nd largest oil marketing company in Pakistan in terms of retail outlets. However, its market share has fluctuated between 6 to 8 percent in the last three years, making it smaller than SHEL and APL. The industry leader remains PSO (enjoying market share of 50%).  

Although, pricing details have not been divulged as yet, according to Pakistan’s leading brokerage house, Intermarket Securities the assessed intrinsic value of US$200 million for SHEL to tentatively price the GO deal.

Given GO’s smaller market share, including in the lubricants business and the lack of a brand value comparable to SHEL, the brokerage house takes the deal price between US$100 million to US$150 million.

A 40% stake at this valuation range translates to US$40 million to US$60 million.

The brokerage house estimates that Vitol Dubai has a 10% share in GO Petroleum but it is unclear at this point if this is part of the 40% stake being acquired by Aramco.

It is likely but not certain that Aramco will take over management rights.

The GO Petroleum deal will be Aramco’s first investment in Pakistan, and comes on the heels of its earlier moves to acquire Valvoline’s global operations and Chile’s Esmax Distribution SpA.

The GO Petroleum investment will likely be very small in comparison to these other overseas downstream ventures. This leads analysts to think it may well represent a testing of the waters, with Aramco reportedly also interested in setting up a mega refinery project in Pakistan.

If GO Petroleum expands rapidly it could eat into the existing market shares of competitors. At present, given its major presence on motorways and the North region, GO primarily competes with HASCOL and APL, while urban centers are dominated by PSO and SHEL.

A possible expansion into the South region will impact the latter two companies more.