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DUBAI — Gulf countries must undertake much deeper reforms or risk seeing their wealth drain away in 15 years as global demand for oil slides, the International Monetary Fund (IMF) warned on Thursday.

"At the current fiscal stance, the region's financial wealth could be depleted by 2034," the IMF said in a study on "the future of oil and fiscal sustainability" in the region.

The Gulf countries, which heavily depend on the "black gold" that has enriched them for decades, have no choice but to accelerate and widen economic reforms to avoid becoming net borrowers, the IMF said.

The Gulf Cooperation Council (GCC), which groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates, accounts for a fifth of the world's crude supplies and oil income makes up 70-90 per cent of public revenues.

Banking on hefty oil revenues over nearly two decades through 2014, the six nations controlled by ruling dynasties accumulated some $2.5 trillion of financial assets invested mostly overseas through sovereign wealth funds.

But the oil price shock of mid-2014 has battered the finances of GCC nations, drastically reducing their revenues and forcing them to borrow and draw down on their assets to plug persistent budget deficits.

GCC gross domestic product plummeted as a result, with the IMF estimating the economies grew by just 0.7 per cent last year from an already meagre 2 per cent in 2018 — far from rates of above 4 per cent before the oil crash.

The global energy market is undergoing fundamental change as new technologies are increasing supply, while concerns over climate change see the world moving towards renewable sources, the IMF said.

"This outlook spells a significant fiscal sustainability challenge for the GCC region," which must adapt for the combination of long-term low demand and prices, the global lender said.

 Good times are over 

A legacy of sharply rising expenditure during 2007-14 thanks to high oil prices, followed by a steep decline in hydrocarbon revenues, has weakened fiscal positions in the region, it said.

The resulting deficits lowered the region's net financial wealth during 2014-18 by around $300 billion to $2 trillion, according to IMF estimates. The drop now is believed to be even deeper.

GCC government debt rose from around $100 billion in 2014 to nearly $400 billion in 2018.

As a result, net financial wealth is on track to turn negative by 2034 or even faster, turning the region into a net borrower, the report said.

Most GCC countries have embarked on economic diversification and reform programmes that include subsidy cuts, raising power prices and even imposing value-added tax and other forms of taxation. 

"Ongoing reforms are moving the GCC region in the right direction, but they need to accelerate," the IMF said.

Rapid diversification of economies will not be enough, the IMF warned, saying the process should be accompanied by reductions in government expenditure and the introduction of broad-based taxes.

GCC nations must also rationalise spending, reform their large civil service sectors, and reduce public wage bills which are high by international standards.

Most Gulf countries see these measures as highly sensitive and a political risk because of the potential adverse affect on citizens who have grown accustomed to subsidies and low taxes.

The proposed measures "would have a multitude of socioeconomic consequences affecting employment, household incomes, and business confidence and investment", the IMF admitted.

MUNICH, Germany — Under fire from climate protesters over his company’s part in a massive coal mine project, Siemens Chief Executive Joe Kaeser hammered home the group’s green credentials at its annual general meeting on Wednesday.

Siemens “did not see the whole picture correctly and in time” when agreeing to supply rail signalling equipment to the planned Carmichael mine in Australia, Kaeser told shareholders in Munich, as the chants of activists outside could be heard.

Kaeser said the company would make one billion euros ($1.1 billion) available between now and 2025 to identify and reduce greenhouse emissions in its supply chains.

But he complained about the company being the focus of “agitation”, warning demonstrators and activists that “protest alone offers no solutions”.

“Those who persist in rejecting dialogue and cooperation on solutions lose the moral right to discredit” companies and leaders who are taking climate action, Kaeser said.

In an earlier press conference, the 40 year Siemens veteran had called activists’ focus on his firm over the 18 million-euro coal mine contract “almost grotesque”.

Siemens products had helped slash almost 640 million tonnes of carbon dioxide emissions by its customers in 2018-19, Kaeser said, or 80 per cent of Germany’s annual output.

Outside the Munich Olympiahalle venue, around 300 people rallied against the firm’s contract with Indian mining company Adani, brandishing placards with messages like “We demand clean air” and “Healthy people on a healthy planet”.

“We will continue our protests for as long as Siemens doesn’t back down,” said Helena Marschall, a representative of the movement, at a Tuesday press conference.

The demonstrators plan to urge the company to “abandon coal” at a larger protest in the afternoon.

Groups like Extinction Rebellion and Fridays for Future have homed in on the shareholder meeting as an opportunity to renew the pressure on Siemens.

“What’s more important: a small financial loss in the short term, or the disastrous consequences such a project will have for generations?” Marschall asked.

She and other environmentalists have been invited to speak inside the cordon by a group of Siemens shareholders.

In mid-January, CEO Kaeser met leading German Fridays for Future activist Luisa Neubauer after protests across the country against Siemens.

He kept activists and observers on tenterhooks for weeks as he decided whether to stick with the coal mine contract.

But he later said in a statement: “We must fulfill our contractual obligations” relating to the signalling deal for the massive open-cast mine, not far from the iconic natural landmark the Great Barrier Reef.

“Only being a credible partner whose word counts also ensures that we can remain an effective partner for a greener future,” Kaeser insisted at the time.

Siemens says it backs the 2015 Paris Agreement and aims to become carbon-neutral by 2030.

The company also plans to create a “sustainability committee” with powers to block environmentally questionable projects.

Activist Neubauer said she was not satisfied.

“This isn’t just about one single coal mine,” she told the daily Bild.

“If Siemens wants to be climate-neutral by 2030 but invests in a project that will mine coal until 2080, something doesn’t add up.”

The open-cut Carmichael mine is set to become operational next year and produce up to 27 million tonnes of coal annually.

Adani spent years trying to secure private finance for the coal mine before announcing in 2018 it was self-financing a trimmed-down, $2 billion version of the project.

Supporters say the mine will bring hundreds of much-needed jobs to rural Queensland in eastern Australia.

But conservationists say the project threatens vulnerable local species and notes that the coal will have to be shipped from a port near the already damaged Great Barrier Reef.

Much of the coal from the mine will be burned in India, a country with some of the world’s highest levels of air pollution.

AMMAN — The International Air Transport Association (IATA) said 2019 saw a drop in demand for global air freight markets, according to IATA’s 2019 data, released on Wednesday. Demand, measured in freight tonne kilometers fell by 3.3 per cent compared to 2018 while capacity rose by 2.1 per cent.

This was the first year of declining freight volumes since 2012 and the weakest performance since the global financial crisis in 2009 (when air freight markets contracted by 9.7 per cent). In December, cargo volumes contracted 2.7 per cent year-on-year while capacity rose 2.8 per cent.

Air cargo’s performance in 2019 was dampened by weak growth in global trade of just 0.9 per cent. Softer business and consumer confidence, along with falling export orders, also contributed to air freight struggles. However, there are signs that confidence and orders could pick up in 2020, but it is too early, according to IATA. “For sure, 2020 will be another challenging year for the air cargo business,” said Alexandre de Juniac, IATA’s director general and CEO.

LONDON — Stock markets rallied strongly on Tuesday, as trading floors assessed the early impact of China’s deadly novel coronavirus on the economy.

Gains overnight on Wall Street saw Asia follow suit and leading European indices and Wall Street were all around 1.5 per cent ahead shortly after the US open.

The dollar largely firmed while the pound recovered, after heavy falls on Monday triggered by Britain and the European Union offering very different ideas regarding their new trade deal following Brexit.

Markets’ main focus remained on authorities’ efforts to contain an outbreak that has now infected over 20,400 people and killed more than 420 people, more than the SARS epidemic that hammered Asian economies in 2003.

Cautioning that “news is hardly uplifting on the virus front”, Edward Moya, senior market analyst at OANDA said “today’s bounce may not go much further.” With swathes of China in lockdown “the world’s second largest economy is shut down and it will be tough to see US stocks recapture record high territories until the virus peaks,” Moya forecast. 

Connor Campbell, analyst at Spreadex trading group, noted that “investors find themselves at an interesting, slightly difficult point in the coronavirus outbreak timeline”, ensuring investors are “picking and choosing what developments they are willing to pay attention to”.

“Further complicating matters is the fact... the impact on the Chinese economy won’t really be known until the next batch of data out of the country,” Campbell added.

Oil prices were meanwhile bouncing back from tumbles since the deadly virus outbreak after Iraq’s oil ministry said members of the Organisation of the Petroleum Exporting Countries (OPEC) and their ally Russia were discussing a further cut to crude oil output because of the epidemic.

OPEC is holding a meeting of a “joint technical committee” in Vienna on Tuesday and Wednesday to discuss the virus’s impact and whether an output reduction is needed, it said.

Benchmark oil contract, Brent North Sea crude, recovered to $55.13 per barrel having earlier touched a 13-month low $53.95.

The WTI oil contract was similarly back off a 13-month-low of $49.66 per barrel at $50.98.

Shanghai’s main stocks index rose 1.3 per cent on Tuesday — boosted by China’s central bank injecting around another $60 billion into the financial markets.

It had dived 8 per cent on Monday, with Chinese traders catching up with losses elsewhere while away for the long Lunar New Year break.

AMMAN — The Aqaba Special Economic Zone Authority (ASEZA) will award the Hyatt Regency Aqaba Ayla Resort a five-star deluxe classification today [on Tuesday]. 

The award is in recognition of the exceptional levels of hospitality services, state-of-the-art facilities, and integrated range of facilities the hotel provides. 

The award granting will take place during a visit by representatives of hotel classifications at the ASEZA to Ayla facilities, considered one of the largest urban development projects in Jordan.

In a statement, Nayef Bakhit, Chief Commissioner of the Aqaba Special Economic Zone Authority (ASEZA) stressed the role of Ayla in developing a world-class tourism product which contributes all the factors of a primary destination for tourists from abroad and increases the number of distinctively rated hotel rooms to become one of the leading destinations for tourists in the Aqaba Special Economic Zone.

In remarks, Sharhabeel Madi, ASEZA commissioner of tourism and economic affairs said: “The classification of the Hyatt Regency Aqaba Ayla as a five-star deluxe hotel is a valuable addition to the tourism product and will have a great impact in strengthening the local tourism ecosystem. ”

During the visit, representatives of the classification committee are scheduled to  take a tour through the various hotel facilities and listen to an overview by Jean-François Durand, general manager of the Hyatt Regency Ayla, of the services and facilities offered by the hotel, considered some of the best in the region, starting from its unique design and quality facilities, and ending with itsworld-class services, uniquesupport for recreational activities, as well asits Spa and wellness centre.

Sahl Dudin, managing director of Ayla Oasis Development Company, will brief the classification committee on Ayla’s various facilities, including the brand-new retail zone in Ayla’s Marina Village, which will be launched in the second quarter of 2020.

 It will provide a one-stop service destination for Ayla’s residents and visitors alike, in addition to offering them the chance to explore the unique yacht marinas and plethora of real estate residential and hotel development areas.

Dudin added that Ayla is transforming into a fully-integrated youth community as it has started the delivery of residential units within the islands area to their owners, in addition to handing over 50 per cent of its golf apartments to their owners as well. 

Ayla pursues its work to offer integrated support services, provided by leading Jordanian brands in the retail, pharmacy, restaurants, cafés and other sectors, noting that Ayla is strongly contributing to the tourism activities in the city by offeringunique promotional campaigns and activities, as well as hosting and organising major sports events, and launching competitive tourism seasons, which have all helped in making Ayla a leading destination for both family and expatriate tourism. 

Ayla’s world-class facilities for water sports and golf have helped it attract high-level global, regional and local sports tournaments which are helping to promote Aqaba’s unique capabilities.

Ayla has completed the first phase of the project about a year ago, with the opening of the Hyatt Regency Aqaba Ayla Resort, a testament to its efforts to comply with a comprehensive plan that includes supplying the tourism sector in the Aqaba Special Economic Zone with about 1,500 new high-end hotel rooms, split among 5 hotels, in addition to adding 3,000 housing units and 20,000 square metres of shops, restaurants, cafés and other support services, and 300 berths for boat owners and enthusiasts, which are all adding to Aqaba’s ability to attractmore tourists, especially after the city exceeded the barrier of one million tourists in 2019, and is now gearing up for even further growth in the coming period.

The visit supports a participatory approach to work between the public and private sectors and reflects joint efforts to achieve development goals.

ABU DHABI — The United Arab Emirates (UAE), a leading member of the Organisation of the Petroleum Exporting Countries, announced on Monday the discovery of huge gas reserves, saying the find would help the Gulf country achieve self-sufficiency.

Abu Dhabi National Oil Co. (ADNOC) said about 2.2 trillion cubic metre of shallow gas resources were discovered between the emirates of Dubai and Abu Dhabi, the largest of the seven-member UAE.

“This new discovery reinforces the nation’s goal of achieving gas self-sufficiency, enabling major development projects,” it said in a statement.

Leaders of Abu Dhabi and Dubai witnessed the signing of an agreement between ADNOC and Dubai Supply Authority for the exploration and development of the gas resources.

In November, Abu Dhabi announced new discoveries of seven billion barrels of oil to raise the UAE’s total crude reserves to 105 billion barrels, the world’s sixth largest.

It also announced the discovery of 1.6 trillion cubic metres of conventional gas, boosting total reserves to 7.7 trillion cubic metres as well as 4.5 trillion cubic metres of unconventional gas.

Most of these reserves are located in Abu Dhabi.

Monday’s statements gave no details on the timeframe for the new gas resources to become onstream or the estimated cost of the projects.

Shallow gas resources are reserves found trapped not too deep from the surface but they need advanced technology for production.

The produced gas will be supplied to Dubai which currently imports most of its gas needs from neighbouring Qatar which is under embargo by a Saudi-led coalition that includes the UAE.

The agreement “reinforces ADNOC’s commitment to ensuring a sustainable and economic gas supply and achieving gas self-sufficiency”, said the firm’s CEO, Sultan Al Jaber.

Throughout 2018, ADNOC granted concession rights in existing and new oilfields to several international companies, and earmarked some $132 billion to invest in the oil sector over the next five years.

ADNOC plans to boost gas production for UAE to become a net exporter and also to raise crude output capacity to 4 million bpd in 2020 and to five million bpd a decade later.

LONDON — Britain on Sunday began to detail a hardline stance in upcoming negotiations with the European Union on future relations, following its historic departure from the bloc.

Foreign Secretary Dominic Raab, who will embark on a tour of Asia and Australia next week as he looks to pave the way for global trade deals, warned that London will not accept alignment with EU rules.

He also insisted that European courts could have no jurisdiction over Britain beyond the 11 month Brexit transition period that runs to the end of the year.

“We’re not going to be aligning with EU rules, that’s not on the negotiating table... it is not even in the negotiating room,” Raab told the BBC.

“We will not be insisting that they align with our rules as a price for a free trade deal” he added in a separate interview with Sky News.

“That’s not the way free trade deals are done.”

But in a sign of the potentially fraught nature of the high-stakes talks, Irish Prime Minister Leo Varadkar urged London to “tone down the kind of nationalistic rhetoric”. 

Britain should avoid repeating the past mistake of insisting on “rigid red lines” which “makes it hard to come to an agreement”, he said.

‘Infuriated’ 

Late on Friday, Britain ended almost half-a-century of often reluctant membership of an organisation set up to forge unity among nations after the horrors of World War II.

It immediately entered an 11 month transition period agreed as part of the divorce, during which there will be little change in practical terms.

Britons will be able to work in the EU and trade freely — and vice versa — until December 31, although the UK will no longer be represented in the bloc’s institutions.

Legally however, Britain is out, and attention is now turning to what may prove to be gruelling talks with Brussels this year to hammer out all aspects of the future partnership.

In speeches by Prime Minister Boris Johnson in London and EU chief negotiator Michel Barnier in Brussels, each side will set out its position on Monday.

British newspapers reported on Sunday that the government was readying for a bruising battle, and unwilling to offer many of the compromises set to be demanded by the bloc.

The eurosceptic Sunday Telegraph said Johnson was “privately infuriated” at perceived EU attempts “to frustrate a comprehensive free trade deal”.

Raab acknowledged there was “a bit of frustration” in London that “commitments” seen as already agreed in the initial Brexit divorce deal were not being “lived up to”.

Canada-style deal 

Johnson, a polarising figure accused of glossing over the complexity of leaving the EU, is in a rush to seal an agreement.

He has vowed not to extend the transition phase, giving himself just 11 months to find consensus on everything from fishing to finance — not enough time, according to his critics.

The British premier wants to pursue a minimal trade deal — dubbed Canada-style, in reference to the EU’s existing agreement with Ottawa — that envisages zero tariffs and quotas on goods.

But Britain makes no binding commitment on maintaining EU standards.

EU negotiators, who fear being undercut on their own doorstep, consider that far too narrow for an important neighbour like Britain.

Barnier has warned that some items will have to be a priority and wants handshakes on fisheries, internal and external security and, above all, trade in goods. 

‘New era’ 

London is also now free to strike trade agreements around the world, including with the United States, whose President Donald Trump is an enthusiastic Brexit supporter.

One of his top envoys on Friday hailed an “exciting new era”.

At a special Brexit day ministers’ meeting in northeast England, Johnson discussed an aim to get 80 per cent of Britain’s commerce covered by trade agreements within three years, a spokesman said.

Raab confirmed on Sunday that he would embark on a tour of Asia and Australia next week, a trip encompassing Japan, Singapore and Malaysia.

The foreign office declined to release further details.

The Sunday Telegraph reported that a trade deal is earmarked to be agreed with Japan by Christmas, followed by more agreements with Australia and New Zealand in mid-2021.

AMMAN — The Arab Bank Group closed 2019 with a net income of $846.5 million after tax compared with $820.5 million in 2018, recording a growth of 3.2 per cent.  

Net income before tax grew to reach $1.15 billion compared with $1.12 billion in 2018, while its equity grew to reach $9.102 billion with a return on equity of 9.3 per cent, according to an Arab Bank Group statement made available to The Jordan Times on Saturday.

In view of 2019's results, the Group's Board of Directors has recommended to its shareholders a distribution of 30 per cent cash dividends for the fiscal year 2019, making a total dividend payout of over $270 million, the statement said.

The group’s net operating income grew by 5 per cent, driven by growth in interest and fee income, while credit facilities grew by 1.2 per cent to reach $26.1 billion. Customer deposits increased by 6 per cent, or almost $2 billion, to reach $36.2 billion. 

Revenues grew by 4.6 per cent to reach $2.23 billion, and generated from both the local and international networks, with revenues from international networks amounting to nearly 70 per cent of total revenues. Total expenses recorded a decrease of 3 per cent from 2018, according to the statement.

The group managed to further grow its equity by 5 per cent during the year to reach over $9 billion despite the exceptional distribution of 45 per cent cash dividend for the year 2018, following the dismissal of the legal case.

Chairman of the Board of Directors Sabih Masri, stated that the "strong performance confirms the success of the group in dealing with the challenging and changing operating environment and reflects the group’s prudent operating policies". 

The group's broad network across countries in the region and globally provides the benefit of diversified sources of income, Masri said, adding that it has demonstrated that it has the "right strategy and footprint to deliver value for its shareholders", according to the statement. 

Chief Executive Officer Nemeh Sabbagh stated that Arab Bank continues to deliver consistent and sustained growth, while investing for the future through “the prudent and efficient deployment of capital, and by building a resilient balance sheet through its disciplined and proactive approach to risk management”. 

Sabbagh added while the operating environment for most regional economies remains challenging, “Arab Bank’s strength, its broad and loyal customer base, diversified business model and wide geographical diversification, and its ability to leverage its unique brand and global network ensured that the performance of the group remained strong”. 

Sabbagh also stated that “the solid results of Arab Bank Group for 2019 were driven by sustainable growth in the underlying business and by well controlled expenses”. 

The group’s loan-to-deposit ratio stood at 72.1 per cent while the capital adequacy ratio calculated in accordance with Basel III regulations is at 16.2 per cent. Asset quality of the group remains high and credit provisions held against non-performing loans continue to be above 100 per cent, according to the statement.

Masri concluded by remarking that the encouraging results will continue to support the strong financial performance of the group and its position in its markets and that the bank will maintain its strong financial position and will aim to deliver to its shareholders healthy and sustainable dividends. 

Arab Bank was named “The Middle East’s Best Bank 2019” by Euromoney — London and “Best Bank in the Middle East for 2019” by Global Finance, New York, for the fourth year consecutively, according to the statement. 

Financial statements for 2019 are subject to the approval of the Central Bank of Jordan, the statement concluded.

LONDON — Stock markets retreated on Thursday on growing concerns over the economic impact of the new coronavirus that has killed 170 people in China after a spike in the number of deaths.

Tech stocks and airlines were among key losers as the World Health Organisation called an urgent meeting on whether to declare a global health emergency over the virus.

Around 11:00 GMT, London's benchmark FTSE 100 index was down 0.7 per cent. Investors were looking ahead also to a policy update due 12:00 GMT from a Bank of England meeting that could see an interest rate cut on the eve of Brexit to help boost Britain's stalled economy.

In the eurozone, Frankfurt's DAX 30 index shed 1 per cent and the Paris CAC 40 slumped 1.2 per cent.

"With the coronavirus death toll leaping... the European markets reverted back to panic mode, quickly unravelling the rebound managed in the last couple of sessions," said Connor Campbell, analyst at Spreadex trading group.

The pound dropped also, with investors "clearly anxious about this afternoon's knife edge Bank of England meeting", he added.

Traders' main focus remained the virus and increased concerns over its spread weighed heavily also on oil prices on Thursday, with benchmark Brent crude sliding more than 2 per cent.

The WHO, which initially downplayed the severity of the disease, has warned all governments to be "on alert" as China reported 1,700 new cases of the SARS-like virus that has infected 7,700 people and been detected in at least 15 countries.

Airlines around the world are either suspending or paring back services in and out of China following cases of human-to-human transmission outside the country, and manufacturers have also been cutting their Chinese operations.

US Federal Reserve Chairman Jerome Powell said the coronavirus posed a new risk to growth in China and elsewhere.

In Asian stock markets on Thursday, Taipei closed down 5.8 per cent on the first day of trade since the Chinese New Year break, with Eva Airways plunging 9.9 per cent and market heavyweight and key Apple supplier Taiwan Semiconductor Manufacturing (TSMC) sliding 5 per cent.

Fellow Apple supplier Hon Hai Precision Industry fell by the daily limit 10 per cent after it said most of its manufacturing plants in China would remain closed until February 10.

Elsewhere Thursday, Tokyo's main stocks index closed down 1.7 per cent and Hong Kong ended 2.6 per cent lower.

Japanese automaker Toyota said it would keep its plants in China closed until at least February 9 over concerns about the outbreak.