Business

DOHA — The political crisis in the Gulf is putting at risk business deals worth $2 billion in Arab countries that have cut ties with Qatar, an economic official in the emirate said on Monday.

Yousuf Mohamed Al Jaida, chief executive of the Qatar Financial Centre, said the majority of the contracts at risk — some $1.5 billion (1.3 billion euros) — were in the area of construction.

The level of exposure for businesses from Saudi Arabia, the United Arab Emirates and Bahrain has been negatively impacted alongside that of Qatari businesses in the current crisis.

“We sincerely believe that the impact is regional, not only local,” Jaida told reporters at a briefing in Doha.

“Qatar’s exposure to the blockade countries — the UAE, Saudi Arabia and Bahrain — is limited. This is a fact,” he said in English.

There are very few Qatari companies doing business in Saudi Arabia, UAE, and Bahrain, he said.

“There is on the other hand a couple of billion dollars of contracts of these blockade countries impacted in Qatar due to restrictions in their own countries,” he added.

Some $18-billion in short-term deposits held by Saudi, UAE and Bahraini banks would mature in the next two months, but if the funds were withdrawn they could be “easily” covered by the Qatari government, said Jaida.

The economist said Qatar’s sovereign wealth fund, worth some $335 billion, was largely unaffected as it was mostly invested outside the Gulf.

Saudi Arabia, the United Arab Emirates, Bahrain are among a string of countries which this month cut ties with Qatar over accusations the emirate supports extremism.

Doha denies the accusations.

Gas-rich Qatar is currently in the middle of a massive $200-plus billion infrastructure programme to help the country prepare for the 2022 Football World Cup.

Imports from Saudi Arabia, the UAE and Bahrain, including construction materials and food, represent about 14 per cent of Qatar’s total imports, said Jaida.

The crisis has forced Qatar to turn elsewhere for long-term trade partners, especially those in Asia.

“We will continue to expand our global outreach, especially with Asia, which happens to be our largest export market,” said Jaida.

Imports from Asia account for 32 per cent of Qatar’s total imports.

Qatar has also shipped in food from Turkey and Iran since Saudi Arabia and its allies on June 5 suspended ties with the emirate.

LE BOURGET, France — Boeing announced on Monday what it claims will be the most efficient jet yet in the highly competitive civil aviation market as it tries to claw back market share from rival Airbus.

“Today, it is our pleasure to officially announce the newest member of our 737 family, the 737 MAX 10,” Kevin McAllister, head of the company’s commercial aviation division, told journalists as the Paris Air Show got under way.

It quickly announced more than 100 orders worth some $13.5 billion (12.1 billion euros), although some were customers changing their selection of models from previous orders. 

The MAX 10 will be the largest of the updated 737 series, which competes head on with Airbus’s A320 neo family. With the latest advances in engines and aerodynamics, they promise significant fuel savings to airlines, which have responded with hundreds of orders for single-aisle airlines that are the workhorses of their fleets. 

Airbus, which moved first to update its aircraft used in most midrange flights, now has a 60 per cent market share.

The 737 MAX 10, which can carry up to 230 passengers, is the largest in the class, and Boeing said it would be 5 per cent cheaper to operate than the Airbus A321neo. As these planes can carry more passengers, they have attracted interest from low-cost airlines as well as carriers looking to exploit their range that allows them to make flights across the Atlantic.

McAllister said the 737 MAX 10 will be “the most efficient single-aisle airplane in the skies”.

Boeing has a test version of the 737 MAX 9 on display at Le Bourget airport north of Paris, which hosts the air show. 

For its part, Airbus announced orders for over 100 planes in its A320neo family, including at least a dozen of the latest A321neo model, worth over $11.5 billion.

While Airbus and Boeing dominate the world’s civil aviation industry, the duopoly is not without challengers: Competition is looming, notably from Russia and China, which have been test-flying their own mid-range models.

The airshow comes a little too early for either Russia’s Irkut, with its MC-21, or China’s Comac, with the much-flagged C919, to be able to showcase their aircraft there, but both will leave little doubt that they expect to win a big slice of the aviation pie in the future.

Airbus will also showcase its new long-haul model A350-1000 and Boeing its 787-10 Dreamliner, while Ukraine’s Antonov will present its 132 D.

Airbus will also have on hand a new “plus” size version of its A380 as it tries to revive interest among airlines in the superjumbo double-decker aircraft. 

Changes to the cabin will allow airlines to add another 80 seats to the planes which carry around 500 passengers on average without reducing comfort. Together with aerodynamic improvements, Airbus said the planes will be 13 per cent cheaper to operate on a per seat basis from current models.

It is the first major update to the plane since it entered service in 2007. Airbus, which has been talking with airlines for years about improvements to the aircraft to take advantage of the latest cost-saving technologies, slowed down production of the aircraft last year as orders dried up.

While new civilian aircraft orders will probably fall short of the $130 billion the Paris show clocked up last time — mostly thanks to airlines ordering the latest fuel-efficient Boeing and Airbus aircraft — the industry is still optimistic about sustained growth. Airbus said this month that it expected the market for large passenger planes to more than double in the next 20 years, driven by growth from Asian markets.

It predicts the need for 35,000 new planes worth $5.3 trillion over the next two decades, an increase from last year’s estimates.

French President Emmanuel Macron officially opened the biennial Paris Air Show, arriving on an Airbus A400M military transport plane.

Military aircraft are also a key part of the air show, and the spectacular displays of supersonic combat planes are a key draw for the crowds.

One star performer will be Lockheed Martin’s F-35A next-generation fighter jet, scheduled to make demonstration flights during the air show.

Some 200,000 member of the public are expected to visit the air show, which runs to June 25. That is in addition to the 150,000 industry professionals from 2,370 companies.

SYDNEY — Australia's first recycled supermarket is giving food destined for landfills a second chance, as the government embarks on a major push to cut down on waste costing the economy Aus$20 billion ($15 billion) a year.

The outlet run by food rescue organisation OzHarvest in Sydney takes surplus products normally thrown out by major supermarkets, airlines and other suppliers, and gives them away for free.

It is an attempt to tackle the mounting waste problem in Australia, home to 24 million people, where consumers toss out some 20 per cent of food they buy with more than 4 million tonnes ending up as rubbish each year. 

"It is simply remarkable that in prosperous, modern-day Australia we produce enough food to feed 60 million people a year but every month more than 600,000 people — one-third of them children — seek food relief from relevant charities," Environment Minister Josh Frydenberg said in April.

The government is drawing up an ambitious plan to halve food waste by 2030 and is convening a national summit later this year involving the private sector and non-profit organisations. 

Globally, one-third of food produced for humans — about 1.3 billion tonnes costing around US$1 trillion — is lost or wasted annually, according to the Food and Agriculture Organisation.

Such wastage is particularly conspicuous in retail, where "large quantities" of food are thrown away "due to quality standards that over-emphasise appearance", the UN body added.

That's where supermarkets like OzHarvest come in, said founder Ronni Kahn, a leading voice in Australia's food rescue community, who hopes the pop-up store will raise awareness about sustainable living.

Besides the needy, "there are people [at the supermarket] who want to take part in this sharing economy... taking produce and understanding why this produce was rejected, why is this here, why is this surplus", she told AFP as she pointed to bread donated by a bakery.

Long queues have formed outside the shop since it opened in late April, with the unemployed, single mothers, and students among those who leave with bulging bags of groceries.

Tip of the waste iceberg

What we eat or throw away is just the tip of the iceberg in the production process, conservation experts say, with huge amounts of resources such as fertilisers, fuel, land and water used to grow and package food.

"When food's wasted, and all of those resources are wasted as well, what's incumbent upon us is to make the most of the food that we produce in those instances, rather than producing more and more," said Marcus Godinho of charity FareShare.

FareShare tackles waste by cooking large quantities of food that farmers and manufacturers struggle to offload, or which is due to expire, in a 500-square-metre  kitchen in Melbourne before freezing and storing it for distribution to the disadvantaged at a later date.

Also, reducing waste at a wholesale level is Yume, an online platform connecting suppliers and buyers for hard-to-sell surplus produce at significantly discounted prices, chief Katy Barfield said.

"It [the unwanted food] can be cancelled orders, it can be mislabelled, it can be brand refresh, it can be export orders that get cancelled, it can be specifications... that are not what the retailers want," Melbourne-based Barfield told AFP.

Barfield, who previously headed up food rescue charity SecondBite, wants to take the platform global as she develops it to handle millions of transactions.

"Because it's a piece of technology, there are no barriers to scaling it," she said.

With Canberra stepping into the fray, waste warriors are optimistic that incentives including tax breaks could reduce excess in supply chains and encourage businesses to keep surplus food still fit for consumption away from landfills.

Even public institutions such as schools, hospitals and prisons could make their procurement of food more sustainable by buying surplus products through platforms like Yume, Barfield added.

"It would save food going to waste, it would be good for the environment, it would be very good for the taxpayers' pockets because we would be paying less for the food, and I think it's a win, win, win," she said.

HAVANA — US President Donald Trump says tightening restrictions on American business and tourism in Cuba will help the island’s people and small private businesses, but analysts warn it will do the opposite.

The US president framed it as a move against a “cruel and brutal” regime: bypassing the state military-run business group GAESA to channel investment to the people.

But in Cuba, cutting out the armed forces means undermining the tourism sector, which is largely controlled by GAESA but also supports many small, private businesses.

“The new measures will attack the only sources of growth that the Cuban economy currently has: tourism and the private sector,” said Pavel Vidal, a Cuban economist at Pontifical Xaverian University in Colombia.

“The companies under military control are decisive for the operation of tourist services. If you restrict its capacity to receive foreign investment and make international payments, the economy is sure to suffer.”

‘Backward move’

Cuba’s state Business Administration Group (GAESA) manages some 50 hotels, chains of shops, construction, communications and distribution firms and the major port of Mariel west of Havana.

Run by Luis Rodriguez Lopez-Callejas, son-in-law of Cuba’s President Raul Castro, GAESA is involved in joint ventures with several foreign firms that have driven a tourism boom on the island, including the Marriott hotel chain.

Since taking over the running of the country just over a decade ago, Castro has been gradually expanding the private sector and trying to open up the country to foreign businesses.

After decades of Cold War enmity, he oversaw a diplomatic rapprochement with the United States under Trump’s predecessor Barack Obama.

But the reforms have been slow and Cuba is in recession, dragged down by the decline in cut-price oil imports from its crisis-hit ally Venezuela.

US companies active in Cuba have complained about the threat to business — such as the Starwood hotel chain which last year opened a Sheraton in Havana. But the biggest impact may be felt by Cubans themselves.

“There will be little impact on the US economy,” said Michael Shifter, a specialist at the Inter-American Dialogue, a Washington-based research group.

“But for the Cuban economy — including the private sector — this shift is a tremendous blow.”

A group of 55 Cuban businesspeople sent a letter this week to Trump’s daughter and adviser, Ivanka, warning against the policy changes.

PARIS — The aircraft industry descends on Paris on Monday for the world’s biggest airshow, a prime battleground for bitter rivals Boeing and Airbus, but also a chance for new kids on the block to snap at the heels of the two giants.

Single-aisle planes for short and medium distances are the hottest ticket in the world’s civil aviation industry, with airline demand for models in the Airbus A320 family giving the European company an edge, for now, over its American opponent which is racing to return in force to the mid-range segment.

But the duopoly is not without challengers: Competition is looming, notably from Russia and China who have each been test-flying their own mid-range models.

The airshow comes a little too early for either Russia’s Irkut, with its MC-21, or China’s Comac, with the much-flagged C919, to be able to showcase their aircraft there, but both will leave little doubt that they expect to win a big slice of the aviation pie in the future.

Squeezing in seats

Boeing, meanwhile, is to showcase the 737 Max 9 model as its anti-Airbus weapon in a market segment where the capacity to squeeze a few more seats into a narrow-body cabin while eking out increased fuel efficiency over greater ranges is key.

Airbus’s biggest-capacity member of the mid-range family, the brand new A321neo, is able to fit in 236 seats in an all-economy class version. Low-cost airlines are eyeing the aircraft to break into transatlantic routes.

Coming up next from Boeing is the 737 Max 10 which is to match that capacity, while also being lighter and cheaper, the plane maker has said. Test flights have been completed and Boeing is now talking to customers about ordering the Max 10.

“This airplane would give airlines increased capacity and the lowest seat costs ever for a single-aisle airplane,” said Randy Tinseth, vice president for Boeing Commercial Airplanes.
“Simply put, the 737 MAX 10X would be the most profitable single-aisle airplane the industry has ever seen,” he wrote in a blog entry.

Airbus will also showcase its new long-haul model A350-1000 and Boeing its 787-10 Dreamliner while Ukraine’s Antonov will present its 132 D.

While new civilian aircraft orders will probably fall short of the $130 billion the Paris show clocked up last time — mostly thanks to booming orders for Boeing and Airbus — the industry is still optimistic about sustained long-term growth.

Airbus said earlier this month it expects the market for large passenger planes to more than double in the next 20 years driven by growth from Asian markets.
Supersonic roars
Raising its previous forecasts for the next two decades, the European aircraft maker also said a slowdown in orders over the past several months did not signal a drop in the market.
“The trend is positive,” said Airbus Chief Executive Fabrice Bregier.
The planemaker predicts the need for 35,000 new planes worth $5.3 trillion over the next two decades, an increase from last year’s estimates.
Airbus earlier warned it expected slow orders this year and perhaps next year, too, but said it was a normal part of the business cycle.

The biennial Paris Airshow, which runs to June 25, is expected to attract 150,000 industry professionals from 2,370 companies.

There will also be some 200,000 regular visitors, many of whom will come especially for spectacular displays of supersonic military hardware as fast combat planes break the sound barrier.

One star performer will be Lockheed Martin’s F-35A new generation fighter jet, scheduled to sortie on demonstration flights during the airshow.

RIYADH — Saudi Arabia’s Kingdom Holding Co. said on Thursday it has bought a stake in car ride-hailing business Careem, its latest venture in the booming sector.

Kingdom Holding, chaired by Prince Al Waleed Bin Talal, acquired a 7 per cent share in the firm, valuing the transaction at $62 million.

Dubai’s Abraaj Group said in a separate statement that it has divested its shareholding in Careem.

It did not give the size of the stake, but confirmed it has been acquired by Kingdom Holding, a diversified Riyadh-based global investor.

The firm has stakes in a variety of sectors, including banking, through Citigroup, and media with Time Warner.

In 2015, Kingdom Holding invested more than $100 million in Lyft, a San Francisco-based rival to another US-based ride-hailing operation, Uber, which is a smartphone app that connects passengers and drivers.

“Our investment in Careem is a continuation of our strategy to invest in new technologies”, as it has already done with Lyft and stakes in Twitter and JD.com, Kingdom Holding’s CEO Talal Al Maiman said in a statement.

“Careem sets an example for regional businesses by providing employment opportunities to locals and developing talent,” he said.

Car booking apps are popular in Saudi Arabia, particularly among women who are banned from driving in the country.

As part of a wide-ranging plan to diversify its oil-dependent economy and give more jobs to Saudis, the kingdom is trying to develop its digital infrastructure and broaden its investment base.

In December, the largest Saudi telecommunication firm, STC, said it would buy a 10 per cent stake in Careem for $100 million.

Uber announced in June last year that Saudi Arabia’s Public Investment Fund would inject $3.5 billion to help the app’s global expansion.

Rival Careem operates in the Middle East and surrounding region.

TOKYO — From edible ink printers to chicken stick conveyor belts, Japan’s food firms put it all on the menu at an industry show this week with one bold exhibitor claiming it could turn anyone into a top sushi chef.

Newmind’s colour printers can graft almost any image — a country flag, Hello Kitty face or message to a loved one — onto cookies and other food just like a conventional printer.

Best of all, you can eat the ink.

Over at Kojima Giken’s booth, a machine plunged wooden skewers into diced chicken and leek bits as they passed along a conveyor belt. 

The result is a wildly popular grilled snack called yakitori, usually accompanied by copious amounts of beer. 

The company says its machines can churn out anywhere from 300 to 20,000 yakitori sticks an hour depending on the size of the machine.

“And we can skewer pretty much anything,” said founder Minoru Kojima.

“Just last year, we designed a big machine to make fruit and vegetables on sticks — the kind of things you eat at parties. We sold them in France.”

There were nearly 800 exhibitors at the International Food Machinery and Technology Exhibition in Tokyo, which wraps up Friday.

Suzumo Machinery has a device that combines rice, spicy green wasabi paste and fresh fish before wrapping the sushi in a clear plastic wrap stamped with an expiration date — at a rate as quick as 2,000 pieces an hour.

“Making sushi is a difficult thing and require skills that take about from three to five years to acquire,” said Suzumo’s Ryosuke Murai.

“With this machine, you can become a sushi chef in a day.”

KUWAIT CITY —  While the Gulf’s bitter diplomatic crisis is unlikely to affect energy prices in the short term, a prolonged rift that disrupts Qatar’s gas supplies could send prices soaring, analysts say.

With rising US shale oil output driving a global supply glut, the decision by Saudi Arabia and its allies earlier this month to sever diplomatic ties with Qatar provided only a fleeting boost to prices.

“Given the severe supply glut in the oil markets globally, it is quite unlikely that the Gulf spat would lead to a spike in oil prices in the short or medium term,” M.R. Raghu, executive vice president of Kuwait Financial Centre (Markaz), told AFP.

Qatar said on Monday that it would comply with an agreement by the OPEC oil cartel and other producers to extend production cuts for nine months until the end of March to rebalance the market.

Qatar’s share in the output cuts of 1.8 million barrels per day is just 30,000.

While its daily oil output of around 600,000 barrels represents less than 1 per cent of world crude production, Qatar is a major player in liquefied Natural Gas (LNG).

The tiny emirate is the world’s leading LNG exporter, accounting for a third of international supplies, mainly to Asia and Europe.

Advisory firm Oxford Economics said Qatar’s exports of oil and gas are unlikely to be significantly affected, with its main sea routes — including through Omani and Iranian waters — still accessible.

But using Iranian waters could involve higher costs, said Jean-Francois Seznec of the US-based Atlantic Council’s Global Energy Center.

“It may have a small indirect impact in the case of continued tension. Insurance rates will start increasing rapidly and those rates would have to be paid by Qatar,” Seznec told AFP.

Most of Qatar’s almost 80 million tonnes of LNG supplies are shipped in tankers, mainly to Japan, South Korea and India, as well as to several European countries.

One-third of Britain’s gas imports, for example, come from Qatar. Other European customers include Spain and Poland.
 Politically fraught
The air, sea and land restrictions imposed by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt have not so far affected maritime routes for Qatari LNG vessels which can pass through the Strait of Hormuz.

Any disruption to Qatar’s LNG exports could anger the European Union.

“If Qatar gas finds it increasingly difficult to reach world markets, especially Europe, then the European Union may feel threatened by the prospect of having to depend on more Russian gas imports, a decision that is highly fraught politically in many EU capitals,” Kuwait Financial Centre said in a report on Monday.

Qatar also pumps more than two billion cubic feet of gas daily through a pipeline to the UAE, mainly for power generation. A small part of the pipeline exports goes to Oman.

So any disruption to Qatar’s gas supplies would be painful for several countries. 

A serious escalation of Gulf tensions or a military confrontation — while seen as highly unlikely — could cause energy prices to soar.

“If the conflict develops into a military confrontation... I would expect a very large spike in prices to around $150 a barrel of oil,” from below $50 per barrel now, Seznec said. 

Gas prices would also increase several-fold, he added.

This would be accompanied by a major leap in insurance premiums.

For oil prices to triple as predicted by Seznec, the conflict must disrupt oil and gas supply lines from most of the Gulf nations, including Saudi Arabia, the world’s largest crude exporter.

The six Gulf Cooperation Council (GCC) states — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — account for a fifth of global crude exports or about 13 million bpd.

Income from energy exports makes up over 80 per cent of public revenues for the six members.

Raghu said an escalation of the crisis could mean “sea routes getting blocked and cost of transshipment of global gas rising”.

Major importers of Qatari LNG like Japan, South Korea and India may face shortages of supplies leading to a scramble for alternative suppliers in the long term, he said.

BEIJING — China must quicken the pace of reforms and do more to curb rising debt, the International Monetary Fund (IMF) said on Wednesday as it raised its growth forecast for the world’s number two economy. 

The International Monetary Fund expects China to expand by 6.7 per cent this year, faster than its previous estimate of 6.6 per cent due to expanding credit and investment.

That would match last year’s growth rate, which was the slowest in a quarter of a century. 

The economy is then expected to slow to an average of 6.4 per cent expansion between 2018 and 2020.

After years of blistering growth, China’s economy has been slowing as it moves from an investment and export-driven model to one more reliant on consumer spending.

However, Beijing’s Belt and Road infrastructure project, for which the government has earmarked hundreds of billions of dollars, has raised concerns it may be retreating from the difficult transition.

David Lipton, the IMF’s first deputy managing director, said it was “critical” that China capitalises on its still-strong pace of expansion to speed up reforms. 

“While some near-term risks have receded, reform progress needs to accelerate to secure medium-term stability and address the risk that the current trajectory of the economy could eventually lead to a sharp adjustment,” Lipton told reporters at the end of a two-week visit to China.

The IMF also called on Beijing to do more to rein in soaring credit, warning that runaway lending could lead to a bad debt problem if borrowers default on their loans.

China’s overall debt liabilities, which include corporate and household borrowing, are above 260 per cent of gross domestic product compared to about 140 per cent before the 2008 financial crisis.

When the debt-to-GDP ratio “rises quickly, when that rise gets beyond certain bounds, there tends to be vulnerabilities and a greater probability of crisis”, Lipton said.

The IMF also urged Beijing to phase out support for underperforming state-owned enterprises (SOEs) and so-called zombie companies — those firms that survive only on rolling credit from the banks. 

Lumbering SOEs and debt-choked companies have been a drag on the economy. While the government recognises the need for restructuring, it also fears mass lay-offs and social instability.