Business

RIYADH — Arab leaders must treat the region's 100 million young people as an asset, not a liability, the UN's youth envoy said in Saudi Arabia on Tuesday.

"This is a generation that is so willing to contribute, but is beset by obstacles in the 22-nation region plagued by conflict since a wave of Arab uprisings demanding reform erupted after late 2010,” Ahmad Al Hendawi told the MiSK Global Forum.

Releasing figures from a forthcoming study, he said the region's average age is below 25 — but the average age of Arab world politicians is 58.

"This region has the highest rate of youth protest if you compare it to all other regions in the world," said Al Hendawi, who assumed the post in 2013.

He said two-thirds of Arab women are looking for jobs.

A separate report by the United Nations labour agency in August showed that Arab states have the world's highest youth unemployment rate, above 30 per cent.

Overall, the region needs to create 60 million jobs by 2020, Al Hendawi said.

Even though that figure seems unreachable, he said the region should establish "an enabling environment" which would make it easier for young people to start businesses, and where they are seen "as an asset, not as a liability".

At the moment, starting a new business "is almost a mission impossible", he told the forum which brings business leaders together with young Saudis in a bid to inspire their involvement in diversification of the kingdom's oil-dependent economy.

Alhendawi said young people's use of social media shows "they are interested in politics and they are interested in public life", though not in the formal institutions of government.

He said the Arab world itself contains the solutions to its problems.

"This is our region," he told the hundreds of delegates. "We have to reclaim it."

The forum, which continues on Wednesday, is organised by the MiSK Foundation which aims to generate youth initiative.

It was founded by 31-year-old Deputy Crown Prince Mohammed Bin Salman, who in April launched the wide-ranging Vision 2030 plan for enhancing the role of the private sector as part of economic diversification.

AMMAN — Al Seraje Real Estate Development, a subsidiary of the Audeh Group, and  Habash-Deir Contracting Co. have signed an agreement for the construction of the skeleton works of Campbell Gray Amman, according to a statement sent to The Jordan Times on Tuesday.

Signed by Tony El Khal, Al Seraje real estate development general manager, the agreement entails the development of the 5-star hotel project, which will be operated by Campbell Gray Hotels and is set for completion in 2018.

Campbell Gray Living, the first investment project of Al Seraje Real Estate Development in Abdali is now open for sales and lease inquiries offering residential, offices and retail space.

Campbell Gray Amman will offer 188 rooms, two restaurants, meeting rooms, a ballroom, screening room, a spa, salon, indoor and outdoor swimming pools, cigar lounge, library and a royal suite atop the tower.

AMMAN — A hospitality and tourism expert believes Jordan has what it takes to assume a better position on the international tourism map. 

Furthermore, Omer Kaddouri, Rotana president and CEO, is confident that the Kingdom has the potential to attract "plenty of opportunities" in the hospitality sector, provided that more efforts are exerted by all stakeholders. 

"Amman is a city that can achieve, and needs to achieve, an 80 per cent [hotel] occupancy rate instead of the current average of 55 per cent," he told The Jordan Times in an exclusive interview on the sidelines of the Rotana Hotel opening ceremony. 

On the reasons for Rotana Group's decision to invest in Jordan, Kaddouri noted that investors have decided to move to Jordan many years ago believing that the country is "in need of more hotels of great calibre". 

"This country attracts corporates, it attracts medical tourism, it attracts tourism because of the culture [and the] availability of beautiful places… There are many good reasons to do business in Amman," he highlighted. 

While citing the difficult situation in the Middle East, which made countries with high hotel occupancy rates lose in that department, he underlined the importance of the Rotana Hotel as a project with long-term benefits.    

"It is not a great time right now, but you do not build a hotel for right now; you build a hotel for the next 20, 30 and 50 years," Kaddouri noted.  

Around 99.9 per cent of Rotana Amman employees are Jordanians, he said, because "there are a lot of Jordanians who have plenty of experience in the hotel business".

"If there is one thing that stands out to me, it is the calibre, the quality, the look and the friendliness of our Jordanian colleagues. They want to make a difference. They all speak English pretty well and they are all excited," said Kaddouri, a graduate of Les Roches International School of Hotel Management.

He underlined the need for young Jordanians to understand how "good this industry is for them", but called for instilling "some more loyalty" among them to understand that they join a company for the future and their career, rather than for a few additional dinars. 

"Rotana can give a lot of Jordanians great careers, not just in Jordan, but they can also transfer to our hotels in the UAE, Turkey, Kuwait, Saudi Arabia and to Africa when we open there next year," he said.

Kaddouri believes that Jordan can do more in familiarising the world with its uniqueness, especially in cooperation with the private sector and Royal Jordanian. 

"There are efforts to reach the world and they are great, but there have to be continuous delegations going from Jordan to all source markets like the UK, Germany and Asia," he said.   

AMMAN — The Amman Rotana Hotel was officially inaugurated on Monday. 

The $280 million investment managed by Rotana Group "reflects the company's faith in Jordan as a leading travel destination that offers its visitors a unique historical and cultural experience", Nasser Al Nowais, Rotana chairman and co-founder, said at the opening ceremony, attended by Prime Minister Hani Mulki on behalf of His Majesty King Abdullah.

Nowais noted that the opening of the new hotel "enhances our growing portfolio in the Jordanian market, which includes the Boulevard Arjaan by Rotana in the new Abdali downtown area".

Combined, the two hotels offer 803 rooms, suites and hotel apartments, employing 900 Jordanians. 

"Rotana has become the largest hotel operator in the Kingdom," said Nowais, who noted that the group, which will operate more than 100 hotels globally by 2020, looks forward to enhancing its presence in Jordan's tourism sector. 

The 188m building is the tallest in the Kingdom and includes 50 floors that house 412 rooms and suites, in addition to other facilities.

Tourism Minister Lina Annab cited the strong relationship Jordan and the United Arab Emirates enjoy, noting that Emirati investments in Jordan are estimated at $15 billion, while the Gulf country is seen as the first destination for Jordanian investments, which stand at around $1 billion.

SEOUL — Samsung Electronics said Monday it would buy US auto parts maker Harman International Industries for $8 billion in a bid to enter the growing market for automotive technology to produce "connected" cars.

The deal, the biggest in the firm's history, will provide a chance for the tech titan to move past the exploding Galaxy Note 7 crisis that is expected to cost it billions of dollars as well as its cherished reputation.

Board members of Samsung — the world's largest producer of smartphones — approved the all-cash deal of the Connecticut-based firm for $112 a share, Samsung said in a statement.

The deal will give the South Korean giant a "significant presence" in the global market for online-connected auto parts, the firm said. 

"Harman perfectly complements Samsung in terms of technologies, products and solutions, and joining forces is a natural extension of the automotive strategy we have been pursuing for some time," Samsung Vice Chairman Kwon Oh-Hyun said in a statement. 

"Harman immediately establishes a strong foundation for Samsung to grow our automotive platform."

Harman produces high-end audio systems and other Internet-enabled entertainment features for global carmakers, including General Motors and Fiat Chrysler.

Samsung Electronics — the flagship unit of the Samsung Group — produces a wide range of electronics from smartphones to home appliances and semiconductors. 

The latest deal will offer the firm a chance to combine Harman's expertise in high-tech auto parts and its own mobile and semiconductor technologies, Samsung said. 

Samsung is hoping to complete the deal by the third quarter of 2017 after getting approvals from Harman shareholders and regulators.

The latest deal comes as the South Korean electronics giant seeks new sources for growth beyond its key business of mobile handsets as the market slows.

"Samsung is trying to fill what it lacks by tapping into a new growth engine," said Greg Roh, an analyst at HMC Investment Securities.

"We can say that Samsung took a big step in gaining a competitive edge in the car info-tainment sector," Roh said.

Samsung in September announced a recall of millions of Note 7s after it emerged they were susceptible to overheating and exploding. The problem was exacerbated when it was discovered replacement gadgets were also blowing up and it discontinued the handset.

Roh said the search for a new growth engine would also likely be aimed at giving the company a boost amid a power transfer to the scion Lee Jae-yong.

The 48-year-old Lee, who is already vice chairman of Samsung Electronics and has seen his influence grow since his father, Samsung patriarch Lee Kun-Hee, suffered a heart attack and was hospitalised in 2014 joined the board last month during an extraordinary shareholders' meeting.

Samsung last year established a new automotive electronics business team, which will work closely with Harman, Samsung said.

The market for smart, connected electric vehicles including self-driving cars would grow by an average of 13 per cent each year to $186.4 billion by 2025, it added. 

The Samsung group dabbled in carmaking business in the 1990s but was soon forced to sell the business to the French carmaker Renault in the wake of the crippling 1997-98 Asian financial crisis.

DUBAI — Dubai business magnate Mohamed Alabbar announced on Sunday the launch of a $1-billion regional e-commerce site in a joint venture with the Saudi sovereign wealth fund and other Gulf investors.

Noon.com is to go online in January with a 50 per cent investment from the kingdom's Public Investment Fund and the rest from around 60 investors led by Alabbar, who heads the emirate's real estate giant Emaar.

He told a press conference that distribution centres are being set up in the Saudi cities of Riyadh and Jeddah, along with a giant warehouse the size of 60 football stadiums in Dubai.

"We expect to become a world player but will concentrate firstly on Saudi Arabia and the United Arab Emirates," said the president of Emaar, the company which built the world's tallest building, the Burj Khalifa in Dubai.

With an initial inventory of 20 million products, the online retailer aims to expand to Egypt, the Arab world's most populous state, at the end of next year or early in 2018.

Alabbar, quoted by Bloomberg, said Noon would be traded on stock markets after five to seven years.

Products will include fashion, books, home and garden, electronics, sports and outdoor, health and beauty, personal care, toys, children's and baby products.

With e-commerce growing fast in the Middle East, the region's Souq.com, founded in 2005 as an auction site before expanding into general retail, is often described as "the Amazon of the Middle East".

In February, Souq.com announced it had raised $273 million from international investors to finance expansion plans.

ALGIERS — Saudi Arabia's oil minister said it was "imperative" that OPEC nations finalise an agreement over a cut in oil production aimed at boosting crude prices, Algerian media said on Sunday.

Khalid Al Falih met his Algerian counterpart Noureddine Boutarfa on Saturday and called on cartel members to stick to the surprise cut deal, reached in Algiers in September.

"In this period marked by unstable oil prices it is imperative to reach a consensus between OPEC nations and to agree on an effective mechanism and precise figures to activate the historic Algiers accord," Falih was quoted as saying by Algeria's APS news agency.

The September meeting of OPEC members produced an agreement to cut the cartel's output by 750,000 barrels per day (bpd), according to Bloomberg News. 

Oil rose on news of the deal, but crude prices are still more than 50 per cent lower than their mid-2014 levels. 

Falih said he was "optimistic" that the agreement would come into effect.

The Saudi minister was quoted as saying that a "fair and balanced" output deal would allow unrest-hit Libya and Nigeria, with a return of security, to raise production, while reaching agreement with Iran on a freeze. 

Falih and his Algerian counterpart Boutarfa called for the date an OPEC preparatory meeting of experts ahead of the Vienna conference to be brought forward to November 21 from its scheduled date of November 25, APS reported.

OPEC officials said in September that the group would aim for a combined output of 32.5-33 million bpd.

On Friday, however, prices fell on news from OPEC that it had pumped oil in October at record levels of 33.64 million bpd, 236,000 bpd more than the previous month.

WASHINGTON — The International Monetary Fund (IMF) on Friday approved a three-year, $12 billion loan for Egypt to help the country recover from its economic crisis amid soaring inflation and deficits.

The IMF executive board said it would release $2.75 billion to Egypt immediately, while further disbursements will depend on the country's economic performance and agreed milestones in implementing the reforms.

The programme "will help Egypt restore macroeconomic stability and promote inclusive growth", the board said in a statement.

IMF Managing Director Christine Lagarde said the IMF would be supporting an Egyptian "homegrown economic programme" that addresses a huge budget deficit, rising debt, slow growth and high unemployment.

"The authorities recognise that resolute implementation of the policy package under the economic programme is essential to restore investor confidence, reduce inflation to single digits, rebuild international reserves, strengthen public finances, and encourage private sector-led growth," she said in a statement.

She said that there were "significant" risks to implementing the programme, but that those risks were mitigated by key actions already being taken by the government and "broad political support" for the loan programme's goals.

Six years of turmoil 

The loan announcement by the global crisis lender comes after Cairo took crucial preliminary reform steps in recent weeks to meet IMF requirements, including cutting fuel subsidies, announcement of a value added tax, and floating the Egyptian pound, which subsequently lost 45 per cent of its value against the US dollar.

Egypt is reeling after six years of political and economic turmoil involving the ousters of two presidents. Police had to put down some small protests Friday against rising prices, and analysts warn the government will continue to face challenges.

Cairo governments had avoided implementing the economic reforms for years fearing unrest, but President Abdel Fattah Al Sisi said Egypt no longer has the luxury of postponing them.

The IMF said Egypt's economic programme will be subject to five reviews over the life of the loan. The reviews are traditionally held every quarter, after which another tranche of the loan is released.

The IMF last month forecast the country's economy will grow 3.8 per cent this year and 4 per cent next year, but inflation is approaching 14 per cent and was expected to surge above 18 per cent in 2017. This is amid a budget deficit of 12 per cent.

The loan approval came hours after Standard and Poor's (S&P) announced it was upgrading the outlook on Egyptian sovereign debt to stable from negative, while keeping the rating at B-.

"A more competitive exchange rate could benefit Egypt's export of goods and services, particularly the depressed tourism sector, if the security environment stabilises further," S&P said.

However, S&P cautioned that floating the currency will increase inflation in the short term and "subsidy cuts on top of recent interest rate hikes will weigh on domestic consumption and may raise social tensions".

The IMF is fully aware of the potential for unrest, and has said repeatedly that social protection measures in the Egypt loan deal "are a cornerstone of the programme, not an add-on or afterthought", and include providing for increases in food subsidies even while advocating budget cuts.

"Even if the IMF has changed and is no longer imposing the same austerity measures, the reality… is that it's a very difficult agreement to implement," Bessma Momani, expert on the Arab world at the Centre for International Governance Innovation, told AFP.

Loans from Saudi Arabia and China will help Egypt gather the $5-$6 billion in additional financing required to complement the IMF loan.

AMMAN — A delegation of Austrian businessmen, which has recently concluded a visit to the Kingdom, has had the chance to get acquainted with investment opportunities available in the country, the Jordan News Agency, Petra, reported on Saturday.

The delegates met with their Jordanian counterparts and representatives of Jordanian concerned institutions and looked into ways to set up joint investment projects in Jordan. They also examined ways through which their investments could venture into neighbouring countries.

The delegates expressed their interest in the field of investment as they also underscored the need for boosting trade. In 2015, Austria’s exports to Jordan reached JD50 million, including pharmaceuticals, machinery and paper in particular, while the Kingdom’s exports to Austria totalled JD5 million, including fertilisers, phosphate and garments.  

CAIRO — Egypt's central bank said Thursday that it had issued $2 billion in bonds to international creditors to buy up assets and restore liquidity to its troubled financial system.

It did not elaborate on who the lenders were, saying only that the bonds had been taken up by a "consortium of international banks" and would have a maturity of one year.

It said the entirety of recent Egyptian government bond issues had been offered as security for the loan.

"The financing transaction was provided by the banks against the entire amount of newly issued Arab Republic of Egypt dollar-denominated sovereign bonds with maturities of December 2017, November 2024 and November 2028," it said.

The Egyptian economy has been reeling ever since the Arab Spring revolution of 2011. A series of militant attacks on foreign tourists have dealt further damage.

In the first couple of years after the 2013 overthrow of Islamist president Mohamed Morsi by then army chief, now President Abdel Fattah Al Sisi, Saudi Arabia and its Gulf Arab allies extended substantial credit to shore up the financial system.

But relations have since frayed amid differences over the civil war in Syria and for the past two months Saudi Arabia has halted promised loan-funded deliveries of fuel.

Sisi has pledged to carry out long-delayed structural reforms demanded by international lenders even at the expense of austerity measures that could fan social discontent.

In return, the International Monetary Fund has promised to recommend approval of a $12 billion loan for Egypt when its board meets on Friday.

Last week, the central bank floated the Egyptian pound, which resulted in a steep devaluation and sharp price rises.

The country has endured months of shortages of products ranging from sugar to baby formula.

The emergency bond issue comes amid a dollar crunch that has led to a thriving black market and a slump in imports, and caused the pound to lose nearly half its value against the dollar.