Business

AMMAN — Cryptocurrency’s use as a digital payment method is accelerating globally, and certainly, the trend is well on its way to the Middle East after the proper regulations are implemented, said Leila Serhan, senior vice president and group country manager for Visa in North Africa, the Levant and Pakistan (NALP).

The number of people using crypto-linked credit cards is subsequently trending, with Visa reporting around $3.5 billion in crypto transactions in 2021, Serhan added.

"This is not just people buying cryptocurrency, but also people using cryptocurrency to enable digital commerce," she told The Jordan Times in a recent interview.

"Crypto is a trend that we cannot ignore. There are around 400 million people who have purchased crypto around the world, and at Visa, we look at ourselves as a network of networks, and crypto networks are definitely one of the networks where we want to facilitate the exchange of money," Serhan said, adding that crypto remains "a strong investment vehicle" that continues to enjoy popularity amongst investors. 

As such, Visa has partnered with over 75 crypto-enabling exchanges.

"What we have done with many exchanges is that we have allowed users to issue Visa cards that hold cryptocurrency, and allow them to go through the 80 million merchants around the world that accept Visa and use their crypto card to buy any product. This is what we are focusing on in this regard currently, and of course, regulations need to allow it,” she said, adding that if a country’s regulations allow for it, the company will facilitate the transactional use of cryptocurrency. 

Visa cards work in approximately 200 countries, and 3.9 billion visa cards have been issued across the world.

During its recent earnings call, Visa reported that customers have conducted $2.5 billion in payments with crypto-linked cards in the first fiscal quarter of 2022. This figured comprises 70 per cent of the company’s crypto volume for all of fiscal year (FY) 2021, according to a report by CNBC, citing Visa CFO Vasant Prabhu.

“To us, this signals that consumers see utility in having a Visa card linked to an account on a crypto platform. There’s value in being able to access that liquidity to fund purchases and manage expenses, and to do so instantly and seamlessly,” Prabhu, quoted by CNBC, said.

Recently, the Middle East has witnessed a notable uptick in crypto investment and transactions.

Illustrating the surge in crypto, Serhan referred to recent Dubai regulations of the digital medium. The Dubai Law No. 4 of 2022 regulating Virtual Assets in the emirate (VA Law) was issued in March of this year. The VA Law established the Dubai Virtual Assets Regulatory Authority (VARA), which was tasked with creating a legal framework for the virtual assets sector.

"We have seen many crypto exchanges setting up shop in Dubai, such as crypto.com, Binance and others," Serhan added.

During the interview, Serhan said Buy Now Pay Later (BNPL), a digital, installment-based payment plan, is likewise gaining popularity in the Middle East.

As of 2021, approximately 51 per cent of Jordanian consumers report a preference for using digital payment methods in ecommerce, compared with 48 per cent in 2020, according to research from Checkout.com and YouGov’s survey of over 13,000 consumers across several Middle Eastern countries. 

The study also showed that 20 per cent of consumers in Jordan used BNPL in the past 12 months.

Thirty-one per cent of those surveyed reported that they had never used BNPL, but plan to in the next 12 months. An additional 30 per cent said that they have no intention to try BNPL at present.

Further economic digitalisation was recognised as the key to achieving the nation’s 2025 Economic Modernisation Vision among 48 per cent of Jordanians surveyed. Advancing digital skills education in the country was similarly considered critical to achieving Jordan’s economic goals, the survey reported.

With the surge in ecommerce comes an increased demand for reliable cybersecurity protection. As for Serhan, the Senior Vice President stressed that Visa invests heavily in cybersecurity.

"We are proud that there is no fraud on our network. Cybersecurity is one of our big investments, as fraudsters are becoming more and more intelligent as we move into the digital world," she said.

As fraudsters and hackers further develop their methods of theft, many fall victim to their techniques. Thus, digital financial literacy is of great importance to prevent such attacks. To combat this issue, Visa has embarked on several efforts to educate users on ecommerce safety and digital financial literacy.

Ultimately, Serhan said, digital payments are vital for increasing the financial inclusion of small and medium enterprises in the Middle East.

"Accepting digital payments is very feasible for small-and medium-sized businesses, as once they start using these payment systems, they can acquire a credit score and find easier access to finance and small loans," she added.

DOHA — Europe faces painful "industrial rationalisation" due to its energy crisis that risks political trouble, the head of Shell warned Sunday, as the oil giant joined a natural gas project in Qatar.

Shell chief executive Ben van Beurden agreed a deal for a 9.3 per cent stake in Qatar Energy's North Field South project, that will play a major role in the Gulf state's effort to increase liquefied natural gas (LNG) production by 50 per cent in the next five years.

At the signing ceremony in Doha, van Beurden said European industry face taking a major hit from the energy crisis, worsened by the Russian invasion of Ukraine.

Europe has reduced consumption "quite effectively, quite significantly" following the loss of 120 million tonnes of Russian gas a year, van Beurden said, but "a lot of this reduction is achieved by switching off industry".

Europe has desperately searched for quick alternatives to Russian gas, but van Beurden said Europe would need large amounts of LNG for decades.

"A lot of people say, turn down the thermostat, or maybe don't switch on the air conditioning," he said.

"But there is also 'why don't we switch off the fertiliser plant that we have' or 'let us scale down on some petro chemicals production in general'. And that rationalisation, if it goes on long enough, becomes permanent."

'Pressure' 

Van Beurden said there have been "some victory laps" in Europe over the way it has reduced demand, but added "some of it is actually bad news for the long term, namely economic or industrial rationalisation".

The Shell chief, who will retire at the end of the year, said industrial cuts could spark some "rejuvenation", but also brought risks.

"To do it at this scale, this abruptness, at a time of economic challenges in general, I think will bring quite a bit of pressure on European economies, and perhaps also a lot of pressures for the political system in Europe," he said.

British-based Shell is the second European company, after France's TotalEnergies, to take a stake in North Field South. 

Twenty-five per cent of the project has been reserved for international energy giants.

Expansion across the North Field, the world's biggest proven gas reserves, is intended to increase Qatar's LNG production by 50 per cent to about 127 million tonnes a year by 2027.

Shell and TotalEnergies took stakes earlier this year in the North Field East zone.

"Natural gas assumes greater importance in light of recent geopolitical turmoil," said Qatar's Energy Minister Saad Sherida Al Kaabi as he welcomed the Shell deal.

WASHINGTON — The US budget deficit fell by half in the past year to $1.4 trillion on the back of a pandemic recovery and as relief spending eased, the government said on Friday.

COVID-related spending on things like unemployment insurance and other programmes have declined following a recovery in the world's biggest economy from the virus outbreak, with businesses returning to normal.

The drop in the budget deficit marks the "largest one-year decrease", said the Treasury Department and White House budget office on Friday.

This was helped by higher individual and corporation tax collections, bolstered by employment growth, with tax revenues for the fiscal year ended September 30 surging a record $850 billion from 2021.

President Joe Biden hailed the big drop as evidence of a resurgent economy just three weeks ahead of November's crucial midterm elections to decide control of Congress.

Hailing the "largest ever decline in the federal deficit", Biden called the development "further proof that we're rebuilding the economy".

The development, he said, was part of "the good news on the economy" that he predicted would help Democrats climb back in the polls, which currently show Republicans poised for victory.

Treasury Secretary Janet Yellen, in a statement citing the American Rescue Plan stimulus package, said "today's joint budget statement provides further evidence of our historic economic recovery".

In a statement, officials also added that the US has "more than recovered all of the jobs lost during the pandemic".

The economy added more than 10 million jobs since early 2021, while unemployment returned to its pre-pandemic level.

The figures for the latest fiscal year showed government outlays dipped $550 billion to $6.3 trillion, in part reflecting reductions in COVID-19 related spending.

But spending for categories such as student loans increased, the report added.

This was the first fall in outlays since 2013, Treasury officials told reporters.

Loan forgiveness 

The overall drop in the deficit came after Biden announced plans to forgive part of the country's massive student debt burden, a topic of controversy between Democrats and Republicans.

Republicans accuse Biden of wasting money on the measure, arguing that public funds could be used more effectively.

Loan modifications had a $430 billion impact in September, with a Treasury official acknowledging that loan forgiveness was one of the primary reasons for the increase.

But the department does not expect to see "similar large modifications" in the future unless there were further changes to policy moving forward.

In the latest fiscal year, federal borrowing rose by $2 trillion to $24.3 trillion, still close to the size of the world's biggest economy, data showed.

With soaring inflation bringing a sharp rise in borrowing costs, interest on the public debt came in at $36.6 billion higher than estimated, the Treasury Department said.

The Federal Reserve has raised its benchmark lending rate several times this year to cool surging prices.

In a breakdown, the report on Friday also showed that individuals paid $2.6 trillion in taxes and those from corporations totaled $425 billion.

The Health and Human Services Department spent $1.6 trillion while the Defence Department spent $727 billion and foreign aid came up to an estimated $24.6 billion, the report said.

BRUSSELS — Spanish Prime Minister Pedro Sanchez said Spain, France and Portugal had agreed Thursday to build an energy pipeline linking the Iberian peninsula to the rest of Europe, reviving a project long-resisted by Paris.

The new project, which Sanchez dubbed a Green Energy Corridor, would replace an earlier plan dubbed MidCat that emerged a decade ago but was dropped in 2019 over regulatory and funding issues.

But, with Russia withholding gas deliveries to most of Europe in reaction to sanctions over its invasion of Ukraine, there has been a resurgence of interest in a link to bring in much-needed supplies from Spain to the rest of the continent. 

With energy prices soaring, Madrid pushed hard for the revival of the project, with the full backing of Berlin, which has seen Russian gas deliveries via a key pipeline shut off for the indefinite future.

"We have agreed to... a new project to be called the Green Energy Corridor to link the Iberian peninsula to France and therefore to the European energy market between Barcelona and Marseille," Sanchez explained on his arrival for an EU summit on the energy crisis.

Sanchez said that the pipeline would move hydrogen and gas "during a transition period needed by the European energy market".

Spain currently has six liquefied natural gas (LNG) terminals for processing gas that arrives by sea which could help the EU boost imports with a better link.

But it only has two low-capacity links to France's gas network, which has connections to the rest of Europe. 

BERLIN — German shoppers are increasingly finding empty shelves where their favourite Kellogg's cereal, Mars chocolate bar or rice brand used to be, as supermarkets square off against major food companies over price hikes.

"Dear customers: We are sorry to inform you that we can't currently offer all the products of our supplier Mars GmbH," reads a note in a sparsely stocked aisle at an Edeka supermarket in central Berlin.

With German inflation running at a record 10 per cent, supermarket giants are pushing back against what they see as unreasonable price increases by some of the world's best-known brands.

Food multinationals argue that their manufacturing costs have risen on the back of soaring energy and transport costs, in part because of the war in Ukraine.

But retailers in Europe's top economy say they are protecting customers' purchasing power at a difficult time, and that price hikes of up to 30 per cent in some cases are overblown. 

"Many international brands are trying to take advantage of inflation to charge excessive prices in order to increase their profits," an Edeka spokesman told AFP, calling Mars's price demands "unjustified".

Edeka and its rival Rewe, two of Germany's biggest supermarket chains, have stopped getting delivery of around 300 products from the Mars company, known for its Twix and Snickers bars, Ben's Original rice packets and Whiskas cat food.

They have also used the supermarket showdown to push their cheaper, own-brand products as alternatives.

Coca-Cola court battle 

Mars for its part blames the "volatile context" and "inflationary pressure".

Thomas Roeb, a retail expert at the Bonn-Rhein-Sieg University of Applied Sciences, said the battle of the brands was not new, and that items get pulled every year in spats between supermarkets and food companies.

"But this time it has gone a little less unnoticed, because Edeka and Rewe are affected at the same time," Roeb told AFP.

At the Edeka in Berlin the absence of pet food, a sector where Mars dominates, is particularly glaring.

In a nearby Rewe, the rice aisle is half empty.

The cereal section is looking bare, too, after Rewe failed to reach a compromise with US company Kellogg's — which according to German media was asking almost 30 per cent more for its popular breakfast food.

Similar price wars are raging with other brands.

In some stores, tea and coffee products by Jacobs Douwe Egberts are missing from shelves. 

Discounters Aldi and Lidl aren't stocking Danone, the world's largest yoghurt maker.

Edeka and Coca-Cola are fighting out their row in court, with the supermarket appealing a recent ruling saying the drinks giant was within its rights to stop deliveries over the dispute.

'Tastes the same' 

"Food, drinks and even hygiene products are missing," said Leana Kring, 24, outside a supermarket on Berlin's Karl-Marx-Allee boulevard.

The supermarket woes add more strain for German consumers, who are already bracing for a grim winter amid high inflation and a deepening energy crisis following Russia's cutoff of gas supplies. 

The German economy, usually a driver of European growth, is forecast to tip into recession next year.

A Rewe spokesman told AFP that supermarkets don't want to see shoppers "unnecessarily penalised" during "these difficult times".

But the retailers have also seized the opportunity to promote their store-brand products, which have grown in popularity as Germans try to watch their pennies.

"Astronomical prices from Mars? Then buy Netto," read a recent tongue-in-cheek Instagram post from discounter Netto, owned by the Edeka group.

At a Rewe store at Berlin's Friedrichstrasse station, the supermarket's own "Ja" (Yes) cereals have already replaced the colourful rows of Kellogg's boxes.

Own-brand sales accounted for 34.6 per cent of revenues in German supermarkets in the first quarter of 2022, according to GfK pollsters, up 1.2 percentage points on a year earlier.

"It's cheaper, and it tastes the same," said Mirjam Branz, a 30-year-old Berlin resident, upon leaving Rewe.

PARIS — Thousands of people took to the streets across France on Tuesday and commuters faced delays as unions staged a nationwide strike for higher salaries, as they remain in deadlock with the government over walkouts at oil depots that have sparked fuel shortages.

"It's a shame it had to come to blockades for something to happen," said Nadine, a 45-year-old employee in the metalworking industry who was among more than 1,000 demonstrators in Strasbourg, northeast France.

"But today if we don't block anything, no one listens," she said.

Among a crowd of some 1,800 marching in the southern city of Montpellier, Magali Mallet, a medical secretary, said she was there because many workers were "living on a knife's edge".

A transport walkout did not cause major disruptions nationwide, despite making commuters travelling into the capital from its suburbs late on Tuesday morning.

The broader strike comes after workers at several oil refineries and depots operated by energy giant TotalEnergies voted to extend walkouts.

Their industrial action has seriously disrupted fuel distribution across the country, particularly in northern and central France and the Paris region.

Motorists have scrambled to fill tanks as the fuel strike, which has lasted for nearly three weeks, has had a knock-on effect across all sectors of the economy.

Prime Minister Elisabeth Borne said that less than a quarter of petrol stations nationwide were experiencing shortages, down from 30 percent previously.

President Emmanuel Macron's government used requisitioning powers to force some strikers back to open fuel depots, a move that infuriated unions but has so far been upheld in the courts.

But his government is also pushing bosses to acknowledge salary demands, with Interior Minister Gerald Darmanin saying Tuesday that there was "a salary problem" in France, and urging employers "to increase pay when possible".

Workers have also been striking in the nuclear power sector, potentially hampering efforts to restart reactors down for maintenance or safety work.

At the northern Gravelines nuclear plant, 32-year-old technician Henia Abidi said she was not usually one to protest.

"But now since it's about inflation and our salaries, I really feel concerned. I won't give up," she said, adding that everything from food to fuel had become expensive.

Power grid operator RTE warned Tuesday that "any extension of the social movement" at the nuclear power stations would have "serious consequences" on electricity provision this winter.

Macron said last week only 30 out of 56 nuclear reactors were online, while the country hoped to have 45 working by January.

But French state energy provider EDF said Saturday it was postponing plans to bring five of the halted reactors back on stream.

The leftist CGT and FO unions called the nationwide strike Tuesday for higher salaries, and against government requisitions of oil installations.

The action is the unions' biggest challenge to Macron since he won a new presidential term in May.

The Liberation newspaper published a front-page caricature of Macron swept off his feet and clinging on to the edge of a giant megaphone blasting the message of angry protesters.

Tense autumn? 

Unions in other industries and in the public sector had also announced action to protest against the twin impact of soaring energy prices and overall inflation on the cost of living.

Beyond transport workers, unions had hoped to bring out staff in sectors such as the food industry and healthcare.

The education ministry said less than six per cent of its workers had walked out, though that rate reached 23 per cent for vocational schools.

Their action will kick off what could be a tense autumn and winter as Macron also seeks to implement his flagship domestic policy of raising the French retirement age.

The economic squeeze partly caused by Russia's invasion of Ukraine, along with the failure of Macron's party to secure an overall majority in June legislative polls, only adds to the magnitude of the task.

A poll by the Elabe group found that one in three French people would be prepared to take part in a strike or protest in the coming weeks to demand pay increases as inflation soars.

LONDON — The pound jumped more than 1 per cent against the dollar Monday as Britain's fourth finance minister in as many months sensationally ripped up a tax-cutting budget that had spooked markets.

Chancellor of the Exchequer Jeremy Hunt tore up the fiscal policy unveiled by the new government of Prime Minister Liz Truss last month.

She is battling to stay in power after dramatically sacking Hunt's predecessor Kwasi Kwarteng on Friday.

Truss and Kwarteng had announced tax cuts, funded by debt — causing the pound to hit a record low against the dollar and UK government bond yields to soar.

'Government can't control markets' 

"No government can control markets but every government can give certainty about the sustainability of public finances," Hunt said in a televised address that demolished the maligned budget.

However, the pound rallied and yields on UK government bonds, or gilts, slid on Monday's fiscal policy U-turns.

"The markets are responding positively to the new chancellor's plans to reverse almost all of the tax cuts announced by his predecessor," noted Victoria Scholar, head of investment at Interactive Investor. 

"Jeremy Hunt's focus on reassuring the markets and reinstating confidence appears to have worked so far with gilt yields trading lower and sterling pushing higher."

The Bank of England on Friday ended its emergency purchasing on UK government bonds triggered by unravelling markets in the wake of Kwarteng's September budget aimed at boosting Britain's recession-threatened economy.

Monday's reversals also lifted London's benchmark FTSE 100 shares index.

Frankfurt and Paris stocks were also sharply higher in afternoon trading.

China disappointment 

All three main indices on Wall Street snapped higher at the open of trading, having finished finished sharply lower Friday. 

The Dow rose 1.6 per cent, the S&P 500 climbed 2 per cent and the tech-heavy Nasdaq jumped 2.5 per cent.

"The three pillars of support for the rebound effort — lower interest rates, a weaker dollar, and strength in the mega-cap stocks — need to remain intact," said market analyst Patrick O'Hare at Briefing.com. 

"They are currently, so the stock market has something to build on."

The markets have been grappling with the latest strong US inflation reading, which ramped up bets that the Federal Reserve will hike borrowing costs by 75 basis points twice more before the end of the year. 

That, in turn, has stoked concerns the world's top economy will flip into a recession.

Traders are keeping tabs on looming earnings reports, with expectations that higher rates and prices will have eaten into companies' bottom lines.

Elsewhere, Asian equities started the week in mixed fashion.

There was a little disappointment among investors after Chinese President Xi Jinping at the weekend reasserted his commitment to the zero-COVID strategy of lockdowns that has hammered the economy this year.

Beijing has also delayed the release of anticipated economic growth figures — which analysts had expected to be some of its weakest quarterly growth figures since 2020, as the economy is hobbled by COVID-19 restrictions and a real estate crisis.

Eyes are also on Tokyo as the yen sits around a three-decade low against the dollar owing to US rate hike expectations and the Bank of Japan's refusal to tighten monetary policy, citing a need to support the economy.

The yen is approaching 150 to the dollar for the first time since 1990, but while officials have said they are keeping tabs on developments, they have yet to intervene in markets for a second time, having done so last month.

WASHINGTON — The International Monetary Fund (IMF) and the Tunisian government have reached a tentative agreement to unblock a $1.9 billion loan as the North African country faces grave economic and political challenges.

Under the four-year accord, the Tunisian government — hit by growing public protests at home amid shortages of food and fuel — has committed to undertake a "comprehensive economic reform programme" as it gets access to the money, according to an IMF statement Saturday.

Those reforms would include steps to extend taxation to the informal economy, to provide greater public-sector transparency and to phase out "wasteful price subsidies" while expanding social safety nets.

The agreement in principle, reached between IMF staff and Tunisian authorities meeting this week in Washington, still requires the approval of the fund's board, which is scheduled to discuss the matter in December.

Earlier Saturday, thousands of people poured into the streets of Tunis to protest the policies of President Kais Saied, who seized power last year in what critics say was a coup, and whom many blame for the country's economic crisis.

Pressures both from the deteriorating global economic environment and from high commodity prices "are weighing heavily on the Tunisian economy, adding to underlying structural weaknesses amid challenging socioeconomic conditions", IMF staff members Chris Geiregat and Brett Rayner said in a statement.

They headed the IMF team that met this week with Tunisian officials in Washington.

The resulting agreement "will support the authorities' economic reform programme to restore Tunisia's external and fiscal stability, enhance social protection and promote higher, greener, and inclusive growth", the statement said, while predicting a near-term slowdown in growth.

The release of funds should provide relief to the heavily indebted country, which is no longer able to borrow on international markets.

Tunisia's budget deficit, up sharply, is set to exceed 9 per cent of GDP this year. 

Year-on-year inflation meantime hit 9.1 per cent in September, while food and fuel prices have soared even more — up 13 per cent from the same 2021 period.

PARIS — French refinery and fuel depot workers at five sites owned by oil giant TotalEnergies vowed to continue striking on Saturday, compounding concern over petrol supply ahead of wider protests early next week.

Four of France's seven refineries and one fuel depot were out of action, after strikers rejected a pay offer from the hydrocarbon industry leader.

Operations had resumed earlier in the week at two other refineries run by Esso-ExxonMobil, however, after workers struck a bargain with management.

The blockages have caused queues outside petrol stations, and worry across all sectors of the economy, from mobile healthcare workers to farmers.

President Emmanuel Macron's government forced some strikers back to work this week to open fuel depots, a move that infuriated unions but has been upheld by courts.

The hard-left CGT union, which launched the industrial action three weeks ago, said on Saturday that workers at three TotalEnergies sites had decided to extend their strike.

"The action has been extended at three sites," said Eric Sellini, the CGT coordinator at the company.

Employees at the two others, including France's largest refinery near the north-western city of Le Havre, had already decided to prolong their action.

Left-wing opponents of Macron have called for anti-inflation marches on Sunday.

The CGT has called a strike for Tuesday that could disrupt public transport nationwide.

The union risks stoking resentment in a country where three-fourths of workers rely on personal vehicles for their jobs, with public support for the strike at just 37 per cent in a BVA poll released Friday.

The CGT is pushing for a 10 per cent pay rise for staff at TotalEnergies, retroactive for all of 2022.

It says the French group can more than afford it, citing TotalEnergies' net profit of $5.7 billion in the April-June period as energy prices soared with the war in Ukraine, and its payout of billions of euros in dividends to shareholders.

It walked out of talks with the French group in the night of Thursday to Friday, even as other unions representing a majority of workers accepted a deal for a lesser pay hike.

TotalEnergies on Saturday urged its workers to resume work, "in view of the signing of a majority deal on salaries" with two other unions.

Esso-ExxonMobil has said it would take two to three weeks to relaunch production at its refineries.