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November 2019 130,000 86 Board Report NOVEMBER 2019 Withdrawal of US troops in Syria leads to renewed conflict; Tax increases provoke unrest in cities across Lebanon; Oil prices remain subdued due to US shale stockpiles; Kais Saied wins Tunisia election Protesters in Washington rally to oppose Turkey’s invasion of Rojava in northeast Syria TURKISH OFFENSIVE CEASEFIRE FAILURE Exit of US troops throws Flawed agreement leads to northern Syria into chaos brief calm in Syria safe zone The decision by US President Donald The Turkish invasion of northeast Trump to withdraw US troops from Syria came to a partial halt on the Kurdish-led enclave in northeast 18 October after the US Secre- Syria on 6 October has plunged the tary of State Mike Pompeo and region back into conflicts resulting Vice-President Mike Pence flew to in scores of deaths and the displace- Ankara to negotiate what the White- ment of around 130,000 people in a house called a ceasefire, but the 130,000 matter of days. Turkish government termed Number of people estimated The power vacuum left by the ‘a pause’. to have fled the conflict in departure of the US’ military deter- The deal, signed in the absence of northern Syria rent was seen as a greenlight for the Kurdish-led SDF, Syria govern- Turkey’s offensive along its south- ment or Russia, gave the SDF until ern border. On 13 October, Russia 22 October to withdraw from the 86 leveraged the situation to coax 32 kilometre-wide safe zone that Civilian death toll on 18 October Syrian Democratic Forces (SDF) into Turkey wants to create due to Turkish offensive, according allowing the Syrian government and There were breaches of the to monitor groups its forces back into the area. ceasefire within hours of the deal. 8 \ MEED Business Review ECONOMY IMF downgrades outlook for cited weaker oil GDP “against the Middle East economies backdrop of the extension of the The Washington-based IMF has Opec+ agreement and a generally sharply downgraded its real GDP weak global oil market”. For 2020, growth forecast for Saudi Arabia growth is expected to increase to to 0.2 per cent for 2019, down 2.2 per cent “as oil GDP stabilises 0.2% from a July forecast for the Saudi and solid momentum in the non- Revised IMF growth forecast economy to grow by 1.9 per cent oil sector continues”. Growth for Saudi Arabia’s economy over the year. The revised growth in the broader Middle East and forecast was part of the IMF’s Central Asia region is expected to World Economic Outlook (WEO) be 0.9 per cent in 2019, rising to 2.2% published on 15 October, which 2.9 per cent in 2020. Expected growth for 2020 SAUDI ARAMCO IPO OIL PRICES Saudi energy giant delays third-quarter earnings information Oil prices face pressure from launch of anticipated IPO and address the impact of the rising US shale inventories On 18 October, Saudi Aramco recent attacks on oil infrastructure Oil prices remained subdued in postponed the launch of its long- at Abqaiq and Khurais that October owing to a buildup in awaited initial public offering approximately halved Saudi stockpiles of US shale oil. (IPO), expected on Sunday 20 Aramco’s output. US crude inventories soared October, casting doubt on whether The IPO is now expected to by 10.5 million barrels to 432.5 the flotation can realistically be entail the listing of a 1 to 2 per cent million barrels in the week to achieved in November. stake in the Saudi oil major on the 11 October, according to the It has been suggested by local Tadawul stock exchange, with American Petroleum Institute’s individuals close to the process shares offered at a discounted rate weekly report. that it will be postponed by ‘weeks’ to Saudi citizens and as part of the Overall global benchmark Brent to allow the company to include pay packages of Aramco employees. crude traded largely under the $60-a-barrel mark in the absence of any significant progress towards LEBANON PROTESTS a resolution of the US-China trade dispute and the removal of Protests hit streets of Lebanon abandonment of the tax, the punitive tariffs. following rise in taxes demonstrations quickly swelled, The price of Brent crude oil Tens of thousands of people took with protesters blocking main closed on global markets at $59.42 to the streets in Beirut, Tripoli roads and demanding the overhaul a barrel on 18 October. and other Lebanese cities on 17 of Lebanon’s political system. October, and have since continued On the third day of protests, to protest against tax increases the Lebanese Forces Party, a and ineffective governance. traditional ally of Lebanon’s Prime The demonstrations erupted Minister Saad Hariri, resigned from after a proposed tax on voice- government and its four ministers over-internet-protocol (VOIP) left the cabinet. calls through messaging apps “We are convinced that the such as WhatsApp, which are the government is unable to take main method of communication the necessary steps to save the for many Lebanese people. situation,” said Samir Gaegea, the There has been a larger than ex- Despite the government’s swift head of the Christian party. pected build up in US inventories MEED Business Review / 9 Board Report KUWAIT EMIR BAHRAIN FURTHER READING Leader welcomed home after King Hamad’s son becomes Read more on medical treatment in the US national security adviser www.meed.com Emir Sheikh Sabah al-Ahmad al- Bahrain’s King Hamad bin Isa Sabah returned to Kuwait on 16 al-Khalifa has appointed his son, October, after a trip to the US for Prince Nasser bin Hamad al- Abu Dhabi National Oil medical treatment. Khalifa, as the island kingdom’s Company (Adnoc) has signed a The Emir’s office first reported new national security adviser. multi-party agreement with India’s that the leader had suffered a The promotion of the 32-year- Adani Group, Germany-based health setback, without providing old prince, who is already the BASF and Austria’s Borealis to details, in August. commander of Bahrain’s Royal conduct a joint feasibility study He later travelled to the US Guard and president of its Olympic for a collaboration to develop a to meet with President Donald committee, consolidates power in chemical complex in Mundra, Trump, but the meeting was the hands of the king’s sons. India. The project will require an cancelled when Sheikh Sabah was The heir to the Bahraini throne estimated investment of $4bn. admitted to hospital. is King Hamad’s eldest son, The 90-year-old Sheikh Sabah Crown Prince Salman bin Hamad Saudi Aramco and Acwa Power has ruled Kuwait since 2006 al-Khalifa, who is deputy supreme have signed a memorandum and is highly respected on commander and first deputy of understanding with the account of his seniority and as an prime minister. Bangladesh government to impartial voice among the Gulf Prince Nasser, for his part, will develop a $3bn liquefied natural Arab leaders. He has frequently now be expected to “oversee the gas terminal and power plant. been called upon to provide national security policies and The project will be Acwa Power’s diplomatic mediation. strategies of the kingdom”. largest gas-to-power project and the first partnership with Saudi Aramco for such a scheme. TUNISIA ELECTION Etihad Aviation Group and Kais Saied wins North African Sharjah-based carrier Air Arabia country’s presidential elections have announced the signing Conservative political outsider Kais of an agreement to launch Saied was given a sweeping mandate Abu Dhabi’s first low-cost airline. to be Tunisia’s next president, Air Arabia Abu Dhabi will be thanks largely to young people who an independent joint-venture flocked to his side. The country’s company that will operate as electoral commission has confirmed a budget passenger airline that Saied won the election with with its hub at Abu Dhabi 72.71 per cent of the votes. Kais Saied was voted into office International airport. In a contest that reflected with support from young adults Tunisia’s shifting post-revolution Construction costs in Saudi political landscape, independent Arabia are expected to increase candidate Saied took more than by 3.2 per cent over the next 2.7 million votes, to the one 72.71% year, according to a report by million votes of his rival, media Proportion of votes won by Colliers. The UK firm also said magnate Nabil Karoui. The electoral independent candidate Kais Saied that the kingdom’s construction commission ISIE reported that the sector is anticipating growth, turnout was at least 58 per cent. mainly driven by an increase According to the Sigma polling 90% in government spending and a institute, around 90 per cent of 18 Proportion of 18 to 25 year olds growing population. to 25 year olds voted for Saied. who voted for Saied 10 \ MEED Business Review.
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