November 2019 Board Report: Top stories at a glance

22 October 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


Exit of US troops throws northern Syria into chaos

The decision by US President Donald Trump to withdraw US troops from the Kurdish-led enclave in northeast Syria on 6 October has plunged the region back into conflicts resulting in scores of deaths and the displacement of between 160,000 and 300,000 people in a matter of days.

The power vacuum left by the departure of the US’ military deterrent was seen as a greenlight for Turkey’s offensive along its southern border.

On 13 October, Russia leveraged the situation to coax Syrian Democratic Forces (SDF) into allowing the Syrian government and its forces back into the area.


Flawed agreement leads to brief calm in Syria safe zone

The Turkish invasion of northeast Syria came to a partial halt on 18 October after the US Secretary of State Mike Pompeo and Vice-President Mike Pence flew to Ankara to negotiate what the Whitehouse called a ceasefire, but the Turkish government termed ‘a pause’ to allow people to evacuate the area.

The deal, signed in the absence of the Kurdish-led SDF, Syria government or Russia, gave the SDF until 22 October to withdraw from the 32 kilometre-wide safe zone that Turkey wants to create.

There were breaches of the ceasefire within hours of the deal.


IMF downgrades outlook for Middle East economies

The Washington-based IMF has sharply downgraded its real GDP growth forecast for Saudi Arabia to 0.2 per cent for 2019, down from a July forecast for the Saudi economy to grow by 1.9 per cent over the year.

The revised growth forecast was part of the IMF’s World Economic Outlook (WEO) published on 15 October, which cited weaker oil GDP “against the backdrop of the extension of the Opec+ agreement and a generally weak global oil market”.

For 2020, Saudi growth is expected to reach 2.2 per cent “as oil GDP stabilises and solid momentum in the non-oil sector continues”. Growth in the broader Middle East and Central Asia region is predicted to be 0.9 per cent in 2019, rising to 2.9 per cent in 2020.


Saudi energy giant delays launch of anticipated IPO

On 18 October, Saudi Aramco postponed the launch of its long-awaited initial public offering (IPO), expected on Sunday 20 October, casting doubt on whether the flotation can realistically be achieved in November.

It has been suggested by individuals close to the process that it will be postponed by ‘weeks’ to allow the company to include third-quarter earnings information and address the impact of the recent attacks on oil infrastructure at Abqaiq and Khurais that approximately halved Saudi Aramco’s output.

The IPO is now expected to entail the listing of a 1 to 2 per cent stake in the Saudi oil major on the local Tadawul stock exchange, with shares offered at a discounted rate to Saudi citizens and as part of the pay packages of Aramco employees.


Protests hit streets of Lebanon following rise in taxes

Tens of thousands of people took to the streets in Beirut, Tripoli and other Lebanese cities on 17 October, and have since continued to protest against tax increases and ineffective governance.

The demonstrations erupted after a proposed tax on voice-over-internet-protocol (VOIP) calls through messaging apps such as WhatsApp, which are the main method of communication for many Lebanese people. Despite the government’s swift abandonment of the tax, the demonstrations quickly swelled, with protesters blocking main roads and demanding the overhaul of Lebanon’s political system.

On the third day of protests, the Lebanese Forces Party, a traditional ally of Lebanon’s Prime Minister Saad Hariri, resigned from government and its four ministers left the cabinet.

“We are convinced that the government is unable to take the necessary steps to save the situation,” said Samir Gaegea, the head of the Christian party.


Oil prices face pressure from rising US shale inventories

Oil prices remained subdued in October owing to a build-up in stockpiles of US shale oil.

US crude inventories soared by 10.5 million barrels to 432.5 million barrels in the week to 11 October, according to the American Petroleum Institute’s weekly report.

Overall global benchmark Brent crude traded largely under the $60-a-barrel mark in the absence of any significant progress towards a resolution of the US-China trade dispute and the removal of punitive tariffs.

The price of Brent crude oil closed on global markets at $59.42 a barrel on 18 October.


Leader welcomed home after medical treatment in the US

Emir Sheikh Sabah al-Ahmad al-Sabah returned to Kuwait on 16 October, after a trip to the US for medical treatment.

The Emir’s office first reported that the leader had suffered a health setback, without providing details, in August.

He later travelled to the US to meet with President Donald Trump, but the meeting was cancelled when Sheikh Sabah was admitted to hospital.

The 90-year-old Sheikh Sabah has ruled Kuwait since 2006 and is highly respected on account of his seniority and as an impartial voice among the Gulf Arab leaders. He has frequently been called upon to provide diplomatic mediation.


King Hamad’s son becomes national security adviser

Bahrain’s King Hamad bin Isa al-Khalifa has appointed his son, Prince Nasser bin Hamad al-Khalifa, as the island kingdom’s new national security adviser.

Prince NasserThe promotion of the 32-year-old prince, who is already the commander of Bahrain’s Royal Guard and president of its Olympic committee, consolidates power in the hands of the king’s sons.

The heir to the Bahraini throne is King Hamad’s eldest son, Crown Prince Salman bin Hamad al-Khalifa, who is deputy supreme commander and first deputy prime minister.

Prince Nasser, for his part, will now be expected to “oversee the national security policies and strategies of the kingdom”.


Kais Saied wins North African country’s presidential elections

Kais SaiedConservative political outsider Kais Saied was given a sweeping mandate to be Tunisia’s next president, thanks largely to young people who flocked to his side. The country’s electoral commission has confirmed that Saied won the election with 72.71 per cent of the votes.

In a contest that reflected Tunisia’s shifting post-revolution political landscape, independent candidate Saied took more than 2.7 million votes, to the one million votes of his rival, media magnate Nabil Karoui. The electoral commission ISIE reported that the turnout was at least 58 per cent.

According to the Sigma polling institute, around 90 per cent of 18 to 25 year olds voted for Saied.


Abu Dhabi National Oil Company (Adnoc) has signed a multi-party agreement with India’s Adani Group, Germany-based BASF and Austria’s Borealis to conduct a joint feasibility study for a collaboration to develop a chemical complex in Mundra, India. The project will require an estimated investment of $4bn.

Saudi Aramco and Acwa Power have signed a memorandum of understanding with the Bangladesh government to develop a $3bn liquefied natural gas terminal and power plant. The project will be Acwa Power’s largest gas-to-power project and the first partnership with Saudi Aramco for such a scheme.

Etihad Aviation Group and Sharjah-based carrier Air Arabia have announced the signing of an agreement to launch Abu Dhabi’s first low-cost airline. Air Arabia Abu Dhabi will be an independent joint-venture company that will operate as a budget passenger airline with its hub at Abu Dhabi International airport.

Construction costs in Saudi Arabia are expected to increase by 3.2 per cent over the next year, according to a report by Colliers. The UK firm also said that the kingdom’s construction sector is anticipating growth, mainly driven by an increase in government spending and a growing population.

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