Saudi Arabia Leads Arab Countries in Online Transactions

Cairo– Online transactions increased in Arab countries by 22 per cent in 2016, a growth that was led by Saudi Arabia with 27 percent, followed by Egypt with 22 percent and UAE with 21 percent.

Events, entertainment, and exhibitions were the fastest growing payments sector with annual 33 percent growth in 2016 in comparison to 2015, according to a survey conducted by the Amazon-owned company, Payfort.

Payfort’s report “State of Payments in the Arab World” revealed that a total of $30.4 billion of goods and services were purchased online in seven countries last year. They are Saudi Arabia, Egypt, UAE, Jordan, Kuwait, Lebanon, and Qatar.

In terms of dollar value and growth in value, UAE was on top with $12.4 billion of transactions, a 21 percent annual growth in total amount paid online, followed by Saudi Arabia with $8.3 billion of transactions and 27 percent growth, and Egypt with $6.2 billion of transactions and 22 percent growth.

According to the report, Saudi Arabia was the fastest growing country in the airlines and travel sectors with a 21 percent growth in airline payment and 36 percent growth in travel and tourism.

The report also indicated that Egypt led the region in the growth of online shopping with a 32 percent increase in volume of payments, while UAE was the fastest growing country in the entertainment and events sector, showing 36 percent annual growth.

Cash-on-delivery remains the most popular payment option in Egypt with 70 percent usage and Lebanon with 60 percent usage. The report attributes that security remains a top concern among online shoppers, with more than 50 percent of cash-on-delivery customers surveyed in all countries stating that they would only switch to online payments if they were convinced that the payment method was secure.

Marketing Director of Payfort Nardeen Abdullah stated that despite the enormous growth in the region’s online payments and usage of eCommerce, security fears remain prevalent among consumers.

“Although we now see a greater willingness to make online transactions, consumers are increasingly aware of the risks of fraud and other cyber crimes. They are also increasingly demanding, seeking faster and easier checkouts,” Abdullah added. 

The report also highlighted the growing interest in mobile payments, with 50 percent of respondents in six out of seven countries showing an interest in mobile payment apps.

Consumer usage of mobile wallets is widespread, with 33 percent of surveyed people in Saudi Arabia stated they use mobile wallets, compared to 27 percent in Egypt and Lebanon, 25 percent in Jordan, 23 percent in the UAE and 17 percent in Qatar.

Managing Director of Payfort Omar Soudodi explained that 2017 edition of the report marks the most dramatic change to the report since the project was launched in 2014.

“This year we put the control in the hands of our readers, providing them with interactive tools that allow them to easily adapt the data sets for their own needs and business decision making,” reported Soudoudi, adding that this year’s report provides a wealth of information on both consumer behavior online and practical advice for merchants who want to improve performance and meet their customers’ rising expectations.

Boom of Electric Cars in Norway Causes Problem

Oslo- The Norwegian capital is suffering from a problem, which may be raising discontent and dissatisfaction in other environmentally-aware cities. The problem is that Oslo’s residents are buying a lot of electric cars, so that the local government can hardly cope with them.

In fact, the Association of Electric Vehicles is seeking to discourage drivers from buying electric cars, if they do not have the capacities of charging them at home.

Peter Hogniland, a spokesman for the Electric Vehicles Association, said the local authorities did not deploy a sufficient number of charging stations to keep up with the number of the sold electric cars.

He added that the rate of newly registered electric and hybrid vehicles reached 35 percent, noting that one in three cars sold in Norway is electric. This rate hits 40 percent in Oslo. The Greater Oslo Region has witnessed the registration of over 50,000 electric cars, and 30,000 hybrid car, according to an official from the capital’s Urban Environment Agency.

Meanwhile, there are only 1,300 domestic charging stations for electric vehicles. The official said: “we are doing our best. Every year, charging stations grow to more than 26 percent, however, the number of electric vehicles has increased by more than 100 percent, and the gap is getting wider.

The Norwegian news agency explained that the main reason behind the boom of electric cars is the financial privileges provided by the government, including the suspension of the value added tax (VAT) and customs fees on the exported cars and engines. This means that the electric version of many cars is cheaper than the traditional ones with internal combustion engine (ICE).

Hogniland says: “In Norway, you pay over 250,000 Norwegian krone ($31,475) for an electric Golf car, and over 300,000 krone for a gasoline-powered Golf, and here is the difference.”

All these privileges aim at fulfilling the ambitious commitment that by 2025, all newly registered vehicles in Norway must be zero-emission vehicles.

This goal can be achieved by using the “carrot and stick” approach: the carrot takes the form of tax exemptions for those who drive electric vehicles, while the stick is the taxes and high gasoline prices for those who stick to fossil fuels.

Modest Share for MENA in Global Economic Recovery

Economy

Cairo – The global economic recovery that has started mid-2016 is gaining mounting power with the accelerating growth in Europe, Japan, China and the US, a by the International Monetary Fund (IMF) has revealed.

IMF warned of possible discontinuity of the global recovery given that some states are not part of it.

Growth in all MENA countries was expected to drop significantly from 5.1 percent last year to 2.2 percent in 2017.

MENA’s economic growth is expected to rebound to 3.2 percent in 2018, according to the IMF.

In its report, IMF pointed that political tension is one of the prominent factors behind some states’ delay in economic recovery, and this tension is centered in several regions including MENA.

It added that if nearly 75% of world economies are growing, more than 25% are not, and this represents a burden on the global growth and a potential source of destabilizing political shocks.

Notwithstanding Libya, because its economic data is unreliable meanwhile, Djibouti is the highest growing since 2017 with up to 7 percent, followed by Morocco, Egypt, Mauritania, and Sudan.

IMF forecast that Kuwait, Yemen, and Iraq will undergo a recession in the annual growth, which reflects the impact of political tension in such countries and the effect of oil prices’ drop in Gulf markets.

Although inflation is usually a phenomenon that accompanies economic recovery, it is not the case in the MENA.

Despite its modest share in growth, it tops the list of high inflation regions according to IMF forecasts (an estimate of 7.1 percent of inflation in that region).

Tender Closed on First Round of Offshore Energy Blocks in Lebanon

Khalil

Lebanese Energy Minister Cesar Abi Khalil announced on Thursday that a tender on the first round of offshore energy blocks has been ended.

“The first licensing round for oil exploration closed,” he said during a press conference

He said that two consortiums had made bids, which will now be evaluated by the Lebanese Petroleum Authority and cabinet.

It will take at least five years for revenue from any of the blocks to start flowing to the country, he explained.

Lebanon relaunched the licensing round for five offshore blocks (1, 4, 8, 9 and 10) in January after a three-year delay due to political paralysis. It extended the bid deadline in September.

The minister rejected claims of political meddling in the tender process.

Abi Khalil revealed that French, Italian and Russian companies involved in the two bids, but he refused to give further details.

A total of 52 companies qualified earlier in the year to bid in this round.

Lebanon sits on the Levant Basin in the eastern Mediterranean along with Cyprus, Egypt, Israel and Syria. A number of gas fields have been discovered there since 2009, such as the Leviathan and Tamar fields.

When the process was first launched in 2013, 46 companies qualified to take part in bidding, 12 of them as operators, including Chevron Corp, Total SA and Exxon Mobil Corp.

Sudan Reaps Benefits of Decision to Lift Sanctions

Khartoum- The US Treasury Department lifted the ban on more than 223 companies, institutions, banks and Sudanese public and private organizations in line with the political decision made by the US government a week ago to revoke the economic embargo on the country.

The list was published on the official website of the Office of Asset Control on Thursday.

The United States imposed sanctions for the first time on Sudan in 1997 for human rights abuses and terrorism-related concerns.

Former US President Barack Obama announced in January a tentative agreement to ease sanctions on Sudan.

In July, President Donald Trump’s administration postponed the decision to lift the sanctions permanently for three months, and set October 12 as a deadline for Sudan to meet conditions, including resolving conflicts and strengthening its humanitarian efforts.

Governor of the Central Bank of Sudan Hazem Abdulkader said Friday in a statement from Washington that the US Department of State’s Office of Foreign Assets Control, which is linked to the US Treasury, has published a list of 223 companies, organizations and factories involved in the lifting of the embargo, their names, addresses and locations inside the country, according to Sudan News Agency (Suna).

Sudan Central Bank, Sudan Railway Corporation, Giad Industrial Company and Sudan Telecommunications Company (Sudatel) topped the list of 223 Sudanese bodies that the embargo was actually lifted on.

Deputy Chairman of the Sudan Banks Union Abbas Ali Abbas said that all banking correspondents around the world will resume banking activity with Sudan next Monday, especially in the field of reviving bank accounts and removing Sudanese banks from US embargo lists.

Minister of Transport, Roads and Bridges, Engineer Makawi Awad pointed out that lifting the US embargo on the railway and airways sectors in Sudan would facilitate many activities related to them.

He confirmed the return of the Sudanese air transport sector and the navigational lines which were controlled by Sudan in several ports.

The Khartoum-Madani railway line will be opened next to railway lines from Khartoum to Gezira, Kassala and Sennar.

The US Treasury’s decision came in line with the announcement of UAE investments in the country in addition to investments by China, Russia, India, South Africa, Brazil, Mauritania, Norway and a number of US and Arab companies, headed by Saudi Arabia.

Besides the weak investments, the country has been suffering from high debts, amounting to $47 billion in the first quarter of this year.

For his part, Minister of Finance and Economic Planning Dr. Mohammed Osman al-Rikabi has revealed that his ministry will implement certain procedures to benefit from the lifting of economic sanctions, a move that would strengthen Sudan’s relations with international financial institutions.

The minister, who is participating in the current annual meetings of the First African Group of the World Bank and the IMF, told Asharq Al-Awsat in a phone call that Sudan has gone a long way in dealing with its commercial debts.

“We need to put more efforts to take advantage of the lifting of sanctions, continue (the implementation of) our economic and political reform packages and receive debt exemption to reintegrate into the global economy,” Rikabi stressed.

$1 Trillion Bad Loan Mountain Casts Shadow over Europe

Berlin- German and French banks have together amassed almost 230 billion euros ($272 billion) of bad loans, according to regulators’ data, underscoring the scale of a problem often linked solely to Italy that is now causing worry across the region.

The tally puts the combined total of problem loans in the euro zone’s largest economies, France and Germany, close to that of Italy’s 260 billion euro bad debt pile.

It lays bare the extent of the pan-European problem although it is far easier for banks in France and Germany to cope with because bad debts there account for a smaller proportion of overall credit.

After Italy, which had bad loans of 262 billion euros at the end of March, the biggest pockets of debt not repaid over roughly three months are found consecutively in France, Spain, Greece, Germany and the Netherlands.

France has 160 billion euros, while Spain has 139 billion euros and Germany 69 billion euros.

The European Central Bank has encountered stiff resistance in the European Parliament not only from Italian but also German lawmakers to its attempts to clean up Europe’s $1 trillion bad loans mountain.

Best Buy’s Secrets for Thriving in the Amazon Age

New York- While running errands the other day, I ducked into a local Best Buy to pick up a pair of new headphones. What I saw inside was shocking.

Happy-looking people were huddled around tables filled with the latest gadgets from Microsoft and Apple. The video game aisle was bustling. Blue-shirted employees were helping a customer pick from a glowing wall of flat-screen TVs. There was a line — a line! — at the checkout counter.

Many people, myself included, assumed that the entire big-box retail sector would eventually fall under Amazon’s steamroller. I knew Best Buy had spent the past several years playing defense against Amazon, finding some initial success by cutting costs and reducing prices to match its online rivals.

But Best Buy’s rebound has been surprisingly durable. Revenue figures have beaten Wall Street’s expectations in six of the last seven quarters. The company’s stock price has risen more than 50 percent in the past year. Workers are happy. And judging from several other visits I paid to Best Buy stores, the chain appears to have avoided the bleak fate of other big-box retailers.

How do they do it?

To find out, I called Hubert Joly, Best Buy’s chief executive.

An upbeat Frenchman who spent more than a decade at the consulting firm McKinsey & Company, Mr. Joly, 58, explained that Best Buy’s turnaround was years in the making, and that it involved reshaping nearly every piece of the business. It’s a fascinating playbook for companies hoping to survive in the Amazon age.
Here are the keys to Best Buy’s turnaround, according to Mr. Joly:

1. Price, price, price

When Mr. Joly took over in 2012, Best Buy was bleeding out. A former chief had resigned after admitting to an improper romantic relationship with an employee. The company’s systems were outdated and many stores were losing money. Many of the products that drew customers to stores, such as new CD and DVD releases, were becoming obsolete.

The most worrisome trend in big-box retail was “showrooming” — customers were testing new products in stores before buying them for less money online from another retailer. To combat showrooming and persuade customers to complete their purchases at Best Buy, Mr. Joly announced a price-matching guarantee.

“Until I match Amazon’s prices, the customers are ours to lose,” Mr. Joly said.

Price-matching costs Best Buy real money, but it also gives customers a reason to stay in the store, and avoids handing business to competitors.

2. Focus on humans

Mr. Joly also realized that if Best Buy was going to compete with Amazon, which has spent billions building a speedy delivery system and plans to use drones to become even more efficient, it needed to get better at things that robots can’t do well — namely, customer service.

In his first months on the job, Mr. Joly visited Best Buy stores near the company’s Minnesota headquarters to ask rank-and-file employees about the struggles they encountered. (Among their gripes: an internal search engine that was returning bad data about which items were in stock.)

Best Buy fixed the search engine. It also restored a much-loved employee discount that had been suspended and embarked on an ambitious program to retrain its employees so they could answer questions about entirely new categories of electronics, such as virtual reality headsets and smart home appliances.

“The associates in our stores are much more engaged now, much more proficient,” Mr. Joly said.

Customers had always loved Best Buy’s Geek Squad, its army of specially trained tech support experts who could be hired to mount TVs and install other appliances at a customer’s home. But sometimes, people needed help before they bought big and expensive gadgets. So it started an adviser program that allows customers to get free in-home consultations about what product they should buy, and how it should be installed. The service started as a pilot program last year and is now being rolled out nationwide.

Best Buy has “really come through the valley by making investments around the customer experience,” said Peter Keith, a retail analyst with Piper Jaffray.

3. Turn brick-and-mortar into showcase-and-ship

When Mr. Joly arrived at Best Buy, the company’s online ordering system was completely divorced from its stores. If a customer placed an order on the website, it would ship from a central warehouse. If that warehouse didn’t have the item in stock, the customer was out of luck.

Mr. Joly realized that with some minor changes, each of Best Buy’s 1,000-plus big-box stores could ship packages to customers, serving as a mini warehouse for its surrounding area. Now, when a customer orders a product on Best Buy’s website, the item is sent from the location that can deliver it the fastest — a store down the street, perhaps, or a warehouse five states away. It was a small, subtle change, but it allowed Best Buy to improve its shipping times, and made immediate gratification possible for customers. Now, roughly 40 percent of Best Buy’s online orders are either shipped or picked up from a store.

Best Buy also struck deals with large electronics companies like Samsung, Apple and Microsoft to feature their products in branded areas within the store. Now, rather than jamming these companies’ products next to one another on shelves, Best Buy allows them to set up their own dedicated kiosks. (Apple’s area inside a Best Buy, for example, has the same sleek wooden tables and minimalist design as an Apple Store.) It’s a concept borrowed from department stores, and it’s created a lucrative new revenue stream. Even Amazon has set up kiosks in Best Buy stores to show off its voice-activated Alexa gadgets.

Granted, Best Buy has a last-man-standing advantage in these partnership deals. Many of its big-box rivals (Circuit City, Radio Shack, HH Gregg) have gone bankrupt or shut down completely. Which means that if Samsung wants to show off its newest line of tablets in a big-box electronics store, it has basically one choice.

4. Cut costs quietly

Almost every business turnaround plan includes cutting costs. Under Mr. Joly, Best Buy has used the scalpel as quietly as possible, gradually letting leases expire for unprofitable stores and consolidating its overseas divisions. He trimmed a layer of middle managers in 2014, and reassignedroughly 400 Geek Squad employees within the company. But he has never announced a huge, public round of layoffs, which can crater employee morale and create a sinking-ship vibe.

“Taking people out is the last resort,” Mr. Joly said in 2015. “Because you need to capture the hearts and minds of the employees.”

Best Buy has also found more creative penny-pinching methods. Once, the company noticed that an unusually high number of flat-screen TVs were being dropped in its warehouses. It revamped the handling process, reducing the number of times TVs were picked up by a clamp lift and adding new carts to prevent TV boxes from falling over. The changes resulted in less broken inventory and bigger profits.

5. Get lucky, stay humble and don’t tempt fate

Mr. Joly didn’t explicitly tell me this, but it is obvious: Best Buy has benefited from some serious good fortune.
It’s lucky that the products it specializes in selling, like big-screen TVs and high-end audio equipment, are big-ticket items that many customers still feel uncomfortable buying sight unseen from a website. It’s lucky that several large competitors have gone out of business, shrinking its list of rivals. And it’s lucky that the vendors who make the products it sells, like Apple and Samsung, have kept churning out expensive blockbuster gadgets.

“They’re at the mercy of the product cycles,” said Stephen Baker, a tech industry analyst at NPD Group. “If people stop buying PCs or they don’t care about big-screen TVs anymore, they have a challenge.”

Mr. Joly knows that despite Best Buy’s recent momentum, it’s not out of the woods yet. To succeed over the long term, it will need to do more than cut costs and match prices. Walmart, another big-box behemoth, is investing billions of dollars in a digital expansion with the acquisition of e-commerce companies like Jet and Bonobos, and could prove to be a fierce rival. Amazon has been expanding into brick-and-mortar retail with its acquisition of Whole Foods, and is moving into Best Buy’s home installation and services market.

Mr. Joly is optimistic about Best Buy’s chances against these Goliaths, but he’s not ready to celebrate yet.
“Once you’ve had a near-death experience,” he said, “arrogance, if you had it in your bones, has disappeared forever.”

The New York Times

Qatar Stuck between Rise in Foreign Debt, Threatened Stake in Gas Markets

Riyadh — Several international economic reports have described Qatar’s current economic status as “threatened to collapse.”

These reports stressed that Qatar’s economy has been facing a very difficult period because investment capitals are not completing their projects and plans; Qatar is heading towards borrowing money despite the rise in the value of foreign debt, which has amounted to 150 percent of the country’s Gross Domestic Product.

The threats that dominate Qatar’s economy are not only related to the investment pause, the decline in purchasing power, nor to the limited competitiveness of Doha’s air force but they have also reached the gas markets.

International news agencies said that Australia now threats Qatar’s Liquified Natural Gas (LNG) production as it is planning to boost exports of LNG by 16 percent from 2018.

On the other hand, Doha is considering raising at least nine billion dollars from international bond markets as the gas-rich nation boycotted by its neighbors seeks to replenish state coffers, news agencies said.

In June, Moody’s confirmed that Qatar’s credit quality would decline if tensions with its Gulf neighbors continue for much longer, raising the country’s debt ratio and hurting banks’ liquidity.

Amid recent indications that Doha is unable to hide the risks its economy has been facing, Qatar’s stock market has been facing in the recent weeks a stage that proves the size of the risks threatening Qatar’s economy with Qatar’s index reached its lowest level in five years.

In this context, Qatar’s central bank has added the equivalent of about $19 billion of previously unreported foreign-currency assets to its total reserves in August based on an International Monetary Fund recommendation, a move that helps offset the impact of the Saudi-led embargo.

Doha has also been facing a major crisis in terms of economic slowdown. Official figures show that Qatar’s economic growth has hit its worst level since the beginning of the global financial crisis.

In addition, there is a high-risk level of liquidity shortage in local banks amid indicators showing Qatar’s central bank’s inability to continue withdrawing from the foreign deposits for so long; since this reveals the volume of financial threats in which Doha’s government won’t be able to face.

Watchdog: Mercedes-Benz, China JVs to Recall over 350,000 Vehicles

Mercedes-Benz, the global automobile manufacturer, and its Chinese joint ventures will recall 351,218 vehicles because of potential issues with airbags that are made by Japan’s Takata Corp, China’s quality watchdog stated Friday.

The brand is known for luxury vehicles, buses, coaches, and trucks.

The airbags deploy with too much force and spray shrapnel. Official Chinese estimates showed more than 20 million cars in China had airbags made by Takata, which have been related to the cause of at least 16 deaths and 180 injuries worldwide.

The defect is now the main cause behind the biggest recall in automotive history.

The Japanese maker could eventually go bankrupt because it had become burdened with tens of billions of dollars worth of liabilities.

The recall by Mercedes-Benz and its Chinese joint ventures will begin from Oct. 15 and will include domestically built and imported cars produced from 2006 through 2012, with models including the SLK-Class and A-Class, the AQSIQ said.

The Chinese watchdog asked the three automakers in July to recall vehicles in China affected by potentially faulty Takata air bags. Up to that time, the automakers had proposed recalling a small number of vehicles for testing and analysis, Reuters reported.

Britain Plans Billion-Pound Boost for Electric Cars

cars

London — ِAs part of plans to invest 2.5 billion pounds ($3.3 billion) by 2021 to help meet its climate change targets, Britain will spend one billion pounds to promote electric and other low-emission vehicles, and step up spending on research and innovation, Reuters reported.

The government’s Clean Growth Strategy, which details government spending between 2015 and 2021, includes heavy investment in science, research and innovation to help reduce carbon dioxide emissions.

Around 900 million pounds will be spent on innovation. This includes 265 million pounds for smart energy, 460 million pounds to support new nuclear technology and 177 million pounds to help develop new technology to further reduce the cost of renewables such as innovations in turbine blades for wind power.

The funding will cover programmes in the energy, transport, agriculture and waste sectors.

The government said it said it would spend one billion pounds “supporting the take-up of ultra low-emission vehicles, including helping consumers to overcome the upfront cost of an electric car,” but gave no details of how the scheme would work.

In July, the government said it would ban the sale of new petrol and diesel cars and vans from 2040.

Britain has a legally binding target to cut greenhouse gas (GHG) emissions, blamed for global warming, by 80 percent by 2050 compared with 1990.

Government data showed by the end of 2016 Britain was more than half way to meeting the target, having cut GHG emissions by 42 percent compared with 1990 levels.

The government will invest up to 100 million pounds in technology to capture, use and store carbon dioxide emissions and in industrial innovations to drive down emissions, according to the plan published on Thursday.