Weekly GCC news to 19 Jan
Source: UN ESCWA

Weekly GCC news to 19 Jan

  • Oil rose back towards $80 and OPEC sees oil demand growing by 1.8m b/d in 2025.
  • Netanyahu rejected talk of a Palestinian state after the war, despite Arab and US proposals. [see (2) below]
  • China called for a binding roadmap to a Palestinian state and an end to Houthi attacks on shipping.
  • Qatar mediated the delivery of the medical supplies to Israeli hostages in Gaza.
  • Gulf ministers were active at Davos, with sessions on the GCC, Saudi Arabia, UAE and Qatar.
  • Neom awarded a $4.7bn contract to build a lake at its Trojena mountain resort.
  • ESCWA scored Saudi Arabia’s business legislative framework as the strongest in the region. [see (1) below]
  • Several (rare) KSA-UAE cross border investments were announced in the financial sector.
  • The UAE federal budget shows a sharp drop in Abu Dhabi grants, replaced by tax and investment income.
  • Qatar’s finance minister said a green bond is coming soon and Ashmore launched a local equity fund with QIA.
  • Kuwait’s cabinet was formed with lots of PhDs but few royals, returning ministers or MPs.
  • Oman made its first payments of social protection benefits, budgeted at 5% of expenditure.
  • Oman Future Fund was launched and will receive $1bn/yr to invest in local projects.
  • Bahrain is considering following the UAE in shifting to a Sat/Sun weekend.
  • Egypt’s outlook was lowered to negative by Moody’s, which separately raised Turkey’s to positive.

These headlines are taken from a 5,000-word report from my research service for GlobalSource Partners, Inc. Sign up as a guest to access the full report and up to four other samples and message me for more information about the research service.

I'm experimenting with LinkedIn newsletter format, which permits longer posts and more formatting to give a bit more of a taste of the weekly reports. Here are a few snippets.

(1) The graph shown is based on UN ESCWA's updated assessment of business legislative frameworks across the Arab world.

  • Saudi Arabia received the highest score in the Gulf and was also by far the most improved in the region, with a 53% increase in its score from the 2nd weakest at the time of the previous assessment in 2020. It saw improvements in all 8 components of the index, with particularly strong improvements in labor protections, the merger regulatory regime and anti-monopoly legislation.
  • The UAE was the second most improved, rising from 6th to 4th place in the Gulf. This improvement was driven by a big increase in its score for international trade agreements. Its score for tackling anti-competitive agreements slipped, although it is not clear why.

(2) There has been further talk about a post-war deal with Arab states, including Saudi-Israel normalisation:

  • An Arab proposal is reportedly being advanced by Saudi Arabia, UAE, Qatar, Jordan and Egypt offering normalisation and financing for Gaza if Israel makes “irreversible” steps towards a Palestinian state. This is notable because until now Arab states have been reluctant to talk about post-war arrangements, given the urgency in securing a ceasefire when around a hundred Palestinians are being killed a day, nearly half of them children.
  • There is also talk of a US “Jerusalem-Jeddah Pact” being championed by envoy Brett McGurk with a 90-day post-war timeline, although his proposals may differ from those of the Arab quintet (FT, BB, HP).
  • A two-state solution and normalisation, the offer that has been on the table for Israel since the 2002 Arab Peace Initiative, would be a very good outcome for the whole region, including being credit positive across the board, and it’s just about conceivable that the scale of tragedy on both sides could motivate movement towards a deal that has failed so often.
  • However, it is still hard to see it being accepted by the current Israeli government, with Netanyahu, who has never shown much interest in a two-state solution, reiterating again on Thursday that Israel “must have security control over the entire territory west of the Jordan River… that collides with the idea of [Palestinian] sovereignty” (AP).
  • His comments added to US frustration and Biden hasn’t spoken with him in nearly a month, having previously held calls several times a week; however, there is no sign of any material US pressure on Israel (Ax).
  • Even if a new Israeli coalition were to form that is more amenable to a deal, the devil would be in the detail of the familiar final status problems, particularly how to draw borders given the patchwork of Israeli settlements in the West Bank, how to share holy sites and what solution to offer the millions of Palestinian refugees. Given the failure of the Oslo process, tentative pledges, such as Blinken’s languages of a “pathway” towards a state, won’t be sufficient for Palestinians or Arab states.


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