The prolonged conflict in Syria could cost more than $1 trillion by 2020, according to a report by World Vision and Frontier Economics.
The report analyzes how the destruction of productive capacity, the disruption of investments, and the diversion of public spending to military and security budgets have impacted the Syrian economy. It says the war has cost Syria an estimated $275 billion to date. Real gross domestic product (GDP) per capita is around 45 percent lower than it would be in the absence of war. “The $275 billion is just to Syria itself. It’s the gap between what the GDP should be and what it is,” World Vision’s Syria Response Advocacy Director Fran Charles said. “Financial loss translates into human loss: lost education, lost health, lost jobs, and lost opportunities,” Chief Executive of World Vision UK Tim Pilkington said. “In the best case scenario, even if the war stops this year and it only takes ten years for the GDP to recover, that will cost Syria between $448-689 billion in terms of lost growth. In the worst case scenario, if the war carries on for another four years to 2020, the GDP takes 15 years to recover and will cost $1.3 trillion,” said Charles explained. The report also emphasizes the “severe economic shock” experienced by Syria’s neighbors. [CNBC, The Guardian, 3/8/2016]
Egypt’s state-owned EGAS has made its first payments to liquefied natural gas (LNG) suppliers since terms for deliveries were extended. Egypt imports around six to eight cargoes of LNG per month. Traders say that until last week, EGAS had not paid suppliers since December when it extended payment terms to 90 days from the usual 15 days due to the country’s foreign currency crisis. EGAS Head Khaled Abdel Badie said the company made all payments that were due on LNG shipments. “We agreed with the companies to paying dues owed to them over a period of 90 days, and we are committed to this payment process,” he said. Market participants said Egypt now owes LNG suppliers up to $1 billion. The extended payment terms have increased Egypt’s risk profile for future LNG deals. [Reuters, 3/7/2016]
Kuwait’s government plans to issue both international and domestic bonds to help cover a budget deficit caused by low oil prices, Finance Minister Anas al-Saleh said Tuesday. Saleh said the issues would be conducted once government committees had agreed on a plan. Kuwait originally aimed to make its first issue by the end of 2015, but officials have not yet come up with a final plan. The ministry projected in January that the government would run a deficit of 12.2 billion dinars ($40.7 billion) in the next fiscal year starting on April 1, nearly 50 percent higher than the deficit estimated for the current year. The government has begun drawing down on its financial reserves to cover part of the deficit, but it is seeking to issue debt to limit the speed of the drawdown and develop Kuwait’s financial markets. [Reuters, 3/8/2016]
A court case over the leadership claims of rival heads of Libya’s $67 billion sovereign wealth fund was adjourned in London’s High Court on Monday. The judge declared it would be premature to rule on the case while steps are being taken to form a government of national accord. Both Hassan Bouhadi and Abdulmagid Breish claim to be rightful chairman of the Libyan Investment Authority (LIA). Judge William Blair’s decision on the first day of the hearing came after a letter from the British Foreign Office was read out in court on the prospects for the establishment of a Government of National Accord under the auspices of the United Nations. The formation of a Government of National Accord could effectively end the dispute. “In those circumstances, the court considers that it would be premature today to decide the issues before it,” Justice Blair said. Breish welcomed the decision. “We must not lose sight of the main objective – to return the assets that we believe have been stolen from the Libyan people,” he said. Bouhadi said he was optimistic a unity government would soon be established. “However, until then, the board of directors of the LIA has a duty to do everything it can do to protect the assets of the LIA,” he said. [Reuters, AP, 3/7/2016]
Also of interest
UAE minister says oil price correction will take time | Gulf News
Saudi Labor Ministry unveils new nationalization program | Saudi Gazette
Foreign governments press Saudi Arabia on workers’ delayed wages | Reuters
Egyptian pound strengthens on black market after exceptional auction | Reuters
Egypt to work with UN agency to set standards for wheat shipments | Reuters (Arabic)
Turkish Deputy PM projects rapid growth in Islamic banking | Daily Sabah
War could cost Syria $1.3 trillion by 2020
The prolonged conflict in Syria will have cost more than $1 trillion by 2020, according to a report by World Vision and Frontier Economics. The report analyzes how the destruction of productive capacity, the disruption of investments, and the diversion of public spending to military and security budgets have impacted the Syrian economy. It says the war has cost Syria an estimated $275 billion to date. Real gross domestic product (GDP) per capita is around 45 percent lower than it would be in the absence of war. “The $275 billion is just to Syria itself. It’s the gap between what the GDP should be and what it is,” World Vision’s Syria Response Advocacy Director Fran Charles said. “Financial loss translates into human loss: lost education, lost health, lost jobs, and lost opportunities,” Chief Executive of World Vision UK Tim Pilkington said. “In the best case scenario, even if the war stops this year and it only takes ten years for the GDP to recover, that will cost Syria between $448-689 billion in terms of lost growth. In the worst case scenario, if the war carries on for another four years to 2020, the GDP takes 15 years to recover and will cost $1.3 trillion,” said Charles explained. The report also emphasizes the “severe economic shock” experienced by Syria’s neighbors. [CNBC, The Guardian, 3/8/2016]
Egypt’s EGAS makes first LNG payments for year
Egypt’s state-owned EGAS has made its first payments to liquefied natural gas (LNG) suppliers since terms for deliveries were extended. Egypt imports around six to eight cargoes of LNG per month. Traders say that until last week, EGAS had not paid suppliers since December when it extended payment terms to 90 days from the usual 15 days due to the country’s foreign currency crisis. EGAS Head Khaled Abdel Badie said the company made all payments that were due on LNG shipments. “We agreed with the companies to paying dues owed to them over a period of 90 days, and we are committed to this payment process,” he said. Market participants said Egypt now owes LNG suppliers up to $1 billion. The extended payment terms have increased Egypt’s risk profile for future LNG deals. [Reuters, 3/7/2016]
Kuwait to issue international, domestic bonds
Kuwait’s government plans to issue both international and domestic bonds to help cover a budget deficit caused by low oil prices, Finance Minister Anas al-Saleh said Tuesday. Saleh said the issues would be conducted once government committees had agreed on a plan. Kuwait originally aimed to make its first issue by the end of 2015, but officials have not yet come up with a final plan. The ministry projected in January that the government would run a deficit of 12.2 billion dinars ($40.7 billion) in the next fiscal year starting on April 1, nearly 50 percent higher than the deficit estimated for the current year. The government has begun drawing down on its financial reserves to cover part of the deficit, but it is seeking to issue debt to limit the speed of the drawdown and develop Kuwait’s financial markets. [Reuters, 3/8/2016]
UK judge adjourns hearing on rival claims to Libyan wealth fund
A court case over the leadership claims of rival heads of Libya’s $67 billion sovereign wealth fund was adjourned in London’s High Court on Monday. The judge declared it would be premature to rule on the case while steps are being taken to form a government of national accord. Both Hassan Bouhadi and Abdulmagid Breish claim to be rightful chairman of the Libyan Investment Authority (LIA). Judge William Blair’s decision on the first day of the hearing came after a letter from the British Foreign Office was read out in court on the prospects for the establishment of a Government of National Accord under the auspices of the United Nations. The formation of a Government of National Accord could effectively end the dispute. “In those circumstances, the court considers that it would be premature today to decide the issues before it,” Justice Blair said. Breish welcomed the decision. “We must not lose sight of the main objective – to return the assets that we believe have been stolen from the Libyan people,” he said. Bouhadi said he was optimistic a unity government would soon be established. “However, until then, the board of directors of the LIA has a duty to do everything it can do to protect the assets of the LIA,” he said. [Reuters, AP, 3/7/2016]
Also of interest
UAE minister says oil price correction will take time | Gulf News
Saudi Labor Ministry unveils new nationalization program | Saudi Gazette
Foreign governments press Saudi Arabia on workers’ delayed wages | Reuters
Egyptian pound strengthens on black market after exceptional auction | Reuters
Egypt to work with UN agency to set standards for wheat shipments | Reuters (Arabic)
Turkish Deputy PM projects rapid growth in Islamic banking | Daily Sabah