Jordan's controversial plan to raise power prices next month for a second time this year is set to go ahead despite warnings such measures could lead to serious civil unrest.
Sabotage attacks on gas pipelines from Egypt - the energy source for 80 per cent of Jordan's electricity - are costing the government at least US$1 million a day, energy officials say.
In response, as it tackles paring down a $10.5 billion budget for this year, the government in Amman intends to raise the price of electricity by 15 per cent, having already doubled taxes on mobile phones to 16 per cent and to 24 per cent on mobile phone contracts.
Grappling with almost no natural resources and an external debt of more than $23bn, the kingdom is trying to reduce a $2bn fiscal deficit this year and at the same time tackle cuts in Egyptian gas supplies.
"Such wrong and uncalculated steps show that the government lacks a comprehensive understanding of the situation," Yusuf Mansur, the chief executive of the Envision Consulting Group in Amman, said yesterday.
Power costs in Jordan are already 10 times higher than Egypt and 20 times higher than Saudi Arabia, said Musa Saket, a board member of Jordan chamber of industry.
Mr Mansur said state coffers would ultimately be hit by another price rise. "When the government increases prices and taxes, the productivity and consumption of people will be affected and this will reduce government revenues.
"People, including government employees, will resort to strikes and protests and the government will be forced to borrow more or impose more taxes. It's a vicious circle," he said. "We are completely dependent on foreign aid and government economic policies have failed, at least in the past three years. I expect a very bad recession in the next stage."
A government decision last November to raise fuel prices, including household gas, by up to 53 per cent, sparked a wave of nationwide protests, with some calling for King Abdullah II to step down, which is punishable by imprisonment.
"When the government increases taxes and prices, citizens will wonder: 'Why are we paying that much and what for?' They are already complaining about bad government services," Jawad Anani, the president of Jordan's economic and social council, said.
"The government needs to be transparent with citizens about economic issues. Jordan needs clear plans and policies to address these problems, including energy, poverty and unemployment," said Mr Anani, a former deputy minister for economic affairs, warning that "otherwise people will hold more strikes and protests".
Jordan is home to more than 500,000 Syrian refugees, and Amman has repeatedly complained they are burdening the country's scarce resources, while calling for international aid.
"Regional instability, including the disruptions in Egypt's gas supplies and the Syrian refugees, is seriously affecting the budget," Muwaffaq Dmur, the head of parliament's finance committee, said yesterday.
"The government is being forced to increase prices and taxes to help save the economy and avoid bigger problems," he said.
But Khalil Attieh, the deputy house speaker and an independent member of parliament, disagreed.
"It's unacceptable … the government is just after people's pockets. I don't think people will accept that and remain silent."
In its national economic reform programme, the government said it would increase tariffs in a bid to end losses at the state-owned National Electric Power Company (Nepco), according to The Jordan Times.
Nepco lost an estimated at 1.19bn Jordanian dinars (Dh6.18bn) last year because of dependency on the imports of heavy fuel as a result of the frequent attacks on pipelines supplying natural gas from Egypt.
Reversing Nepco's demise is part of a medium-term strategy the government and the IMF agreed in April to enable the kingdom to take a $2.1bn loan from the fund.
In response to the proposed power price hikes, Fawzi Hammouri, the president of the private hospitals association, said hospitals would increase fees by 10 to 13 per cent to cover increased energy costs.
The foodstuff traders' association (FTA) also warned the price hike would push commodity prices up after Ramadan.
"It is consumers who will pay the price of the government decision," said the FTA board member Ghassan Khoury.
business@thenational.ae
* with AFP
Coffee: black death or elixir of life?
It is among the greatest health debates of our time; splashed across newspapers with contradicting headlines - is coffee good for you or not?
Depending on what you read, it is either a cancer-causing, sleep-depriving, stomach ulcer-inducing black death or the secret to long life, cutting the chance of stroke, diabetes and cancer.
The latest research - a study of 8,412 people across the UK who each underwent an MRI heart scan - is intended to put to bed (caffeine allowing) conflicting reports of the pros and cons of consumption.
The study, funded by the British Heart Foundation, contradicted previous findings that it stiffens arteries, putting pressure on the heart and increasing the likelihood of a heart attack or stroke, leading to warnings to cut down.
Numerous studies have recognised the benefits of coffee in cutting oral and esophageal cancer, the risk of a stroke and cirrhosis of the liver.
The benefits are often linked to biologically active compounds including caffeine, flavonoids, lignans, and other polyphenols, which benefit the body. These and othetr coffee compounds regulate genes involved in DNA repair, have anti-inflammatory properties and are associated with lower risk of insulin resistance, which is linked to type-2 diabetes.
But as doctors warn, too much of anything is inadvisable. The British Heart Foundation found the heaviest coffee drinkers in the study were most likely to be men who smoked and drank alcohol regularly.
Excessive amounts of coffee also unsettle the stomach causing or contributing to stomach ulcers. It also stains the teeth over time, hampers absorption of minerals and vitamins like zinc and iron.
It also raises blood pressure, which is largely problematic for people with existing conditions.
So the heaviest drinkers of the black stuff - some in the study had up to 25 cups per day - may want to rein it in.
Rory Reynolds
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
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3.15pm: Al Marwan Group Holding – Handicap (PA) Dh40,000 (D) 1,700m
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3.45pm: Al Ain Stud Emirates Breeders Trophy – Conditions (PA) Dh50,000 (D) 1,700m
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4.25pm: Sheikh Mansour bin Zayed Al Nahyan Cup – Prestige Handicap (PA) Dh100,000 (D) 1,200m
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4.45pm: Sharjah Equine Hospital – Handicap (TB) Dh40,000 (D) 1,200m
Winner: Edaraat, Antonio Fresu, Musabah Al Muhairi
Where to buy art books in the UAE
There are a number of speciality art bookshops in the UAE.
In Dubai, The Lighthouse at Dubai Design District has a wonderfully curated selection of art and design books. Alserkal Avenue runs a pop-up shop at their A4 space, and host the art-book fair Fully Booked during Art Week in March. The Third Line, also in Alserkal Avenue, has a strong book-publishing arm and sells copies at its gallery. Kinokuniya, at Dubai Mall, has some good offerings within its broad selection, and you never know what you will find at the House of Prose in Jumeirah. Finally, all of Gulf Photo Plus’s photo books are available for sale at their show.
In Abu Dhabi, Louvre Abu Dhabi has a beautiful selection of catalogues and art books, and Magrudy’s – across the Emirates, but particularly at their NYU Abu Dhabi site – has a great selection in art, fiction and cultural theory.
In Sharjah, the Sharjah Art Museum sells catalogues and art books at its museum shop, and the Sharjah Art Foundation has a bookshop that offers reads on art, theory and cultural history.
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Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
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Producer: Maddock Films, Jio Movies
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Rating: 3.5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE currency: the story behind the money in your pockets
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
FA Cup quarter-final draw
The matches will be played across the weekend of 21 and 22 March
Sheffield United v Arsenal
Newcastle v Manchester City
Norwich v Derby/Manchester United
Leicester City v Chelsea
A list of the animal rescue organisations in the UAE
Company%20Profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Neo%20Mobility%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20February%202023%3Cbr%3E%3Cstrong%3ECo-founders%3A%3C%2Fstrong%3E%20Abhishek%20Shah%20and%20Anish%20Garg%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Logistics%3Cbr%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%2410%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Delta%20Corp%2C%20Pyse%20Sustainability%20Fund%2C%20angel%20investors%3C%2Fp%3E%0A
Scoreline:
Cardiff City 0
Liverpool 2
Wijnaldum 57', Milner 81' (pen)
