Global Business Outlook Issue 04 2024

- December 2024

Redefining healthcare in Saudi Arabia

The October-December 2024 edition of the Global Business Outlook will feature an offbeat topic: food automation. AI and robots are creating recipes based on available kitchen ingredients or the molecular compatibility of those ingredients, revolutionising cooking efficiency, sustainability, and personalised dining experiences. This shift could change how we approach meal preparation and food production.

Shifting our attention to the United States, the Federal Reserve's regulatory chief, in September 2024, announced a significant overhaul of two major draft bank capital rules. This decision came after intense opposition from the banking industry, which had delayed the projects and created divisions among the top federal banking regulators. The revised drafts of the "Basel Endgame" rule will be reissued, along with a separate capital rule for global banks, marking a major victory for Wall Street lenders who have actively lobbied to weaken these regulations.

The latest analysis from the International Monetary Fund indicates that Saudi Arabia's economic growth is expected to exceed the global average by 2025. The Kingdom's output growth is projected to increase by 4.7% in 2019, which is above the global forecast of 3.3%. However, this estimate for the Gulf country is lower than the April forecast, which had predicted a growth rate of 6% by 2025 for the Gulf powerhouse.

The cover story of the year-end edition highlights another success story from the Kingdom's healthcare sector: Sajaya Medical Care Services. This organisation is successfully integrating cutting-edge technology with compassionate and personalised care. With an investment of $120 million over two years, Sajaya has established itself as a healthcare provider focused on quality, efficiency, and patient well-being.

Thomas Kranjec Editor kimberly@gbomag.com

Analysis

06 | Slot Hoarding: A menace in Australian aviation?

| Are electric vehicles truly eco-friendly?

| The socio-economic minefield called South Sudan

46 | Nairobi's debt crisis fuels youth discontent 56 | Child Trust Funds: Could your money be waiting?

66 | How to secure the best mortgage interest rate

76 | AI kitchens: The end of family cooking time?

86 | Dark patterns expose users to privacy risks online

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Industry

Slot Hoarding

Analysis

Slot Hoarding: A menace in Australian aviation?

GBO Correspondent

Virgin and Qantas Group, which owns budget carrier Jetstar, welcomed the proposed reforms which they said would prove claims of slot hoarding wrong

The Australian aviation sector will want to forget the year 2024. Rex (Regional Express) Airlines became the second aviation venture to go into voluntary administration this year after Bonza’s collapse in April.

The courts have given the administrators, Ernst & Young, until November 25, 2024, to find a buyers. The administrators have argued that this outcome, as opposed to liquidation, is the best case for creditors.

However, liquidating the airline will likely be politically unacceptable to the Australian government, given that it is the sole carrier in many regional and rural airports, and its demise could have significant implications ahead of 2025's federal election.

Instead of discussing what went wrong for the airline, our article will focus on the “Slot Hoarding” theory that emerged after Rex’s failure.

Presenting the Slot Hoarding theory

In July 2024, Qantas CEO Vanessa Hudson stated that Australia does not have enough passengers to support more than three domestic airlines. She emphasised that the high costs of providing services across the country, coupled with its small population and heavy reliance on domestic aviation, make it difficult for more airlines to operate successfully.

While some analysts argue that the narrative suits Qantas and Virgin Australia in maintaining their domestic airline duopoly, another theory suggests that Rex is a victim of strategic management by other airlines. This strategy, known as “slot hoarding,” involves limiting the number of airport slots available to Rex, thereby hindering its ability to operate flights between the capital cities.

The former chair of the Australian Competition and

Consumer Commission (ACCC), Rod Sims, told ABC radio, "The government outsources the management of the slots at Sydney airport to a company that’s majorityowned by Qantas and Virgin, it is just unbelievable."

In fact, reports emerged in August 2024 about Sydney Airport facing a major shake-up of how flights are scheduled and who can get access, as the federal government sought to quash alleged issues of "slot hoarding" by Qantas and Virgin at the nation's biggest airport.

A company majority-owned by Qantas and Virgin was in charge of deciding which carriers get access to limited and in-demand time slots at Sydney's Kingsford Smith gates. The pair faced the accusation of keeping spaces for themselves even when they did not have flights to run in those slots, as a tactic to lock out competitors.

Transport Minister Catherine King has now opened a tender for that slot management job as part of an effort to

make that system more transparent.

Rod Sims believed that the management of airport slots should not be open to any carriers. He asserted that carriers should be excluded from bidding for this responsibility.

What are airport slots and can they be hoarded?

Back in the 1970s, the International Air Transport Association (IATA) developed the airline slot system to reduce airport congestion. The aim was to improve traffic flow during peak travel times at “Level Three” high-traffic density airports, a category that includes Sydney and Melbourne.

Under the system, airlines are allocated a daily number of slots they can use. Importantly, there is a set number of slots available, as they represent specific time windows for aircraft to take off or land.

Doug Drury, Professor/Head of Aviation, CQ Univer-

sity Australia, said, "Airlines schedule their slots ahead of time as part of a yield management programme. This plan looks across the whole calendar year, taking into account projected peak and off-peak travel times for business and leisure travellers. An airline owns the time slot it is designated by the airport infrastructure capacity, whether it gets used or not."

"The IATA system relies on what’s called the “80/20 rule,” which states an airline must use 80% of its allocated slots or it will lose its unused slots. The 20% is a buffer. But it has been criticised as overly generous. Airlines can also buy sell or lease, slots they are not using due to slow demand or the need for financial gain. These can sell for huge sums," he added.

Slot hoarding is the practice of booking slots for use only to cancel them in bad faith, preventing other airlines from getting access to premium travel times.

In June 2023, Rex’s then-deputy-chairman John Sharp accused Qantas of engaging in the practice, as he stated, "It’s as plain as the nose on your face that Qantas is hoarding slots by cancelling sufficient flights to remain within the 80/20 rule. Slot availability is a particular issue for Sydney Airport, because take-offs and landings are capped at 80 per hour."

In February 2024, the federal government

unveiled a range of reforms for Sydney Airport’s slot system. These included requirements for increased transparency on how slots are used, and new independent audits. Notably, it made no change to the 80/20 rule.

In testimony to a Senate enquiry in 2023, Rex said it was not allocated the slots it had applied for and only had 20 peak slots out of the 800 daily peak slots available.

Changes needed

Professor Doug Drury pitches a reform where a predefined number of slots can be sold to the major participating airlines. The applicants will have to make a business case outlining their proposed needs over the next calendar year.

"Currently, airlines request slots from the airport slot management team at no cost to the airline, a system which favours established airlines that have met the 80/20 rule. However, a key criticism of this proposal is that the cost of purchasing slots would be passed down to the flying public, likely resulting in higher airfares. Bidding for slots would also add new cost barriers to entry for wouldbe start-up challengers," Drury stated.

Another possibility is to reexamine slot allocation based on fairness, measuring an airline’s needs against airport infrastructure. Airlines that had historically used 80% of their allocated slots can be given priority bidding on up to 50% of the following year’s total airport slot allocation.

The remaining 50% of slots can then be prioritised for new airlines without an established history, to award them take-off and landing times that aren’t necessarily

premium, but close enough.

Drury advocates that airlines not achieving the above-mentioned 80% target or found to be abusing the slot hoarding rules should be removed from the top-tier fairness status and placed in a slot allocation “sin bin” until their performance measures are brought up to standards.

Government steps in

As of October 2024, a newly introduced legislation has given the Australian government the power to impose civil penalties on carriers that hoard slots at Sydney Airport. The system will be made more transparent, with the administration gaining the power to compel airlines to produce information on slot use.

If passed, the bill would allow the government to impose civil penalties on airlines that fail to use a slot, apply for slots with no reasonable prospects of using them, and fail to return or transfer unused slots. Authorities will be able to increase access for new entrants and New South Wales-based regional airlines, potentially bringing down airfares and ensuring regional connectivity.

No changes will be made to the curfew system or the overall daily movement cap. But a recovery period will be introduced for major disruptions such as extreme weather, adding further flexibility and hopefully reducing cancellations. Following disruptions, the airport will temporarily be allowed an extra five movements per hour so that airlines can catch up with their schedule.

Virgin and Qantas Group, which also owns budget carrier Jetstar, welcomed the proposed reforms which they said would prove claims of slot hoarding wrong. Qantas said it was operating over 90% of its allocated slots, above the international standard of 80%.

A Virgin spokesperson said the company had always been committed to fair slot allocation and supported greater transparency on how airport charges were determined.

Weather shadow looms over solar energy

Feature

GBO Correspondent

The International Energy Agency (IEA) has highlighted big shifts in global energy trends in its recently released document called the World Energy Outlook 2024. Not surprisingly, solar power has been tipped to remain at the forefront of the energy sector's "Clean Transformation," with projections showing that global solar electricity generation could grow fourfold by 2030. This growth is set to accelerate the decline of coal and reshape the global energy mix.

According to the report, global energy markets stabilised in 2023, with natural gas prices dropping after a spike in 2022 and energy demand growing by 2.1%, aligning with the pre-2020 average. However, demand growth is expected to slow to 0.7% annually until 2030. Most of this growth will be in emerging markets and developing economies.

By 2033, solar will surpass nuclear, wind, hydro, and natural gas as a major electricity source. Eventually, it may even overtake coal to become the largest source of electricity globally.

The evolving renewable energy industry

The IEA predicts that as more renewable energy like solar and wind comes online, global CO2 emissions from non-renewable energy will reach their peak around 2025, which could be a major step forward in reducing the impact of climate change. However, the global body warns that these changes alone aren’t enough to meet the goals of the Paris Agreement, which aims to limit global warming to well below 2°C, preferably to 1.5°C, above pre-industrial levels. Even with the growth of renewables, CO2 emissions are expected to fall only 4% below 2023 levels by 2030. This would still result in a global temperature increase of about 2.4°C, higher than the desired target.

Solar and wind will provide nearly 60% of global electricity by 2050

Solar energy production worldwide from 2013 to 2022 (In Terawatt Hours)

Source: Statista

To reach the 1.5°C target, the IEA outlines a path that it calls “increasingly narrow, but achievable.” This roadmap includes strategies like a rapid shift to clean energy technologies, faster adoption of electric systems, and a big reduction in emissions, around 33%, by 2030. Achieving these goals will demand new policies and large investments in renewable energy, especially in regions that still rely heavily on fossil fuels.

Solar and wind will provide nearly 60% of global electricity by 2050. However, fossil fuels still met 80% of global energy needs in 2023, though their demand could peak by 2030, as per IEA's estimates. The rise of clean energy also has a correlation with the falling cost of solar and wind power, which has made them competitive with traditional fossil fuels. The IEA estimates that solar capacity could exceed 16,000 gigawatts (GW) by 2050, a huge jump from current levels.

According to a recent Allied Market Research report titled "Solar Fuel Market," the market was valued at $2.6 billion in 2023 and is projected to grow at a CAGR of 7.7%, reaching $5.4 billion by 2033.

The report also raised a warning for the sector, as it stated, "The global solar fuel market is experiencing growth due to several factors such as escalating greenhouse gas emissions, advancements in solar energy technology, and growing

investment in green hydrogen projects. However, the high technical cost and lack of widespread infrastructure hinder market growth. Moreover, the shift towards green hydrogen production will provide opportunities for expanding the solar fuel market."

Extreme weather events: Worry for policymakers?

Solar energy generation is fundamentally dependent on weather conditions and daylight hours, resulting in fluctuations in energy output over time. This factor also introduces uncertainty and variability in the availability of solar resources, which can disrupt continuous fuel production processes. Consequently, reliance on solar energy as the primary input for fuel production may lead to inconsistent output and operational challenges for solar fuel facilities.

There is a constant need for tactics to enhance energy storage technologies, in addition to the necessity of introducing hybrid systems that integrate multiple renewable energy sources to mitigate the effects of intermittency and ensure reliable fuel production.

Between 2013 and 2022, 46% of global renewable energy investments went into solar photovoltaics, according to the International Renewable Energy Agency (IRENA), which also highlighted that in 2022 solar PV accounted for 60% of this investment, around $300 billion. However, as extreme weather events increase in frequency, insurers and lenders want assurances that potential threats to productivity, performance and resilience of these assets are being addressed.

Towards the end of the last decade, a significant loss for a utility-scale solar PV plant typically ranged from $100,000 to $200,000, with some losses reaching as high as $1 million.

According to GCube, a specialist renewables insurer owned by Tokio Marine HCC that has underwritten over 20 GW of solar capacity, claims resulting from hailstorm damage to solar PV plants in the US now average approximately $58.4

million each. These claims account for 54.21% of the total costs incurred from solar loss claims.

GCube director of operations and legal counsel, James Papazis, said, “The premiums for the solar plant’s construction phase as well as its operational phase have increased, along with increases in deductibles and imposed sub-limits and limits.”

"Today $100 million-plus losses from hail damage at solar sites in the US are not unusual with sub-limits at $50-$60 million. The loss is shared by multiple insurers and reinsurers. Even then the project is exposed with an uninsured loss for a substantial figure. This had led to tension between financiers, lenders and insurers," he stated, while adding about more due diligence and effort occurring at the planning stage of projects, and also insurance too is being discussed at a much earlier stage of the project’s development because lenders want to know about sublimits, premiums and deductibles.

"As solar PV projects have increased in size and are increasingly being sited in more remote locations, longer construction phases ensue. Supply chain bottlenecks and limited availability of components and equipment have also impacted projects so they are taking longer to build," Papazis remarked.

According to Paul Raats, principal consultant, energy systems at risk

management consultancy DNV, financiers and insurers are paying increasing attention to the risk that comes with climate change and extreme weather events.

DNV has been advising IRENA on developing a set of recommendations to help the solar PV industry better manage extreme weather event-related risks regarding solar projects and assets.

“More attention needs to be given to sudden harsh weather during construction as the PV systems are not at their full bearing capacity and are more vulnerable to heavy loads,” said Raats, while adding, "developers and their contractors are advised to schedule construction by considering short-term weather forecasts, a practice that is more usual in offshore wind."

DNV recommends that the assessment of the 100-year flood probability should be included in project evaluations. Any recommendations from this assessment should be incorporated into the project design. Potential measures may include raising the height of mounting systems so that the bottom edge of the solar PV module is positioned above the highest recorded water level, installing inverter cabinets off the ground, reinforcing foundations, and implementing or improving drainage systems.

Insurance against damage should provide an additional layer of financial protection to the projects located in such

Solar and wind will provide nearly 60% of global electricity by 2050. However, fossil fuels still met 80% of global energy needs in 2023, though their demand could peak by 2030, as per IEA's estimates. The rise of clean energy also has a correlation with the falling cost of solar and wind power, which has made them competitive with traditional fossil fuels

The findings, published in the journal "Progress in Photovoltaics: Research and Applications," show degradation of future PV modules will result in up to a 12% increase in power loss, leading to approximately a 10% rise in future energy prices by 2059

regions. DNV has been pitching for projects having owners’ engineers for oversight and inspection activities during the plant construction phase, apart from contractors putting proper insurance in place.

In its latest study, UNSW Sydney noted that shifts in temperatures brought on by climate change would result in solar panels having greater risk of degradation due to prolonged exposure to harsh outdoor conditions.

The findings, published in the journal "Progress in Photovoltaics: Research and Applications," show degradation of future PV modules will result in up to a 12% increase in power loss, leading to approximately a 10% rise in future energy prices by 2059.

For the study, the researchers used regional climate model projections to study the forecasted levels of temperature and relative humidity in Australia and track their impact on the degradation of PV modules across Australia.

The study looked at three degradation

mechanisms that are typically observed in silicon modules: hydrolysis degradation, which considers temperature and relative humidity; thermal degradation, which takes into account changes in temperature of the module; and, photo degradation, which factors in UV radiation temperature and humidity.

The weighted average degradation rate was calculated using the probability of occurrence of each of these mechanisms under specific climate types including hot and humid, moderate, and desert conditions. To assess the impact of climate change on module degradation, the reasearchers estimated and forecasted the changes in the weighted average module degradation rate under a low and high emission scenario.

Finding the solution

American solar plant owners and developers are adopting approaches where they use ground weather monitoring stations, and onsite sensors, at their project site for

a minimum of one year. The gathered data will then be compared with high-resolution satellite data, sometimes going back 20-30 years, to produce bankable site-specific data.

Solargis, which provides this kind of modelling service, counts solar PV project developers and independent power producers, as well as technical advisers and independent engineers on projects, while banks also use its data and services for their financing process.

Accurate historical temperature and irradiation values are crucial for analysing trends, predicting scenarios, and making informed decisions, said Giridaran Srinivasan, Solargis America's CEO, as he explained, “This allows for more accurate prediction of output, based not only on the best-case scenario but also for periods of extreme or non-typical scenarios. More and more, lenders in the solar PV sector are including rigorous due diligence procedures for project funding.”

As part of this process, the solution mainly opts for calculations and simulations that incorporate more extreme event models upfront to account for the worst-case scenario in terms of energy production. The aim is to provide an accurate representation of the solar PV project’s potential performance.

Kevin Christy, Head of Innovation & Operational Excellence (in North America), at Lightsource bp, said, “The US is experiencing severe hail events in Texas, Kansas, Oklahoma, to name a few. A large hailstone can do a lot of damage if it hits a solar panel dead on. Our hail monitoring and mitigation system, Project Whiskyball, helps to mitigate damage.”

The trackers that the company uses in its projects tilt in order to maximise the incoming light from the sun. But when the risk of a hailstorm is detected, the trackers stow the modules in a more vertical position.

“Any hail striking the modules will be reduced to a glancing blow rather than a direct hit. It is extremely effective at reducing the force applied by any hail and

greatly reduces the potential for damage. Project Whiskyball is now operational across all of our completed solar assets in the US,” Christy added.

Talking about innovation, Solar Defender Technologies has developed a protective net that covers modules mounted on single-axis tracker systems, used in ground-mounted utility-scale installations, while allowing the modules to move to achieve optimum energy output.

GCube director of operations and legal counsel, James Papazis, said, “This is becoming a big issue for the industry. When lenders have to factor in increased premiums or uninsured hail losses, the economics of projects can change significantly. There isn’t really a clear answer yet.”

"Where developers are building projects that they intend to operate and own for the majority of the operational lifetime, lenders are more comfortable with these sorts of companies to partner with. This long-term approach does change the economics, making it attractive for those with large balance sheets and large portfolios,” he added.

Portfolios with projects spread across different locations and regions mean that ones in a hail-prone part of a state or by the coast can be offset by others that are in areas where weather is less severe.

“Wildfires are the latest issue for the industry. Generally, solar projects in some parts of the US are becoming more expensive to finance and insure due to mitigating against more weather events, not just natural catastrophe,” Papazis observed, as he concluded, "The industry has options available to support mitigation and underwriting of risks, including paying more attention to site selection, equipment and technology choices and making better use of weather modelling, as well as looking at water tables and frequency of flooding events. There are multiple factors so use of multiple different modelling tools, including satellite imagery, is important."

“The US is experiencing severe hail events in Texas, Kansas, Oklahoma, to name a few. A large hailstone can do a lot of damage if it hits a solar panel dead on. Our hail monitoring and mitigation system, Project Whiskyball, helps to mitigate damage”

- Kevin Christy

Sajaya

Sajaya Redefining healthcare in Saudi Arabia

Cover Story

Sajaya Medical Care Services

Saudi Arabia

Sajaya has been steadily building up a solid foundation in medical care services, demonstrating an exquisite standard of service

Sajaya Medical Care Services is a success story in Saudi Arabia's healthcare, where cutting-edge technology seamlessly blends with compassionate and personalised care. Established in 2020, Sajaya Medical Care Services has embarked on an ambitious journey to transform the Kingdom's healthcare scenario. With a $120 million investment over two years, Sajaya has become a healthcare provider that has moved toward a future where quality, efficiency, and patient well-being are paramount.

"When we redefined the concept of preventive care in the Kingdom of Health we’ve built, at Sajaya, we shaped the story of achievements and endless aspirations. We are not just a medical facility; rather, we represent an ambitious vision for healthcare in the Kingdom, embodied in achieving key goals like Saudi Vision 2030, which grows and evolves with our progress," Sajaya told Global Business Outlook (GBO).

Sajaya aims to provide first-class medical services, adhering to the highest quality standards, with an annual target of 40,000 patient visits. Sajaya's comprehensive service offerings include a highly specialised diagnostic network, and professional and specialised home care. Sajaya's rapid expansion is evident with the completion of two new branches in 2023, supported by numerous contracts and a growing workforce.

Driven by values like trust, innovation, impact, and care, Sajaya is committed to revolutionising healthcare in Saudi Arabia and empowering patients through advanced technology and lifestyle medicine. It is re-energising local healthcare, partnering with international experts to bring world-class services directly to communities across the Kingdom.

"We believe in the importance of prevention and early diagnosis as the foundation of robust health. Thus, we strive to provide comprehensive healthcare through a 360-degree approach that combines traditional and modern treatments, leveraging the latest technologies and profound medical expertise, along with personalised care for each patient who relies on us," the healthcare facility added.

Cover Story

Sajaya Medical Care Services

Saudi Arabia

Sajaya's vision and mission

Since its formation in 2020, Sajaya has been steadily building up a solid foundation in medical care services, demonstrating an exquisite standard of service.

"Today we build on our success by extending our scope of service to include diagnostic as well as preventive health screening tests, targeting new heights by maintaining our renowned Level of service tackling critical cases in the fields of genetics lifestyle, premarital, sexology, cardiovascular, mental health, and many others. We have our lead with cutting-edge technologies that we have introduced and consolidated to maximise the effect of pinpointing the potential physiological causes for a wide range of medical conditions," Sajaya continued.

Now what has been the secret recipe behind the success story? It is Sajaya's vision, that puts them as the guiding force in revolutionising the Kingdom's healthcare sector, by empowering clients with the latest medical technologies and lifestyle medicine.

Global Business Outlook caught up with Dr. Kamel AlDosari, Sajaya CEO, who shared his views about the success of the healthcare facility and its vision.

He said, "We aim to move beyond traditional healthcare models, embracing a holistic and proactive approach to patient well-being. This vision is driven by a deep commitment to innovation and a belief in the power of technology to transform patient care. Our vision is not merely about providing healthcare services; it's about creating a seamless and positive experience that empowers individuals to take control of their health."

"Our mission is equally ambitious: to provide unparallelled healthcare excellence by delivering the highest quality medical services and smart solutions. This means continually striving for improvement through efficient technology and secure data management systems. We're committed to personalised care, ensuring that each patient receives the attention and treatment plan best suited to their individual needs. Our mission isn't just about treating illnesses; it’s about empowering individuals to live healthier, more fulfilling lives through proactive and personalised care,” Dr. Kamel AlDosari added.

This combination of technological advancements and a human-centric philosophy has defined Sajaya's approach to transforming healthcare and delivering exceptional experiences, as it keeps on investing in the latest technologies and devices in the field of diagnostic

laboratory tests, as well as diagnostic imaging tests, to achieve the highest levels of quality and international accreditation.

Top-notch innovation

Dr. Kamel AlDosari told GBO, "At Sajaya, we are leading a new era of innovative and patient-centric care in Saudi Arabia where advanced technology enhances both the quality and accessibility of care."

This innovative approach has been evident in several key areas like "Advanced Diagnostics Network," where Sajaya has strategically designed a comprehensive diagnostics network to provide comprehensive and timely results, enhancing diagnostic capabilities and fostering early interventions. This network comprises three key components: Luxury Care Centres (LCCs) offering advanced medical imaging such as PET-CT and SPECT-CT scans; Care Centres (CCs) providing routine lab and radiology services (CT, MRI, and ultrasound); and a robust home healthcare network (HHC) ensuring convenient access to care. This layered approach not only streamlines the diagnostic process but also ensures patients receive the appropriate level of care.

Recognising the need for focused expertise, Sajaya offers a wide range of specialised and subspecialised clinics catering to diverse healthcare needs. These include, but are not limited to, cardiology, neurology, pain management, sleep clinics, and endocrinology and obesity management. Each clinic has a team of highly trained specialists equipped with advanced technology to diagnose and treat specific conditions effectively, while providing personalised care.

"At Sajaya, technology is integral to enhancing the quality and efficiency of care. Our digital capabilities enable us to deliver the most effective outcomes, utilising the latest technology in laboratory services (heavy elements testing, anatomic pathology, clinical chemistry, immunology and more). In radiology, we use the latest technologies such as MRI, CT, PET-CT, and SPECT-CT, ensuring accurate diagnoses and efficient treatments. Our computerised systems ensure secure data management and facilitate seamless communication between healthcare providers and patients, streamlining the overall healthcare process," Dr. AlDosari noted.

Since 2020, the facility has remained at the forefront of integrating cutting-edge technology to enhance diagnostic precision and efficiency. For radiation-

Cover Story \ Sajaya Medical Care Services

Dr. Kamel AlDosari Sajaya CEO

Cover Story

Sajaya Medical Care Services Saudi Arabia

All complex services like heavy elements testing, anatomic pathology and cytopathology, haematology and coagulation, microbiology, clinical chemistry and cytogenetics, immunology, molecular pathology and special chemistry get done under one roof

based imaging, Sajaya utilises dose monitoring sensors that adjust radiation levels according to the body part and patient profile. This is particularly vital for paediatric and elderly patients, minimising unnecessary exposure.

"The bone mineral density (BMD) technology which is highly sensitive to changes, as small as 10 grams, offers a nuanced view of body composition, crucial for personalised nutrition plans. Sajaya has also integrated MRI screens made of pure silicon, initially developed for brain activity research, now repurposed to alleviate claustrophobia during scans, improving patient comfort. The use of PET scans and amyloid imaging for early Alzheimer's detection, and CT scans with calcium scoring for preventative cardiology measures, further exemplify Sajaya's commitment to advanced, preventative diagnostics," the CEO explained.

Take the radiology department for example, that provides more than a stateof-the-art, accurate and comprehensive diagnosis, by using the latest radiological technologies, such as magnetic resonance imaging (MRI) and computed tomography (CT) scanning, aiding in the precise and effective identification and diagnosis of various medical conditions and diseases. Mammography, SPECT-CT scan, angiography, ultrasound, bone mineral density (BMD) test: Name any radiology-base diagnosis method, Sajaya Medical is ready with its solutions.

Sajaya also offers advanced and comprehensive laboratory services, including blood and urine tests, genetic testing, and several other tests that aid in providing accurate diagnosis and effective treatment for patients. All complex services like heavy elements testing, anatomic pathology and cytopathology, haematology and coagulation, microbiology, clinical chemistry and cytogenetics, immunology, molecular pathology and special chemistry get done under one roof.

"Sajaya's 360 Clinic represents a

revolutionary approach to preventive medicine. This integrated model combines advanced technology (radiology, laboratory testing, genetic mapping, PET scans) with personalised lifestyle medicine, including tailored nutrition plans, physiotherapy, and oxygen therapy. By considering the whole person – their lifestyle, genetics, and medical history – Sajaya's 360 Clinic proactively addresses health risks, rather than just reacting to existing problems," Dr. AlDosari noted.

Talking about these specialised clinics, Sajaya aspires to be the leading force in Saudi Arabia, when it comes to providing exceptional healthcare that assists patients in adopting a healthy lifestyle tailored to their needs. The venture's dedicated team of physicians and staff works diligently and with dedication to deliver the highest level of service, ensuring effective outcomes that help the patients achieve their health goals, covering basics like nutrition, sleep cycle and pain management, apart from providing specialised services like intervention radiology, neurology, endocrinology and obesity clinic and cardiology.

Enhancing patient experience significantly relies on Sajaya's facility design. The open-space clinic design, incorporating natural sunlight, indoor greenery, and water features, creates a calming environment conducive to positive patient interaction.

"Our centralised layout—placing radiology and lab services along a single corridor—optimises workflow and minimises wait times. This careful attention to detail extends beyond the physical space; Sajaya's commitment to personalised care ensures each patient receives tailored treatment plans and support, reflecting their unique needs and preferences. The extension of healthcare services to home care, with online clinic options, exemplifies a commitment to convenience and accessibility," Dr. AlDosari continued.

In essence, Sajaya's innovative

practices are not simply about adopting new technologies but fundamentally reimagining the healthcare experience. Through a holistic, patient-centric model, Sajaya sets a new standard for preventative care and personalised medicine in Saudi Arabia.

Sajaya's "360 Clinic Services" offer comprehensive healthcare that addresses all aspects of human health, whether physical or psychological, supported by distinguished health experts and modern medical technologies, striving to achieve the highest levels of healthcare by focusing on prevention and comprehensive treatment.

Patient-centric care

"At Sajaya Medical Care Services, the patient is at the heart of everything we do. Our patient-centric approach isn't just a philosophy; it's the driving force behind every decision we make. This

commitment translates into several key aspects of our service," Dr. AlDosari noted, as he added, "We understand that every patient is unique, with distinct needs and preferences. Therefore, our team develops individualised care plans, taking into account medical history, lifestyle, and personal goals. This personalised approach ensures the most effective and tailored treatment."

Sajaya strives to create a seamless and stress-free experience for every patient, from the moment they book an appointment to their final follow-up visit. This commitment to a seamless experience includes: user-friendly online scheduling and communication tools; a comfortable and relaxing clinic environment designed to reduce anxiety; prompt and efficient service; and clear, easy-to-understand explanations of procedures and treatment plans. The centralised layout of Sajaya's

Take the radiology department for example, that provides more than a state-of-theart,

accurate and comprehensive diagnosis, by using the latest radiological technologies, such as magnetic resonance imaging (MRI) and computed tomography (CT) scanning, aiding in the precise and effective identification and diagnosis of various medical conditions and diseases

Cover Story \ Sajaya Medical Care Services

Cover Story

Sajaya Medical Care Services

Saudi Arabia

Another such game-changing treatment package offered by Sajaya is "Bone Density Screening," which deals with Osteoporosis treatment. The medical condition is a common one in Saudi Arabia, affecting 50% of women and men over fifty in the Kingdom

facilities, placing key services in close proximity, further optimises workflow and patient flow, minimising wait times.

"Our team is comprised of highly trained and compassionate medical professionals who are dedicated to providing the highest standard of patient care. We believe that excellent medical care goes hand-in-hand with compassionate service. Our staff members take the time to listen to their patients' concerns, answer their questions, and offer support throughout their healthcare journey. We foster an environment of empathy and understanding, treating each patient with the dignity and respect they deserve," Dr. AlDosari told GBO.

"Sajaya's commitment to patient well-being extends beyond individual consultations and treatment. Our proactive approach to preventive healthcare, evident in the 360 Clinic, focuses on proactive preventive healthcare and allows us to address

potential health issues before they become major problems. Our home healthcare services provide convenient and comfortable care for patients who are unable to visit our facilities, emphasising accessibility and convenience," he added.

On the "Health Lifestyle Medicine" front, Sajaya provides tailored programmes for disease prevention and enhancement of life quality and its standards, by focusing on proper nutrition, suitable physical exercises, and positive health habits, aiming to achieve comprehensive health and well-being.

An expanding envelope of services

Sajaya also offers specialised home care services for patients and the elderly (along with new mothers and their babies) who require special care and meticulous medical supervision. This includes nursing care, physical therapy, and psychological and social support, to

ensure an improvement in their health.

Sajaya's comprehensive and integrated health packages have been carefully designed to align with the patients' lifestyle, to assist them in enjoying better health and longevity. These packages are crafted by a team of top doctors and experienced specialists in the field of preventive medicine to facilitate early detection and prevention of diseases, thereby enhancing the overall quality of life.

For example, the "Oxygen Cell Regeneration" method, aids in promoting health and well-being, ensuring the inhalation of pure oxygen in a closed environment. It improves the nutrition of surrounding tissues and stimulates the growth of new tissues that work to deliver blood to the body’s affected areas.

Another such game-changing treatment package offered by Sajaya is "Bone Density Screening," which deals with Osteoporosis treatment.

The medical condition is a common one in Saudi Arabia, affecting 50% of women and men over fifty in the Kingdom. The facility harnesses the latest medical technology methods under the supervision of specialised bone consultants with international expertise (including lifestyle specialists) to detect and prevent the disease. These professionals monitor bone density and body curvature, and detect symptoms that may lead to osteoporosis, before drawing up comprehensive therapy and evaluation sessions.

Partnerships and network

Sajaya’s success in redefining Saudi's medical landscape has also been made possible due to factors like strategic partnerships and a robust network that expands the group's reach and capabilities across the Kingdom. These collaborations strengthen the venture's ability to deliver high-quality healthcare services by leveraging the

expertise and resources of industry leaders.

Sajaya has formed key partnerships with leading international and national companies, each bringing unique expertise and resources to enhance the quality and breadth of services offered. These partnerships are carefully selected to complement Sajaya’s commitment to technological advancement, patient-centric care, and operational efficiency. Partners such as Siemens Healthiness, Bayer, and KPMG bring their extensive knowledge and experience in medical technology, pharmaceutical solutions, and business consulting respectively, to support Sajaya’s growth and operational excellence, thereby ensuring that the facility remains at the forefront of innovation, bringing best-in-class solutions to its clients.

"A significant partnership with Agility and Bexa focuses on expanding access to breast cancer screening. This

Cover Story \ Sajaya Medical Care Services

Cover Story

Sajaya Medical Care Services

Saudi Arabia

collaboration aims to train and certify Saudi female specialists in using Bexa's innovative, radiation-free breast examination technology, enhancing local expertise and contributing to early detection. The programme targets 100,000 women across Saudi Arabia, signifying a major commitment to addressing women's health issues," Dr. AlDosari added.

Sajaya has also signed an agreement with Unilabs, a leading international provider of diagnostic services. This collaboration leverages Unilabs' extensive expertise in medical diagnostics and Sajaya's cutting-edge technology in diagnostic labs and imaging. The joint venture focuses on advancing genetic testing and diagnostics, further enhancing Sajaya’s capabilities in preventative medicine and personalised treatment options. This partnership has been explicitly designed to align with the Kingdom's "Vision 2030" goals of improved healthcare access and quality, apart from signalling a commitment to supporting the development of local expertise within the Saudi healthcare sector.

"These partnerships are not isolated initiatives but rather integrated strategies to enhance Sajaya's capabilities and broaden its reach. The collaboration with Agility and Bexa focuses on expanding access to essential health services for women, while the partnership with Unilabs elevates Sajaya's capacity for advanced diagnostics and personalised medicine. This multi-faceted approach underscores Sajaya's commitment to driving innovation, improving healthcare quality, and meeting the evolving needs of the Saudi population. These partnerships allow Sajaya to integrate global expertise with local

Cover Story \ Sajaya Medical Care Services

innovation, advancing healthcare quality and expanding access to essential services across the Kingdom," Dr. AlDosari said.

Sajaya Medical Care Services is committed to building a strong presence in Saudi Arabia's healthcare sector, while executing an ambitious expansion plan to broaden access to high-quality care across the Kingdom. This growth strategy demonstrates a long-term vision focused on exceeding expectations and making a meaningful contribution to the nation's health objectives in line with "Vision 2030."

"Central to this vision is a planned expansion to over a dozen branches within the next two years. This significant increase in accessible locations will bring Sajaya's advanced diagnostic capabilities, specialised clinics, and personalised care closer to communities throughout Saudi Arabia, addressing the need for improved access to superior healthcare services, particularly in underserved areas. This expansion strategy is not just about geographical reach but also aims to provide diverse medical services within each new branch," Dr. AlDosari commented.

Creating healthier and vibrant society

Sajaya is looking to proactively engage with local communities through health education initiatives, disease awareness campaigns, and community outreach programmes. This proactive approach ensures that the benefits of Sajaya's services reach beyond individual patients to improve the overall health and well-being of the communities it serves. The goal is crystal clear here: to become a central force in Saudi Arabia’s healthcare infrastructure, driving innovation and improving health

outcomes across the Kingdom.

Sajaya’s commitment to excellence has been recognised through prestigious awards, including the Global Business Outlook Award for "Most Innovative Specialised Healthcare Services Provider – Saudi Arabia 2024," validating its dedication to integrating cutting-edge technology with patient-centred care, reinforcing the group's position as a leader in Kingdom’s healthcare sector.

"The company also holds CAP accreditation, signifying its adherence to the highest international standards for laboratory quality and precision. This accreditation underscores Sajaya's commitment to accuracy, reliability, and patient safety within its diagnostic services. Additionally, CBAHI accreditation affirms our commitment to providing trustworthy, high-quality care, ensuring patient safety and satisfaction," Dr. AlDosari noted.

Sajaya stands resolutely committed to revolutionising healthcare in Saudi Arabia, placing patient care at the heart of its mission. Through innovative solutions and a relentless pursuit of excellence, Sajaya is elevating the standards of healthcare services, ensuring that every patient receives the best possible care.

"As we look to the future, our vision remains clear: to create a healthier, more vibrant society where cuttingedge healthcare is accessible to all. Together, we are not just transforming healthcare; we are setting a new precedent for wellness and quality of life in our communities—empowering every individual to thrive," Dr. AlDosari concluded.

Industry

Electric Vehicles

Analysis

Are electric vehicles truly eco-friendly?

GBO Correspondent

Emission Analytics reports that the increased weight of electric vehicles accelerates tyre deterioration and releases harmful compounds into the atmosphere

While electric vehicles (EVs) have emerged as the harbinger of environment-friendly transportation options, a study by Emission Analytics, a firm that analyses emissions data, has challenged the idea. The study has brought attention to the problem of particle pollution originating from brakes and tyres in both electric and fossil fuel-powered cars.

The key finding is that EVs, due to their heavier weight, may release significantly more particulate matter from brakes and tyres compared to modern gasoline-powered vehicles with efficient exhaust filters. The study suggests this could be 1,850 times greater.

As per the Emission Analytics, EVs' heavier weight causes tyres to deteriorate faster, releasing harmful chemicals into the air. This is because most tyres are made from synthetic rubber derived from crude oil. Also EVs, due to the presence of heavier batteries, put more strain on the brakes and tyres, accelerating wear and tear.

The study further claimed that tyre wear emissions from an EV with a half-tonne (1,100 pounds) battery could be over 400 times higher than exhaust emissions from a modern petrol car.

Similarly, the Guardian has investigated claims regarding electric vehicles in the 'EV Mythbusters Series,' examining topics such as carbon emissions, battery fires, and the notion that hydrogen will eventually replace EVs.

The claim

The brakes and tyres of electric cars still depend on friction to function, even though their engines emit no pollution. Friction breaks down materials, some of which may find their way into the environment. There are those who argue that switching to electric vehicles, which are typically heavier and thus wear down more easily, might lead to an increase in air pollution in general.

George Eustice, the United Kingdom's thenenvironment minister, expressed his "scepticism" about improvements in air quality to the Parliament in 2022.

A Daily Mail report stated that tyre pollution is the "dirty secret of electric cars," and EV drivers have been alerted to the fact that their super-heavy electric cars actually produce more pollution than gasoline and diesel engines.

Since EVs only produce electricity from zero-carbon sources, they do not directly burn fossil fuels and do not emit any emissions. This includes not releasing carbon dioxide in populated areas, nitrous oxides, carbon monoxide, or a mixture of metals, carbon, and unburned hydrocarbons.

Although fossil fuel power plants are still a challenge when it comes to charging EVs, they are typically located outside of major cities in wealthy countries.

However, the friction on tyres, brakes, and road surfaces causes all cars to produce particulate matter

(PM), which pollutes the air and the ground with a dusty trail. Hazardous chemicals are present in this pollution.

According to Euan McTurk, a battery chemist who has researched the particulate matter issue for the RAC, electric cars typically produce less particulate matter when stopping because they use regenerative brakes.

He said that EV brakes deteriorate far more slowly. However, since more weight equals more tyre wear, electric cars do have a point to make when it comes to tyres and roads.

Meanwhile, a campaign group called 'Transport and Environment,' claimed that the average weight of an electric vehicle is approximately 400 kg more due to its large batteries. A large number of assertions regarding electric vehicles contributing to air pollution cite data from the private firm Emissions Analytics.

Founder Nick Molden's measurements claim that particulate emissions from the vehicle can be 1,850 times higher than those from contemporary car exhausts,

which are now cleaner due to regulations. However, it is important to provide some context for the headline finding, as the tests have not undergone peer review by scientists, and the industry contests the results.

Crucially, not only electric cars but all cars emit those pollutants. It is very difficult to measure small particulates, and there aren't many comparative studies out there at the moment. This indicates that it is still unclear whether the additional weight of EV batteries will cause air pollution to worsen.

The German tyre manufacturer Continental emphasised that driving technique and road curvature impact tyre wear more significantly than vehicle and tyre design.

"In theory, EVs do not produce more particulates than an otherwise similar internal combustion engine vehicle simply because of the battery-induced increased weight," a Continental spokesperson said.

Any computation has a lot of moving (and rubbing) parts, but some attempts have been made to add them all up.

"The adoption of electric vehicles will lead to very marginal decreases in total PM emissions from road traffic in future years," according to a 2020 study by the Organisation for Economic Cooperation and Development.

The OECD study further claimed that heavier electric vehicles result in slightly increased tyre and road wear for both the smaller PM 2.5 and larger PM 10 particles. However, the difference in engine pollution between gasoline and diesel cars was not that great.

Any caveats?

Most people concur that tyre pollution is still dangerous. Due to its ability to enter the bloodstream and travel to the brain or placenta, many scientists feel that smaller PM 2.5 matter is more harmful.

Manufacturers of tyres are considering modifying their compositions. An electro-

static device that collects tyre particles and may be recycled into new tyres is the clever potential solution offered by UK start-up.

"Tyre wear has always been a problem. It has just been overshadowed. You can’t really claim the title of zero-emission vehicle if there are all these non-exhaust emissions," Hanson Cheng, The Tyre Collective Co-Founder said.

If the SUV juggernaut keeps going, tyre pollution will worsen whether cars run on gasoline or electricity. Automobiles are becoming heavier, wider, and taller, which will reduce energy efficiency and carbon emissions.

Although there isn't enough data to draw a firm conclusion about whether electric cars will result in higher particulate emissions, Anna Krajinska, manager of Transport and Environment's vehicle emissions and air quality division, noted that we should work to slow down the adoption of SUVs.

Do EVs emit more particle pollution?

Meanwhile, a study conducted by Emission Analytics, an organisation specialising in emissions data analysis stated that even EVs are not better for the environment.

Published in a Wall Street Journal opinion piece, this study highlights the issue of particle pollution caused by brakes and tyres, affecting both electric and traditional fossil fuel-powered vehicles.

The issue is tyre wear. Emission Analytics reports that the increased weight of electric vehicles accelerates tyre deterioration and releases harmful compounds into the atmosphere. This is because most tyres are made from synthetic rubber derived from crude oil.

The study also emphasises how battery weight matters. Compared to conventional gasoline engines, EVs usually have heavier batteries. This excess weight accelerates wear and tear on the tyres and brakes by

placing additional strain on them.

According to the study, tyre wear emissions from an electric vehicle with a half-ton (1,100-pound) battery may be more than 400 times higher than the exhaust emissions from a contemporary gasoline-powered vehicle.

Although tailpipe emissions have historically received most of the attention, this study suggests that when assessing the environmental impact of EVs, particle pollution from brakes and tyres should also be taken into account.

Shift to EVs inevitable?

Undoubtedly, the automotive industry remains unaccountable when it comes to pollution. Tyre wear is one of the few sources of particulate pollution that occurs while a car is in motion, so as

internal combustion engines become rarer; expect to see increased attention paid to this issue. For both people and wildlife, that may have significant health benefits.

It is undeniable that increasingly heavier vehicles almost certainly emit more tyre dust. Right now, electric vehicles weigh even more than their counterparts. But even so, tyre pollution seems to be about the same for electric, diesel, and gasoline vehicles. Moving to an electric vehicle also has many other advantages, not the least of which is reduced carbon pollution.

Despite being a significant factor, combating air pollution does not seem to be a good excuse to postpone the switch to electric vehicles.

Analysis \ Pollution

Crucially, not only electric cars but all cars emit those pollutants. It is very difficult to measure small particulates, and there aren't many comparative studies out there at the moment. This indicates that it is still unclear whether the additional weight of EV batteries will cause air pollution to worsen

Fossil fuel cash in academia: A dilemma

The oil and gas sector has a profound impact on higher education, influencing curriculum design, academic research, and even public policy. Universities benefit financially from this partnership, but there are worries that it could skew academic freedom and climate research.

Research funding and academic focus

Funding for research is one of the most direct ways that oil and gas businesses influence policy. Universities frequently receive significant financial support from fossil fuel industries, particularly those with departments of engineering and environmental science. The purpose of this funding is to create research centres, provide project money, and endowed professorships that support the goals of the industry.

This piece explores how the oil and gas business permeates higher education, the consequences for science and climate policy, and the mounting opposition from scholars and students.

For instance, studies from the fossil fuel

Fossil fuel companies frequently use colleges as a platform to justify their involvement in climate action

Share of fossil fuels in primary energy consumption worldwide from 2015 to 2023 (In Percentage)

industry-funded MIT Energy Initiative supported natural gas as a "bridge fuel" to a low-carbon future. This story strengthened the industry's influence in academia and government by influencing research as well as being a part of the Obama administration’s US Energy Policy.

Shortly after a significant oil disaster, the Canadian energy corporation Enbridge funded a business school research centre at the University of Calgary, a move that some perceived as an attempt to improve the company's public image.

This phenomenon is not exclusive to Canada; analogous trends are discernible in the United States, the United Kingdom, and Australia, wherein fossil fuel corporations have played a role in moulding university programmes and swaying public opinions around fossil fuel innovations such as hydraulic fracturing and carbon capture and storage (CCS). Despite the frequent presentation of these innovations as solutions to the climate emergency, their primary objective is to extend the lifespan of the fossil fuel industry.

Developing curriculum and industryfavourable education

In addition to providing funding for research, the oil and gas sector has influenced university curricula, particularly in disciplines like engineering and geosciences. Industry leaders have occasionally provided advice on course creation and design.

reforms that would lessen reliance on fossil fuels. Examples of these technological solutions include carbon capture and storage. Not only does this alter the curriculum, but it also presents the case for climate action in a manner that benefits the fossil fuel industry.

Fossil fuel firms are able to continue participating in talks about energy policy while holding off on more radical reforms by presenting themselves as important stakeholders in the shift to a low-carbon future.

Perception and policy influence

The oil and gas sector's influence on scholarly enquiry extends beyond academic institutions and permeates public policy. These corporations influence policy discussions to their advantage by providing financing for research that bolsters the notion that fossil fuels are an essential part of the energy transition. For example, studies supported by the industry are more likely to minimise the potential of renewable energy sources and promote natural gas.

The promotion of natural gas as a "bridge fuel" to a low-carbon future is a positive example of this. This narrative has played a major role in postponing the switch to renewable energy, as evidenced by research funded by the industry.

Source: Statista

Companies such as BP, Shell, and Equinor have influenced engineering and geoscience programmes in the United Kingdom by collaborating with prominent universities like Oxford University and University College London. In a similar partnership, representatives of fossil fuel companies helped develop undergraduate programmes at the University of Western Australia.

This involvement significantly impacts students' education. Industry-friendly curricula typically place more emphasis on technological solutions than on systemic

According to one assessment, rather than promoting a full switch to renewable energy sources, academic research supported by the fossil fuel industry typically favours technological advancements that extend the use of fossil fuels. The ramifications of this have been extensive in terms of climate policy, since governments base their choices on academic research.

Moreover, fossil fuel companies frequently use colleges as a platform to justify their involvement in climate action. These businesses become more credible and are able to portray themselves as part of the solution to the climate catastrophe rather than a contributing factor by

forming partnerships with respectable academic institutions.

As a means of pushing for incremental technological fixes rather than systemic change, the sector aims to postpone significant climate action, a tactic known as "climate obstruction."

Reactions and demands for openness

Students and academics have been demanding that universities cut their ties to the fossil fuel sector, and this opposition has been increasing in recent years. Campus activist groups have been outspoken in their demands for academic autonomy and funding transparency from industry.

They contend that public welfare ought to come first at universities and that the interests of fossil fuel companies should have no bearing on their decisions. This movement has resulted in calls to divest from fossil fuel firms, evoking memories of earlier movements against the tobacco and pharmaceutical industries.

A few colleges have begun to move in this direction. As an example, Princeton University has tightened its policies about taking donations from fossil fuel companies, and other educational institutions are facing pressure to reveal their financial ties to the sector. Yet progress has been sluggish, and despite the need for financial support for research and teaching, many colleges still take money from oil and gas firms.

The more urgent the climate situation gets, the more probable it is that the demand for accountability and openness will grow. Universities are essential to solving the climate catastrophe because they are hubs of knowledge and innovation. However, having financial ties to sectors of the economy that have a stake in maintaining the status quo hinders their ability to do so.

The impact of the oil and gas sector on higher education is extensive and includes funding for research, curriculum

creation, and public relations. Despite its frequent presentation as essential for furthering scientific research and education, this financial support raises serious ethical questions regarding the independence of academic institutions and their involvement in tackling the climate catastrophe.

Universities will have to deal with the conflict between their need to contribute to a sustainable future and the financial support from the fossil fuel sector as the movement for transparency and divestment picks up steam. They can then make sure that their research and teaching initiatives complement the more general objectives of social responsibility and climate action.

Based on the growing opposition from students and professors, we expect the relationship between higher education and the fossil fuel sector to be a divisive subject in the years to come.

According to one assessment, rather than promoting a full switch to renewable energy sources, academic research supported by the fossil fuel industry typically favours technological advancements that extend the use of fossil fuels

Oman gets world’s second-biggest polymer project

The groundbreaking ceremony for the world's second-largest polymer manufacturing facility was celebrated by Universal Fine Chemicals Company at Sohar Port and Freezone in Oman.

The project, expected to be established at a cost of approximately $300 million, represents a major turning point in the growth of Oman's industrial sector and strengthens the nation's standing for innovation and sustainable development on the international scene.

HE Sultan bin Salim al Habsi, Minister of Finance, sponsored the groundbreaking ceremony, which was attended by a distinguished group of officials and HH Sayyid Faisal bin Turki al Said, Chairman of Universal Fine Chemicals.

The 240,000 square metre-long facility will use cutting-edge technologies to produce polyacrylamide and related monomers that are

necessary for industries like papermaking, wastewater treatment, energy, and agriculture. It promotes innovation-led growth while addressing global issues in water management and energy production.

The growth of downstream industries within the port's petrochemical cluster will also be supported by Universal Fine Chemicals and Sohar Port's partnership. The plant will likely start to function by 2026.

The project, which will take up 240,000 square metres in Sohar Port, shows a strong dedication to industrial expansion and technological advancement

Egypt eyes meeting industrial power demand

Egypt's Kamel Al-Wazir, the minister of industry and transportation and deputy prime minister for industrial development, met with investors and officials in the Giza Governorate to discuss the difficulties and problems that investors face in the different industrial zones within the governorate as well as the steps that

must be taken to address these difficulties.

The Giza Governorate's approved industrial zones, which comprise six industrial areas totalling 299,658 feddans in the area, were reviewed for implementation status at the meeting.

These areas include: the

industrial zone in 6th October City, spanning 7,025 feddans; the industrial zone in New 6th October City, covering 10,109 feddans; the industrial area in Abu Rawash, encompassing 2,291 feddans; the industrial zone near Arab Abu Saed, which covers 6,328 feddans; the industrial area near the Gerza link in Al-Ayat, covering 1,785 feddans; and the Al-Wahat area, which stretches over 272,119 feddans.

The meeting also addressed the state of land allocation and operations in each zone, talked about the progress of infrastructure development in these areas, and looked at the industrial developers' execution status on October 6th City. The minister stated that a committee consisting of the Industrial and Mining Projects Authority.

Abu Dhabi

ADNOC partners with local, federal entities

The Ministry of Industry and Advanced Technology (MoIAT), Abu Dhabi Department of Economic Development (ADDED), Abu Dhabi Investment Office (ADIO), and Abu Dhabi Chamber of Commerce and Industry (ADDCI) have all signed a Strategic Collaboration Agreement (SCA) with ADNOC with the goal of increasing local manufacturing capacity.

The SCA now expands on ADNOC's successful In-Country Value (ICV) programme, which is boosting the UAE's manufacturing capacity and promoting industrial growth and diversification. It is intended to support local manufacturers and strengthen the UAE's industrial ecosystem by utilising important incentives, guaranteeing alignment with national strategic objectives,

and encouraging adherence to UAE regulations.

The agreement focuses on empowering small and medium-sized enterprises (SMEs) by integrating them into ADNOC's supply chain, encouraging innovation, enhancing competitiveness, and supporting the UAE's broader economic diversification goals.

Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology, ADNOC Managing Director and GCEO, and Ahmed Jasim Al Zaabi, Chairman of ADDED and ADDCI, witnessed the agreement's signing.

"The partnership between MoIAT, Abu Dhabi Chamber of Commerce and Industry, ADNOC and the Abu Dhabi Investment Office reflects a shared commitment to supporting the industrial sector," Shamis Ali Al Dhaheri, Vice Chairman of ADCCI said.

Jordan to produce 3.4 million tonnes of green hydrogen

According to a Jordanian official, the country's output of green hydrogen is expected to reach 600,000 tonnes in 2030 and could reach 3–4 million tonnes by 2050.

Amani Al-Azzam, Secretary General of the Jordanian Energy and Mineral Resources Ministry, after the signing of Memorandums of Understanding with several foreign companies, stated that investments in this sector over the coming years will propel Jordan to the forefront of green hydrogen and ammonia producers.

She stated at an energy conference in Brussels that Amman has increased the share of renewable energy in its energy mix from 1% ten years ago to 27% currently, with the percentage predicted to surpass 30% by 2030.

"Jordan is also planning to become a key player in the green hydrogen and ammonia market with production possibly reaching 600,000 tonnes in 2030. Output could be increased to nearly 3.4 million tonnes by 2050,” Azzam said in her address, carried by Adductor and other Jordanian publications.

She also disclosed, without going into specifics, an upcoming pumped storage project that will help Jordan better manage its renewable energy resources.

Economy

South Sudan

Analysis

The socio-economic minefield called South Sudan

GBO Correspondent

Factors exacerbating South Sudan’s oil revenue decline include volatile global oil prices, internal instability and poorquality crude oil

History has been witness to the newly independent nations (especially the ones coming out of the clutches of colonialism) using the elections as a way to chart out their own socio-economic journeys. However, South Sudan, the world's youngest nation, which won its freedom in 2011, after a long conflict with Sudan, has not conducted its first election yet.

Though a tentative date has been set for a national election this year (22nd December 2024), the timing remains in question, with the United Nations and other global bodies doubting whether adequate preparations have been made for the important exercise. The reason behind the broad scepticism lies in the fact that the election was supposed to take place in 2015 but got postponed after the young African country entered into a civil war.

South Sudan has failed to establish a robust electoral framework crucial for fair and credible polls, including constitutional, legal, financial and political conditions to ensure the feasibility of holding a credible national election. Also, ongoing disagreements among political leaders are equally threatening to complicate the situation further.

Nation on the brink of collapse

As per the S&P Global estimates in May 2024, the newly independent country saw a months-long halt to crude exports due to a rupture in its export pipeline through wartorn Sudan, a situation which worsened things further for the African country.

Landlocked South Sudan was producing 150,000 b/d of crude oil until February, when it declared force majeure on crude loadings from Port Sudan due to the pipeline outage. Some 90% of government revenues and most of its foreign exchange come from oil exports.

According to the Platts OPEC Survey from S&P Global Commodity Insights, output fell to 70,000 b/d in March and 60,000 b/d in April. Meanwhile, a $12 billion cashfor-crude deal signed in December 2023 by South Sudan's recently sacked finance minister and a member of the UAE's ruling family, stamped by ministries in the two countries and seen by Commodity Insights, has shone a light on the poor state of South Sudan's public finances.

The agreement reportedly guarantees the newly formed nation $12 billion, almost twice the country's GDP, in three tranches subject to delivery of cargoes of South Sudanese crude, purchased at a $10/b discount to a Platts benchmark. It is not clear whether the first $5 billion instalment of the loan had been delivered. The agreement, which stipulates payments will be made into a UAE bank account, has proven controversial in South Sudan due to its length.

While a staggering 7.1 million of South Sudan’s 12 million-strong population are acutely hungry, the

country's problems have got further complicated due to the presence of factors like a weak economy, rampant corruption, catastrophic floods, and deadly clashes in much of the countryside.

A sorry picture

The power struggle between the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF) erupted into a large-scale conflict in April 2023 and has been driving humanitarian needs in the country ever since. Conservative estimates say the conflict has killed at least 15,500 people, while some estimates are as high as 150,000, and counting.

The brutal conflict since April 2023 has resulted in the displacement of over 12 million Sudanese people, thereby representing the largest displacement crisis in the world. Humanitarian access too got severely curtailed.

The conflict made things harder by expanding its ugly head into the African nation's “breadbasket", Al Jazirah state, by exacerbating the country’s food crisis. And then

Economy

add the looting of businesses, markets and humanitarian aid warehouses, which are further contributing to food shortages.

The conflict has decimated the country’s public infrastructure, including the health system. The latter is suffering from an acute staff shortage, funding and medical supplies crunch, in addition to repeated attacks, looting and occupation of medical facilities and hospitals. More than 70% of health facilities in conflictaffected regions of Sudan are inoperable.

Before the conflict's outbreak, Sudan’s economy was marred by rampant inflation and shortages of essential goods. Now, the conflict has worsened the crisis further as nearly half of the African country’s population has remained unemployed while the Sudanese pound has lost at least 50% of its value. In Khartoum, factories, banks, shops and markets have been looted or damaged, further reducing the population’s access

to goods, services and cash.

People have also been facing pockets of internet and communication blackouts, leaving millions struggling to contact their families, seek safe zones, access essentials and use mobile money services. In February 2024, all three of Sudan’s main internet operators were reported offline, leaving almost 30 million Sudanese without internet or telephone access for more than a month.

According to the International Rescue Committee (IRC), children are at particular risk in Sudan. At least 10,400 schools in conflict-affected areas are shuttered, leaving an estimated 19 million children without education and at risk of abuse or exploitation.

Election faces funding roadblock

The government has been urged multiple times to hold elections, as promised under the 2018 Revitalised Agreement on the Resolution of Conflict in South Sudan. Amid implementation delays, a road map was endorsed in August 2022 to guide the peace process and elections.

In December 2022, the government reconstituted key bodies, including the National Constitutional Review Commission and the National Electoral Commission, as a precursor to elections. However, both entities face financial challenges, with the National Constitutional Review Commission yet to receive any funding.

While the National Electoral Commission and the Political Parties Council, a body tasked with promoting political dialogue and cooperation, have received some funding, the amount is insufficient for full operations. International stakeholders, including the United Nations, the African Union and the European Union, had expected the government to finance the elections, but ongoing delays have left these bodies advising and encouraging the government from the sidelines, concerned

about the lack of progress.

Another reason behind the meagre funding is the sharp reduction in oil revenues, compounded by economic hardships and the diversion of resources by the ruling elite.

At independence in 2011, and before the conflict that began two years later, South Sudan’s daily oil exports stood at 300,0000 barrels. However, the ongoing conflict and infrastructure damage have led to a steady decline in production, with current exports reduced to approximately 150,000 barrels per day. Factors exacerbating South Sudan’s oil revenue decline include volatile global oil prices, internal instability and poor-quality crude oil.

Abigail Kabandula, post-doctoral fellow in global governance and Director of Africa Centre, University of Denver, said, "The payment structure for oil proceeds dictates that private oil companies claim nearly 60% of production as their share, while neighbouring Sudan also takes a significant portion based on agreements made during independence. Consequently, South Sudan receives revenue only from approximately 45,000 barrels out of the total daily production ranging from 150,000 to 170,000 barrels. It is from this limited allocation that the government funds 98% of the national budget."

Divisions among political stakeholders

President Salva Kiir and First Vice President Riek Machar share a complicated history and entrenched mistrust of each other that threatens the integrity of the entire electoral process.

"The two have clashed and have been on opposing sides off and on since 2013, leading to civil war. Their complex relationship now threatens the integrity of the electoral process amid fears of ethnic tension. Critical tasks such as the training and deployment of 33,000 security

personnel remain unfinished, risking national stability. Ensuring nationwide election security is paramount; however, the absence of unified national security forces raises concerns about voter safety," Abigail Kabandula observed.

Unlike other post-conflict African countries, where the international community facilitated elections, South Sudan’s transition depends solely on its current transitional government, mandated to lead until December 2024.

"Despite South Sudan’s political and security challenges, immediate steps can facilitate peaceful elections. Leadership dialogue, expedited funding and enhanced security mechanisms are essential. Meanwhile, regional and international stakeholders can be engaged to secure robust financial support and complete critical tasks. If a rumoured joint ticket between Kiir and Machar materialises, it could potentially reunite the country and set a course for stability," Abigail Kabandula concluded.

At independence in 2011, and before the conflict that began two years later, South Sudan’s daily oil exports stood at 300,0000 barrels. However, the ongoing conflict and infrastructure damage have led to a steady decline in production, with current exports reduced to approximately 150,000 barrels per day

Protectionism: United States’ key weapon against China

GBO Correspondent

The incoming President Donald Trump's “America First” policies were labelled as anti-free market and anti-globalisation by critics. None were more vocal than the Democratic Party. But the outgoing Joe Biden administration itself kept in place many of the tariffs Trump put forward during his first stint (2016-2020).

It was hard to fathom that the champions of global free trade were formulating unfair trade policies that artificially interfered with the market. However, the Biden administration argued that China is using technology to promote its authoritarian governance model, upgrade its military, and advance its interests and ideals abroad.

The administration identified certain technologies as potentially threatening the United States and allied security, and accordingly, restricted China's access to them. It was dubbed as a “small yard, high fence” approach. The goal was to restrict a few military-grade technologies while maintaining normal economic interchange.

The Chinese leadership sees these moves as a form of containment to prevent Beijing's rise and maintain hegemony. Washington’s allies also regard sanctions on China as protectionist rather than a matter of national security.

As the number of firms and sectors targeted rises, the US risks further undermining its relations with China, losing allied backing, and hurting its own companies while failing to slow China's technical advancement.

What restrictions has Biden announced?

In 2022 and 2023, the Bureau of Industry and Security (BIS) announced new export controls to limit China's “ability to obtain advanced computing chips, develop and maintain supercomputers, and manufacture advanced semiconductors.”

Under the Biden administration, BIS added over 200 Chinese companies to the “Entity List,” which bars them from importing almost all US-origin products.

In June 2021, President Biden signed an executive order launching the NS-CMIC List sanctions programme. The executive order forbids American citizens from buying or selling publicly traded securities of companies the Secretary of Treasury deems involved in China's defence and related material or surveillance technology industries.

In September 2023, Washington implemented an executive order instructing the Committee on Foreign Investment in the US (CFIUS) on risks to consider while examining covered deals. The executive order covers semiconductor manufacturing and advanced packaging, microelectronics, AI, biotechnology and biomanufacturing, quantum computing, advanced clean energy, climate adaptation technologies, critical materials, food securityrelated agriculture industrial base elements, pharmaceuticals and active pharmaceutical ingredients, and information and communications technology.

In August 2023, President Biden signed another order implementing overseas investment screening. The advanced notice of proposed rulemaking

Source: Statista

says that the Treasury Department is thinking about making it illegal or requiring people to notify them before they do certain things in the semiconductors and microelectronics, quantum information technologies, and AI sectors that are important to China's military, intelligence, and AI. These things include mergers and acquisitions, private equity investments, venture capital investments, greenfield investments, joint ventures, and some debt financing transactions by American citizens.

How small is the yard?

The Biden administration’s priority areas were semiconductors and microelectronics, AI, quantum information technologies, defence, and surveillance technology. Semiconductor export controls included advanced semiconductors, their manufacturing equipment, and knowledge. Sanctions targeted Chinese firms' military, intelligence, and security R&D, weapons and equipment production, and surveillance technology usage. Inbound investment screening emphasises military, intelligence, surveillance, and cyber capabilities.

The dilemma here was the fact that all technology targeted by two or more limitations was dual-use, except for defence. AI can improve facial recognition,

information operations, autonomous weaponry, drug research, language translation, and logistics. Quantum information technology can expedite medication discovery, product design, and supply chain optimisation, as well as let troops operate in GPS-denied areas, identify submarines, and crack current encryption. Surveillance technologies can help countries spy on their citizens, protect homes and businesses, and aid legitimate police investigations.

Secretary of Commerce Gina Raimondo said semiconductors “drive innovation in nearly every emerging technology,” and National Security Advisor Jake Sullivan called microelectronics, quantum information systems, AI, biotechnologies, biomanufacturing, and clean energy “force multipliers.”

How high is the fence?

To implement semiconductor export controls, the US needed Japan and the Netherlands' help. The Netherlands and Japan joined the US semiconductor export limits, but Japan does not ban re-exports and covers other semiconductor equipment. The government gave Samsung and SK Hynix indefinite export control exemptions for their Chinese operations and is likely to do the same for TSMC.

NS-CMIC sanctions only restrict investment in publicly traded company stocks. This method disregards private loans, private equity, and joint ventures, providing American people and organisations with a variety of ways to invest in sanctioned enterprises. Because the NS-CMIC List only applies to American citizens, foreign investors can replace American investors.

Finally, investment replacement affects inbound and outbound investment screening. Chinese FDI to Europe has topped US FDI since 2019, and in 2021, FDI from Europe, Japan, and South Korea exceeded US FDI to China. Also, 21 of the 27 European Union (EU) countries have inbound investment screening systems; however, their restrictions and investment

types differ. Despite discussing the need for outward investment screening, the EU lacks such requirements.

The Biden administration's economic constraints were more “mid yard, medium fence” than “small yard, big fence." By going beyond a "little yard," the administration played into China's idea that Washington is trying to control its rise, jeopardises alliance cooperation, and hurts American enterprises. Without a "high fence," the government risks failing to meet its goals.

Beijing prevented Chinese enterprises handling important data from buying Micron Technology processors and blocked an Intel-Tower Semiconductor merger. It also restricted shipments of semiconductor materials gallium, germanium, and graphite.

For effective export controls, sanctions, and inbound and outbound investment screening, the US needs allied collaboration. However, allies are reluctant to comply with these limitations. Not all US partners see China as a threat and benefit from its economic ties. As Washington introduces constraints in the coming days, allied collaboration may become difficult.

China generates over $50 billion for Nvidia, Intel, and Qualcomm. American companies and investors may suffer more

than European, South Korean, and Japanese companies and investors due to the gaps between Japanese, Dutch, and US export controls, Samsung and SK Hynix's export control waivers, and US and EU investment screening regulations. If limitations increase, US companies will suffer more economic damage.

Despite US prohibitions, Chinese capabilities grow. China's SMIC created a 7nm chip, and YMTC created the most sophisticated consumer 3D NAND memory chip. Despite US export regulations preventing such technological advances, China's 7nm chip production may not be high enough to meet domestic demand or be cost-effective. Furthermore, China is replacing American investment with its own. China raised $40 billion for its semiconductor industry through a statebacked investment fund.

Addressing current approach flaws

The Biden administration has stated that economic constraints are necessary for US strategy, and that national security comes first. If the Trump administration sticks to this, it should establish a “small yard, high fence” policy. The administration should restrict its constraints to defence, AI, semiconductors, and microelectronics.

China generates over $50 billion for Nvidia, Intel, and Qualcomm. American companies and investors may suffer more than European, South Korean, and Japanese companies and investors due to the gaps between Japanese, Dutch, and US export controls, Samsung and SK Hynix's export control waivers

Fate of the auto industry and pressure from China became a major theme in the 2024 presidential election with Trump suggesting China could dominate future auto production. American officials are already in talks with their Mexican counterparts, while sharing "concerns" about China

The administration should prioritise these sectors for military, intelligence, cyber, and surveillance developments. These technologies also support each other.

Advanced AI uses cutting-edge semiconductors and will improve military, intelligence, cyber, and surveillance capabilities. Meanwhile, the administration should deprioritise quantum information and surveillance.

On the “high fence” side, the administration should prohibit new equity investments, loan financing, joint ventures or other corporate entities with NSCMIC List businesses and convince allies to impose comparable measures. The administration should also reduce Samsung and SK Hynix's indefinite waivers to tighten export rules. Finally, the government should push the EU to review outbound investments.

Allies must cooperate; thus, the administration should offer incentives to join US limitations. Free trade agreements may be an incentive. America has no FTAs with allies like the United Kingdom, European Union, and Japan. Lifting the Inflation Reduction Act's American content criteria for sustainable energy technologies,

which has irritated the EU, South Korea, and Japan, might be another incentive. Third, providing partners with a comment period before Washington imposes extraterritorial sanctions could improve coordination.

The White House also announced an investigation into whether Chinese vehicle imports pose national security dangers and potentially impose limitations due to “connected” automotive technology, as the latter "collect enormous volumes of sensitive data about their drivers and passengers (and often use their cameras and sensors to gather detailed information on the American infrastructure), necessitating the Commerce Department investigation."

The Alliance for Automotive Innovation, which represents General Motors, Toyota, Volkswagen, and other major automakers, advised the Commerce Department to “work closely with the auto sector to establish the breadth of any action.”

The group advised the Commerce Department to target “undue danger to US economic and national security” but not “capture low-risk transactions that could have unanticipated near-term implications on advanced car safety technologies.”

Washington trying to control the game

Top White House economic adviser Lael Brainard recently stated, "China is flooding global markets with a wave of auto exports on the back of their own overcapacity. We saw a similar playbook in the China shock of the early 2000s that harmed our manufacturing communities and this administration is determined we will not see a second China shock. That means putting safeguards in place now before a flood of unfairly underpriced autos undercuts the ability of the US auto sector to compete fairly on a global stage.”

Fate of the auto industry and pressure from China became a major theme in the 2024 presidential election with Trump suggesting China could dominate future auto production. American officials are already in talks with their Mexican counterparts, while sharing "concerns" about China using the Latin American country as a platform to ship into the United States at artificially low prices.

Chinese automaker BYD is seeking an extension of tariff relief for EV imports from Mexico's government, as the company aims to build a plant in the country. A decree exempting some 15% to 20% of tariff payments on EVs imported from countries with which Mexico does not have a trade agreement was set to expire at the end of September 2024, as President Andres Manuel Lopez Obrador leaves office.

BYD launched sales in Mexico in 2023 via imports, and the company has since announced plans to build a local plant to push out up to 500,000 cars a year for the domestic market. BYD's proposal to the government also offered alternatives, such as applying no tariff, a preferential tariff to the firm or a quota-based tariff.

On the other hand, MG Motor plans to build a manufacturing plant and a research and development centre in Mexico, to bring the additional benefit of gleaning market intelligence specific to Latin America.

The move will allow MG, a formerly British brand now owned by China's SAIC

Motor Corp, to "not only produce vehicles, but to also produce market intelligence specifically designed for and by Latin America."

The venture's sister brand IM, a luxury electric vehicle line, also plans to enter the Mexican market. For Mexico, the prospects of Chinese companies bringing new investments might sound music to the ear, in terms of propelling the Latin American nation's economic growth further.

However, we are talking about a nation, which was coincidentally, the United States' biggest trade partner in 2023, with nearly $798 billion in goods and services exchanged between the two sides.

In April, reports emerged about the Mexican government, under pressure from Washington, declining to offer incentives to Chinese automakers to invest. Trump is crystal clear on his intention to put a 100% tariff on every car coming into the United States across the Mexican border. He has also stated that to avoid the tariff, the foreign EV ventures operating in Mexico must open factories in the United States, while giving Americans priority during the hiring process.

Since we are talking about Washington's "Protectionist" trade policies against China and the importance of the USMexico-Canada agreement in that, China has targeted Canada's tariffs with the anti-discriminatory probe, hitting back at Ottawa, which recently announced its restrictive measures against Beijing including additional tariffs on Chinese electric vehicles, steel and aluminium products.

With Europe already upping its tariff game against China and the United States joining the fray by making its trade protectionism against Beijing harsher, the ultimate loser will be here the globalised 21st century economy whose operating basis has been the free movement of goods, technology and products.

Chinese automaker BYD is seeking an extension of tariff relief for EV imports from Mexico's government, as the company aims to build a plant in the country. A decree exempting some 15% to 20% of tariff payments on EVs imported from countries with which Mexico does not have a trade agreement was set to expire at the end of September 2024

Nairobi

Analysis

Nairobi's debt crisis fuels youth discontent

GBO Correspondent

The majority of people who live in Nairobi's slums still cannot afford permanent homes or healthcare

Young Kenyans have staged many anti-government protests in the capital city of Nairobi during the summer of 2024. The adoption of an unpopular financial measure in mid-June set off the unrest that became known as the "Gen Z" rallies. The measure was pulled a month later, but protests continued, and the police crackdown that followed claimed the lives of at least 50 protesters.

However, Kenyans' discontent with the country's economic situation dates back to mid-2023, when the first rallies occurred. Although the budget bill's numerous tax increases may have served as the impetus for these most recent protests, young Kenyans' issues go much beyond that.

Angela R. Pashayan, Professor, School of International Service, American University, said, "I have spent over ten years interviewing low-income Nairobi locals and researching the city's slums. Since 2010, when some Gen Zers were as little as 5 years old, I have observed them mature. Kenya enacted a new constitution that same year, ensuring everyone's rights to equality, clean water, cheap housing, healthcare, freedom of assembly, freedom from violence, and basic education for children. To put it succinctly, Gen Zers were offered a path to a respectable life."

The longstanding grievances of Kenya's impoverished population, highlighted by major protests this summer, stem from the government's failure to deliver on its promises.

Suffering and assurances

Nairobi, where 70% of people live in impoverished, unofficial settlements known as "slums," is the focal point

of the current protests. They barely make ends meet. Their lives have become miserable due to the rising cost of living, thereby undermining the promise of the 2010 constitution, especially with such small salaries.

Although there are many reasons why Kenyan governments have fallen short of expectations, institutional and economic ones predominate. Amounts allocated for housing and healthcare reform led to the construction of new dwellings throughout the city and an expansion of the National Health Insurance Fund.

However, the majority of people who live in Nairobi's slums still cannot afford permanent homes or healthcare. Funding for clean drinking water has increased public taps, but not by enough to reduce the average slum dwellers' daily walks. In the meantime, modest improvements in Kenyan sanitation have occurred, and more access to textbooks does not assist those who cannot purchase them.

In 2022, new President William Ruto pledged to lower living expenses. But his inability to do so has only made the

current demonstrations more angry. Since 2021, inflation has ranged between approximately 6% and nearly 8%. Even without rent, the average monthly cost has grown to $533, or around $6,000 annually. However, in 2023, the average yearly income per person was a mere $2,110.

In October 2023 and May 2024, Kenya experienced its worst floods since 1997 due to heavy rainfall. The flooding destroyed 168,000 acres of crops, resulted in the loss of over 11,000 cattle, and displaced nearly 278,380 people, in addition to causing almost 300 fatalities.

For security considerations, the government demolished the 40,000 surviving slums within 30 metres (approximately 100 feet) of the Nairobi River. However, many remained homeless as there was no provision for temporary accommodation.

Who is voicing their objections?

An environmental tragedy on top of years of economic hardship meant that dissatisfaction was already building

Source: Statista

before the summer. Subsequently, the government unveiled the budget, which included new tax increases (including a 6% tax on bread, a 25% tax on cooking oil, and levies on necessities for the home, including feminine hygiene items and diapers for women). With a median age of about 20, Kenya is a young nation. The bulk of Nairobi's 5.5 million residents are between the ages of 19 and 22.

These are the Nairobi youth that spearheaded the protests, breaking into the National Assembly on June 25 while the politicians sought safety in a subterranean tunnel. William Ruto retracted the suggested tax increases on June 26. However, Gen Z persisted in their protests and remained dissatisfied.

“Even though the tax bill was withdrawn, nothing was promised to address the long-standing social and economic problems that young, impoverished Kenyans had confided in me over the years,” Angela R. Pashayan noted.

“Funds meant to alleviate poverty in the slum are frequently, if not always, misappropriated. In 2020, a Mukuru slum resident informed me, [It is either] stolen or, due to corruption, there is only little left available for use to serve the community. Another said that governments are passing along our difficulties to one another. They show up during elections to solicit votes; they then leave without ever returning to enquire about any significant developments,” she added.

Maintaining international loans

The national debt has increased under William Ruto to over $80 billion, or almost 75% of Kenya's GDP. The country is in a high-risk category for debt default because of this huge amount. A default might have even more negative effects on Kenya's economy given the already enormous strain of servicing this national debt.

Fears of a default led to the planned tax increase. However, the new tax policy would have caused significant financial hardship for households in all income brackets if it had passed. Kenyans with higher income levels would have been required to pay a combined rate of 40% yearly. Additionally, other regressive taxes would have disproportionately affected Kenya's poorest citizens, like value-added and sales taxes. For instance, the fuel levy was to increase from 8% to 16%.

Reversing the tax bill hasn't made Kenya's issues disappear, and the country's new finance minister announced on August 19 that part of the proposed levies would be implemented to pay off its foreign debt.

However, the discussion over how to pay off foreign debt does little to improve the situation of Gen Zers living in Nairobi's shantytowns.

"Modern housing, manufacturing companies to employ people, health programmes, upgraded roads, education, training for skills, greater security and higher food production is what they want, according to a teenage slum resident I spoke with in 2020,” Pashayan wrote.

Kenya's amended constitution made all of those promises to them fourteen years ago, but it appears that the country's administration stole them as it tried to

balance the budget and pay off the nation's growing and unmanageable foreign debt.

The future of Nairobi's youth

William Ruto has made a compromise now by announcing the formation of a broad-based administration, but the opposition coalition rejected the proposal on August 20 and demanded a constitutional convention in its place.

Ruto's office also scheduled "multisectoral" discussions in the month of August, but there was no indication that these had started. Most of the key activists behind the demonstrations have turned down the offer and instead demanded swift action on problems like corruption.

In reaction to attempts to outlaw demonstrations, activist Boniface Mwangi posted on social media site X, saying, "(The police and president William Ruto) have no jurisdiction to suspend rights provided by the constitution."

An advisory agency called the Communications Authority of Kenya (CA) has advised the media not to "perpetuate" violence in their reporting

of the demonstrations, as this "may potentially spark widespread civil unrest in the country."

The protests in Nairobi reflect the deep-seated issues faced by the city's young, impoverished population. The dissatisfaction goes beyond the recently retracted tax bill, as the root causes lie in the government's failure to fulfil promises made in the 2010 constitution. Mismanagement of funds meant for poverty alleviation, coupled with the burden of a growing national debt, has worsened the economic hardships faced by the people. While the retraction of the tax bill was a start, it is clear that much more needs to be done to address the long-standing social and economic problems faced by the young Kenyans in Nairobi's slums.

William Ruto has made a compromise now by announcing the formation of a broad-based administration, but the opposition coalition rejected the proposal on August 20 and demanded a constitutional convention in its place

Analysis \ Kenya

Photo Credits: president.go.ke

The IMF stated that Saudi Arabia's growth estimate for 2024 has been lowered downward by 0.9% points

Saudi growth to outpace global average?

GBO correspondent

The most recent International Monetary Fund (IMF) analysis has projected that Saudi Arabia's economic growth will surpass the global average in 2025.

According to the IMF's World Economic Outlook update, the Kingdom's output growth is projected to increase by 4.7% in 2019. This growth rate is higher than the global prediction of 3.3%. However, this estimate for Saudi Arabia is lower than an earlier forecast made in April, which anticipated the country would expand at a rate of 6% by 2025.

Additionally, the IMF reduced its 2024 prognosis for the Kingdom; in its most recent report, it went from 2.6% in its previous estimate to 1.7%. The Washington-based organisation maintained its earlier estimate that the global output will grow at a rate of 3.2% in 2024 and 3.3% in 2025, but it also labelled the global economy as being in a "sticky spot".

The IMF stated that Saudi Arabia's growth estimate for 2024 has been lowered downward by 0.9% points; the revision reflects mainly the continuation of oil production curbs.

Gross Domestic Product of Saudi Arabia from 2014 to 2023 (In Billion US Dollars)

Source: Statista

As cyclical causes fade and activity becomes more in line with its potential, the varied impetus in activity at the beginning of the year has helped to somewhat narrow the output dispersion among economies. The July 2024 update said that "inflation in services prices is impeding disinflationary progress and complicates the normalisation of monetary policy."

The IMF went on, saying, "In the context of rising trade tensions and heightened policy uncertainty, upside risks to inflation have thus intensified, raising the potential of higher-for-even-longer interest rates."

Careful sequencing of the policy mix is necessary to establish price stability and restore depleted buffers to handle these risks and maintain growth.

What lies ahead for world economy?

Divergent patterns in major economies shaped economic projections for 2024 and beyond. Less consumer spending and unfavourable net trade dynamics caused the United States to experience a more severe slowdown than forecast earlier in the year.

The revised growth estimate for 2024 is 2.6%, which is 0.1% points less than the April estimate. The revised estimate for 2025 is 1.9%. More pressure is about to come from cooling labour markets and tightening budgetary policy. Particularly in the services sector, inflation is still obstinate, and any changes to monetary policy are postponed. As a result, in terms of relaxing measures, it is trailing other mature economies.

The services sector, whose growth is predicted to reach 0.9% in 2024 and climb to 1.5% in 2025, will be crucial to Europe's recovery. This hopeful prognosis is supported by stronger consumer demand, which is

reinforced by improving financing conditions and rising real salaries. Persistent deficits in manufacturing, particularly in Germany, point to a more complex recovery across industries.

Reviving domestic consumption and strong export performance are the main drivers of China's economy's resiliency, with a revised growth prediction of 5% for 2024. However, growth is expected to fall to 4.5% in 2025 and beyond as the nation deals with changing demographics and a decline in productivity improvements.

Forecasts indicate that growth in emerging markets and developing economies will reach 4.3% in 2024, primarily due to robust performance in Asia, namely in China and India. Higher than the 6.8% growth estimate from April, the revised growth estimate for India for 2024 is now 7.0%, thanks to increased private consumption and favourable spillover effects from 2023.

In 2024, the UK expects growth of 0.7%, which will increase to 1.5% in 2025. The enduring fiscal restraint and lingering effects of past inflationary pressures on investment and consumer behaviour determine the economic outlook. Due to temporary supply interruptions and muted private investment, Japan's revised GDP prediction for 2024 is now 0.7%, down from 0.9% in April.

However, strong salary settlements are expected to drive private spending to rebound by the second half of the year.

Global commerce and its impact on regions

According to IMF research, regional conflicts and oil production are significant obstacles to the economic prospects of the Middle East and Central Asia. Prolonged warfare has greatly diminished Sudan's economic outlook, as well as that of Saudi Arabia.

On the other hand, in different areas, like Brazil, where rehabilitation efforts support economic expectations in the wake of severe flooding and structural reasons like higher hydrocarbon output, there have been upward adjustments.

The IMF continued, "Global trade growth

is estimated to recover to approximately 3.25% annually in 2024-2025 and align with global GDP growth again."

The first quarter of this year's rise is probably going to level out because manufacturing activity is still quite low. Forecasts indicate that the global trade-to-GDP ratio will be steady despite a noticeable increase in crossborder trade restrictions influencing it between far-off geopolitical blocs.

Monetary policy and inflation

The inflation of service prices is making the normalisation of monetary policy more difficult, which is a challenge to global disinflation efforts. The research emphasised that while goods prices have deflation, higher-than-average inflation in service costs has persisted.

According to the updated prediction, the rate of deflation in advanced economies will decrease in 2024 and 2025. This is a result of increased commodity costs and anticipated more persistent price inflation for services, according to the international body. By the end of 2025, headline inflation is expected to return to the target due to the gradual cooling of the labour market and the anticipated decrease in energy prices.

“We expect price increases to continue at high levels in developing economies and emerging markets, with a slower decline than in developed nations,” IMF stated.

For the average emerging market and developing country, inflation has almost reached pre-pandemic levels, partly because of falling energy costs.

The recent International Monetary Fund analysis

According to IMF research, regional conflicts and oil production are significant obstacles to the economic prospects of the Middle East and Central Asia. Prolonged warfare has greatly diminished Sudan's economic outlook, as well as that of Saudi Arabia

provides a comprehensive view of economic projections for various countries and regions. It highlights the challenges and opportunities facing global economies, including the impact of regional conflicts, oil production, trade dynamics, and monetary policy.

The report emphasises the need for careful policy sequencing to ensure price stability, restore buffers to handle risks, and maintain sustainable growth. Additionally, it underlines the importance of understanding divergent patterns in major economies and their implications for future economic growth. Overall, the IMF's insights serve as valuable guidance for policymakers, businesses, and individuals navigating the complex landscape of the world economy.

China's recent attempts to support waning economic demand appear to be having little effect, as factory deflation continued and fresh food prices declined, causing consumer inflation to fall to a five-month low in November 2024.

The second-largest economy in the world is preparing for new

China's inflation weakens

Reuters poll of economists.

The CPI decreased 0.6% month over month, compared to a 0.3% decline in October and a 0.4% decline predicted.

According to NBS statistician Dong Lijuan, the weather-related 2.7% drop in food prices was the primary cause of the CPI's quicker monthly decline.

tariffs from a second Donald Trump administration and is already facing other challenges, indicating that additional policy stimulus will be required to support fragile growth.

The National Bureau of Statistics reported that the consumer price index increased 0.2%, which was less than the 0.3% increase in October and the 0.5% increase predicted by a

Trump tariffs could weigh on Europe

Piero Cipollone, a board member of the European Central Bank, stated that the US President-elect Donald Trump's administration may impose import tariffs that would reduce inflation and economic growth in the 20 countries that share the euro.

Although opinions on the impact on consumer prices vary, most economists concur that potential tariffs would have an effect on growth.

According to some, the US trade restrictions

Dong stated in a statement that November's national average temperature was the highest for any comparable period since 1961, facilitating the production and transportation of agricultural products and lowering the cost of fresh food.

Core inflation, excluding fluctuating food and fuel prices, increased slightly from 0.2% in October to 0.3% in November.

will cause the dollar to appreciate, increasing the cost of importing essential commodities. It is also likely that European retaliation will result in higher prices. Cipollone took the opposite stance in a pre-recorded interview at a financial conference.

"All this put together makes me think that we will have a reduction in growth but also a reduction in inflation," he said.

Since some of the more dovish members of the ECB's rate-setting Governing Council have been arguing that the bank should lower rates sooner because it was now in danger of undershooting its 2% inflation target, this argument has become more pertinent.

According to Cipollone, US tariffs would depress the economy, which would lead to less demand and less pressure on prices. Meanwhile, oil imports could be more expensive given a stronger dollar.

According to some, the US trade restrictions will cause the dollar to appreciate, increasing the cost of importing essential commodities

Economic Recovery

US economy holds firm in early Q4

In October 2024, US consumer spending grew marginally more than anticipated, indicating that the economy maintained much of its strong growth momentum from the first quarter.

However, efforts to reduce inflation seem to have stalled in recent months.

The likelihood of interest rate reductions from the US Federal Reserve in 2025 may be limited due to the failure to return inflation to the 2% target and the possibility of increased import tariffs under the incoming Trump administration.

Other data released indicated that more jobless people were facing extended periods of unemployment in mid-

November, underscoring the Fed's continued widely held expectation of a third rate cut in December.

The Fed's November 6-7 policy meeting revealed that officials were split on how much more rate cuts they might need to make.

"It is a closer call than it was at the prior two policy meetings since core services inflation remains sticky and could lead some Fed officials to argue for a pause in the rate-cutting cycle next month. We instead look for the Fed to pause the rate cuts in early 2025 to assess prospective policy changes under the second Trump administration," Kathy Bostjancic, chief economist at Nationwide said.

Vulnerable Germany heaps pressure on ECB

It's difficult to imagine the dire situation surrounding Europe's largest economy getting much worse, but Germany's prospects have been on a nosedive.

The European country's economy stagnated in 2024, and Germany now faces possible trade disputes with China and the United States, which would put further strain on its already troubled auto industry.

Energy prices are beginning to rise again, geopolitical concerns in Ukraine are intensifying, and the haze surrounding the February 2025 election is clouding the nation's fiscal future.

Naturally, the rest of the region is doing noticeably better, and Germany is not in the eurozone. However, the third-largest economy in the world still accounts for over 30% of the bloc's GDP, and more harm to the zone's long-standing dominant force may compel the European Central Bank to ease much more than its recent gradualism declarations imply.

The Bundesbank's version stood out in November 2024, even in a season when central banks are required to conduct financial stability reviews and provide frightening lists of excessive risks.

The central bank emphasised that "profound structural challenges" continue to plague the nation's corporate sector, resulting in a nearly quarterly decline in aggregate earnings for the past two years.

Banking & Finance

Child Trust Fund

Analysis

Child Trust Funds: Could your money be waiting?

GBO Correspondent

The government has made several billion pounds available from the nearly £10 billion currently held in Child Trust Fund accounts

Is your name on a pot of thousands of pounds? HM Revenue and Customs, which is more known for requesting money than giving it away, called on hundreds of thousands of young people to come forward and "cash in their stash" recently.

According to the tax authority, around 671,000 individuals between the ages of 18 and 22 have matured Child Trust Fund (CTF) accounts worth an average of £2,082 that are sitting unclaimed. Nevertheless, the millions of Child Trust Fund accounts that exist worldwide are far larger than those 671,000 matured pots of cash.

The latest official data revealed that there are approximately 42.2 million Child Trust Fund accounts overall. However, many of these accounts appear to have been overlooked or forgotten. The government has made several billion pounds available from the nearly £10 billion currently held in CTF accounts.

Additionally, parents and children were encouraged to use the HMRC announcement recently as a reminder to assess the performance of their CTF and consider whether it would be more prudent to move the funds to an account that offers a higher return and/or lower fees.

What are CTFs?

Introduced in 2005, CTFs, also known as "baby bonds," are long-term, tax-free accounts for kids. Before being abandoned in 2011, more than 6.3 million were opened. Each child born between September 1, 2002, and January 2, 2011 received a monetary "endowment" of about £250.

Family members and friends have also been able to contribute money, and some kids have received top-up

payments from the government. The first CTF children turned 18 in the fall of 2020, beginning a multibillionpound payout that will continue until the beginning of 2029.

According to estimates, 55,000 teenagers, or 1,800 every day, turn 18 every month, entitling them to a pot of money bearing their name. The youngest CTF children are 13 and a half, and the oldest, who have yet to claim their pot of cash or transfer their account, turned 22 this month.

The government awarded about a third of that £10 billion, with the remainder coming from contributions from friends and family and interest and growth from investments. In general, there was a choice between accounts that primarily invested in shares and those that saved cash. The funds are kept in banks, building

societies, and other savings institutions rather than by the government.

It’s their cash

The child owns the money in a CTF, but they can't access it until they're eighteen, at which point they can either spend it or reinvest it in an adult Isa.

This money should probably be spent carefully, maybe investing it, paying for driving lessons, or helping with the costs of college or a gap year. However, once they turn 18, they can spend it on anything, which could lead to them squandering it on drunken friends' vacations or freshmen week parties.

The HMRC stated, "We want to reunite young people with their money, and we're making the process as simple

as possible."

The agency reports that thousands of Child Trust Fund accounts belonging to individuals aged 18 to 22 remain unclaimed. Many young adults may not be aware that they have a CTF account in their name.

These accounts were opened long ago, and some parents may have moved and forgotten about them. Additionally, it is possible that a few years back, the accounts were transferred to a different provider. If the young adults, or their parents, already know who their CTF provider is, they can easily reach out to them directly.

In case they are unsure of the location of their account, they can use the online tool on the gov.uk website to identify their provider. Young people will need their national insurance number and date of birth to get hold of the information.

The Share Foundation is a nonprofit organisation that operates a free search engine and has been collaborating with the government to assist youth in locating their accounts. You can fill out a straightforward form by visiting findctf. sharefound.org. This will be sent to a specific HMRC department if needed.

More than 65,000 young people have had their CTF accounts reunited with them by the Share Foundation thus far. Keep in mind that there are third-party businesses that advertise online that they can assist in finding people's accounts, but they will always charge. According to HMRC, one of these companies demanded up to £350, or 25% of the account's value. Don't spend money to locate your funds.

If your child is under 18

According to the most recent data, a majority of CTF accounts did not receive any payments during the April 2023-April 2024 12-month period. That implies a large number have been overlooked.

If you hold a Child Trust Fund for your child, you have several options available. You can either transfer it to a different CTF provider or keep it as it is.

It's important to check the interest rate for your cash CTF. If the rate is too low, consider transferring to the Earl Shilton Building Society in Leicestershire, which currently offers a Cash Savings Account (Non-Stakeholder) that accepts transfers and pays an interest rate of 4%. You can manage the account at their branches or through the mail.

Transferring funds to a junior Isa has been possible since 2015. For many, this will likely be the best course of action because they will typically be able to receive a higher return.

Top-paying junior cash Isas that take transfers from CTFs include Tesco Bank's Junior Cash Isa, which pays 4%; the Stafford Building Society's account, which pays 4.75%; and the Coventry Building Society's Junior Cash Isa (2), which pays 4.7%. Although there are occasional restrictions on who can open them, Junior Isas pays respectable rates at several smaller building societies.

On the Moneyfacts website, you can view the most recent junior cash Isa rates and information.

Are you being overcharged?

Junior investment Isas typically have lower fees, so if you have an investment CTF, you might be paying too much in charges.

According to Charlene Young, a savings specialist at the investment platform AJ Bell, many CTF providers are taking "huge sums" of money to manage the accounts, which is something that was brought to light in a parliamentary report in 2023.

“According to the report, a lot of accounts charge 1% per year for a passive fund portfolio, while a junior Isa on a modern platform might cost about 0.25% plus the cost of a tracker, which can be as low as a few basis points,” she continued.

Furthermore, compared to junior Isas, which frequently offer a wide variety of funds, shares, and other investments, CTFs frequently only offer a small portion of the investment options.

A platform that accepts transfers and has a wealth of helpful information on its website, like AJ Bell or Hargreaves Lansdown, might be a good first port of

call for a junior investment Isa. You can invest with either company starting at £25 per month.

Meanwhile, HM Revenue and Customs (HMRC) has started the countdown clock by reminding clients that they have one hundred days to file and pay their “SelfAssessment Tax” return by the deadline of January 31. Already, over 32.5 million people have beat the clock and filed their returns. HMRC is reminding people that by beginning their self-assessment early, they can better budget, avoid last-minute panic, and increase the likelihood that they will file an accurate tax return.

"The countdown to the selfassessment deadline has begun but there is still time to thoroughly prepare and file an accurate tax return by 31 January. You can access online help and support to help you file. Search ‘help with SelfAssessment’ on GOV.UK to find out more," Myrtle Lloyd, HMRC’s Director General for Customer Services, said.

More than

65,000

young people have had their CTF accounts reunited with them by the Share Foundation thus far. Keep in mind that there are third-party businesses that advertise online that they can assist in finding people's accounts, but they will always charge

The BCBS considered poor governance and risk management, inappropriate incentive structures, and an overleveraged banking industry as reasons for the collapse

Capital requirements: New flashpoint in US banking

Correspondent

The Federal Reserve's regulatory chief, in September 2024, outlined a sweeping overhaul easing two major draft bank capital rules following intense industry opposition that delayed the projects and sparked divisions among the top federal banking regulators.

Fed Vice Chair for Supervision Michael Barr said regulators would reissue watereddown drafts of the so-called "Basel Endgame" rule and a separate capital rule for global banks, in a major win for Wall Street lenders which have aggressively lobbied to weaken them.

The draft Basel rule, first unveiled in July 2023, overhauls how banks with more than $100 billion in assets calculate the amount of capital they must put aside to absorb potential losses. The other draft rule for global systemically important banks (GSIBs) aims to make capital levels for those lenders more risk-sensitive.

In July 2024, reports surfaced that the Federal Reserve was considering changes to a specific rule. Originally, the plan aimed to increase capital requirements for the largest American banks by approximately 19%. However, after a significant revision of the draft, that percentage has now been reduced to 9%, according to Barr.

He added that banks with under $250 billion in assets will be mostly exempt from Basel, which is good news for players like KeyBank, M&T, Huntington, and Fifth Third, among others.

Those lenders will only have to account for unrealised gains and losses on securities in their portfolio, an issue which sparked turmoil in the banking sector of the world's largest economy in

Banking & Finance

In the wake of the Lehman Brothers collapse of 2008 and the ensuing financial crisis, the BCBS decided to update and strengthen the Accords. The BCBS considered poor governance and risk management, inappropriate incentive structures, and an overleveraged banking industry as reasons for the collapse

2023. Overall, their capital increase would be roughly 3-4%, Barr added.

A sensitive topic

The recent policy changes may trigger another wave of industry lobbying, which could ultimately lead to further weakening of the rules.

While regulators say the rules will make the banking system safer, especially after three big American lenders failed in 2023, progressive groups and some Democrats may criticise the Fed for being too soft on the industry. In public campaigns and conversations with Washington lawmakers and regulators, Wall Street banks have argued against the infusion of more capital, saying the move will hurt the economy. They have been threatening to sue to kill the final rule on grounds the "US central bank and other agencies did not follow the proper procedure."

Bowing to that pressure, Fed Chair Jerome Powell said this summer that regulators would make "broad and material" changes and that the new draft should be re-proposed for public feedback.

However, officials have been at loggerheads with their counterparts at the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) who wanted to finalise the rule before the all-important 2024 Presidential Election.

The Fed's decision to overhaul the GSIB surcharge plan is also a win for big banks, who have lobbied the central bank for years to update the rule to account for economic growth, which would in turn lower their capital burdens.

US Treasury Secretary Janet Yellen recently emphasised the importance of adjusting the complexity and severity of banking regulations based on the activities of institutions. This approach aims to prevent unnecessary compliance burdens. She also expressed her support for strong capital requirements.

Janet Yellen also credited the strong capital requirements put in place after the 2007-2009 financial crisis behind the US economy weathering the COVID-19 pandemic well. She also said the industry's concerns that the 2010 Dodd-Frank

Photo Credits: Gerald R Ford School of Public Policy

banking regulation law would make US banks uncompetitive were proved unfounded, but has heard industry complaints about increasing regulatory burdens "loud and clear" and added that regulators should coordinate their approaches.

She went on to say that the Treasury and regulators would work with the banking sector to address vulnerabilities revealed by turmoil in 2023 after the failure of Silicon Valley Bank and Signature Bank. Some of these concerns are increased shares of uninsured and concentrated deposits and unrealised losses on loan and securities portfolios.

Why is the banking sector up in arms?

The industry has launched an aggressive campaign against a reform in capital rules. The reform has been named ‘Basel III endgame’ after the Swiss city where the Bank for International Settlements (BIS) that oversees central banks is based. When the reform proposals came in the first half of 2024, it required banks with over $100 billion in assets to set aside tens of billions more by early 2028.

The proposals also talked about these banks having to include a larger part of losses in capital ratios, which would in turn have resulted in these institutions no longer being able to use lower historical capital losses to reduce their capital requirements. The reforms were drawn up to reduce "systemic risk and improve the US banking sector’s resilience."

The overhaul aimed to harmonise US capital rules with international standards. Most developed economies have already implemented capital rules dictated by the Basel Committee on Banking Supervision, which sets global capital requirements. In 2017, the committee reached an agreement for higher capital requirements to address concerns that ‘Basel III,’ a banking regulation package implemented after the credit crunch, had failed to tackle systemic risks.

Basically, the "Basel Accords" are

a series of three sequential banking regulation agreements (Basel I, II, and III) set by the Basel Committee on Bank Supervision (BCBS). The committee provides recommendations on banking and financial regulations, specifically, concerning capital risk, market risk, and operational risk. The accords ensure that financial institutions have enough capital on account to absorb unexpected losses.

In the wake of the Lehman Brothers collapse of 2008 and the ensuing financial crisis, the BCBS decided to update and strengthen the Accords. The BCBS considered poor governance and risk management, inappropriate incentive structures, and an overleveraged banking industry as reasons for the collapse. In November 2010, an agreement was reached regarding the overall design of the capital and liquidity reform package.

This agreement is now known as Basel III. It now requires banks to have a minimum amount of common equity and a minimum liquidity ratio. It also includes additional requirements for what the Accord calls "systemically important banks," or those financial institutions that are considered "too big to fail." In doing so, it got rid of tier three capital considerations.

The Basel III reforms have now been integrated into the consolidated "Basel Framework," which comprises all of the current and forthcoming standards of the Basel Committee on Banking Supervision. Basel III tier one has now been implemented and all but one of the 27 Committee member countries participated in the Basel III monitoring exercise held in June 2021.

The 2023 collapse of Silicon Valley Bank raised eyebrows about the practices of smaller banks. Just a few months later, First Republic, a San Francisco-based bank, followed suit. Crucially, the proposed rules were also supposed to cover regional lenders previously exempt from strict capital requirements.

Under the initial proposals, banks were required to increase their capital when regulators anticipated a recession, as the

Source: Statista Top 10 leading banks in the United States in 2023, by total assets (In Billion US Dollars) JPMorgan Chase 3,395.13 Bank of

2,540.12

The 12 largest banks in the United States currently hold a record $180 billion in excess common equity tier one capital, which is a key indicator of their financial strength. However, several banks and lobbying groups have expressed concerns regarding these projections

regulators aimed to prevent further bank bailouts.

“Since the real estate market and debt scenarios have started to mimic the pre-2008 crash scenarios, regulatory organisations are trying to prevent a banking sector collapse with strict policies,” said Ethan Keller, president of Dominion, a US-based network of legal and financial advisors, while interacting with the World Finance.

Concerns and pushback

The proposals sent a shockwave across Wall Street. An analysis by the law firm Latham & Watkins found that a staggering 97% of responding institutions to the public consultation process found the changes problematic. Banks fear that stricter capital requirements will limit their lending capabilities, hurting the US economy and especially SMEs.

Their bone of contention was the risk-weighted assets (RWA), which are measured based on a risk weighting assigned to banks’ operations. As the denominator to determine capital ratios against future losses, low RWAs help banks look stronger financially. Previously, banks were allowed to use their own models to gauge risk, but discrepancies in modelling across the industry have urged regulators to set a common standard to measure operational risk.

Critics, as soon as the initial draft reforms came out, argued that the proposals, if realised, would increase capital requirements for mortgages and corporate loans, and even put products such as the hedging contracts airlines use for fuel purchases in jeopardy.

“The pushback is justified, because the rules will have costs but no clear benefit,” said Charles Calomiris, an expert on financial institutions teaching at the University of Austin, while interacting with World Finance. Other experts, however, question the validity of the banks’ claims.

“If the loans are good loans to make in

the first place, why wouldn’t they be willing to fund them with a portion of money from their shareholders. The kind of loans that capital requirements are going to lead to a reduction in are loans that were bad loans to start with – that is, loans that only make sense to the bank if it can get the profits if the loans perform well, but pass off the costs if they perform badly,” said Michael Ohlrogge, an expert on financial regulation teaching at NYU School of Law.

Critics of banks also argued that their real concern was pay, as higher equity capital will hit executive bonuses based on return-on-equity, and possibly dividends and share buybacks.

Regulators estimate that the new rules will lead to an aggregate 16% increase in capital requirements for the largest banks. However, they clarified in their initial proposal that “the largest US bank holding companies annually earned an average of 180 basis points of capital ratio between 2015-2022,” meaning that the hit would be mild at best.

The 12 largest banks in the United States currently hold a record $180 billion in excess common equity tier one capital, which is a key indicator of their financial strength. However, several banks and lobbying groups have expressed concerns regarding these projections. The Bank Policy Institute, representing large and mid-sized banks, estimates that the largest banks may need to increase their capital by up to 24%. Some banks argue that they are already financially robust and worry that raising capital requirements could lead to higher costs without necessarily enhancing safety. Additionally, the Financial Services Forum (FSF), which represents the eight largest US banks, estimates that its members had $940 billion in capital in 2023, which is three times the amount they had in 2009.

Another concern was the potential loss of international competitiveness, as American banks were required to comply with more stringent capital requirements

than those their competitors face, currently standing at 3.2% for large British banks and 9.9% for European Union-based ones. Diminished internal competition could be another unintended consequence if more banks merge to comply with the new rules. One of the regulators, the Federal Deposit Insurance Corporation (FDIC), recently proposed reforms that would make big bank mergers more difficult.

“Considering EU banks’ existing technology and framework to maintain the Basel framework, this will give them a competitive advantage over US banks. As this framework means additional costs for training, tracking, and setting aside a specific portion of the capital, the banks will churn out the additional costs from the customers. Hence, smaller banks with Basel Endgame exception will gain a new clientele not willing to pay extra money for US banking conglomerates,” said Ethan Keller, president of Dominion, a US-based network of legal and financial advisors, at a time when the first set of policy recommendations came from the American regulators.

As the pushback intensified, Fed watered down the most stringent rules of the initial proposal and acknowledged that a balance had to be struck between potential costs and the stability of the financial system. Fed board members

like Michelle Bowman and Christopher Waller also raised concerns over reduced competition, curtailed lending, less liquidity and costlier credit as a result of the changes.

Basel Rules became poll issue too

As the United States voted for its next President in 2024, "Basel Rules" became a political issue as well. The banking industry launched a website where voters could notify elected representatives about their concerns. Banks also lobbied lawmakers to put pressure on regulators. Many Republican Congressmen and senators openly opposed the reforms.

When the initial proposals were announced, regulators were concerned about the 2023 bank failures, while Joe Biden administration officials were worried about an imminent financial crisis.

Stricter capital requirements may be implemented globally, especially in light of recent changes to US regulations and potential overhauls of Basel regulations. This comes at a time when banks and regulators around the world have taken notice of these developments. Ironically, the Swiss government, home to the BIS, has proposed increasing capital requirements for Swiss banks following the collapse of Credit Suisse in March 2023.

Financial institutions will prioritise data security, compliance, and business continuity regardless of the option they select. For most banks, onpremise solutions continue to be the best choice because data security concerns continue to be the main concern

Analysis

How to secure the best mortgage interest rate

GBO Correspondent

A fixed-rate mortgage ensures that your interest rate remains the same for a specified period, typically between two and ten years

Navigating the world of mortgages can be challenging, especially in the United Kingdom market where thousands of products, fluctuating interest rates, and various lender offers create a maze for buyers.

Whether you're a first-time buyer, remortgaging, or moving home, securing the best interest rate deal is crucial for minimising costs and making your property dream more affordable. This guide provides practical insights, strategies, and expert tips on achieving that.

What affects mortgage interest rates?

Loan-to-Value Ratio (LTV) is the amount you need to borrow relative to the property's value, expressed as a percentage. The higher the deposit you put down, the lower your LTV, resulting in better interest rates. Typically, lenders provide the best rates to borrowers with an LTV of 60% or less.

Your credit score also tells lenders about your financial reliability. The better your score, the lower the perceived risk, leading to lower interest rates. It's important to monitor your credit score and ensure its error-free before applying for a mortgage.

The Bank of England's base rate and the overall economic environment have a significant impact on mortgage interest rates. When the base rate changes, it influences how much lenders charge on their mortgages. Lenders also assess your income stability and existing debts. Higher income with fewer financial liabilities positions you better for competitive mortgage deals.

Before applying for a mortgage, try to reduce your existing debts. Lenders want to see that you can responsibly manage credit, and having a lower debt-to-income ratio improves your

chances of qualifying for a mortgage with favourable rates.

Nicholas Mendes, a mortgage technical adviser at John Charcol, recommends minimising debts and refraining from taking on new credit commitments in the months leading up to your application. This demonstrates to lenders that you're financially disciplined, which translates into a lower risk for them.

Credit record and incentives

Lenders will scrutinise your credit record to understand your financial history and determine the level of risk you present. This is why it's advisable to review your credit report before applying.

Errors on your credit report, such as incorrect missed payments or inaccuracies regarding your credit limits, can negatively impact your score. Correcting such mistakes before applying can help you qualify for better rates.

A larger deposit can significantly improve your mortgage prospects. The lower the loan-to-value (LTV) ratio, the lower the interest rate lenders will offer. For example, a 20% deposit results in an 80% LTV, which

typically attracts more favourable rates compared to a 95% LTV.

With property prices increasing, saving for a larger deposit can be a challenge, but doing so allows you to access better deals. A bigger deposit reduces the lender's risk and opens up a wider range of mortgage options with lower interest rates.

Online mortgage calculators serve as a helpful starting point for estimating your borrowing potential. However, it is crucial to conduct detailed budgeting to ensure you can comfortably afford mortgage payments over time.

David Hollingworth, from L&C Mortgages, emphasises the importance of creating a comprehensive budget plan that includes all income streams, such as bonuses and overtime, and breaks down essential and discretionary expenditures. Lenders will use this information to assess your affordability, in terms of how much you can borrow without overextending yourself financially.

If you're a first-time buyer, you're in luck, many lenders offer incentives like cashback, free property valuations, and reduced fees for your “first home.”

For example, Yorkshire Building Society offers

Average mortgage interest rate in the United Kingdom from first quarter of 2022 to second quarter of 2024 (In Percentage)

a mortgage with a £5,000 deposit requirement, allowing up to 99% LTV for first-time buyers with at least £5,000 saved. Skipton's track record mortgage also provides 100% financing if you can show consistent rent payments equivalent to the expected mortgage payments. These incentives can reduce the upfront costs of buying a property and make the process a bit easier for those struggling to save for both a deposit and fees.

Fixed rate vs tracker mortgages

A fixed-rate mortgage ensures that your interest rate remains the same for a specified period, typically between two and ten years. This option offers stability, as your payments remain consistent, making it ideal for those who value predictability.

Tracker mortgages, on the other hand, are tied to the Bank of England base rate, meaning your interest rate fluctuates depending on whether that rate goes

up or down. While they can be cheaper during periods of low interest rates, they come with the risk of increased payments if rates rise.

Currently, many borrowers are favouring shorter-term deals as interest rates are trending downward. However, short-term fixes are often priced higher than their longer-term equivalents. For instance, Nationwide's five-year fixed-rate deal is available at 3.83%, while a twoyear deal costs around 4.35%.

The problem is that the future trajectory of interest rates remains uncertain. Therefore, it might be better to plan based on your personal life events rather than market predictions. For example, if you know you'll pay off debts in a couple of years or your LTV will drop, you might choose a shorter fix to take advantage of potentially better rates later.

Lenders also offer mortgages that include either a lower rate of interest with an arrangement fee or a fee-free mortgage with a slightly higher rate. Calculating

Market size of neobanks from 2021 to 2023 (In Billion US Dollars)

Source: Statista

the total cost over the fixed term can help you determine which option is cheaper.

Ensure flexibility for overpayments

If you plan on overpaying your mortgage to reduce the total interest paid over time, you need a mortgage that permits this without penalties. Most lenders allow up to 10% of the outstanding balance to be overpaid each year without charges, but the terms can vary significantly between lenders.

Nicholas Mendes warns borrowers to understand how the 10% allowance works, whether it's based on the original loan amount, the balance at the start of the year, or the balance at the time of overpayment, as these details will influence how much you can repay without incurring fees.

Given the wide range of mortgage products in the market, navigating this landscape can be overwhelming. Using a reliable broker can save time, provide access to the best deals, and streamline the mortgage process.

While estate agents often suggest using their in-house brokers, they typically work with a limited panel of lenders, which means you may not get the best deal available. A whole-of-market broker, by contrast, will have access to a wider range of products, offering more choices.

Ensure you understand how your broker is paid, as some charge a fee to clients, while others receive commission from lenders. Either way, it's good practice to clarify potential costs before proceeding.

When you're ready to start looking for a property, getting an Agreement in Principle (AIP) can help demonstrate your credibility as a serious buyer. An AIP is an indication from a lender regarding how much they might lend you, based on your current financial situation.

While it's not a formal mortgage offer, it can help with negotiations and reassure estate agents and sellers that you have the finances available. An AIP isn't binding, so once you find a property, you should still shop around to see if better deals are available before proceeding with the formal application.

Role of economic trends

The Bank of England's base rate is a key driver of mortgage interest rates. When the base rate is high, borrowing becomes more expensive, and mortgage rates rise. Conversely, when the base rate drops, lenders typically follow suit, making mortgages more affordable.

In recent times, the United Kingdom has seen considerable shifts in the base rate, reflecting the economic uncertainty caused by factors such as Brexit, the COVID-19 pandemic, and ongoing financial pressures. Borrowers need to be aware of these trends and plan accordingly.

Opting for a fixed-rate mortgage during times of rising interest rates can lock in a favourable rate, protecting you from potential hikes. When rates are expected to fall, it may be worth considering a shorter-term deal with a plan to remortgage once rates improve. However, always weigh the potential cost against the possibility of better deals in the future.

A fixed-rate mortgage ensures that your interest rate remains the same for a specified period, typically between two and ten years. This option offers stability, as your payments remain consistent, making it ideal for those who value predictability

Travel insurance included will usually exclude existing medical conditions, unless approved by the insurer

GBO Correspondent

Consumers with packaged bank accounts are being advised to carefully consider how much they pay for the benefits they receive after another major provider raises its fees.

Users are being urged to make sure they are getting the best deal after Nationwide, the most recent well-known company, announced that it was raising prices, in this case by nearly 40%. In addition to charging a monthly fee, these accounts typically offer several perks like discounts, coupons, breakdown assistance, travel insurance, and mobile phone coverage.

In the past, they have generated controversy due to claims that they are not worth the money and that certain banks may have been misselling them.

The most recent expense increase by providers is

Nationwide's increase in the monthly fee for its FlexPlus current account, which went from £13 to £18.

James Daley, founder of consumer group Fairer Finance, says the quality of packaged accounts varies, and warns they need to be scrutinised.

"They can offer great value if you use all the benefits. But they can also be a colossal waste of money if you don’t. Some of the recent price rises will be diluting the value even further for those who are not making full use of all the perks," he said.

So how can consumers ensure they are getting the best value for their monthly fee?

What are they?

These current accounts offer several advantages and have

Source: Statista

This entails carefully considering Popular features included in packaged current banking accounts in the United Kingdom as of 2023 (In Percentage)

monthly fees ranging from around £10 to £45. For instance, Halifax's Ultimate Reward (£19 a month) offers home emergency coverage, international family travel insurance, and other features, while Virgin Money's Club M (£12.50 a month) includes UK breakdown coverage as well as worldwide family mobile and gadget insurance.

One of the most advertised products on the market was Nationwide's FlexPlus, which consumer advocacy group Which? named a best-buy. However, the building society recently declared that the monthly fee would rise to £18 starting December 1. The increasing insurance cost is cited, but the number of account holders is not disclosed.

Numerous other options are available. While NatWest offers several options, such as Reward Platinum for £22 per month and Lloyds Platinum for £22 per month, among many others, the Co-op Bank's Everyday Extra costs £15 per month.

App-only providers also offer customers options, with plans ranging from Monzo's Max, which starts at £17 per month, to Revolut's Ultra, which costs £45 per month and offers a plethora of benefits like unlimited access to airport lounges and excess insurance for car rentals.

According to a Fairer Finance analysis, Royal Bank of Scotland, Halifax, Lloyds, and NatWest have all raised their fees in recent months.

Balancing the benefits

To determine if a packaged account is suitable for you, it's important to do some research. Start by assessing the annual cost of the account. Once you know that, you can evaluate whether the included features, such as insurance or breakdown assistance, are truly valuable for your needs.

whether you will take full advantage of these benefits or if you could, for instance, opt out of the packaged account and obtain a more affordable insurance policy that meets your needs. Even though you don't own a car, it might provide breakdown assistance insurance.

“Look at the overall value, not just the fee. Compare the cost of buying the insurance and other benefits separately, versus the fee,” Daley said.

Additionally, consider if some of the benefits are already covered by other sources, such as your current home insurance policy that covers your cell phone.

Policies that come with packaged accounts may also have exclusions and restrictions on their coverage.

According to Damien Fahy of the Money to the Masses website, owners of these accounts ought to periodically assess their cost-effectiveness.

"You should also review any restrictions or conditions attached to the perks, such as limits on medical coverage or age exclusions on travel insurance," he says, adding that this is particularly important if you have a pre-existing condition.

"Travel insurance included will usually exclude existing medical conditions, unless approved by the insurer, and, even then, you may have to pay an additional premium. For most people with pre-existing conditions, it’s best to shop around and it is usually cheaper to use a specialist travel insurer. Also, always check who can use the account benefits. Is it just the account holder that’s covered, or your entire family?" Damien Fahy said.

Joint account holders can frequently benefit both parties for a single fee, but that shouldn't deter them from calculating the costs and determining whether the features are worth it. According to Fairer Finance, the Nationwide FlexPlus offer

is still a great deal despite the cost increase.

Fahy notes that the Halifax Ultimate Reward account, which offers travel insurance, AA breakdown, and home emergency coverage, may be especially appealing to homeowners.

If things go wrong

These accounts have been frequently discussed as "the new PPI" for some years now because of issues with purported mis-selling. You might be eligible to recover a portion of the costs if you think you were misled about a packaged account.

If you discovered you were not eligible for some of the insurance plans being offered, or if you were told you had to close the account, it might have been mis-selling. Another possibility is that you were informed that having an account would raise your credit score, or you attempted to cancel but were unsuccessful.

The first step is to complain to your bank. A free online resource

is available on Martin Lewis's MoneySavingExpert website. If the bank dismisses your complaint, you may take it to the Financial Ombudsman Service.

According to Daley, there is more protection because of the recently enacted consumer duty, which outlines how businesses and financial institutions should treat customers.

"Given these new regulations, it’s no longer OK for banks to sit back and let their customers get poor value from these products. They need to be making sure that customers are using the benefits, and if they’re not, they should be ready to downgrade them to cheaper, lower-frills alternatives," Daley concluded.

If you discovered you were not eligible for some of the insurance plans being offered, or if you were told you had to close the account, it might have been misselling. Another possibility is that you were informed that having an account would raise your credit score, or you attempted to cancel but were unsuccessful

News Banking & Finance

Kuwaiti banks retain employees with revoked nationalities

Sheikh Fahad Al-Yousef, the first Deputy Prime Minister, Minister of Defence, and Minister of Interior, recently announced a new government policy that calls for Kuwaiti banks to take action to keep workers whose nationalities have been revoked.

Women impacted by the loss of nationality would continue to work and be paid under updated contracts with the same benefits, Sheikh Fahad confirmed. The majority of private sector banks are implementing a similar strategy for impacted workers, irrespective of gender.

Conversations among bank representatives revealed that this problem affects people in

several positions, including regular employees, managers, and officials.

Although there is no centralised banking directive or regulatory order behind this action, individual banks are taking decisions based on humanitarian and professional considerations.

Affected employees of certain banks have already been informed of their intention to keep their positions,

titles, and benefits while modifying their contracts to take into account the new situation.

This strategy is in line with Kuwaitization policies because it has no bearing on current plans to nationalise the banking industry. Additionally, in order to maintain operational effectiveness and business continuity, banks are eager to retain the knowledge of seasoned workers.

HSBC names more senior leaders for revamped CIB

HSBC has appointed a further layer of senior executives to its four business areas following the reorganisation led by CEO Georges Elhedery, which began in October 2024.

Adam Bagshaw has been appointed as the sole global head of investment banking. Michael Roberts will oversee the banking major’s operations throughout Europe and head a reorganised corporate and institutional banking team.

Roberts will further oversee teams, products, and services related to wholesale banking under this heading, such as international payment solutions, markets and securities services, investment banking, and worldwide coverage.

A combined multinational and international subsidiary banking business, as well as credit and lending, will be jointly managed by Gerry Keefe and Jo Miyake.

Following Matthew Ginsburg's departure as cohead of investment banking, Bagshaw will manage investment banking alone. According to HSBC, Ginsburg will retire in March 2025 and his departure was a part of a long-term plan.

After working at Barclays, Morgan Stanley, and First Boston, including in senior positions in Asia, Ginsburg joined HSBC in 2021 from Fitch. Bagshaw

was the global co-head of advisory and investment banking coverage when he joined HSBC four years ago from Deutsche Bank. He worked at Deutsche Bank for 14 years, including as co-head of corporate finance for EMEA and global co-head of financial sponsors.

Moody’s sees stable outlook for GCC banks

Moody's Investors Service anticipates that governments in the Gulf region will keep investing in non-hydrocarbon industries and diversifying their economies.

Construction, real estate, and tourism will all gain from this, enhancing banks' asset quality. While capital levels are expected to remain stable, declining interest rates may pressure profitability.

Growth in deposits will continue to be the main source of funding, though some banks—especially those in Saudi Arabia—may become more dependent on market funding. Government assistance to banks is probably going to continue, but in certain situations, financial restraints may limit the scope of that assistance, according to Moody's.

Moody's Investors Service upgraded its global outlook for banks from negative to stable, citing monetary easing and stabilising economic growth. Geopolitical tensions, trade disputes, and possible changes in US policy, the ratings agency cautioned, could bring about a great deal of uncertainty and risk.

“We have changed the global outlook for banks to stable from negative, reflecting our expectation that stabilisation of economic growth and monetary easing will support operating environments for banks, alleviate pressure on their asset quality and help their deposit growth recover," David Yin, vice-president and senior credit officer at Moody’s Ratings said.

Mortgage Lending

Norway eases loan-to-value mortgage limit to 90%

The finance ministry announced that the Norwegian government would relax its loan-to-value restriction on mortgage lending, lifting a policy that had limited borrowing and slowed the building of new homes.

Borrowers must now contribute 10% of their home's value, down from 15% previously, and the maximum loan-to-value mortgage ratio is set at 90%, up from 85% previously.

"The change will allow more people to enter the housing market," Finance Minister Trygve Slagsvold Vedum said in a statement.

The goal of the mortgage regulation, which was first implemented in 2015, is to safeguard consumers, the banking system, and the larger

economy by preventing the development of a housing market bubble and restricting the growth of borrowing.

The debt-to-disposableincome ratio for Norwegian households has been the highest among OECD nations, at 253% in 2022, up from about 130% at the beginning of the century.

However, borrowing has slowed recently due to rising interest rates and restrictive mortgage regulations, which prompted calls for a relaxation of the rules from the construction industry and others.

"The current requirements appear to be somewhat stringent when compared with the benefits. This is why we are now adjusting the equity rule," Vedum said.

Analysis

AI kitchens: The end of family cooking time?

GBO Correspondent

AI kitchens have the potential to free up chefs' creativity and reduce laborious, repetitive tasks like peeling potatoes and spending hours at a workstation

Food automation is not like other automation. The availability, preparation, and consumption of food have the power to drastically alter societies because it is essential to life and sustains both the body and the soul. Automated kitchens are not a thing out of "Star Trek" or "The Jetsons" science fiction, technology is real and widespread.

Today, robots are employed in a wide range of tasks including bread baking, sushi making, pizza making, frying chicken, flipping burgers, salad preparation, serving ramen, and much more. Artificial intelligence has become capable of creating recipes based on whatever is in a kitchen or the molecular compatibility of ingredients. More sophisticated ideas are being developed to automate the kitchen completely for elegant dining.

Restaurants and other businesses are among the early adopters of AI kitchen technologies, as these tend to be expensive initially. Prices should eventually drop enough to affect the housing market, which could alter social and residential dynamics.

“Certainly, just think about the seismic effects of the microwave oven to see how food technology can truly transform society. The ability to quickly prepare a meal for one person was made possible by that technology, which can be both advantageous and disruptive to society,” writes Patrick Lin, Professor of Philosophy, California Polytechnic State University, in his article titled "Robots are coming to the kitchen − what that could mean for society and culture" for The Conversation.

“Pre-packaged meals and plastic containers heated in a microwave are two common concerns regarding the

Analysis \ Cooking

technology. These include poorer nutrition and health outcomes. Less evidently, that ease of use can also turn eating together, from a social, cultural, and artistic activity, into a practical act of survival, changing millions of people's relationships, customs, ways of working, cooking techniques, and other aspects of daily life,” he wrote.

Just consider how life would be different if there were no microwaves. You might have to go out and socialise with people while taking a break from work, rather than working at your desk while eating a reheated lunch. Living more slowly has its merits in a world where social isolation and franticness are on the rise.

Convenience can have a high price, so it's important to consider the ethical and social disruptions that emerging technologies may cause. This is especially true for food, a deeply cultural and human domain that permeates daily life.

Artificial intelligence has become capable of creating recipes based on whatever is in a kitchen or the molecular compatibility of ingredients. More sophisticated ideas are being developed to automate the kitchen completely for elegant dining

In his article, Professor Lin talks about a study conducted by his team at California Polytechnic State University, which is halfway through what its members believe to be the first study of the effects AI kitchens and robot cooks could have on diverse societies and cultures worldwide, thanks to funding from the US National Science Foundation. Three main areas of advantages and dangers have been delineated for examination.

The four-year project will anticipate the effects of

Food safety can be increased by robot cooks because humans are a major disease vector. AI recipes that maximise ingredient utilisation combined with other automation techniques like precision trimming can help cut down on food waste

robot kitchens on society, kickstarting the first extensive conversation on the subject, apart from helping to draw out the hidden and very broad impacts of technology.

"By focusing on the trend of robot kitchens that's just emerging from under the radar, there is still time for technical and policy interventions in order to maximise benefits and minimise harms and disruptions,” Professor Lin commented.

Creators and consumers

AI kitchens have the potential to free up chefs' creativity and reduce laborious, repetitive tasks like peeling potatoes and spending hours at a workstation. Time can be saved thanks to technology.

Eliminating the chore of cooking allows you to prioritise more pressing duties or spend more time with your loved ones. AI can accommodate various special diets, allergies, and tastes on demand for personalised eating.

However, the safety of people is not exempt. Cooking is therapeutic and offers opportunities for a variety of things, including self-expression, growth, independence, confidence, and more. If no one needs to cook, these opportunities may be lost.

If parents and kids aren't working together in the kitchen anymore, it could have an impact on family dynamics because the kitchen is a safe place to talk rather than the dining room, which sometimes feels like an interrogation.

Science education might be negatively impacted because the kitchen doubles as the family's science lab. Learning about microbiology, physics, chemistry, materials science, math, cooking methods and equipment, food ingredients and where they come from, human health, and problem-solving are all part of the alchemy of cooking for kids and other learners. These abilities and expertise may be undermined by not having to cook.

Community and cultures

AI can support creativity and experimentation in the form of elaborate food presentations and inventive recipes that are true to a culture. Similar to how AI and robotics contribute to the creation of new scientific knowledge, they can also improve our understanding of things like food ingredients' properties, interactions with one another, and new cooking techniques.

However, culture carries some risks. AI is prone to stereotyping, so it might, for instance, flatten or oversimplify cultural details and distinctions, ruining traditional recipes and methods. The cuisine that AI and robot cooks produce may become less diverse as a result of this selection bias.

If the limitations of their devices result in the homogeneity of creativity and cuisines, tech developers may end up acting as gatekeepers for food innovation, much like the strangely similar feel of AI art images across various apps.

Additionally, consider your preferred dining establishments and evening meals. Would it diminish your own culinary experience to know that the people preparing your food weren't your friends and family but rather robots? How might automated kitchens alter the character of those neighbourhoods?

Technology is expected to result in the creation of more jobs than its destruction. Numbers can conceal the impact on actual human lives, even in cases where there is a net increase in employment. An inability to pick up new skills for a different job may be experienced by many in the food service industry, which is one of the most popular jobs in any economy. While it's true that some people are better suited for jobs like cooking, not everyone has the aptitude to work as an AI developer or robot technician.

If true creativity requires inspiration and intuition, then the philosophical question of whether AI can produce it remains unanswered. If a chatbot is just producing words that statistically follow the words that came before it, then assuming that it understands what it's saying could be as mistaken as that. In line with the ongoing discussions about AI music and art, this has implications for the authenticity and aesthetics of AI cuisine.

Safety tand responsibility

Food safety can be increased by robot cooks because humans are a major disease vector. AI recipes that maximise ingredient utilisation combined with other automation techniques like precision trimming can help cut down on food waste. For example, by assisting people in avoiding allergens and excess salt and sugar, customised meals can improve nutrition and overall health.

Since the technology is still in its infancy, it's uncertain if those advantages will materialise. Foodborne infections are unknown. Will AI and robots be able to carry out additional safety checks and detect whether an ingredient is fresh or not by tasting, smelling, or in some other way?

Another concern is physical safety. It's crucial to make sure a robot chef doesn't unintentionally burn, cut, or crush someone due to a malfunctioning computer vision system or other issue. Given that AI chatbots have been known to recommend things like rocks, glue, gasoline, and toxic mushrooms to humans, it is reasonable to assume that AI recipes could also contain errors. It may be difficult to determine liability for robot cooks, even if they are compromised, in the same way that legal systems are still having trouble determining liability for autonomous vehicles.

Given the importance of food, food technologies play a role in shaping society. Since the kitchen holds a special place in households, communities, and cultures, changing this venerable institution will require careful consideration to maximise advantages and minimise risks.

Crypto stealers are now exploiting Google ads to commit heinous crimes like sending phishing links to carry out malware attacks

Google vs hackers: Legal fight is on

GBO Correspondent

Three years ago, a significant issue was brought to the attention of Google's company attorneys by several security engineers. The security team discovered that the search engine giant was unintentionally contributing to the spread of a form of malware known as Glupteba.

The malware had infected over a million Windows PCs, converting them into tools for mining cryptocurrency and monitoring users. The hackers were moving toward infecting even more computers when they started to use Google Cloud tools improperly, bought Google advertisements to entice users, and took over Google accounts.

Tech giants such as Google have long had strategies in place for destroying botnets like Glupteba. Together, they coordinate a massive takedown operation by contacting other companies and various American authorities. It happens that the police bring criminal charges. However, this time, Google's legal counsel suggested a course of action that the business hadn't taken in a long time: monetary litigation against the hackers.

Google's new headache

In April 2024, Gmail and YouTube users turned to Google support forums after hackers took over their accounts, bypassing two-factor authentication security and then locking the users out. Then in July, details emerged about a "massive ad fraud operation" that leveraged hundreds of apps on the Google Play Store to perform a host of nefarious activities.

The campaign has been codenamed Konfety, the Russian word for Candy, owing to its abuse of a mobile advertising software development kit (SDK) associated

Feature \ Hackers

Source: Statista

with a Russia-based ad network called CaramelAds.

While the decoy apps, totalling over 250 in number, got distributed via the Google Play Store, their respective "evil twins" were disseminated through a maladvertising campaign designed to facilitate ad fraud, monitor web searches, install browser extensions, and sideload APK files code onto users' devices.

The evil twin was also masquerading as the decoy twin by spoofing the latter's app ID and advertising publisher IDs for rendering ads. Both the decoy and evil twin sets of apps were reportedly operating on the same infrastructure, allowing the threat actors to exponentially scale their operations as required.

Crypto stealers are now exploiting Google ads to commit heinous crimes like sending phishing links to carry out malware attacks. These malicious programmes are illegally transferring cryptocurrency from victims’ wallets using various techniques, including campaign launches, deceptive websites, wallet connections, smart contract interaction, asset transfer, and obscuration.

Anti-scam solutions provider Scam Sniffer has discovered a series of crypto drainer malware attacks stealing approximately $59 million from 63,210 victims by embedding a wallet drainer dubbed MS Drainer in Google search and X (formally Twitter) ads. The attack campaign is leveraging malicious ads on Google and X to redirect users to phishing pages.

How is Google responding?

Google has filed at least eight cases against various hackers and scammers, the first of which would be this one against two Russian men and a dozen unidentified people who are allegedly behind Glupteba. The strategy, which Google refers to as affirmative litigation, aims to deter potential scammers and raise public awareness of them. For the first time, Google is now discussing this tactic. According to leaders of Google's legal

and security teams, suing people has proven to be successful. Despite forcing hundreds of businesses or websites to close, Google has won almost all of the more than $2 million it has won through legal means and hasn't lost a single case to date. Although the awards may not seem significant to Google and its $2 trillion parent company Alphabet, they could have dire consequences for the defendants.

Affirmative action has been taken by several “Big Tech” companies, albeit not always by that name and using different tactics. Since 2008, Microsoft has brought over twenty lawsuits, primarily aimed at getting court approval to take down botnets and other hacking tools. Since 2018, Amazon has filed at least 42 complaints regarding counterfeit goods, 38 for fraudulent reviews, three for copyright infringement, and, most recently, two for false product returns. Amazon has been a vocal complainant since 2018. The federal court in western Washington assigned three magistrate judges to concentrate on Amazon's counterfeit cases due to the company's volume of filings.

Since 2019, Meta has brought at least seven cases involving data theft or counterfeiting. Of those cases, four have resulted in settlements or default judgments, one of which saw Meta win close to $300,000 in damages. Similar to Meta, Apple is suing NSO Group, an Israeli spyware developer, for alleged acts of hacking.

A few lawyers who have researched how the private sector applies litigation to uphold the law are dubious about the plaintiffs' chances of success. Professor of law at Rutgers University David Noll, who is writing a book called Vigilante Nation about state-sponsored private enforcement, says it's hard to think businesses could handle the number of cases required to drastically reduce abuse.

According to Noll, the biggest risk is that Google and other tech companies might be flooding the legal system with cases that, while they may garner some positive press,

ultimately accomplish little to improve internet safety compared to what the companies could accomplish by investing in more effective anti-fraud measures.

Nevertheless, all six of the outside legal experts who spoke with WIRED agreed that, on the whole, Google should be commended for bolstering the efforts of the underfunded government agencies that are fighting to stop online abuse.

According to former prosecutors, it's a low-risk initiative for the tech giant, costing an estimated hundreds of thousands of dollars per case.

Marketing scams

According to DeLaine Prado, Google has thought about taking legal action against users who misuse its platforms and intellectual property since its inception. However, the initial case that she and other Google executives filed was in 2015.

Google accused the California marketing firm Local Lighthouse of using robocalls to trick small businesses into paying to raise their search engine ranking. Google

claimed deceptive advertising, unfair competition, and trademark infringement. In exchange for a settlement, Lighthouse terminated the troublesome calls.

Since then, Google has brought complaints against five allegedly dishonest marketers; thus far, settlements have been reached in three of them. A Los Angeles man who had allegedly posted 14,000 fake reviews on Google Maps agreed to stop, and a Florida company and its owners agreed to pay Google $850,000.

The third deal's terms, involving an Illinois company, were not revealed in court documents; however, according to Google spokesperson Jose Castaneda, Google received payment in the seven figures.

Castaneda claimed that Google has given away all of the money it has raised to organisations like the National Consumers League, the Partnership to End Addiction, the Cybercrime Support Network, the Better Business Bureau Institute, and several US chambers of commerce. Individuals submitting false copyright complaints to Google in an attempt to

Since 2019, Meta has brought at least seven cases involving data theft or counterfeiting. Of those cases, four have resulted in settlements or default judgments, one of which saw Meta win close to $300,000 in damages. Similar to Meta, Apple is suing NSO Group, an Israeli spyware developer, for alleged acts of hacking

Feature \ Hackers

have content removed from the company's services have been the focus of another type of case. Google accused a man in Omaha, Nebraska, of making up an ownership claim.

Google was successful in 2022 in obtaining a default judgment against a Cameroonian who had failed to reply to accusations that he was using Gmail to con people into paying for phoney puppies, one of which was a $700 basset hound.

Google claims that following the lawsuit, the scammer's complaints decreased. However, experts in law claim that the four cases Google filed against purported computer hackers are the most intriguing examples of affirmative action. Following months of Glupteba research, the suits were revealed.

Google security engineers came to the conclusion that it would be challenging to eradicate Glupteba by taking down related servers as is customary. Because the hackers had created a blockchain-based backup system, Glupteba was able to come back to life and continue robbing people. Additionally, Google can file lawsuits and has a powerful voice. Chun and other lawyers warned their superiors that the hackers could use the lawsuit to take advantage of Google's investigation techniques and strengthen Glupteba's resistance and evasion. DeLaine Prado, who has the last say in lawsuits, finally

gave her approval. Chun claims that the complaint was well received by his former government colleagues.

Following their association of websites linked to the virus with Google accounts in their names, Google filed a lawsuit against Dmitry Starovikov and Alexander Filippov, claiming that they were the masterminds behind Glupteba, based in Russia. The search giant claimed that the two (as well as unidentified co-conspirators) had broken the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, and the Racketeer Influenced and Corrupt Organisations Act (RICO).

A trademark law infringement was also claimed in the lawsuit due to Glupteba's concealment within a program that promised to download YouTube videos. Google stated that it suffered significant harm because it never received payment for the advertisements sold to the hackers, who allegedly used fraudulent credit cards. Additionally, the experiences of users with Google services were subpar.

According to court documents, Starovikov and Filippov only found out about the lawsuit from friends, at which point they made the decision to have Igor Litvak, a lawyer in New York, represent them. At first, the defendants claimed that their projects had not been directed towards the United States market and provided innocent justifications for their Glupteba-related software. They allegedly demanded $1 million from Google at one point and $10 million from them at another in exchange for the keys to shut down the botnet.

In the end, they refuted the accusations made against them. After a protracted legal battle over the defendants' ability to obtain Russian passports, appear in court in Europe, and surrender work files, Litvak and Google's lawyers exchanged accusations of dishonesty. US District Judge Denise Cote took Google's side in 2022.

In a 48-page decision, she concluded that to "avoid liability and further profit" from Glupteba, the defendants

"intentionally withheld information" and "misrepresented their willingness and ability" to disclose it.

Cote stated, "This record is sufficient to find a wilful attempt to defraud the Court."

Litvak was sanctioned by Cote and made a settlement agreement to pay Google $250,000 through 2027. Additionally, the jury mandated that Starovikov and Filippov pay Google's legal fees of almost $526,000. According to Castaneda, Google has been paid by all three.

According to Litvak, the judge may not have trusted certain people because of Russia's tense relations with the United States. Litvak still disagrees with the judge's conclusions. As per Google's Castaneda, the case had the desired outcome: the Russian hackers ceased their misuse of Google services and closed their marketplace for compromised logins, and the proportion of computers infected with Glupteba decreased by 78%.

Not every case has outcomes that can be measured. The accused in the other three Google hacking cases have not answered back to the allegations. As a result, Google was awarded a default judgment against three people in Pakistan last year who were allegedly responsible for infecting over 672,000 computers through the use of malware that appeared to be Google Chrome downloads.

The remaining cases, one in which foreign app developers are being sued for violating YouTube Community Guidelines after they are allegedly accused of stealing money through fraudulent investment apps, are also anticipated to be settled without opposition.

According to Royal Hansen, Google's vice president for privacy, safety, and security engineering, lawsuits that end in defendants making no alimony or consenting to cease the alleged misuse can nevertheless complicate the lives of those who are accused of violating the law.

Google leverages court decisions to persuade companies, such as banks and cloud providers, to cease doing business

with the defendants. As a result of being exposed, those involved may be reluctant to collaborate with other hackers. Additionally, defendants may become more cautious when entering different countries, especially when facing heightened scrutiny from local authorities.

More to come

In order to discuss possible lawsuits, Google's small litigation advance team now meets with other departments twice a week. They consider whether a case might highlight a new danger or provide Google's policies more teeth by creating a useful precedent.

Adopting an affirmative litigation strategy, Google's sibling company Waymo recently filed a lawsuit against two individuals for allegedly smashing and slamming its self-driving taxis.

As for Microsoft, assistant general counsel of the business's Digital Crimes Unit Steven Masada says the company is considering filing lawsuits against individuals who use generative AI technology for fraudulent or malevolent intent.

In order to discuss possible lawsuits, Google's small litigation advance team now meets with other departments twice a week. They consider whether a case might highlight a new danger or provide Google's policies more teeth by creating a useful precedent

Feature \ Hackers

Dark patterns expose users to privacy risks online

GBO Correspondent

Many apps come with default settings that are preselected to allow extensive data sharing

Dark patterns are design techniques used in apps and websites that manipulate users into making choices that may not be in their best interest, often prioritising the company's goals over user privacy. These deceptive designs exploit cognitive biases and the user's desire for convenience, leading them to inadvertently share more personal data than intended. In the context of privacy settings, dark patterns play a significant role in making users opt for less secure options, thus exposing them to greater privacy risks.

Ignorance of extra steps

Many apps come with default settings that are preselected to allow extensive data sharing. For instance, a social media app may have preselected options that make users' profiles public or a fitness app might share workout data with third parties by default. These settings often require users to manually change them to a more private configuration, which they might overlook due to the effort required.

Apps often use complex or ambiguous language that makes it difficult for users to fully understand what they are consenting to. Terms like "improving user experience" or "personalising your service" can be euphemisms for data collection and sharing. Privacy policies might be buried in lengthy legal jargon, making it hard for the average user to discern what data is being collected and how it will be used.

The visual design of privacy settings can significantly influence user choices. Dark patterns may involve placing privacy-friendly options in less prominent locations or

using colours and fonts that draw attention to the less private choices. For example, a brightly coloured button might encourage users to "Accept All" data permissions, while the option to "Customise Settings" or "Reject All" might be in a smaller, duller font, discouraging users from choosing the more private route.

Some apps frame privacy-enhancing choices as inconvenient or suggest that changing settings could impair the app's functionality. For instance, a prompt might warn users that limiting permissions could result in a "reduced experience" or "limited functionality," even when the app can function perfectly well with more restrictive settings. This tactic pressures users to prioritise convenience over privacy, even when the impact on usability is negligible.

It's common for users to be ignorant of the extra actions required to achieve optimal privacy settings. Examining the fine print of each app's policy may be

necessary to comprehend its intricate privacy statement. For instance, the user of Venmo must select whether to share their buddy lists and transactions with the entire public, only their pals, or remain private. Users must, however, individually set their Friends List, Past Transactions, and Default Privacy Settings. The app's default privacy settings do not cover every feature. Additionally, by default, all of your transactions on a Venmo account are public, making your financial activity instantly visible to anybody on the internet.

It should come as no surprise that a few well-known individuals, such as Ohio Senator and Republican nominee for Vice President JD Vance, have made their Venmo privacy settings public, making their contacts and transactions visible to everybody using the app. These incidents emphasise how crucial it is to comprehend these settings to guarantee the security of your privacy.

Apps may repeatedly prompt users to grant

Users have just discovered that the Journal app's 'Discoverable by Others' option, which raised severe privacy concerns, was hidden beneath the app's complex privacy settings

permissions they previously declined, wearing down their resistance over time. This persistence can lead to "consent fatigue," where users eventually agree to data sharing simply to stop the interruptions, rather than making an informed decision about their privacy.

Some apps, like Venmo, default to public sharing for actions such as transactions, friend lists, or activity feeds. Users may not realise that their information is publicly visible until after it has already been shared. Changing these settings often requires navigating multiple menus or understanding intricate options, which can be a deterrent for less tech-savvy users.

Venmo is not the only one, though.

In late December 2023, Apple published an app named Journal. Diary facilitates the writing of diary entries by iPhone users about their feelings and thoughts. You can include images, movies, towns you visited, and other personal activities in your diary entries. The app makes

customised recommendations on userrelevant subjects by utilising an on-device artificial intelligence function.

Users have just discovered that the Journal app's "Discoverable by Others" option, which raised severe privacy concerns, was hidden beneath the app's complex privacy settings. Apple claims that other iPhones with journals that are in your contacts can use this capability to determine your proximity. By adding you, the goal is to assist in giving the Journal suggestions from other users a higher priority.

But the contacts on your phones are not just full of close friends you can't wait to meet and who have already met you. Rather, your phone book could contain arbitrary numbers like a plumber you once hired to fix your house, a realtor you heard about but never used, and so forth. The issue is that similar to other programmes, whether or not you activated the journaling recommendations, new users will always

start with the "Discoverable by Others" function enabled.

In some cases, privacy settings are deliberately hidden in less accessible areas of the app or within submenus that are not intuitive to find. This obfuscation means that users are less likely to locate the settings that would help them better protect their privacy, essentially trapping them in the default, less private state.

The use of dark patterns can have significant implications for user privacy. By manipulating users into sharing more data, companies can build more comprehensive profiles that are valuable for targeted advertising, analytics, and other revenue-generating activities. However, this comes at the expense of user trust and security.

Data collected through manipulative means can be more susceptible to breaches, unauthorised access, and misuse by third parties. Moreover, as data accumulates, the potential harm from data breaches increases, with risks ranging from identity theft to unauthorised surveillance.

Safeguarding personal information

Taking control of your data and privacy is the first step towards attaining privacy in a world where digital connections are ubiquitous. It's crucial to understand that app developers and owners might not have the motivation to implement the most stringent privacy-setting procedures as long as mobile apps can access private user data.

Improper management of your app's permissions and privacy settings indeed increases the likelihood that other parties, particularly those with malicious intent, may gain access to your data.

Additionally, users frequently find it difficult to distinguish between the contents of their devices and apps, and occasionally they believe that devicelevel safeguards are sufficient to reduce the danger of using a mobile app with

inadequate data security protection. However, this is untrue. Checking the app's default privacy settings after downloading it is a wonderful general rule of thumb.

A better way to protect privacy is to restrict access rather than provide it. It is a common misconception among app users that access restrictions will compromise an app's functionality and level of support. Because of this, people often choose to provide access rather than restrict it, and they frequently stick with the default settings.

To combat dark patterns, users need to be vigilant and proactive in managing their privacy settings. This includes taking the time to explore settings thoroughly, reading the fine print, and opting for the most restrictive privacy options available. Additionally, increased awareness and digital literacy can empower users to recognise and resist manipulative designs.

Regulatory measures also play a crucial role. Laws like the GDPR in Europe and the CCPA in California aim to promote transparency and user control over personal data. Enforcement of these regulations can help deter companies from using deceptive practices by imposing penalties for non-compliance.

Dark patterns in privacy settings are a subtle yet powerful tool that can significantly undermine user privacy. By deliberately designing interfaces that favour data sharing and make privacy-friendly choices less accessible or appealing, companies can gather extensive personal data, often without the user's fully informed consent. Users must be aware of these tactics and take steps to safeguard their privacy, while continued advocacy for stricter regulations can help hold companies accountable for responsible data handling.

Share of internet users who are willing to accept online privacy risks for convenience as of 2023, by country (In Percentage)

Source: Statista

Chinese game developers and players have no domestic options because American companies produce the best GPUs and upscaling technologies

China leverages gaming to boost soft power

GBO Correspondent

The Chinese video game "Black Myth: Wukong" became an overnight success, selling over 10 million copies within a few days of its release in August 2024. This achievement has been heralded as a soft-power victory for the Asian superpower.

But "the intention of the drunkard lies not on the wine, but on other purposes," according to a Chinese proverb.

China's entry into the gaming sector also serves a "harder" kind of power: the need to support domestic chip manufacturing in the wake of the United States semiconductor export restrictions, which were meant to impede Chinese AI research.

Blockbuster gaming with Chinese characteristics

Players take control of Wukong, the Monkey King, in “Black Myth: Wukong,” an adventure game with fights and mysteries drawn from old Chinese mythology and set in the world of the Ming dynasty novel Journey to the West.

The big-budget game is the first of its kind from China to be this widely successful internationally. “Black Myth: Wukong” demonstrates how

China is the biggest gaming market in the world, but local laws like censorship, time limits for kids to play video games, and prohibitions on gambling and in-game purchases have reduced earnings for Chinese game companies

popular culture can comply with the propaganda directive to "tell China's story well."

It was created and released by Game Science, a studio supported by tech behemoth Tencent. The game is a successful cultural export and a tool of Chinese cultural soft power, as previously pointed out, even in the face of criticism from Western media.

Chinese gamers who are sick of playing games with foreign settings take great pride in this, as demonstrated by this widely shared post on Chinese social media platforms: "You once rode a horse in Damascus, duelled with guns in a small town in the American West, also served as an assassin in Egypt. Now you can finally return home and be your own hero."

Chinese industry levels up Beijing has long supported gaming. For example, in 2019, the municipal government of the Chinese capital city

released guidelines with the goal of making the territory the “international capital of online games” and using games to promote engaging Chinese narratives.

Broader policies enacted in 2021, 2022, and 2023 have reinforced the "go global" strategy for gaming by fostering the creation and global release of topnotch games consistent with Chinese culture and values.

“Black Myth: Wukong” is intended for the more affluent and prestigious console and PC gaming markets, which also demand more sophisticated software and hardware, despite the industry's prior successes with mobile gaming. Due to the game's success, China's gaming industry is receiving more funding for the development of significant projects.

China is the biggest gaming market in the world, but local laws like censorship, time limits for kids to play video games, and prohibitions on gambling and in-game purchases have reduced earnings for Chinese game companies. In response, now these companies are turning to international markets.

The development of blockbuster games can be a winner-take-all endeavour, with resources usually concentrated among the top companies due to the high development costs. Therefore, it might take some time for China to become a clear leader in the world gaming industry.

Hardware is a major obstacle, especially the availability of sophisticated chips and the technological know-how needed to create and manufacture them. This is the keystone of China's global domination in the digital sphere.

Heavy-duty gaming hardware

The hardware bottlenecks brought on by the Washington-Beijing tech war are well known to Chinese policymakers, tech companies, members of the gaming industry, and gamers. For the last two years, the United States has restricted China's access to advanced chips.

The limitations target AI-capable chips, but “Black Myth: Wukong” and other high-end games also require the same hardware.

NVIDIA, a leading American chip company known for its graphics processing units (GPUs) that are essential for advanced graphics and machine learning, is actively promoting gaming. The company claims to have significantly contributed to the graphics and technological advancements in the game "Black Myth: Wukong".

To fully experience the game's stunning graphics, players will need an NVIDIA GPU, such as the RTX 4090, which can cost up to $3,000.

The AI-powered "upscaling" technologies that gamers need to equip their PCs with, like NVIDIA's DLSS or substitutes from rival chip manufacturers AMD and Intel, are also required.

Chinese game developers and players have no domestic options because American companies produce the best GPUs and upscaling technologies.

China has significantly increased its internal chip manufacturing capacity. The sophisticated chips required for cutting-edge gaming are still beyond its current competitiveness.

Serious games

Supporting the gaming sector will increase consumer demand for cuttingedge chips and open new markets for larger producers. Alongside state-led, top-down investments, there will be industry-driven, bottom-up initiatives.

It is understandable why social media influencers who are connected to the Chinese state media have been pushing the game. It goes beyond simply increasing the gaming industry's growth or effectively narrating Chinese stories (which in turn inspires both Chinese and Western players to be more proud of their own culture).

This game is part of China's strategic

plan to encircle the cities from the countryside, as taught by Mao, to win the chip war. The short-term objective of occupying the "countryside" of video games is to prepare for the long-term takeover of the "cities" of sophisticated chip manufacturing.

December 2023 marked the return of China's gaming industry to doubledigit growth after two years of harsh regulatory crackdowns that had brought the industry to its knees.

A semi-official gaming industry association in China reports that video game sales rose 14% year over year to reach 303 billion RMB ($42.07 billion) in 2022. This represents a significant victory following a 10% decline in sales in 2022.

Over the course of the year, the percentage of license approvals granted to developers steadily increased, reaching levels seen before the crackdown. This trend led observers to feel cautiously optimistic. The growth, marked by double-digit increases, clearly indicated that a turnaround was beginning.

Moreover, Tencent Games, the largest developer in China, currently only receives around 30% of its revenue from outside sources; in the coming years, it hopes to increase this percentage to 50%.

In an attempt to capture a larger market share of international gaming markets, especially the United States, Tencent is now concentrating more on console games that are marketed to a wider audience. Its upcoming release, The Sentinel, created by Lightspeed, a studio based in Los Angeles, is a promising beginning.

Ultimately, developers must determine how to meet regulatory standards for instructional materials that emphasise China's cultural heritage while creating a work of entertainment that is accessible worldwide.

Source: Statista

Nokia, Ooredoo announces new partnership

Nokia and Ooredoo Oman will develop a state-of-the-art Dense Wavelength Division Multiplexing (DWDM) wholesale network. This will position Oman as a crucial connectivity hub between the Indian Ocean, the Gulf, and Europe while meeting the evolving demands of cloud-based platforms, AI-driven applications, and large data centres for hyperscalers.

The new nationwide network will utilise Nokia's flagship 1830 Photonic Service Switch (PSS) to ensure reliable performance through WDM transmission across C and L bands. Additionally, WaveSuite optical automation software will enhance network operations and accelerate service delivery

The new network will facilitate smooth traffic flow to international destinations while

guaranteeing low-latency connectivity for wholesale clients and hyperscalers.

“Oman Vision 2040” is in line with the strategic partnership between Ooredoo and Nokia, which is enabling the deployment of this vast high-capacity network.

This initiative aims to position Ooredoo Oman as a key player in the global data traffic ecosystem by offering highquality connectivity that empowers both communities and businesses in the region.

The new network will facilitate smooth traffic flow to international destinations

Microsoft sees strong progress in Saudi data centre

According to Microsoft's updates on the development of its data centre region in Saudi Arabia, construction of all three Azure availability zones has been completed, with operations expected in 2026.

Following a recent site visit by a group of Saudi Ministry of Communications and Information Technology (MCIT) government

officials and Microsoft executives from the company's headquarters and Saudi Arabia, the updates were released.

The three Azure availability zones are in the Eastern Province of Saudi Arabia and offer separate networking, cooling, and power systems.

Modern hardware will be installed

so that Saudi Arabian government and private sector organisations can easily run their workloads in the cloud with options for high availability and low latency.

The new data centre region in Saudi Arabia will provide enterprisegrade performance and dependability along with data residency, customer privacy, and high-speed latency standards comparable to the rest of Microsoft's global cloud infrastructure, which consists of more than 60 Azure regions, making it one of the biggest and safest in the world.

The investments are in line with Microsoft's mission to enable all individuals and organisations worldwide to accomplish more. They also emphasise responsible cloud practices, such as security, digital safety, privacy, compliance, and transparency.

Nvidia signs deal to help build Thai 'sovereign cloud'

Thai tech company SIAM and the US chip giant Nvidia will partner in building the Southeast Asian nation's first "sovereign cloud" with AI. The agreement was made when Jensen Huang, the CEO and founder of Nvidia's top semiconductor design company, visited Bangkok in December 2024 and pledged to help Thailand's artificial intelligence development.

The notion that a nation, area, or community will have authority over its data—where it is kept, how it is accessed, and who is in charge of it—is known as a "sovereign cloud."

According to Huang, a local "AI ecosystem" could be powered by the data on Thailand's sovereign cloud server.

Huang's announcement that it would collaborate with the Thai government to create "world-class AI infrastructure" in the kingdom prompted the move. In order to provide local businesses and educational institutions with "access to Thai AI," Huang said that Nvidia would collaborate with 40 Thai universities and more than 50 start-ups.

"The Thai data. The Thai people are the rightful owners. You have it as a natural resource. The sovereignty of the digital cloud "does a better job of protecting national interests," he declared.

Cloud

Global cloud spending to hit $723 billion by 2025

According to the most recent prediction from top management consultancy Gartner, end-user spending on public cloud services is predicted to increase from $595 billion in 2024 to $723 billion in 2025.

“The use of AI technologies in IT and business operations is unabatedly accelerating the role of cloud computing in supporting business operations and outcomes. Cloud use cases continue to expand with increasing focus on distributed, hybrid, cloud-native, and multi-cloud environments supported by a cross-cloud framework, making the public cloud services market achieve a 21.5% growth in 2025," said Sid Nag, Vice-President Analyst at Gartner.

According to Gartner, 90% of businesses will use a hybrid cloud strategy by 2027. Data synchronisation within the hybrid cloud environment is the most pressing GenAI issue that needs to be resolved in the upcoming year.

I&O leaders are under pressure to successfully incorporate I&O into their GenAI strategies and get ready to run AI and GenAI infrastructure at the edge, as evidenced by the fact that all cloud market segments are anticipated to experience double-digit growth rates in 2025.

The development of curated, private, secure GenAI models that are industry and vertical-specific and that call for sophisticated training, inferencing, and fine-tuning.

Data synchronisation within the hybrid cloud environment is the most pressing GenAI issue that needs to be resolved in the upcoming year

Geidea to launch payment solution in Egypt

In order to further solidify its position as a fintech pioneer with a strong network of thousands of merchants and a solid presence in the United Arab Emirates (UAE), Geidea, a leading Middle Eastern provider of digital payment solutions, will launch its ground-breaking SoftPos service in Egypt.

The successful two-year rollout of SoftPos in Saudi Arabia and the UAE is being followed by the upcoming launch in Egypt. Geidea, the first company in the Middle East and North Africa (MENA) region to introduce SoftPos solutions, has completely changed the payment landscape since its debut in Saudi Arabia. This technology removes the need for conventional point-of-sale (POS) devices by allowing retailers to accept payments via smartphones.

Businesses of all sizes can process secure contactless payments straight from smartphones with SoftPos, which satisfies

MPOC and CPOC standards. This greatly increases the accessibility and efficiency of payments. The SoftPos service from Geidea quickly became popular in Saudi Arabia, establishing a strong network of thousands of merchants throughout the kingdom.

Due to the service's success in Saudi Arabia and the UAE, it will soon be launched in Egypt, where the company aims to provide merchants with advanced payment solutions that enhance business operations.

Businesses of all sizes can process secure contactless payments straight from smartphones with SoftPos

Intel faces sale restrictions under subsidy deal

Intel announced that its agreement to receive $7.86 billion in US government subsidies limits the company's ability to sell shares in its chip manufacturing division should it become a separate business. In an attempt to boost chip manufacturing in the world’s largest economy, the US Commerce

Department announced the Intel subsidy.

The subsidy is a portion of $39 billion for the industry, which also includes Taiwan Semiconductor Manufacturing.

The company intends to spin its chip manufacturing operations into

a subsidiary, Intel Foundry, and is open to accepting outside investors, according to Intel Chief Executive Pat Gelsinger's September announcement.

Intel stated in a securities filing that if the Intel Foundry division is split up into a new privately held legal entity, the subsidies require it to own at least 50.1% of the company.

The company could only sell 35% of Intel Foundry to a single shareholder before encountering change-in-control clauses if Intel Foundry goes public and Intel is not the biggest shareholder. According to a spokesman for the Commerce Department, the government is negotiating changein-control provisions with all direct grant recipients. The move would also help Intel in having a better chance of attracting tech heavyweights, such as Apple, Broadcom, and even AMD.