West Asia & North Africa Digest by Ambassador Mahesh Sachdev | December 2020

Ananta Aspen Centre  |  

ANANTA ASPEN CENTRE

ANANTA ASPEN CENTRE

IA) Political Developments Covid 19 Pandemic

Regional Impact of Covid-19Second Wave Persists

While the regional rate of Covid-19 incidence went up over the last month to hover around the global level, the death rate came down marginally (Reference: Table on the next page). While many countries reported a surge, the figures for the Gulf Cooperation States were more stable. The data from some conflict zones such as Yemen, Somalia, Syria, Iraq and Libya seemed quite low against the backdrop of healthcare challenges and insecurity. In several cases, there was circumstantial evidence to suggest that authorities were under-reporting Covid-19 related statistics either due to systemic inadequacies or to mask their failures. 

Covid-19 and the Individual WANA Countries:

  • Under pressure from the opposition, Turkish authorities began including asymptotic positive cases (as per international norms) in their statistics from Nov 25, leading to far higher numbers of Covid-19 positive cases. The opposition also alleged that the Covid-19 deaths were being under understated.
  • Lebanon went into lockdown for two weeks from Nov 10
  • To combat the third wave of Covid-19 cases, Iran tightened movement restrictions from Nov 20 but avoided a complete lockdown
  • On Nov 1, Israel began human trials of its domestic vaccine called Brilife
  • From Nov 1, Saudi Arabia allowed Umrah pilgrimages, under strict conditions.

Cumulative Covid-19 Cases in WANA (as of December 1 2020)

Country No. of Confirmed Cases No. of Deaths
Total World Wide 63,359,632 (+37.4%) 1,470,769 (+23.0%)
India 9,462,809 (15.6%)  137,621 (+12.7%) 
Iran 975,951*  48,628 
Turkey 638,847*  13,746 
Iraq 554,767  12,306 
Saudi Arabia 357,360#  5,896 #
Morocco 356,336*  5,846 *
Israel 337,422# 2,867 #
Jordan 219,430^  2,751^ 
UAE 170,149  576
Kuwait 142,992  881#
Qatar 139,001#  238 #
Lebanon 127,944*  1,018* 
Oman 123,908#  1,430 
Egypt 115,911#  6,650 #
Tunisia 96,769*  3,260^ 
Palestine 88,004*  747*
Bahrain 86,956#  341#
Libya 83,417  1,196 
Algeria 83,199  2,431 
Sudan 17,810  1,249* 
Mauritania 8,601#  177#
Syria 7,887  417*
Somalia 4,451#        113#
Yemen 2,191#  619#
Western Sahara 10# 1#
Total for WANA 4,739,313 (+37.1%) 107537 (+26.4%)

Source: Johns Hopkins University Coronavirus Resource Center.

Legend: #  Grew ~10% since last month;* Increase of over 50% since last month; ** Nearly Doubled since last month; ^ More than doubled

IB) Political Developments

Iran:

On Nov 27, Dr Mohsen Fakhrizadeh, a top Iranian nuclear scientist, was assassinated on a road in a Tehran suburb. While no organisation claimed responsibility, the Iranian security agencies blamed Israeli spy agency Mossad and anti-regime outfit Mujahedin al-Khalq and vowed revenge. They later claimed that the operation was conducted by remote using an artificial intelligence equipped machine gun mounted on a pick-up truck which was subsequently destroyed in an explosion.
Comment:
Dr Fakhrizadeh was the senior-most of the six Iranian nuclear scientists assassinated in past few years. The deceased was a low profile, but high ranking and politically well-connected figure. He was mentioned by Israeli Prime Minister Netanyahu in a televised expose on Iranian nuclear weapons programme in 2018. This act appeared to be part of a shadowy and persistent campaign to derail or delay the Iranian nuclear programme through computer hacking virus (“Stuxnet”) explosions at Natanz and information skimming by Israel. On other hand, Iran – a hydrocarbon-rich country – seemed quite determined to pursue its avowedly “civilian and peaceful” nuclear programme as a strategic priority under multilayered stealth.

According to an IAEA leak on Nov 11, Iran had commissioned the first batch of a cascade of advance centrifuges for Uranium enrichment at a deep underground site at Natanz.  The IAEA also reported that Iran’s stockpile of low enriched Uranium had reached 2.4 tons, which was over ten times the quantity permitted under JCPOA.

The New York Times reported that Abdullah Ahmed Abdullah (nom de guerre Abu Mohammed al-Misri) the second in command of the al-Qaeda, was assassinated on Aug 7 2020 in Tehran, where he was living in hiding. The US had a $10 mn reward on him for masterminding the al-Qaeda attack on the US embassy in Nairobi in 1998 killing 234 persons. On Nov 14 Iran official denied that any al-Qaeda terrorist was on its soil. The New York Times also reported that President Trump had sought options for an attack on the Iranian nuclear facility at Natanz, but decided against any operation. Iranian spokesman responded by threatening that such as attack would receive “a crushing response.”

An anti-terror trial commenced in Brussels on Nov 27 in which accused Assadalah Assadi, an Iranian diplomat in Vienna was the main accused of planning to bomb a rally of the National Council of Resistance of Iran (NCRI, a group opposed to the Islamic Republic) held in Paris in 2018.  He declined to attend the trial citing his diplomatic immunity.

Notwithstanding its loss at the US presidential elections, Trump administration intensified its ongoing drive to sanction the entities linked to Iran during November. Thus, it sanctioned 6 companies and 4 persons on Nov10, Supreme Leader Ali Khamenei’s Moniyad Mustazafan on Nov 18 and 4 Russian and Chinese companies for adding Iranian missile programme on Nov 25.

Further Reading: “You’re sanctioned!: Donald Trump’s sanctions in the Middle East have had little effect”, The Economist, Nov 28; http://go.pardot.com/e/827843/le-east-have-had-little-effect/csvl9/132840096?h=HioGGK677nyI6Hu4IyHos-9cPmh7_umm7Lh8-0CGj0w

On Nov 19, Iranian foreign ministry rejected a resolution passed in the previous week by the UN Human Rights Council criticising Iran’s human right violations.

On Prophet Mohammed’s birthday (Nov 10)), Iranian authorities released 2301 detainees, including 157 accused of participation in the anti-government demonstration last year.

Turkey

Turkey’s pursuance of an ultra-nationalistic foreign policy in its immediate neighbourhood began being pushed back during the month. Ankara’s brinkmanship in repeatedly extending the hydrocarbon exploration in the East Mediterranean waters contested by Greece and Cyprus as well as President Recep Tayyip Erdogan’s visit to Northern Cyprus on Nov 15 pushed the European parliament to pass a non-binding resolution seeking sanction on Turkey. Ankara’s actions also constrained the EU foreign policy chief Josep Borrell to comment on Nov 19 “Turkey needs to understand that its behaviour is widening its separation from the EU” and urged a fundamental change in Ankara’s attitude.  While Russia pointedly excluded Turkey from the initial negotiations of a ceasefire agreement in the Nagorno-Karabakh conflict between Armenia and Azerbaijan, it was later co-opted to send some observers for one year. There were signs of incoming Biden Presidency being less indulgent with Turkey than outgoing Trump administration. Eventually, President Erdogan blinked on Nov 21 and issued a conciliatory statement saying “Turkey’s future was in Europe” and calling for dialogue with the EU.

On Nov 26, 337 persons, most of them military officers, were given life sentences over their participation in a plot to overthrow President Erdogan in 2016.

Saudi Arabia:

An Israeli cabinet minister revealed that Prime Minister Benjamin Netanyahu had travelled to Saudi Red Sea city of Neom on Nov 22 for a secret meeting with Crown Prince Mohammed bin Salman. Although corroborated by flight record and other evidence, Saudi Foreign Minister Prince Faisal bin Farhan Al-Saud categorically denied the event and also reiterated that the Kingdom would not normalise relations with Israel until it signs a full peace deal with Palestinians.
Comment:
If confirmed, the Neom meeting would be the first public face-to-face bilateral Summit and break a longstanding Saudi foreign policy taboo. It took place during a string of very significant developments including transition at the White House, normalisation of Israel’s relations with three Arab Countries (even as Riyadh has ruled out normalisation until a satisfactory resolution of the Palestine Cause) and shared concern over Iran. The meeting was widely seen as a signal to incoming US President Joe Biden by two major regional allies against rushing to soften the Trump administration’s tough policies against Tehran.

Further Reading:   “A meeting that never took place: Israel and Saudi Arabia send a clear signal to Iran—and Joe Biden” The Economist, Nov 22; http://go.pardot.com/e/827843/r-signal-to-iran-and-joe-biden/csvlc/132840096?h=HioGGK677nyI6Hu4IyHos-9cPmh7_umm7Lh8-0CGj0w 

On Nov 11 a small bomb exploded in Jeddah at the Remembrance Day ceremony attended by several foreign diplomats. The Islamic State claimed responsibility for the attack which injured at least three persons. The incident prompted a statement from Crown Prince Mohammed bin Salman that the perpetrators of such acts of terror would face “an iron fist”.

An al-Houthi missile hit an Aramco distribution facility in Jeddah on Nov 23. It started a small fire which was put down in a few hours without any major disruption.

On Nov 4, Saudi Arabia announced plans to ease some restrictions on the employment terms of the expatriates. Among the main changes was the abolition of the Kafala (sponsorship) system which ties up the foreign worker to the first Saudi employer. The proposed changes are to take effect from March 2021.
Comment:
The Saudi labour law reforms follow those by Qatar and the UAE. With nearly ten mn expatriates, the Kingdom has the region’s largest expatriate community. While motives for such reforms vary in each GCC state, in Saudi Arabia they mark an abrupt reversal of a multi-year long robust drive to replace foreigners with the Saudis.

In the run-up to G20’s Riyadh Summit, held virtually on Nov 21-22, the Kingdom’s human and women’s rights record came under pressure from several NGOs such as the Human Rights Watch and Amnesty International. However, these campaigns did not produce any tangible movement on the ground. Possibly with an eye to G20 Summit, a Saudi Women’s Football League with 24 teams commenced on Nov 18.

The UAE:

On Nov 6, Trump administration notified the US Congress of its intention to sell to the UAE $23 bn worth of advanced weapon systems, such as 50 F-35 fighter jets, 18 armed drones, etc. The Congress has up to 30 days to file objections if any. The Israeli side did not deem the proposed package to violate the US commitment to maintain its “Qualitative Military Edge” over the Arab armies.

Several socio-economic reforms were introduced in the United Arab Emirates during the month to ease the foreigners living and working in the country. Thus on Nov 7, the authorities announced liberalisation of the Sharia-based civil code to allow alcohol at homes, cohabitation without marriage and to criminalise “honour killings”. The government said that these steps were intended to improve tolerance and investment climate. On Nov 15, the Golden Visa regime was expanded and made more flexible for foreign professionals, meritorious students, etc. In the same direction, a Presidential Decree on Nov 23 allowed, for the first time, changed the corporate law to permit the foreign investors and entrepreneurs to set up companies in the UAE mainland without having to offer majority ownership of board memberships to the Emiratis. Further, the publicly traded companies were allowed to offer 70% of their shares for trading instead of 30% so far. The amended terms of the corporate law were to take effect in six months with the business entities getting one year to comply.
Comment:
The UAE being a pioneer and a poster child for ease of doing business (2020 rank 16th), is keen to stay ahead of the regional pack. Its economy has suffered in 2020 due to Covid-19 pandemic which cut global oil consumption and blighted trade, tourism and aviation. The IMF projects the GDPs of UAE and its Dubai Emirate to shrink in 2020 by 6.6% and 9.8% respectively. Moreover, with 90% of its residents being foreigners, the UAE needs to retain them to boost the flagging demand for consumer goods, real estate, etc. Thus, these socio-economic changes were both an acknowledgement of profound ground shift and a comprehensive attempt to regain the initiative. However, the amendments to the corporate law would affect the viability of the 45 Free Zones as well as the rentier system that allowed the Emiratis to get rich by simply being a passive “majority partners” in companies run by foreigners. 

On Nov 18, The UAE temporarily suspended the issuance of new visa to 13 countries, including Pakistan. While the authorities provided no specific reasons, the ban seemed aimed at curbing Covid-19 pandemic and insecurity.

Fly Dubai, a UAE based budget carrier, commenced scheduled flight to Tel Aviv from Nov 26.

Israel:

The US Secretary of State Mike Pompeo created history on Nov 19 by being the first US political official to visit one of the Israeli settlements in the West Bank and also visit the Golan Heights.
Comment:
Trump Administration broke with the past US policies as well as the international consensus by declaring the Israeli settlements in the occupied West Bank as “not illegal” and recognising the Golan Heights, occupied from Syria during 1967 war, as part of Israel.

On Nov 25, Pakistan Foreign Ministry categorically rejected any move to recognise Israel.

On Nov 3, visiting Malawi Foreign Minister announced the decision to set up an embassy in Jerusalem by the summer of 2021. It would be the first African embassy in the disputed city. 

Iraq:

Land border crossing with Saudi Arabia at Arar was reopened on Nov 18 after being closed for 30 years.
Comment:
The long Saudi-Iraqi land border was closed in 1990 in the wake of Saddam Hussein’s invasion of Kuwait. Its reopening came amidst other sign of warmer bilateral relations and Saudi Arabia’s intention to contest growing Iranian influence in Iraq, an “Arab” country with Shia majority. The opening of land border would facilitate cross-border movement of large nomadic Sunni tribes such as al-Shammar that straddle the common border.  

According to some American media reports, Trump administration plans to reduce the American troop presence in Iraq from 3000 to 2500 by Jan 15 2021.

The year-long political standoff due to reform seeking protestors squatting at public places in large Iraqi cities turned violent during the month as various Shia groups, led mainly by maverick cleric Moqtada al-Sadr, clashed with them. Thus, reformist camps in Baghdad, Nasiriyah and Basra became conflict zones with many deaths and injuries.     

Egypt:

The second stage of parliamentary election was held on Nov 8 with 29% voter participation so far. The pro-government Mostaqbal Watan party gained nearly 75% seats contested.

Security agencies detained three members of the Egyptian Initiative for Personal Rights (EIPR), a human rights NGO, on Nov 3 on charges of joining a terrorist group and spreading false news. Sharp criticism by UNHCR, US and EU resulted in these being freed on Dec 3 after a month of detention.

In African Champions League final on Nov 28, Al-Ahly beat Zamalek 2-1 in Cairo. It was the first time in the history of the continent’s most popular football tournament that the final was fought between the clubs from the same country. 

Algeria:

The referendum on revised constitution draft, held on Nov 1, was marked by low turnout of 23.7%. The authorities nevertheless declared that 66.8% of participants had approved of the draft.
Comment:
The new constitution made important changes by putting a two-term limit on political appointments, setting up an anti-corruption institution and guaranteed the press freedom. However, the Hirak protest movement considered these changes to be only cosmetic and rejected the draft “in substance and in the form” calling for the boycott of the referendum.

On Nov 22 Al-Qaeda in Islamic Maghreb (AQIM) appointed Abu Obeida Yusuf al-Annabi, an Algerian, as its head to replace Abdelmalek Droukdel killed in Mali by French troops in June 2020.

Western Sahara:

Tensions escalated between Morocco and Polisario Front after 30 years of a ceasefire in
Western Sahara at the land transit point at Guerguerat from the territory to Mauritania. While details were unclear, both sides accused each other of ceasefire violations during the second week of November prompting the UN Secretary-General to issue a statement urging calm. 

Comment:
Western Sahara is a disputed and divided former Spanish colony till 1975, mostly under Morocco’s control, where tensions with the pro-independence Polisario Front, supported by Algeria, have simmered since the 1970s. Western Sahara has been on the United Nations’ list of non-self-governing territories, a stance also taken by the African Union, the International Court of Justice (ICJ), and the EU. The Sahrawi Arab Democratic Republic (SADR), which Polisario leaders proclaimed in 1976, is a member of the African Union but controls just 20 percent of the territory, mostly empty desert. Although India had withdrawn her recognition of SADR in 2000. The territory is home to some 500,000 people, most of whom live in the capital, Laayoune. Its main sources of revenue – its phosphate deposits and rich Atlantic fisheries – are all in Moroccan hands.

Bahrain:

Sheikh Khalifa bin Salman Al-Khalifa, 84, country’s Prime Minister since its independence in 1971 died on Nov 11 in a US Hospital. He was succeeded by Crown Prince Sheikh Salman bin Hamad Al-Khalifa, 51. The deceased was the architect of the stern response to pro-democracy protests in Bahrain during the 2011-12 phase of the Arab Spring movement.

Foreign Minister Abdullatif al-Ziyani led first official delegation visit to Israel from Nov 18 during which the two sides formally signed agreement to establish their embassies.

Jordan:

King Abdullah met Palestine Authority President Mahmoud Abbas at Aqaba on Nov 29.

The parliamentary elections for the 130-seat lower house, held on Nov 10, were marked by a low turnout of 29.9%. Muslim Brotherhood-affiliated Islamic Action Front got 8 seats, half of what it had before.

Palestine:

During the month, the Palestine Authority resumed civil and security cooperation with Israel suspended in May 2020 in response to Israeli plans to annex a part of the West Bank. Israel also handed back $ 890 mn in taxes to the PA which had been held back over some time.

Saeb Erekat, a veteran Palestinian negotiator, died of Covid-19 infection on Nov 10 in an Israeli hospital. He was 66.

Lebanon:

The fourth round of maritime talks between Lebanon and Israel was held in Naqoura on Nov 11.

Qatar:

US Secretary of State Mike Pompeo visited Qatar on Nov 21 as part of his regional tour.

In a televised address on Nov 3, Emir Tanim bin Hammed Al-Thani unveiled plan to hold a much-delayed election to the Shoura Council in Oct 2021.   

Sudan:

The number of Ethiopian refugees fleeing conflict in Tigray province crossed 43000 by end of November.

Syria:

Longstanding Foreign Minister Walid al-Moalem, 79, passed away on Nov 16. He was succeeded by Faisal Mekdad, 66, hitherto the Deputy Foreign Minister.

WANA and the US Presidential Elections:

Nov 3 US Presidential Elections were keenly followed in the region as the two candidates represented sharply contrasting visions for the WANA. The delay and confusion in the outcome added to the consternation of the regional stakeholders. While Trump aficionados in Israel, Saudi Arabia, Egypt and UAE were disappointed – and demurred in congratulating Joe Biden – Iranian leadership was vertically split in their reactions. While radical wing led by Supreme Leader Ali Khamenei ruled out any prospects of early more accommodative American policies, liberal leaders such as President Rouhani and Foreign Minister Zarif were more hopeful about the debilitating US sanctions being lifted after President Biden administration rejoins the JCPOA.
Comment:
The outcome of the US elections was seminal to Iran, a country upended by the Trump administration’s “maximum pressure” policies since abandoning the JCPOA in 2018. While most Iranian leaders would be glad to see the back of President Trump, they equivocation about Biden Presidency stems from domestic political calculus. The US antagonism has been leveraged by the radicals to corner the liberals who sowed optimism about JCPOA’s positive fallout in restoring normalcy.  This strategy helped the Radicals regain an overwhelming majority in Majles, the national parliament, during elections earlier this year. With Presidential elections due in Iran in June 2021, an early rapprochement with the US could re-strengthen the liberals.  

Libya:

The UN-sponsored peace negotiations between the two civil war antagonists (viz. Tripoli-based GNA and Ben Ghazi-based LNA) picked up pace during this month with three rounds to talks. The first face-to-face talks on the Libyan soil were held in Ghadames on Nov 2-4 and focused on the implementation of the ceasefire agreement. Second round (called Libyan Political Dialogue Forum) was held in Tunisia with 75-delegates from Libya’s three regions. They reportedly agreed to hold a general election within 18 months under a “roadmap” to create unified institutions. They also agreed to unify the guards for petroleum facilities in Libya. The second round of the Dialogue Forum began on Nov 23.

On Nov 25, the United States blacklisted Kaniyat Militia, allied to Gen Haftar’s establishment, accused of mass murders in Tarhouna.    

Nile Water Talks:

The African Union mediated virtual talks between Egypt, Ethiopia and Sudan over sharing of Blue Nile waters were held on Nov 2-5 but failed to make any headway.

II) Economic Developments

Oil Related Developments:

International oil markets remained unsettled during the month due to perturbed conditions on the supply and demand side.  There were growing signs of a rift within OPEC+ in the run-up to a collective decision on oil production cuts (currently at 7.7 mbpd, but planned to eased it to 5.7 mbpd from 1.1.2021) and overproduction by some members. While a surge in Libyan production (– which reached 1.2 mbpd on Nov 13) added to an already oversupplied market, progress in Covid-19 vaccine production buoyed the oil bulls. An unusual rift developed between Saudi Arabia and the UAE with some reports hinting at Abu Dhabi quitting the OPEC+ over its past overproduction being compensated. However, on Nov 19, the Emirati Oil Minister asserted that the UAE has always been “a committed member of OPEC+”  

Other Economic Developments:

  • Saudi Arabia virtually hosted G20’s Riyadh Summit concluded on Nov 21 with a final declaration by the leaders of the 20 biggest economies. It vowed to spare no effort to supply COVID-19 drugs, tests and vaccines affordably and fairly to “all people”, reflecting worries that the pandemic could deepen divisions between the world’s rich and poor. They also agreed to a framework for consolidated restructuring of the government debt of the low-income countries so as to avoid any defaults. Further Reading: ‘Former envoy praises ‘synergy between Riyadh, New Delhi’ Sanjay Kumar, Arab News, Nov 11; http://go.pardot.com/e/827843/node-1761331-business-economy/csvlf/132840096?h=HioGGK677nyI6Hu4IyHos-9cPmh7_umm7Lh8-0CGj0w
  • The Institute of International Finance estimated Saudi fiscal deficit to stand at $72 bn in 2020, equivalent to 10.2% of the GDP. Official Saudi statistics revealed that the country’s GDP declined by 4.2% in Q3. This was the fifth consecutive quarterly decline of Saudi GDP. The IMF projects the Saudi economy to shrink by 5.4% in 2020. On Nov 21 Saudi Minister for Investment cited 12% y/y increase in the FDI inflow in H1/20 as a sign of the resilience of the Saudi economy. Saudi Aramco’s Q3 profit (SR44.21 bn) improved significantly over Q2 (SR24.62 bn) but were still down 44.6% from Q3/19 figure (SR79.84 bn). On Nov 17, Saudi Aramco, world’s largest oil company, announced plans to borrow $ 8 bn from international debt market to fund its commitment to pay $37.5 bn as dividend to investors in H2 2020 and to fund purchase 70% of Sabic Group for $69.1 bn. 
  • Turkey’s Central Bank Governor and Finance Minister (-President Erdogan’s son-in-law) were replaced during Nov 7-9  following the sharp decline in value of Turkish lira and double-digit inflation as Turkey prioritised stimulus-driven growth over fiscal discipline. New appointees were professional who reversed the policies and raised bank rate leading to a 6% rise in Lira’s value against the dollar. On the other side, on Nov 30, official data released claimed that the national GDP had risen by 6.7% y/y during Q3/20 – highest among G20 countries, including China. Most observers expect the Turkish GDP to grow around zero percent in 2020. Further Reading: “On the edge: Recep Tayyip Erdogan faces up to economic facts” The Economist, Nov 21; http://go.pardot.com/e/827843/gan-faces-up-to-economic-facts/csvlh/132840096?h=HioGGK677nyI6Hu4IyHos-9cPmh7_umm7Lh8-0CGj0w
  • Bank of Israel data release on Nov 16 put national GDP having grown in Q3 at an annualised rate of 37.9% with the exports surging by 63.9%. The GDP is expected to shrink by 6.5% during 2020. The joblessness was 18.2% in October 20.
  • The UAE Cabinet approved 2021 budget with an outlay of Dh 58 bn ($15.8 bn) nearly 5% lower than current year’s budget of Dh 61.35 bn.
  • On Nov 6, London Bullion Marketing Association (LBMA) issued a warning circular asking all major gold markets to follow the regulatory standards on money laundering etc. or face being blacklisted from the mainstream market. The Reuters report on this development quoted unnamed sources as saying that Dubai in the United Arab Emirates (UAE) was the main focus. The UAE has more than 10 gold refineries and none of them is certified by the LBMA. The report also linked this development to the recent mention of money-laundering in Dubai by FATF. Further Reading: ‘Exclusive: Gold market authority threatens to blacklist UAE and other centres’ Reuters, Nov 12; http://go.pardot.com/e/827843/nd-other-centres-idINKBN27S0NK/csvlk/132840096?h=HioGGK677nyI6Hu4IyHos-9cPmh7_umm7Lh8-0CGj0w
  • Kuwait’s political uncertainty prevented parliamentary passage of the Public Debt Law which is to double the limit of sovereign borrowing to $65 bn. Without this authorisation, the government was at the verge of reneging on its major domestic financial commitments, including payment of the wages.
  • The Sultanate of Oman was faced with a record fiscal deficit of 15.8% of the GDP in 2020 due to a sharp fall in oil revenue and Covid-19 pandemic. Among the various belt-tightening measures being either implemented or planned were paring the subsidies, visa fee exemption to boost tourism, borrowings of $2 billion from the global markets and introduction of an income tax from 2022.

III) Bilateral Developments

On Nov 11, Indian Prime Minister Shri Narendra Modi condoled passing away of Bahrain’s Prime Minister Sheikh Khalifa bin Salman Al-Khalifa.

External Affairs Minister Dr S. Jaishankar paid an official visit to the Kingdom of Bahrain on Nov 24-25. During the visit, he called on Sheikh Salman bin Hamad Al Khalifa, the Crown Prince, Deputy Supreme Commander & Prime Minister and Sheikh Ali bin Khalifa Al Khalifa, Deputy Prime Minister. He held talks with his counterpart Dr Abdullatif bin Rashid Al-Zayani. There is 3,00,000 strong Indian Community in Bahrain.

The EAM also visited the UAE on Nov 25-26. During the visit, he called on Crown Prince of Abu Dhabi, Sheikh Mohamed bin Zayed Al-Nahyan and held talks with his counterpart Sheikh Abdullah bin Zayed Al-Nahyan.

On Nov 29, Ministry of External Affairs issued the following Press Release on “Unwarranted references to India in resolutions adopted by the Organisation of Islamic Conference”:
“We strongly and categorically reject the factually incorrect, gratuitous and unwarranted references to India in resolutions adopted by the Organisation of Islamic Conference (OIC) at the 47th CFM Session in Niamey, Republic of Niger, held on 27-28 November 2020.       

“We have always maintained that OIC has no locus standi in matters strictly internal to India, including that of Union Territory of Jammu and Kashmir, which is an integral and inalienable part of India.
“It is regrettable that OIC continues to allow itself to be used by a certain country, which has an abominable record on religious tolerance, radicalism and persecution of minorities, to indulge in anti-India propaganda. We strongly advise the OIC to refrain from making such references in future.”

India’s hydrocarbon imports in September 2020 presented a mixed picture. While crude imports declined by 9.8% y/y, those of LPG surged by 4.5% – the highest growth rate since at least 2004. The crude imports fell for the past six months due to pandemic, but the decline in September was the least, pointing to a gradual recovery in consumption. Exports of refined products, too, fell by 27% in September from a year ago.

On Nov 15, Indian immigration authorities stopped Dr B.R. Shetty, former Chairman of Abu Dhabi-based NMC Group, from boarding a flight to the UAE where his group, currently under UAE receivership, is facing bad debts of $6.6 bn. The Bank of Baroda has sued him in India to recover 16 properties as the collateral for the debts his group has defaulted.

On Nov 5, Saudi Arabia’s Public Investment Fund bought a 2.04% stake in Reliance Retail Ventures Limited for about $1.3 bn.

 ………………………………………………………………………………………………
(The views expressed are personal)
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