Israel pushing for more settler homes despite UN vote

May 11: Saudi Arabia will triple its value-added tax rate and suspend a cost of living allowance for state workers, it said on Monday, seeking to shield finances hit by low oil prices and a slump in demand for its lifeline export worsened by the new coronavirus.

Historic oil output cuts agreed by Riyadh and other major producers have given only limited support to prices after they sank on oversupply caused by a war for petroleum market share between the kingdom and its fellow oil titan Russia.

Saudi Arabia, the world's largest oil exporter, is also being hit hard by measures to fight the new coronavirus, which are likely to curb the pace and scale of economic reforms launched by Crown Prince Mohammed bin Salman.

"The cost of living allowance will be suspended as of June 1, and the value added tax will be increased to 15% from 5% as of July 1," Finance Minister Mohammed al-Jadaan said in a statement reported by the state news agency. "These measures are painful but necessary to maintain financial and economic stability over the medium to long term...and to overcome the unprecedented coronavirus crisis with the least damage possible."

The austerity measures come after the kingdom posted a $9 billion budget deficit in the first quarter.

The minister said non-oil revenues were affected by the suspension and decline in economic activity, while spending had risen due to unplanned strains on the healthcare sector and the initiatives taken to support the economy.

"All these challenges have cut state revenues, pressured public finances to a level that is hard to deal with going forward without affecting the overall economy in the medium to long term, which requires more spending cuts and measures to support non-oil revenues stability," he added.

The government has cancelled and put on hold some operating and capital expenditures for some government agencies, and cut allocations for some reform initiatives and projects worth a total 100 billion riyals ($26.6 billion), the statement said.

Central bank foreign reserves fell in March at their fastest rate in at least 20 years and to their lowest since 2011, while oil revenues in the first three months of the year fell 24% from a year earlier to $34 billion, pulling total revenues down 22%.

"The reforms are positive from a fiscal side as greater adjustment is essential. However, the tripling of VAT is unlikely to help that much in 2020 revenue wise with the expected fall in consumption," said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

She said she kept unchanged her deficit forecast of 16.3% of GDP for this year, which already factors in a greater than previously announced spending cut.

About 1.5 million Saudis are employed in the government sector, according to official figures released in December.

In 2018, Saudi Arabia's King Salman ordered a monthly payment of 1,000 riyals ($267) to every state employee to compensate them for the rising living costs after the government hiked domestic gas prices and introduced value-added tax.

DIFFICULT TIMES

A committee has been formed to study all financial benefits paid to public sector employees and contractors, and will submit recommendations within 30 days, the statement said.

In late 2015, when oil prices fell from record highs, the kingdom slashed lavish bonuses, overtime payments and other benefits once considered routine perks in the public sector.

In a country without elections and with political legitimacy resting partly on distribution of oil revenue, the ability of citizens to adapt to such reforms is crucial for stability.

"Tripling the VAT will test the limits of the balance between revenues and consumption as the economy dives into a deep recession. The move will impact consumption and could also lower the expected revenues," said John Sfakianakis, a Gulf expert at the University of Cambridge.

"These are pro-austerity and pro-revenue moves rather than pro-growth ones," he said.

Hasnain Malik, head of equity strategy at Tellimer, said the VAT rise could bring about $24-$26.5 billion in additional non-oil fiscal revenue. The rise would hit consumer spending further but was a needed step towards fiscal sustainability, he said.

Jeddah, Jul 8: The Organization of Islamic Cooperation (OIC) writes to the members of the United Nations Security Council (UNSC), urging the body to come in the way of a plan announced by Israel for annexation of significant portions of the occupied West Bank.

The letter was addressed by the 57-member organization’s Secretary-General Yousef al-Othaimeen to the UNSC’s members as well as the members of the Middle East Quartet — the European Union, Russia, United Nations, and United States— the Arabic-language Rai al-Youm news website reported on Tuesday.

The letter urged the Council to adopt “the necessary measures” that would prevent the annexation and compel Israel to stop all its illegal activities.

The OIC also urged the UNSC to hold an emergency meeting to “salvage the [remaining] opportunities for peace, and revive attempts at reinstatement of the political process under international supervision.” Such meeting, it added, had to enable realization of “the two-state solution, and [creation of] a Palestinian state with East Jerusalem [al-Quds] as its capital.”

Israel’s Prime Minister Benjamin Netanyahu announced the plan to annex 30 percent of the occupied Palestinian territory — namely the areas upon which the regime has built its illegal settlements as well as the Jordan Valley — after US President Donald Trump backed the annexation in January.

Trump pledged the support while unveiling details of his Middle East scheme called the “deal of the century.”

The highly controversial scheme allegedly seeks to resolve the Palestinian-Israeli conflict, but is heavily tilted in favor of the occupying regime. As well as backing the annexation, the scheme re-endorses Washington’s incendiary recognition in late 2017 of al-Quds as “Israel’s capital,” although Palestinians want the occupied holy city’s eastern part to serve as the capital of their future state.

Palestinians have roundly rejected either the American design or the Israeli plan that is rooted in it.

Tel Aviv had previously announced July 1 as the date it sought to start implementing the annexation plan. It, however, is yet to get it off the ground amid far-and-wide international condemnation and speculation that the plan was announced in the first place to deflect attention from a massive corruption scandal involving Netanyahu.

Countries warn Israel of consequences to bilateral ties

Also on Tuesday, Egypt, France, Germany, and Jordan warned Israel against going ahead with the plan, saying that doing so could have consequences for their bilateral relations with the Tel Aviv regime.

In a statement distributed by the German Foreign Ministry, the countries said their foreign ministers had discussed how to restart talks between Israel and the Palestinian Authority.

Most other European countries have likewise communicated their objection to the plan.

“We concur that any annexation of Palestinian territories occupied in 1967 would be a violation of international law and imperil the foundations of the peace process,” the European and Middle Eastern foreign ministers said, referring to the year, when Israel occupied the West Bank.

“We would not recognize any changes to the 1967 borders that are not agreed by both parties in the conflict,” they added. “It could also have consequences for the relationship with Israel.”

Israel had no immediate response. In a separate statement, however, Netanyahu’s office communicated Tel Aviv’s intransigence on the matter.

The statement said the Israeli premier had told his British counterpart Boris Johnson on Monday that he was committed to Trump’s “realistic” plan.

“Israel is prepared to conduct negotiations on the basis of President Trump’s peace plan, which is both creative and realistic, and will not return to the failed formulas of the past,” the statement alleged.

Abu Dhabi, Jan 16: The number of people being killed by terrorism activities worldwide has decreased significantly over the recent years, according to the latest Global Terrorism Index.

The 2019 Global Terrorism Index, which was presented at a forum in Abu Dhabi on Wednesday also showed that the UAE improved its ranking in the index by coming down to 130th rank among the 163 countries. The terrorism impact in the UAE is categorised as 'very low'. In the UAE, only two terrorism incidents were reported over the past decade - one in 2010 and another in 2014 - and there were no casualties.

Commenting on the report, Mansour Al Mansouri, director of the UAE National Media Council (NMC) said: "These findings rightly show the UAE as one of the safest countries in the world in terms of terror threat."

The index showed that the total number of deaths from terrorism declined for the fourth consecutive year in 2018, falling by 15.2 per cent to 15,952 deaths. This represents a 53 per cent reduction since its peak in 2014 when 33,555 people were killed in terrorist attacks.

The index published for the seventh year in a row, ranks 163 countries across the globe according to the relative impact of terrorism. This takes into account the number of terrorist incidents, deaths caused by terror and total value of property damage.

The latest results saw three Middle East countries - Iraq, Syria and Yemen - continue in the top 10 positions of the index.

The findings also showed Taleban overtaking Daesh as the deadliest terrorist group in the world, accounting for 38 per cent of all terrorist deaths. This is an increase of 71 per cent. Afghanistan is the country most affected by terrorism in 2018 followed by Iraq, Nigeria, Syria and Pakistan, according to the report. The least impacted nations were Belarus, Guinea-Bissau, Oman, The Gambia and North Korea.

During his presentation of the key findings of the index at the Foreign Correspondent's Club of the UAE (FCC), Serge Stroobants, director of Europe and Mena at the Institute of Economics and Peace, said lesser people were now being killed in terrorism activities.

"There have been long-term trends in global terrorism, with deaths caused by terror down by 52 per cent compared to high point of 2014, which saw Daesh and Boko Haram at their peak," said Stroobants attributing the decrease in the deaths to the increase in security measures and cooperation among nations in the fight against terrorism.

In contrast to this, there has been a 320 per cent increase in far-right terrorist incidents in the West, with political ideology being the driving force behind an increased proportion of terror motivation.

"There has been an increase in far-right terrorism in Western Europe, North America and Oceania for the third consecutive year," said Stroobants.

Terrorism still remains a global security threat, according the index, with 71 countries recording more than one death - the second highest number of countries since 2002.

Stroobants said conflicts remain the main cause of terrorism with 90 per cent of terrorist incidents occurring in places where there are conflicts or insurgencies.

The report said the global economic impact of terrorism was $33 billion in 2018, a substantial decrease of 38 per cent from the previous year.

Boko Haram was responsible for 80 per cent of all female suicide attacks, said the terrorism index.

Global Terrorism Index: Most affected countries

>Afghanistan (7379 deaths)

>Iraq (1,054 deaths)

>Nigeria (2,040 deaths)

>Syria (662 deaths)

>Pakistan (537 deaths)

>Somalia (646 deaths)

>India (350 deaths)

>Yemen (301 deaths)

>The Philippines (297 deaths)

>Democratic Republic of the Congo (410 deaths)