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G20 finance chiefs to address global economic threats


Top financial leaders from the Group of 20 leading economies are gathering in the south Indian technology hub of Bengaluru this week to tackle myriad challenges to global growth and stability, including stubbornly high inflation and surging debt.

India is hosting the G20 financial conclave for the first time in 20 years. Later in the year it will convene its first summit of G20 economies. The meetings offer the world’s second most populous country a chance to showcase its ascent as an economic power and its status as a champion of developing nations.

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This week’s gathering of finance ministers and central bank governors takes place just a year after Russia invaded Ukraine, setting off a cascade of shocks to the world economy, chief among them decades-high inflation.

US Treasury Secretary Janet Yellen is expected to address the global economic impacts of the war while at the G20 meetings.

India is among the countries treading lightly between the Western nations and Russia, wary of becoming embroiled in antagonisms as its economy benefits from purchases of discounted Russian crude oil.

As host of more than 200 G20 meetings in 28 cities leading up to the summit in November, Prime Minister Narendra Modi is expected to use that role to burnish India’s stature as a leader in fighting climate change and to act as a bridge between the interests of industrialized nations and developing ones.

It’s an urgent priority, given the growing importance of emerging economies to global growth: the International Monetary Fund estimates that India and China alone will contribute more than half of global economic growth this year, with other Asian countries contributing another quarter of that expansion with annual growth rates of 6 percent to 7 percent.

India’s economy is forecast to expand at a 6.1 percent annual rate this year after growing 6.8 percent last year, the IMF said in a report issued Monday.

“The tough conditions at the macroeconomic level have somewhat eased but inflation rates are still high. In this situation coordination among major economies is vital,” Ajay Seth, a senior Finance Ministry official, told reporters Tuesday in Bengaluru.

Bengaluru is India’s start-up and technology powerhouse. First recognized as an outsourcing hub, it’s now known for its entrepreneurs and information technology companies.

But the city is plagued by poor planning. Last year, it experienced extreme flooding, partly due to global warming, that caused an estimated $30 million in damage.
Improving urban infrastructure will figure in this week’s talks, the first of four G20 finance minister meetings due to take place this year in India.

The G20 includes the world’s largest economies and has a rolling presidency. Last year, Indonesia was host and next year Brazil will take over, followed by South Africa in 2025.

In countries like India, it’s seen as a counterbalance to gatherings of wealthier economies such as the Group of Seven.

At the meetings in Bengaluru, officials will discuss a range of issues related to climate finance, seeking consensus on regulating digital currencies, global tax issues and other financial priorities.

Yellen and other officials have indicated they will also be discussing risks of heavy debt burdens for many countries after costly efforts to cushion the worst impacts of the COVID-19 pandemic. Those woes have deepened as countries’ import bills surged due to sustained higher prices for food, oil and fertilizers and weakening currencies.

Yellen visited Zambia in January, in part to discuss the African country’s $6 billion debt to China, its biggest creditor. Zambia became the site of Africa’s first coronavirus pandemic-era sovereign nation to default when it failed to make a $42.5 million bond payment in November 2020. But a slew of other countries have seen their finances deteriorate in the past year, including India’s neighbor Sri Lanka and others in Asia.

“Several countries are facing huge debt problems. Finding lasting solutions for them will feature prominently in the discussions,” said Seth, the Finance Ministry official.

A senior Treasury official, who spoke on condition of anonymity to preview Yellen’s travel plans, said she intends to urge fellow G20 countries to reduce carbon emissions and

invest more in developing renewable energy, infrastructure and agriculture.

At a UN climate conference last November, India — currently the world’s third largest emitter of greenhouse gases — proposed a phaseout of all fossil fuels and repeatedly emphasized the need to revamp global climate finance.

Those longstanding G20 priorities, which also include building stronger public health systems, expanding use of sustainable energy and helping countries improve productivity often tend to be overshadowed by immediate concerns such as stalling global growth, debt crises and conflicts like the war in Ukraine.

Shocks from the war and from the pandemic have amplified disruptions to energy supplies, shipping and food security, complicating efforts to stabilize the world economy after the upheavals of the pandemic.

Another priority in Bengaluru will be coordination on monetary policy as central banks assess whether to keep raising interest rates or to dial back on efforts to cool inflation.

Read more:

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G20 energy meeting in India to balance fossil fuels, renewables

India aims to triple defense exports to $5 bln, says PM Modi at Aero India show

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Abu Dhabi Overtakes Oslo for Sovereign Wealth Fund Capital in Global SWF’s First City Ranking

Today, industry specialist Global SWF published a special report announcing a new global ranking of cities according to the capital managed by their Sovereign Wealth Funds (SWFs). The findings show that Abu Dhabi is the leading city that manages the most SWF capital globally, thanks to the US$ 1.7 trillion in assets managed by its various SWFs headquartered in the capital of the UAE. These include the Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company (MIC), Abu Dhabi Developmental
Holding Company (ADQ), and the Emirates Investment Authority (EIA). Abu Dhabi now ranks slightly above Oslo, home to the world’s largest SWF, the Government Pension Fund (GPF), which manages over US$ 1.6 trillion in assets. Abu Dhabi and Oslo are followed by Beijing (headquarters of the China Investment Corporation), Singapore (with GIC Private and Temasek Holdings), Riyadh (home to the
Public Investment Fund), and Hong Kong (where China’s second SWF, SAFE
Investment Corporation, operates from). Together, these six cities represent two thirds
of the capital managed by SWFs globally, i.e., US$ 12.5 trillion as of October 1, 2024.
For the past few decades, Abu Dhabi has grown an impressive portfolio of institutional
investors, which are among the world’s largest and most active dealmakers. In addition
to its SWFs, the emirate is home to several other asset owners, including central banks,
pension funds, and family offices linked to member of the Royal Family. Altogether, Abu
Dhabi’s public capital is estimated at US$ 2.3 trillion and is projected to reach US$ 3.4
trillion by 2030, according to Global SWF estimates.
Abu Dhabi, often referred to as the “Capital of Capital,” also leads when it comes to
human capital i.e., the number of personnel employed by SWFs of that jurisdiction, with
3,107 staff working for funds based in the city.
Diego López, Founder and Managing Director of Global SWF, said: “The world ranking
confirms the concentration of Sovereign Wealth Funds in a select number of cities,
underscoring the significance of these financial hubs on the global stage. This report
offers valuable insights into the landscape of SWF-managed capital and shows how it is
shifting and expanding in certain cities in the world.”

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AM Best Briefing in Dubai to Explore State of MENA Insurance Markets; Panel to Feature CEOs From Leading UAE Insurance Companies

AM Best will host a briefing focused on the insurance markets of the Middle East and North Africa (MENA) on 20 November 2024, at Kempinski Central Avenue in Dubai.
At this annual regional market event, senior AM Best analysts and leading executives
from the (re)insurance industry will discuss recent developments in the MENA region’s
markets and anticipate their implications in the short-to-medium term. Included in the
programme will be a panel of chief executive officers at key insurance companies in the
United Arab Emirates: Abdellatif Abuqurah of Dubai Insurance; Jason Light of Emirates
Insurance; Charalampos Mylonas (Haris) of Abu Dhabi National Insurance Company
(ADNIC); and Dr. Ali Abdul Zahra of National General Insurance (NGI).
Shivash Bhagaloo, managing partner of Lux Actuaries & Consultants, will his present
his observations in an additional session regarding implementation of IFRS 17 in the
region. The event also will highlight the state of the global and MENA region
reinsurance sectors, as well as a talk on insurance ramifications stemming from the
major United Arab Emirates floods of April 2024. The programme will be followed by a
networking lunch.
Registration for the market briefing, which will take place in the Diamond Ballroom at the
Kempinski hotel, begins at 9:00 a.m. GST with introductory comments at 9:30 a.m.
Please visit www.ambest.com/conference/IMBMENA2024 for more information or to
register.
AM Best is a global credit rating agency, news publisher and data analytics
provider specialising in the insurance industry. Headquartered in the United
States, the company does business in over 100 countries with regional offices in
London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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Future of Automotive Mobility 2024: UAE Leads the Charge in Embracing Digital Car Purchases and Alternative Drivetrains

-UAE scores show highest percentage among the region in willingness to purchase a car
completely online
– Openness to fully autonomous cars has grown to 60% vs previous 32%.
– More than half of UAE respondents in the survey intend to move to hybrid cars during
next car purchase, while less than 15% intend to move to fully electric car.
– UAE sees strong use of new mobility services such as ride-hailing (Uber, Careem, Hala
Taxi)
– The perceived future importance of having a car is not only increasing in UAE but is
higher than any other major region globally, even China

Arthur D. Little (ADL) has released the fourth edition of its influential Future of Automotive Mobility (FOAM) report, presenting a detailed analysis of current and future trends in the automotive industry. This year’s study, with insights from over 16,000 respondents across 25 countries, includes a comprehensive focus on the United Arab Emirates (UAE). The report examines car ownership, electric vehicles,
autonomous driving, and new mobility services within the UAE.

“The UAE is at the forefront of automotive innovation and consumer readiness for new mobility
solutions,” said Alan Martinovich, Partner and Head of Automotive Practice in the Middle East
and India at Arthur D. Little. “Our findings highlight the UAE’s significant interest in
transitioning to electric vehicles, favorable attitudes towards autonomous driving technologies,
and a strong inclination towards digital transactions in car purchases. These insights are critical
for automotive manufacturers and policymakers navigating the evolving landscape of the UAE
automotive market.”
Key Findings for the UAE:
1. Car Ownership:
o Over half of UAE respondents perceive that the importance of owning a car is
increasing, with the study showing the increase higher than any other major
region, including China.
o Approximately 80% of UAE respondents expressed interest in buying new (as
opposed to used) cars, above Europe and the USA which have mature used
vehicle markets

2. Shift to Electric and Hybrid Vehicles:
o While a high number of UAE respondents currently own internal combustion
engine (ICE) vehicles, more than half intend that their next vehicle have an
alternative powertrain, with significant interest in electric and plug-in hybrid
(PHEV) options. Less than 15% plan to opt for pure battery electric vehicles
(BEVs).

3. Emerging Mobility Trends:

o Ride-hailing services are the most popular new mobility option among UAE
residents, with higher usage rates than traditional car sharing and ride sharing.
The study indicates a strong openness to switching to alternative transport modes
given the quality and service levels available today.

4. Autonomous Vehicles:
o UAE consumers are among the most open globally to adopting autonomous
vehicles, with a significant increase in favorable attitudes from 32% in previous
years to 60% this year versus approximately 30% in mature markets. Safety
concerns, both human and machine-related, remain the primary obstacles to
broader adoption.

5. Car Purchasing Behavior and Sustainability:
o The internet has become a dominant channel for UAE residents throughout the car
buying process, from finding the right vehicle to arranging test drives and closing
deals. UAE car buyers visit dealerships an average of 3.9 times before making a
purchase, higher than any other region in the world, emphasizing the need for
efficient integration of online and offline experiences.
o Upwards of 53% of respondents from the region would prefer to ‘close the deal’
and complete the purchase of their car online, which is the highest for any region
in the world.
o Sustainability is a key factor cited by UAE consumers as influencing car choice.
The UAE scored among the top half of regions, highlighting the importance of
environmental considerations.

“Our study confirms the promising market opportunities for car manufacturers (OEMs) and
distributors in the UAE” commented Philipp Seidel, Principal at Arthur D. Little and co-Author
of the Global Study. “Consumers in the Emirates show a great and increasing appetite for cars
while being among the most demanding globally when it comes to latest vehicle technologies
and a seamless purchase and service experience.”
The comprehensive report, “The Future of Automotive Mobility 2024” by Richard Parkin and
Philipp Seidel, delves into global automotive trends and their impact on various regions,
including the UAE. This study is an invaluable tool for industry stakeholders seeking to navigate
and leverage the dynamic changes driving the future of mobility.

 

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