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Russians rush to shop amid fast-weakening rouble, fears for future

In bright sunshine, a long queue of shoppers snaked outside an IKEA store near Moscow this week. Similar scenes were repeated across Russia as families rushed to spend their fast-depreciating roubles at the Swedish retailer which is exiting the crisis-hit country.
Russians are bracing for an uncertain future of spiraling inflation, economic hardship and an even sharper squeeze on imported goods.

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The rouble has lost a third of its value this week after unprecedented Western sanctions were imposed to punish Russia for invading Ukraine. The moves froze much of the central bank’s $640 billion in reserves and barred several banks from global payments system SWIFT, leaving the rouble in free-fall.
Cities across Russia were outwardly calm, with little sign of the crisis devastating financial sector and markets. Except for the lines of people looking to stock up on products – mostly high-end items and hardware – before shelves empty or prices climb further.
“The purchases that I planned to make in April, I urgently bought today. A friend from Voronezh also told me to buy for her,” shopper Viktoriya Voloshina told Reuters in Rostov, a town 217 kilometers (135 miles) from Moscow.
Voloshina said she was looking for office shelves and tables and also shopping on behalf of a friend from another town. “My heart is breaking,” she added.
Dmitry, another Moscow resident, lamented rapid price rises.
“The watch I wanted to buy now costs around 100,000 rubles, compared to 40,000 around a week ago,” he said, declining to give his surname.
But the spending burst visible this week may peter out.
While there is no palpable sign of panic, the wipe-out of rouble savings and the doubling of interest rates to 20 percent will squeeze mortgage holders and consumers.
Financial conditions — reflecting availability of credit in the economy — have tightened brutally this year, which Oxford Economics predicted would shrink domestic demand by 11 percent by year end and raise unemployment by 1.9 percentage points in 2023.
Zach Witlin, an analyst at Eurasia Group, notes sanctions are already hitting consumers via prices hikes and digital payments disruptions.
While consumers are not directly targeted, “fear and caution are exaggerating the impact,” with the exit of foreign brands such as IKEA creating a “snowball effect,” he added.

Imports to isolation

Cars, machinery and car parts comprised nearly half of Russia’s $293 billion imports last year, according to the Federal Customs Service.
The government’s strenuous import cutbacks in recent years mean 2021 imports remained 7 percent below 2013 levels, before the first sanctions following Russia’s 2014 annexation of Crimea.
It has also beefed up trade with China, which is the only country to boost exports to Russia since 2014.
But further declines look inevitable as the rouble plunges, insurers refuse cover to businesses exporting to Russia and shippers back away from Russian ports whether to export or to import.
While only a few Russian companies are targeted by sanctions “all of them will feel the chilling effect,” said Matt Townsend, sanctions partner at law firm Allen & Overy. “This is why sanctions are a very effective measure to isolate a country.”
The immediate economic shock will cause a 35 percent GDP contraction in the second quarter and a 7 percent decline in 2022, JPMorgan predicted. But “growing political and economic isolation will curtail Russia's growth potential in years to come,” it added.
That may come about if restrictions “limit the acquisition of technology needed to support Russia's highest value industries,” RBC Global Asset Management warned.
The Biden administration is preparing rules to curb Moscow’s ability to import smartphones, aircraft parts and auto components.
But multinationals, from tech firms Apple and Microsoft to consumer goods producers Nike and Diageo, have severed links with Russia, meaning shoppers will have limited access to the consumer goods they have grown accustomed to over three decades.
Chinese companies, so far staying put, could grab some market share but they too could fall prey to secondary sanctions as many of their products such as smartphones use US origin technology.
Some Russians are not staying to find out. Lidia, a freelance worker from Rostov said the money transfer curbs were complicating receiving payments from abroad.
“The sanctions have hit me very hard. Prices are already up around 20 percent…It’s a fact that you already can’t buy some medicines. Things will get worse,” she said.
“Today my family and I are leaving Russia.”

Read more:

US condemns ‘reckless’ Russian attack on Ukraine’s nuclear plant

Saudi Arabia, Russia foreign ministers review Ukraine invasion, Middle East security

Heavy fighting to the north-west of Kyiv continues: UK

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Saudi Fund for Development Celebrates 50 Years of Global Impact with Over $20 Billion in Development Contributions

The Saudi Fund for Development (SFD) celebrated its 50th anniversary in Riyadh today, under
the theme “50 Years of Global Impact.”The event brought together key development partners to
reflect on the SFD’s significant contributions to sustainable development worldwide. Over the
past five decades, the SFD has allocated over $20 billion, financing more than 800 development
projects and programs in vital sectors, including social infrastructure (education, healthcare,
water and sewage, and housing and urban development), communication and transportation
(roads, railways, airports and seaports), energy, agriculture, mining and industry, and others.
Since its inception in 1974, the SFD has been the international development arm of the Kingdom
of Saudi Arabia and has provided critical support to over 100 developing nations around the
world. With a strong focus on supporting countries to achieve the Sustainable Development
Goals (SDGs), the SFD has played a pivotal role in driving sustainable development in Least
Developed Countries (LDCs) and Small Island Developing States (SIDS).
During the event, SFD Chairman H.E. Ahmed Al-Khateeb emphasized the importance of
collaboration in driving global development. He highlighted that SFD’s success is deeply rooted
in its partnerships, with 27 development projects and programs in 23 developing countries in
2023 co-financed with other funders. He also underscored the need to forge new partnerships and
strengthen existing ones to create a world where every individual has the opportunity to reach
their full potential.
Reflecting on this significant milestone, the SFD CEO , Mr. Sultan bin Abdulrahman Al-
Marshad, stated: “As we celebrate five decades of impactful work, we are committed, now more
than ever, to supporting developing countries on their journey to economic self-reliance and
resilience. Our goal is to ensure that all children can go to school, that education is not a
privilege but something every child should have access to, and that families have access to
healthcare and basic vital services. Equally, we focus on critical infrastructure development, like
building roads and enhancing airports and sea ports, so that countries can thrive and engage in
economic activities and trade. This work is not just about financing; it’s about tangibly
improving lives, creating opportunities, empowering communities, and building a more
prosperous future.”
On the sidelines of the 50 th Anniversary Gala, the SFD and the Asian Development Bank (ADB)
signed a new $25 million agreement to co-finance a renewable energy development project in the
Solomon Islands. This marks the first project for SFD in the Solomon Islands. The primary aim

of the project is to develop renewable energy infrastructure, reduce dependency on fossil fuels,
and promote sustainable development in the region.
This agreement builds on SFD’50 years of transformative impact through development projects
that have spanned Africa, Asia and the Pacific, Latin America and the Caribbean, and Eastern
Europe.
This includes key projects such as the Metolong Dam in Lesotho, which received $25 million in
funding and now provides potable water to 280,000 people, enhancing water security and public
hygiene and health in the region. This is just one of the 433 projects across Africa, with a total
funding of $11.5 billion, which focuses on critical areas such as infrastructure and water security.
In Asia, the SFD has funded 271 projects with a total funding of $7.8 billion. One notable
example is the SFD’s contribution to the Mohmand Dam Hydropower Project in Pakistan, which
has an overall project cost of $240 million. The projects contributes to the country’s energy
security and flood resilience by generating 800 megawatts of renewable energy and storing 1.6
million cubic meters of water.
In Latin America and the Caribbean, the SFD has financed 21 projects, totaling $951 million
USD. This includes rehabilitating the Water and Sewage System in Havana, Cuba, where the
SFD has allocated $35 million to enhance public infrastructure. Another significant initiative is
the rebuilding of St. Jude Hospital in Saint Lucia, supported by $75 million funding, which will
contribute to providing high-quality health services to citizens in a modern and sophisticated
facility and providing sufficient medical supplies and equipment to support the effective
operation of the hospital.
In Eastern Europe, the SFD has contributed to 14 projects with a total investment of $303
million. A key initiative is the construction of the Tirana-Elbasan-Chokos-Chalf-Ploce Road,
where the SFD provided $73.8 million to rebuild essential roads and bridges, thereby boosting
regional economic activities.
During the celebration, esteemed speakers shared insights on the SFD’s pivotal role in global
development, and in championing critical partnerships and collective action and response.
Keynote speakers included:

 HRH Prince Turki bin Faisal Al Saud, Founder and Trustee of the King Faisal
Foundation
 H.E. Ahmed bin Aqeel Al-Khateeb, Chairman of the Board of Directors of the SFD
 H.E. Akinwumi Adesina, President of the African Development Bank Group
 H.E. Muhammad Al Jasser, Chairman of the Islamic Development Bank

These global development leaders emphasized the SFD’s commitment to fostering sustainable
growth in countries and communities with the most pressing developmental needs. The gala was attended by more than 500 people, including ministers, heads of regional and international organizations, ambassadors, representatives of the United and other distinguished
guests. As the SFD looks to the future, it reaffirms its mission and pledge to drive international
development efforts, on behalf of the Kingdom of Saudi Arabia, and to contribute to global
stability, social progress, and economic prosperity for future generations.

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Jordan warns of escalation in southern Lebanon

Jordan warned on Sunday of the increasing escalation in southern Lebanon and a potential regional war in light of the ongoing Israeli aggression in Gaza, Jordan News Agency (Petra) reported.

Foreign Ministry spokesperson Sufian Qudah discussed supporting Lebanon, its security, stability and the safety of its people and institutions, noting the need to adhere to Security Council Resolution 1701 to reduce and prevent further escalation and protect the region from the risk of slipping into a regional war.

Qudah added that the Israeli war on Gaza and the failure to reach an exchange agreement that leads to an immediate and permanent ceasefire puts the entire region at risk of the conflict expanding.

He discussed launching an effective international movement that imposes an immediate cessation of the aggression on Gaza.

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China issues guidelines for coordinated digital, green transformation

China’s Office of the Central Cyberspace Affairs Commission and nine central departments have issued new guidelines for the coordinated transformation toward digital development and green growth, Xinhua News Agency reported.

Published on Saturday, the guidelines focus on two main areas: promoting the green, low-carbon development of digital industries and accelerating the green transformation of various sectors through digital technology.

They aim to accelerate the coordinated transformation toward digital development and green growth, promote the integration of emerging technologies with green, low-carbon industries, and enhance traditional industries using digital and green technologies.

Outlining fundamental principles, the guidelines specify the roles of authorities, industry associations, universities, research institutes and businesses in driving this transition.

They provide a three-part framework covering the basic capacity, technological systems and industrial systems for digital-green integration.

Regions are encouraged to focus on high-quality development, develop new quality productive forces, leverage local resources and create specialized industries and functional advantages to accelerate coordinated digital and green development.

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