Author: AsiaOne

Egypt has signed seven Memoranda of Understanding (MoUs) with global developers for green hydrogen and renewable energy ventures in the Suez Canal Economic Zone (SCZONE). It promises investments surpassing $40 billion over the next decade.

The Egyptian government signed agreements with international developers, anticipating investments of about $12 billion for a preliminary pilot programme and an additional $29 billion for the first phase. Ayman Suleiman, CEO of the Sovereign Fund of Egypt, emphasised the growing interest from investors in green hydrogen projects, highlighting the programme’s significance in steering Egypt towards sustainable initiatives.

Along with representatives from the Suez Canal Economic Zone Authority and the New and Renewable Energy Authority, PM Mostafa Madbouly witnessed the signing. Hala El-Said outlined Egypt’s ambition to position itself as a regional green energy hub, citing successful projects such as Africa’s premier green ammonia plant.

A National Green Hydrogen Strategy released in November aims to reduce carbon emissions by 40 million metric tonnes by 2040 and contribute 5-8% to the global hydrogen market. Additionally, Egypt sealed a $15.6 billion deal with Chinese firms in November 2023 to boost renewable fuel manufacturing in the Suez Canal Economic Zone, promising approximately 9,000 job opportunities and establishing 11 projects.

On Wednesday, Namibia’s finance minister announced its economic growth forecasts for 2023 and 2024. He further announced a reduced budget deficit, primarily driven by robust performance in the oil and mining sectors.

Forecasts predict a 5.6% growth rate for the previous year and 4.0% for the current year, up from earlier estimates of 3.5% and 2.9%, respectively. Growth is expected to moderate to 3.9% in 2025, as per Ipumbu Shiimi’s budget speech.

The budget deficit for 2023–24 is estimated at 3.2% of GDP, down from 4.2%, and is forecast to remain at 3.2% of GDP in 2024–25. Shiimi emphasised that increased uranium production as a result of rising prices and ongoing petroleum exploration were the main factors driving the strong growth.

Although Namibia does not produce oil, significant interest from energy companies has been attracted following discoveries by TotalEnergies and Shell.

With a $750 million Eurobond maturing in October 2025, the government plans to retire $500 million at maturity and refinance the remaining $250 million in the upcoming fiscal year.

Shiimi also proposed corporate tax reforms to enhance competitiveness and a tax reduction for low-income households to alleviate financial burdens.

Indonesia and South Africa, leading coal exporters, target expanding thermal coal sales to India to regain lost market share. The competition intensified with the United States, Russia, and Australia seizing ground due to geopolitical shifts in trade routes.

South Africa, leveraging its low sulphur, high calorific value coal, eyes India’s growing steel industry. Kgabi Masia from Exxaro Resources anticipates supplying 60 million metric tonnes by March 2025. However, South Africa’s share in India’s thermal coal imports dropped to 16% in 2023 from 22% pre-pandemic, while Indonesia’s declined to 58% from 65%.

Ardian Rosadi Budiman, from Adaro Energy, projects Indonesia supplying up to 110 million metric tonnes to India in 2023, a 7% increase from 2022. Indonesia, the world’s largest thermal coal exporter, aims for a record output of 710 million metric tonnes this year. Despite domestic demand, Budiman is confident in India’s steady appetite for Indonesian coal.

Following Russia’s conflict with Ukraine, South Africa diverted coal supplies to Europe, reducing India’s share. Due to increased exports to China, Indonesia lost ground to Australia.

It emphasises the fluidity of global energy markets and the strategic importance of securing key trade partnerships. For Indonesia and South Africa, the Indian market remains crucial, prompting them to optimise strategies for sustained growth amid evolving market dynamics.

Brazil’s Finance Minister Fernando Haddad warned about global economic challenges as G20 finance leaders convened in Sao Paulo, grappling with divisions over Ukraine and Gaza conflicts. Haddad emphasized the need for G20 action on climate change and poverty amidst a “challenging” global economic environment.

Regarding the economic part of the communiqué, Tatiana Rosito, the coordinator for Brazil’s G20 financial track, reported successful discussions. Meanwhile, for Germany to agree to the statement, German Finance Minister Christian Lindner insisted on discussing geopolitical matters such as the conflict in Ukraine.

Lindner suggested funding Ukraine with money from Russian assets that were placed under lockdown, highlighting possible obstacles to a final agreement. Brazil’s aim to avoid contentious geopolitical matters is reflected in the draft communique’s sparse discussion of regional problems.

The G7 also convened to deliberate tactics against Russia, with U.S. Treasury Secretary Janet Yellen pleading with allies—supported by Canada—to release frozen Russian assets to support Ukraine.

The G20 gathering occurs amid global economic uncertainties, rising debt burdens, and inflation concerns. The Brazilian government advocates for greater representation for developing nations in the G20 and international financial institutions dominated by advanced economies.

Abu Dhabi’s Mubadala Investment Co. plans significant investments in artificial intelligence and space technology this year, prioritizing the United States.

Managing director Khaldoon Mubarak emphasized the shift from mere asset investment to fostering global progress at an investor conference in Abu Dhabi. They intend to deepen strategic investments in the UK, Europe, and France while expanding into healthcare, digital infrastructure, and financing, with an increased focus on Asia.

Mubadala, controlling $276 billion of assets, aims to drive progress by investing in solutions for global challenges, including dynamic markets in Asia. Despite not disclosing specific investment amounts, Mubarak emphasized increased long-term allocations for Asia, including Japan, China, Korea, and India.

Mubadala’s heightened focus on Asia implies confidence in the region’s economic resilience and investment potential. Mubarak clarified that investments are driven by opportunity rather than geopolitics, despite close UAE-China ties. However, concerns persist in Washington about Gulf-Chinese partnerships and the potential exposure of sensitive U.S. technology.

In partnership with Goldman Sachs, Mubadala announced a $1 billion private credit initiative focusing on the Asia Pacific, amidst efforts by the U.S. and its allies to counterbalance China’s regional influence. Mubadala’s strategic investments signal confidence in the future of global markets, particularly in Asia.

Vietnam intends to ratify the UN’s Free Trade Union Convention this year, aiming to prevent trade disputes but possibly unsettling some foreign firms. The move addresses labour rights concerns, crucial for its extensive trade partnerships.

Currently, Vietnam’s sole national union operates within the Communist Party framework. The country, a manufacturing hub hosting major international corporations like Samsung and Intel, heavily relies on commerce, surpassing its domestic economy by 160%.

By ratifying Convention 87, Vietnam aligns itself with global labour standards. While government officials have not confirmed the timeline, the International Labour Organisation expects Vietnam’s commitment to be ratified by October 2024.

Missed deadlines have implications; Canada, with over $10 billion in trade, may pursue sanctions under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The EU, with bilateral trade exceeding $65 billion in 2022, sees Convention 87 as crucial for compliance.

While empowering unions may discomfort some companies, including major investors like Samsung, it strengthens labour protections. The government plans to raise the minimum wage by 6% in July, adding to previous increases, and to impose higher taxes on large multinationals.

Despite concerns about union empowerment and wage increases, experts predict a minimal impact on foreign investment. As a result, Vietnam is resilient to changes in labour regulations beyond its cost competitiveness.