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May 7, 2018
The Impact of VAT on Key Kuwaiti Sectors
This article was originally published in Kuwait Times. Decrease in oil prices have led the member countries of GCC in search for alternative means of revenue. One way was to introduce a common tax called Value Added Tax (VAT) in the region. On July 09, 2017 two members of GCC, Saudi Arabia and UAE ratified the VAT framework agreement for the introduction of VAT in the region. With a tax rate of 5%, it will be applicable in the entire...
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April 2, 2018
Trade Wars – How will it play out for the GCC?
The fears of a trade war were looming large ever since Donald Trump took charge as the U.S president. In an attempt to revive domestic industries, the U.S president has decided to levy charges on imports of steel and aluminum, signaling a potential trade war. After taking nearly a decade to bring back the optimism to the world economy post-financial crisis, the development of a trade war could become a deterrent to global growth. Trade wars are an unfavorable outcome...
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March 22, 2018
How Inflationary is VAT in the GCC?
The residents of Saudi Arabia and the UAE, who had long enjoyed a tax-free existence, were finally subject to a Value Added Tax of 5% on goods and services, from Jan 1st 2018. The introduction of VAT, which is seen as one of the biggest policy shifts in recent times across the region, is expected to bring in additional revenue to the respective governments. VAT being a consumption based tax, will have implications on customer spending as well as inflation....
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January 11, 2018
Why are the breakeven oil prices coming down for GCC countries?
Fiscal breakeven oil prices (in USD/bbl) Source: IMF Fiscal break-even oil price is the minimum oil price needed to meet the spending commitments of oil-exporting country while balancing its budgets [BEP = {(Government Expenditure minus Non-oil revenue)/Oil quantity produced} + per barrel cost of production] (Fiscal Breakeven Oil Price). Prior to the collapse of oil prices, fiscal break-even oil prices were rising rapidly in GCC countries, reflecting the substantial increase in government spending by an annual average of 11 per...
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January 7, 2018
How do you mimic the price performance of spot oil market? – The answer is its nearly impossible
Crude oil by a wide margin is the most traded commodity in the world and arguably the most important. Having hit lows of less than USD 43 a barrel in the summer, WTI crude has spent the second half of the year on a steadily rising trend and looks set to end 2017 somewhere close to USD 60. The main driving force behind the oil price rise has been OPEC’s decision to maintain oil production cuts that started in December...
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December 4, 2017
Paris Climate Accord – Which side will the GCC pick?
The Paris Accord, hailed as one of the biggest environmental treaties ever negotiated has now hit a roadblock as the U.S has stated its intention to withdraw from the agreement. In terms of size, the agreement supersedes the Kyoto protocol of 1997 signed by 41 nations that set emission targets for the participating nations. Despite countries meeting the expected target, it failed to make the desired impact as China and U.S, the world’s largest emitters of greenhouse gases were not...
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November 26, 2017
Emerging startups in the Arab region – Can they make it big?
Arab Region's Top Start-ups Top 10 from GCC Source: Forbes, Marmore research UAE – Start-up hub of the GCC UAE has been the prime destination for budding start-ups in the Arab region offering a plethora of opportunities for prospective business owners. It is one of the most diversified economies in the GCC and home to some of the most highly valued start-ups in the region like Careem and Fetchr. Prime reasons to it are the measures taken by the government...
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November 15, 2017
How much more can KSA cut production
Saudi Arabia plans to pump about 9.77mbpd in November, which would be its lowest output since January 2015. According to the Saudi energy ministry, the decrease in allocations for November includes a full 290,000-bpd reduction over and above the 486,000 bpd that Saudi Arabia pledged to cut as part of its commitment. Table: Saudi Arabia Oil Supply (Jan-2015 to Sep-2017) Source: Reuters, Marmore Research Considering Saudi Arabia’s commitment to do whatever it takes to end the oil glut, it is...
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October 24, 2017
Saudi Aramco’s India Investment – To where is the oil flowing to?
Saudi Aramco is arguably one of the world’s largest Oil and Gas Company in terms of revenues and reserves that they control. To give an idea of its size, Aramco produces close to 10.3Mn barrels per day and its closest rival, the Russian state-owned Rosneft produces a third of that. Given their relative dominance in this space, it is surprising that only recently Saudi Aramco has opened its office in India and plans to invest in India’s downstream opportunities including...
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August 17, 2017
Should GCC Countries be content with the Food Security Rankings?
Food Security Index Ranking 2016 Country Affordability Availability Quality & Safety Overall Rank US 3 1 3 1 UK 11 5 22 8 Qatar 1 43 25 20 Japan 23 23 19 22 Oman 32 21 25 26 Kuwait 6 40 34 27 UAE 3 49 43 30 KSA 27 36 44 32 Bahrain 20 38 51 33 China 51 32 40 42 Egypt 74 37 58 57 Source: GFSI Dependency on imports in GCC Food security is a perennial...