Business

MANAMA — With a multibillion dollar economic revamp in full swing, tiny Bahrain is vying to keep pace with its Gulf neighbours after more than a decade beset by political unrest.

It's a difficult path for the island nation that is a neighbour to gas-rich Qatar and connected by a causeway to Saudi Arabia, a key ally and the world's biggest oil exporter.

The United Arab Emirates, another regional powerhouse with well-developed trade, tourism and financial industries alongside its large oil sector, is just a short flight away.

Bahrain has witnessed turbulence since the crushing of an uprising in 2011 but has since begun a modernising facelift, instigating economic and fiscal reforms.

Extensive land reclamations are literally changing the shape of the country, while a host of gleaming new buildings dot the skyline and cranes work above nascent housing developments.

The small, non-OPEC oil producer, is seeking to decrease its reliance on its oil sector which accounts for 80 per cent of revenues, much of that from refining.

"The principles are clear: We want to grow. We want to grow faster than the world," Khalid Ibrahim Humaidan, head of the government's Economic Development Board, told reporters this month in Manama, the capital.

An unexpected boost could come from the announcement of diplomatic ties between Saudi Arabia and Shiite-majority Iran, which Bahrain accused of stoking unrest during the 2011 protests.

"In an optimistic scenario, the Saudi-Iran rapprochement would gather pace and create a more conducive environment for political conciliation within Bahrain which in turn could derisk the economy," Gulf Economist Justin Alexander, director of consultancy group Khalij Economics, told AFP.

Building spree 

Bahrain, a monarchy whose Cabinet is appointed by the king, boasts a rich commercial tradition dating back to its days as a flourishing pearling centre.

Consisting of one large island and about 30 smaller ones, it was a British protectorate until 1971, becoming a financial hub that initially led its neighbours in terms of economic diversification.

Increased regional competition, mainly from Dubai and Doha, but also political instability and economic challenges, especially after global oil prices plunged in 2014, have all hurt Bahrain.

The 2011 uprising, inspired by revolutions sweeping the region, ended in a crackdown against demonstrators who had demanded an elected government.

Sunni-ruled Bahrain, assailing the movement as a plot by Shiite theocracy Iran, banned opposition parties and jailed political opponents, drawing harsh international criticism.

In 2018, wealthier Gulf countries agreed to support Bahrain's economic goals with $10 billion in loans, giving rise to the current building spree.

As well as land reclamations for new housing projects and skyscrapers around Manama, Bahrain is building diving centres including an underwater park.

A new $1 billion passenger terminal at its international airport opened last year, doubling annual capacity to 14 million passengers.

Bahrain has also built one of the region's biggest conference centres, aiming to attract international events and visitors.

Investors' concern 

The country's financial planners aim to balance the national budget by next year, with its Economic Vision 2030 focused on reducing reliance on oil and gas and developing finance, logistics and tourism.

Many visitors to Bahrain stream across the 25 kilometre King Fahd Causeway from Saudi Arabia where alcohol is banned, unlike its more laid-back neighbour.

Manama wants tourism to contribute 11.4 per cent of GDP by 2026, up from around seven percent currently.

Last year, real GDP increased 4.9 per cent, the kingdom's highest growth since 2013, the finance ministry said on Monday.

"We're confident that we will continue going down that path and achieve the results that we desire," said Humaidan, who spoke as Bahrain hosted its annual Formula One Grand Prix, an event it has held since 2004.

With a footprint the size of New York City, Bahrain is a Western ally and hosts the US Navy's Fifth Fleet and a smaller British base.

The kingdom of 1.4 million, half of whom are foreigners, enjoys a strategic location along shipping routes — making it an important logistics hub, but also placing it at the heart of regional conflicts.

"Bahrain has tried to develop new sectors, such as fintech... However, since the 2011 protests and crackdown, the tensions in Bahrain's society have become a concern for investors," said Alexander.

But after the Chinese-brokered deal to end Iran and Saudi Arabia's seven-year rift, Tehran said it would also welcome restoring ties with Manama.

At the same time, Bahrain's Crown Prince Salman Bin Hamad Al-Khalifa, 53, who was appointed prime minister in 2020, is among a new generation of Western-educated Gulf leaders positioning themselves as a force for change.

BEIJING — Alibaba announced Tuesday that it would split into six business groups in one of the most significant overhauls of a leading Chinese tech firm to date.

The Hangzhou-based firm is one of China's most prominent tech giants, with business operations spanning cloud computing, e-commerce, logistics, media and entertainment, and artificial intelligence.

Daniel Zhang, the company's chairman and CEO, said in a statement that the restructuring would enable each separate business to pursue its own fundraising and public listing plans.

Alibaba claimed the moves were intended to "unlock shareholder value and foster market competitiveness".

Under the new arrangement, each of the six newly established units will be managed by its own CEO and board of directors.

A key exception to the restructuring is Taobao Tmall Commerce Group — the operator of one of China's top online purchasing platforms — which will remain wholly owned by Alibaba Group.

Zhang will remain in his post as CEO of the company, although day-to-day operations of the individual business units will be ceded to the new management bodies.

The company said the new structure would bring greater market visibility to the value of its diverse business operations.

These changes will not affect Alibaba shares currently listed in New York and Hong Kong, the firm said.

Aiming for a more "nimble structure", the reorganisation will also involve cuts to the firm's middle and back office functions.

Recent years have seen the Internet giant face unprecedented headwinds as Beijing has imposed tighter restrictions on the domestic tech industry.

Combined revenue at China's internet companies shrank by just over 1 per cent to 1.46 trillion yuan ($212 billion) in 2022, the first contraction in almost a decade, according to data from the Ministry of Industry and Information Technology.

Alibaba founder Jack Ma has kept a low profile since late 2020, when a speech he made attacking Chinese regulators was followed by Beijing pulling the plug on Alibaba affiliate Ant Group's planned IPO.

Having ballooned into a sprawling corporate behemoth since its founding in 1999, the company has been seeking new ways to drive growth and reinvigorate its development.

Referring to the plan as a "transformation", Zhang said in the statement that it would make Alibaba "more agile, enhance decision-making, and enable faster responses to market changes".

Ma has been spotted around the world over the past two years, but made a rare public appearance in China on Monday after his fall from grace.

The celebrity entrepreneur has recently emphasised the need for Alibaba to embrace artificial intelligence technology, as new tools such as ChatGPT appear poised to reshape the global industry.

RIYADH — The chairman of Saudi National Bank (SNB), the main shareholder of troubled lender Credit Suisse which was bought out this month, has resigned, a statement said on Monday.

The Saudi bank's board of directors "accepted the resignation" of Ammar Al Khudairy "due to personal reasons", said the statement published on the Saudi stock exchange.

Credit Suisse's shares plummeted on March 15 after Al Khudairy said the Saudi bank would not raise its stake from 9.8 per cent due to regulatory constraints.

The following day, Credit Suisse rallied on the stock market after grabbing a $54 billion central bank lifeline in a bid to restore investor confidence.

But fears about the health of the broader financial sector led to its takeover by domestic rival UBS on March 19.

In the aftermath of his comments, Al Khudairy tried to minimise what he described as a "panic". 

"If you look at how the entire banking sector has dropped, unfortunately, a lot of people were just looking for excuses," he told CNBC television.

"It's panic, a little bit of panic. I believe completely unwarranted, whether it be for Credit Suisse or for the entire market."

The Wall Street Journal reported last week that Saudi National Bank's $1.5 billion investment in Credit Suisse was made at the behest of the kingdom's de facto ruler, Mohammed Bin Salman.

It said that some officials at the Saudi sovereign wealth fund thought the move "was too risky... raising legal issues and the potential for large future losses".

'Multiple failures' 

In an interview with AFP following Al Khudairy's comments, Saudi Finance Minister Mohammed Al Jadaan did not comment on specific financial institutions but said "multiple failures" including on the regulatory front had fuelled troubles in the banking sector — "whether it is supervisory, whether it is management, whether it is concentration, whether it is mismatch of asset liability".

He added that he did not believe those risks applied to Saudi Arabia. 

"Just focusing on Saudi, you will go back to history, and you will hear a lot of comments that the two regulators in Saudi Arabia are quite conservative. And that's what we then benefit from in a situation of distress," he said. 

A media report on Sunday said the Swiss financial regulator Finma was probing how to hold bosses at Credit Suisse to account following its emergency takeover by UBS. 

"We are not a penal authority but we are exploring the corresponding possibilities," Finma chair Marlene Amstad was quoted as saying in an interview with NZZ am Sonntag weekly. 

Saeed Mohammed Al Ghamdi, who had been serving as Saudi National Bank's CEO, will replace Al Khudairy as chair, Monday's statement said. 

Talal Ahmed Al Khereiji has been appointed acting CEO, it said.

NEW YORK — Elon Musk has put the current value of Twitter at $20 billion, less than half the $44 billion he paid for the social media platform just five months ago, according to an internal e-mail seen by American news media.

The e-mail to employees referred to a new stock compensation programme in the San Francisco-based company and the allocation of shares to employees of X Holdings, Twitter's umbrella company since Musk purchased it in late October.

The compensation plan values the platform at $20 billion, slightly more than Snapchat's parent company Snap ($18.2 billion) or Pinterest ($18.7 billion), both of which are publicly traded, unlike Twitter. 

Musk, who is also the chief executive of Tesla Inc. and aerospace group SpaceX, said that Twitter would allow its employees to cash in shares every six months. 

A query from AFP emailed to Twitter's communications department generated an automatic response in the form of a poop emoji.

In the internal email, Musk describes the brutal contraction in Twitter's value. He says the platform faced such grave financial difficulties that at one point it was on the verge of bankruptcy.

"Twitter was trending to lose ~$3B/year," Musk said in a message posted Saturday on the platform.

He cited a revenue drop of $1.5 billion a year and a debt-servicing burden of the same amount — leaving it with "only 4 months of money".

Musk, Twitter's majority shareholder, added simply: "Extremely dire situation".

But he then said that "It looks like we will break even" in the second quarter of the year, with advertisers — many of whom fled the platform after the mercurial billionaire bought it — now beginning to return.

Since taking control, Musk has sharply cut the group's payroll from 7,500 employees to fewer than 2,000.

He said in the email that he sees a "clear but difficult path" to a valuation of $250 billion, without specifying how long that might take.

However, in another setback for the company, fragments of Twitter's source code were published on the development platform GitHub, the latter told AFP on Sunday, confirming a report by The New York Times.

GitHub removed the files from its site at Twitter's request, but their brief exposure could allow hackers to identify flaws in Twitter's original software.

AMMAN — Arab Jordan Investment Bank (AJIB) and Standard Chartered Bank (SCB) entered into an agreement on Sunday for the acquisition of Standard Chartered’s business in the Kingdom, following the Central Bank of Jordan's approval, according to a statement from AJIB.  

Under the agreement, the Corporate, Commercial & Institutional Banking, and Consumer, Private & Business Banking businesses of Standard Chartered in Jordan will be migrated to AJIB. Additionally, all SCB Jordan’s employees will be transferred to AJIB. The two banks will work closely in the coming months to provide a seamless transition for its their clients and staff.

According to Sunil Kaushal, the regional chief executive officer of Standard Chartered Bank in Africa & the Middle East, the agreement with AJIB for the sale of the bank’s business in Jordan is aligned with its global strategy to deliver efficiencies, reduce complexities and redirect resources within the AME region to areas with the greatest potential to drive scale, grow and better support clients. 

“Our agreement with AJIB will allow us to accelerate our strategy and leverage on their record of previous acquisitions to meet the financial needs of our clients. We will work closely with AJIB to service the needs of our global clients in Jordan. While we will be selling our local business, we will continue to facilitate and be a bridge for international capital flows into Jordan,” Sunil said. 

Commenting on the agreement, Hani Al Qadi, chairman of the board of directors of Arab Jordan investment Bank, said: “We are pleased to sign this agreement today and to have been selected by Standard Chartered Bank as the preferred buyer. Standard Chartered Bank is a leading regional and international bank with more than 160 years of experience, and has been present in Jordan for more than 98 years." 

"We are also pleased to announce that this agreement has already been approved by the regulatory authorities. We look forward to working closely with Standard Chartered’s team over the coming few months towards achieving a successful conclusion to this transaction without any impact on clients and employees.”

This purchase falls within AJIB’s strategy to grow its banking business market share in Jordan, which continues to expand following the bank’s series of landmark acquisitions of HSBC's banking business in Jordan in 2014, and the National Bank of Kuwait’s banking business in Jordan in 2022. Signing this agreement further enhances AJIB’s presence in the Jordanian banking sector, according to the statement. 

BRUSSELS — The European Union and Germany on Saturday said they had struck a deal after a dispute over the planned phaseout by 2035 of the sale of cars using fossil fuels.

A landmark deal to prohibit new sales of fossil fuel cars from 2035 is key to the bloc’s ambitious plan to become a “climate-neutral” economy by 2050, with net-zero greenhouse gas emissions.

But in an unprecedented move earlier this month, leading car producer Germany blocked the agreement at the last minute after it had already been approved under the traditional EU legislative process.

Berlin demanded that Brussels provide assurances the law would allow the sales of new cars with combustion engines that run on synthetic fuels, the focus of the breakthrough announced on Saturday.

“We have found an agreement with Germany on the future use of efuels in cars,” EU environment commissioner Frans Timmermans said on Twitter. 

“We will work now on getting the CO2-standards for cars regulation adopted as soon as possible.”

German Transport Minister Volker Wissing said on Twitter that vehicles with combustion engines could continue to be registered after 2035 if they only use fuels that are neutral in their CO2 emissions.

Weeks-long negotiations between the European Commission and Germany to break the impasse centred on Berlin’s desire for a stronger commitment on synthetic fuels than that presented in the initial text.

The synthetic fuels Germany wanted an exemption for are still under development and produced using low-carbon electricity. The technology is unproven, but German manufacturers hope it will lead to the extended use of combustion engines.

Environmental NGOs have disputed the value of synthetic fuels in the automotive sector’s transition towards clean energy sources, saying they are too expensive, polluting and energy-intensive.

Some industry experts have expressed doubt over whether vehicles powered by synthetic fuels can compete in a market against electric cars that are expected to become cheaper over time.

Audi boss Markus Duesmann told the Der Spiegel weekly that synthetic fuels “will not play an important role in the medium-term future of passenger cars”, even if they prove to be helpful in the green transition.

Domestic politics at play 

Some observers saw domestic political calculations behind Germany’s initial move to block the deal, which ruffled the feathers of some of Berlin’s EU partners.

German Chancellor Olaf Scholz’s Social Democrats form a coalition government with the Greens and the liberal FDP Party, which initiated the move.

The FDP, which has lost five regional elections in a row, is struggling in national polling and hoped to gain the support of voters hostile to a ban on combustion engines.

Scholz was seen as acting to maintain the unity of the coalition by aligning with the FDP position against the Greens.

Fellow major car manufacturer Italy, Poland and Hungary joined Germany in a small alliance against the combustion engine ban.

The EU aims to reduce CO2 emissions from new vehicles to zero, with the planned combustion engine plan effectively imposing electric vehicles from the middle of the next decade.

The industry has anticipated the new EU rules by massively investing in electric vehicles in recent years.

BEIJING — A massive new gas pipeline to China could help reduce Russia's reliance on European buyers, but analysts say the project reveals a growing imbalance between the longtime strategic allies.

Beijing emerged as an economic lifeline for Moscow last year, especially through energy purchases, after Western sanctions over Russia's invasion of Ukraine cut off crucial trade links.

Moscow is confident that the new pipeline — Power of Siberia 2 — is going ahead, but Beijing has so far avoided an explicit commitment.

Analysts say the lagging response shows an imbalance favouring Beijing in energy deals between the two countries — as well as China's wariness of over-reliance on Russia for fuel.

China is "in no rush to sign anything unless the proposal is favourable and is shaped on China's terms", researcher Marina Shagina at the International Institute for Strategic Studies (IISS) in Berlin told AFP.

The project was discussed during Chinese President Xi Jinping's summit with Russian leader Vladimir Putin in Moscow this week.

Putin said after talks with Xi that "all agreements have been reached" on the Power of Siberia 2 project.

But their joint statement only said the two sides will work on pushing forward "research and consultation" on the pipeline.

The Chinese foreign ministry did not respond to a request for more details.

Power of Siberia 2 could facilitate the transport of 50 billion cubic metres of gas to China annually, roughly on par with the total capacity of the controversial Nord Stream 2 pipeline from Russia to Germany.

A senior Russian official suggested last year that it could strategically replace Nord Stream 2.

'Russia is desperate' 

Previously the world's largest exporter of liquefied natural gas (LNG), Russia's gas exports plummeted in 2022 after a flurry of Western sanctions over the Ukraine war.

As Europe looked for other suppliers, Moscow turned to alternative buyers including China, with which it is already linked by the first Power of Siberia pipeline.

In 2022, China overtook Germany to become the top buyer of Russian energy. It has paid a total of $12.2 billion for coal, gas and oil from Russia so far this year, according to the Helsinki-based Centre for Research on Energy and Clean Air.

Russian gas deliveries to China through the existing Power of Siberia pipeline reached a record 15.5 billion cubic meters last year.

But sales to Asia pale in comparison with the 155 billion cubic metres of gas Russia exported to Europe prior to the Ukraine war.

"Russia is desperate to send as much gas as possible eastwards as Europe strives to reduce its dependence on Russian gas," said Philip Andrews-Speed, a senior research fellow at the National University of Singapore's Energy Studies Institute.

And a potential Power of Siberia 2 gas deal would consolidate China as a long-term market, said Jaime Concha, a gas market expert at industry analysis firm Energy Intelligence. 

Russia's existing pipeline infrastructure "was mostly structured to cater to the European market", Concha told AFP.

Building up an equivalent network in Asia would be costly and time-consuming, he said, "which shows how few alternatives Russia has".

'Lessons from Europe' 

China, meanwhile, has sought to ensure a diverse set of energy suppliers.

It has signed a flurry of long-term gas deals around the world in recent years, including a $60 billion, 27-year agreement with Qatar in November.

"Chinese policymakers also observe the lessons from Europe of overreliance on Russian energy imports," said Yan Qin, lead carbon analyst at Refinitiv.

With a strengthened position in energy negotiations with Russia, "China emerged as the winner from the war in Ukraine", IISS researcher Shagina told AFP.

"Beijing capitalised on Moscow's international isolation and ramped up its purchases of heavily discounted Russian oil, gas and coal."

At the same time, China has felt the bite from the turmoil in global energy markets.

The war in Ukraine has pushed thermal coal prices at China's Qinhuangdao port "almost as high as Europe", Qin said, while rising LNG prices have hit gas power plants and industrial users.

Ultimately, she said, the Power of Siberia 2 pipeline could "enhance China's gas imports capacity greatly and potentially reduce China's LNG imports demand".

SAN FRANCISCO — Google on Tuesday invited people in the United States and Britain to test its AI chatbot, known as Bard, as it continues on its gradual path to catch up with Microsoft-backed ChatGPT.

Bard, ChatGPT and other similar artificial intelligence apps churn out essays, poems or computing code on command and have taken the world by storm as the biggest new thing in tech since the advent of the iPhone.

Google CEO Sundar Pichai told staff that after testing Bard with 80,000 Google employees, the chatbot would be tested with the public in the United States and Britain as a "first step" before going out to more countries in other languages.

"As more people start to use Bard and test its capabilities, they'll surprise us," Pichai said in a memo to staff seen by AFP.

"Things will go wrong. But the user feedback is critical to improving the product and the underlying technology," added Pichai, who had faced some criticism within the company for rushing to catch up with Microsoft.

In the launch, people wishing to play with Bard can sign up on a waiting list at bard.google.com website, distinctly separate from the tech giant's search engine.

"We've learned a lot so far by testing Bard, and the next critical step in improving it is to get feedback from more people," Google vice presidents Sissie Hsiao and Eli Collins said in a blog post.

As exciting as chatbots can be, they have their faults, Hsiao and Collins cautioned.

'Constantly learning' 

Google has so far proceeded more carefully in its rollout of generative AI to consumers, in contrast to Microsoft's choice to swiftly make the products available despite reports of problems.

ChatGPT's OpenAI is backed by Microsoft, which earlier this year said it would finance the research company to the tune of billions of dollars.

Asked by AFP how its product was different from ChatGPT, Bard said that unlike its Microsoft-backed rival it was "able to access and process information from the real world through Google Search and keep my response consistent with search results."

The bot also underlined that it was still "under development, while ChatGPT has been released to the public. This means that I am constantly learning and improving, while ChatGPT is likely to remain relatively unchanged".

OpenAI recently released a long-awaited update of its AI technology that it said would be safer and more accurate than its predecessor.

Much of the new model's firepower, known as GPT-4, is now available to the general public via ChatGPT Plus, OpenAI's paid subscription plan and on an AI-powered version of Microsoft's Bing search engine.

Microsoft has said that its quick adoption of generative AI has seen usage of its Bing search engine increase in recent weeks, but it is still a clear underdog to Google, which captures about 85 per cent of the global search engine market.