COVID-19 Prompts Iran to Re-open Drive-in Cinema

Iranians have not been able to roll into their local open-air cinema since the 1979 Revolution, but with movie theaters closed to curb the spread of COVID-19 the infamous drive-in made a comeback in Tehran last week.

Authorities quickly shut down the open-air movie theaters after the revolution for fear of the immoral acts that could take place in private cars under the cover of darkness. The combined desires of movie makers to get their work on to the screen, in spite of COVID-19, and a public hungry for entertainment heralded the drive-in movie theater’s return to Tehran on May 1.

The open-air cinema sits in a Tehran parking lot, underneath Milad Tower, and is showing a film titled “Exodus.” The project is a collaboration between Owj Arts and Media Organization and filmmaker Nurtaban, who have links with Iran’s hard-line Revolutionary Guard.

The film itself picks up a narrative popular with Iran’s hardliners and tells the tale of peasant cotton farmers who protest against the government, symbolic of moderate President Hassan Rouhani’s regime, after salty water from local dams lays waste to their crops. “Exodus” debuted in February at Tehran’s Fajr Film Festival but, due to COVID-19 cinema closures, could only be shown online until the drive-in cinema opened.

For film goers, it was not the movie that mattered but the opportunity for an outing and to experience something not seen in the rogue-nuclear state for over 40 years.

“It was very fascinating, this is the first time this is happening, at least for people my age,” 36-year-old Behrouz Pournezam told the Associated Press (AP).

Pournezam, who watched the movie from the safety of his car with his wife, told AP, “we are here mostly for the excitement to be honest, the movie itself didn’t matter that much. I didn’t care what movie it is or by whom or which genre.”

Fellow film buff Atefeh Soheili said she enjoyed the night out without having to stress about COVID-19 restrictions for a change.

“Now I’m sitting here with clean hands and if I want to eat something or relax I don’t need to worry about distancing from other people,” Soheili said.

Drive-in Prayers Gain Popularity

Iran’s newfound interest in the drive-in is not limited to the movies, with in-car prayer services gaining popularity around the country in conjuction with the Muslim holy month of Ramadan.

Mosques remain closed to help prevent the spread of COVID-19, which has killed over 6,200 people in Iran, making it one of the MENA region’s worst hit countries. Imams are instead keeping the spirit of Ramadan alive by holding drive-in prayer services for the faithful.

At Eram Park, a leisure complex outside Tehran, Shiite clerics wearing face masks lead chants and prayers beamed out to attendees via a big screen and their car radios. A service on April 30 drew a crowd of over 100 cars, neatly spaced out by diligent parking attendants.

“During this quarantine with mosques closed, we really missed (religious) ceremonies,” Fatemeh, 28, told France24.

“When I read on Instagram that this had been set up, I found it to be really creative and beautiful,” the chador-wearing public servant added.

The drive-in prayer phenomenon is being principally driven by maddahs such as Haj Saeed who organized the Eram Park event. Maddahs are a class of Iranian religious figures known as “eulogists of Imams,” who lead worshippers in signing the praises of the Prophet and twelve Shiite imams. They do not have a clerical rank but due to their close relationship with Iran’s hardliners have grown in social standing and political influence since the revolution.

Another influential maddah, Mansour Arzi, was arrested last week three nights into a month-long ceremony at Tehran’s Arg Mosque, in contravention of Iran’s coronavirus-related restrictions.

 

Western Leaders Divert Blame for Pandemic Response Failures to China

Months after the first cases of COVID-19 started to spread across the globe, national governments have finally settled on specific measures to stop the pandemic. Most governments have committed to painful economic shutdowns and providing large amounts of testing kits and personal protective equipment to national health systems.

Now that most countries have settled on their approach, national leaders and politicians have time to reflect on the origins of the crisis and establish ways to prevent a similar crisis in the future. These elites appear to refrain from critically evaluating their own mistakes or the economic system that ensured there were no stockpiles of medical goods or contingency plans in place.

Politicians cast blame

Instead, national leaders are pointing the accusatory finger to China. This could simply be a case of psychological projection, a human defense mechanism that “projects” personal failings onto others. It could simply be a way for them to cope with their failure to prepare for a pandemic that scientists have predicted for decades. National leaders must find a way to emotionally cope with their responsibility for the deaths of thousands of citizens who counted on their leaders for protection.

Lashing out at China could also be an underhanded political maneuver to avert blame and make China the guilty “other.” While observers tend to instantly recognize this behavior from US President Donald Trump, many politicians across the Western world have engaged in similarly craven political games that paint China as either guilty, responsible, or simply as an exotic foreign force to fear.

While it is impossible to confirm the motivations for politicians’ behavior, the arguments they are using reveal these failed leaders’ desperate maneuvering.

China’s initial response

The first accusation directed at China is that their early suppression of news on the virus allowed for its spread. Leaders point to the initial suppression of statistics and the silencing of whistle-blowers to frame China as responsible for the global pandemic.

Politicians who make this argument conveniently forget that China could not have known the scale of its problem, and brought in WHO experts and even American scientists from the Centers for Disease Control (CDC) when it became aware. One of the invited WHO experts stated that China’s “bold approach” had “changed the course of a rapidly escalating and deadly epidemic.”

Slow response

It was not Chinese authorities who were slow to act, but Western leaders. Even after detecting the first Western cases of COVID-19 in Italy and Spain, governments continued to drag their feet, waiting weeks before implementing the by-then proven lockdowns that China had successfully implemented.

Sources revealed on May 5 that US President Trump knew about the threat and refused to act as far back as January, in what MSNBC called “smoking gun evidence.”

As they did realize the scale of the problem, Western leaders started propagating what can only be described as “fake news” in an effort to mislead their citizens and keep them going to work, even as they potentially faced exposure to the virus.

Misinformation

British and Dutch national leaders imagined a fantasy where everybody would be protected by a “herd immunity,” even as scientists raised the alarm that there was no evidence that COVID-19 antibodies would prevent future infections. Leaders also conveniently ignored the fact that 60% of the population would have to become infected to realize “herd immunity.”.

Accusing misleading Chinese data is similarly craven, as many countries continue to manipulate their reported numbers, often ignoring deaths of people without a confirmed COVID-19 status. Thousands of elderly people in long-term care facilities died and Western governments did not count their deaths within reported numbers.

Misguided measures

Western media painted China’s lockdowns as harsh and overbearing but these arguments dissipated as nations around the world were forced to implement similar methods. The moment when most Western nations decided to respond revealed how little preparation had gone into the health aspects of combating the pandemic, even as governments mobilized trillions of euros and dollars to keep businesses and multinationals alive.

Elderly people died in their beds and health workers became disproportionately infected because Western leaders failed to ensure sufficient intensive care beds, protective equipment, and ventilators in the weeks they spent debating economic stimulus measures. Many developed nations still struggle to provide enough of the testing kits that scientists say are needed before lifting lockdowns should even enter consideration.

Influencing the WHO

Following Donald Trump’s decision to stop funding the WHO over its “China-centric” approach, Western media and politicians started painting China as a force manipulating the global health body. Knowing that the WHO itself has little practical power, and that Western leaders have structurally ignored WHO guidance, they continue to present China as the “puppet master” of our shared global health institute.

Just like most major countries, China is expected to voluntarily contribute to WHO funding. Unlike other countries, outsiders paint the millions that China has contributed as intended to manipulate the organization. The fact that the US still paid a significantly higher share, as it does for NATO, the IMF, and the World Bank, apparently does not pose any risk of manipulation.

Hiding structural problems

The hollow statements from Western leaders reveal a culture of self-preservation and economic prioritization that they are desperate to hide. Most Western countries are not serving their populations in this crisis, but instead offer up their workforces for economic exploitation in order to promote economic growth.

While our national leaders continue to pursue a strategy of perpetual growth on a planet with finite resources, perhaps the COVID-19 crisis will lead to a better understanding of the system in which we live. It is possible that many citizens will accept the political status quo as “common sense” as they did in response to the 2008 meltdown, given that many political leaders have seen their polls rise during the pandemic.

Back to ‘normal’

The world is starting to see politicians urging citizens to get back out and restart the economy, even knowing they cannot feasibly test enough people to ensure proper safety. That is not the priority.

We need to get back to extracting exorbitant volumes of oil. We need to get back to burning untold amounts of kerosene to fly tourists around the world to see our remaining natural splendor, while it lasts. We need to get back to having the world’s poorest people, including children, produce cheap disposable fashion items. We need people back in their offices, ready to fearfully obey their bosses in the undemocratic way that most of us have accepted as the normal way of living.

Whenever Western politicians express their concerns over China, we should keep in mind that their priorities often have very little to do with providing a better future for their people.

 

Read also: Amid Low Oil Prices, China’s Industry Restarts

Libyan Government Kidnaps Its Own Anti-Corruption Official

A militia linked to Libya’s interior ministry abducted Reda Gergab, Libya’s top anti-corruption official, on May 4. Gergab is the administrative director of the country’s audit bureau, tasked with uncovering corruption in the troubled country. 

The eyebrow-raising move highlights the structural nature of corruption and the disturbing links between militias and Tripoli-based ministries.

Libya’s anti-corruption efforts

The chaotic Libyan conflict has left its people impoverished and under constant threat of violence. With oil revenues decreased by 95% by hostilities, the country still holds over $70 billion in foreign currency, making it the 31st largest holder of foreign currency in the world, above Norway.

Because of the cash reserves built during the Qaddafi era, the country’s government has access to significant funds, requiring a strong government body tasked with providing oversight.

To address concerns, the UN-backed Government of National Accord (GNA) established the Libyan Audit Bureau as the highest financial regulatory authority in the country. The bureau is responsible for monitoring corruption and has come in frequent conflict with the government.

The Audit Bureau even rejected the GNA’s 2019 budget as it allocated an additional $4.8 billion for increased government expenses that could be due to corruption.

Kidnapped by the interior ministry

The Libyan audit bureau announced yesterday that its director had been abducted, accusing the GNA’s own interior ministry of “forcibly disappearing” the anti-corruption chief. 

“It is regrettable that the body entrusted by the community to implement the law is violating it,” the bureau stated.

For experts on Libyan politics, the move comes as no surprise as the UN-backed government continues to be run by a variety of militias who use violence and intimidation to gain and retain power.

The interior ministry did not deny the kidnapping but instead sought to justify it in a statement, arguing it directed its military force to abduct the official to stop him from investigating the distribution of funds intended to combat the local spread of COVID-19.

The interior ministry said the funds were urgently needed to “rescue the Libyan people” as part of the government “carrying out (its) responsibilities.”

Kleptocracy revealed

While the move by the interior ministry was undoubtedly intended to silence Libyan anti-corruption advocates, it has instead done the opposite. 

The blatant move reveals the far-reaching intertwining between GNA ministries and their opaque militia forces. It has similarly revealed the structural corruption that defines the Libyan government.

With the GNA making significant military advances against Libyan National Army (LNA) rival Khalifa Haftar, the move could signal an increased focus by government officials to establish a structural kleptocracy fueled by Libya’s foreign currency reserves and future oil revenues.

The fact that the kidnapping came just before the distribution of COVID-19 funds could indicate that Libya’s GNA is even eyeing these vitally needed funds for its own enrichment.

If the interior ministry manages to silence the Audit Bureau, there would be little resistance left to stop government officials and their militias from stealing Libya’s riches. The ministry admission to conducting the kidnapping could be a clear signal that the GNA is becoming more powerful in the country.

The GNA now has less of a need for foreign assistance due to Turkish intervention. This growing independence appears to have prompted the government to consider itself free to ignore international complaints and confiscate as much of Libya’s wealth as it can.

As the GNA continues to advance militarily, the UN will have a brief window of influence left before Libya’s overflowing coffers will be looted by the government it backed.

 

Read also: Haftar Vows to Build a New Libya

Israel Extends Mandate of Security Agency’s COVID-19 Phone Tracking

The Knesset Subcommittee for the Intelligence Services gave domestic security agency Shin Bet the go-ahead today to continue using Israeli COVID-19 patients’ mobile phone data to track their movements and interactions. 

Shin Bet controversially gained cabinet approval for the controversial virus surveillance program on March 17 in a move labeled a “power grab” and a threat to civil liberties. Critics argued that Israel’s health ministry is better placed to handle the data used to retrace COVID-19 positive citizen’s movements and notify others they have potentially infected.

The Israeli parliament requested a six-week extension of Shin Bet’s mandate but the intelligence subcommittee only prolonged the program by three weeks, meaning it will now expire on May 26. 

“I see this as the right balance between not using this tool for the entire period and ensuring there is a legislative process,” said subcommittee chair and Blue and White parliamentarian Gabi Ashkenazi.

Netanyahu’s newly-formed unity cabinet is in the process of drafting legislation to regulate Shin Bet’s access to and use of the mobile-data spying technology normally used for anti-terrorism purposes. Israel’s Supreme Court ruled it could not continue to use the technology past April 30 without legislative oversight. 

A law governing tracking is expected to be drawn up by May 18 and open to public comment for one week before the parliament holds a vote.

Defenders of the COVID-19 surveillance tool like Meir Ben-Shabbat, national security advisor and pandemic response coordinator, have pushed privacy concerns aside.

“We think that at this time… we need a tool that will allow surgical and quick action that will cut the chain of infection and allow the populace to continue with its life,” Ben-Shabbat said in response to the extension.

The health ministry’s head of public health, Sigal Sadetsky, agrees with Ben-Shabbat, arguing the program is more important than ever as lockdown restrictions are eased across Israel. Sadetsky also reported that of Israel’s 16, 268 COVID-19 cases, some 5,516 were identified thanks to Shin Bet tracking. 

Opposition MK’s from Yisrael Beytenu and Yesh Atid-Telem remain firmly opposed to the surveillance. 

“If the Shin Bet could monitor the speed of all cars, does that justify tracking all the drivers?” quipped Yesh Atid-Telem MK Yair Lapid.

 

Read also: Israel to Ease COVID-19 Curbs While Morocco Extends Lockdown

Breakthrough in Iraqi Politics as Kadhimi’s Cabinet Expects Approval

After months of failed candidates and political opposition, Iraq’s parliament is set to approve a ministerial lineup which will establish the country’s first cabinet since the resignation of Adel Abdul Mahdi in November 2019. Parliament will convene in Baghdad on the evening of May 5 or May 6 to approve the nation’s first cabinet in five months.

Iraq’s prime-minister designate Mustafa al-Kadhimi looks to succeed where his predecessors Mohammed Allawi and Adnan al-Zurfi failed. Kadhimi is the former head of the Iraqi National Intelligence Service and emerged as a potential candidate for the position of prime-minister following Mahdi’s resignation in 2019.

From 2003 until 2010, Kadhimi was the director of the London-based Iraqi Memory Foundation. He led the NGO as it documented Saddam Hussein’s atrocities against the Iraqi people by collecting testimonies and footage from victims of the regime.

Kadhimi was also a columnist and editor for Al-Monitor and has written several books on Iraqi culture and religion.

Opposition remains

Kadhimi does not enjoy unanimous support, however. Former Prime Minister Nouri al-Maliki, who heads the “state of law” coalition, has announced the coalition will be boycotting the meeting to confirm Kadhimi’s cabinet. Broad support by the remaining political blocs in Iraq should be sufficient to finally approve a new Iraqi cabinet.

“Kadhimi will be approved as prime minister because there are no other alternatives,” an Iraqi parliamentarian told London-based newspaper Al-Awsat on May 4.

The official told Al-Awsat that he does not expect all candidates to be approved because of political interference in the nominating process of the ministerial candidates.

Eighteen nominees will likely be approved according to Farhad Alaaldin, chairman of the Iraq Advisory Council, who predicted today that disputes over the appointment of a finance ministry are likely to come to a head as several political blocs attempt to influence the important appointment.

“The situation is very complicated,” Alaaldin told Al-Awsat, “especially since the PM-designate does not have a magic wand that can resolve the stifling crises.” He expressed hope that international support for Kadhimi will put the new prime minister in a “good position.”

Limited mandate

With five ministerial appointments remaining contested, Iraq’s parliament will have a brief window of goodwill to mend political disagreements and settle on acceptable compromises. The country is facing a political, health, and economic crisis amid its failures to form a government, eroding public support for its governing institutions. 

With the most powerful positions still under debate, control over Iraq’s purse and other important positions will require opposing blocs to strike difficult deals if the government is to be effective.

Iraq’s geographical position between several conflict zones and countries in the midst of their own national epidemics means its government urgently needs a mandate to stem the spread of the virus within its borders.

The continued presence of the US military also presents a potential stumbling block. Kadhimi’s international support could suffer if the potential prime minister pressures the US to commit to the Iraqi parliament’s decision to demand a draw-down of the US military presence in the country.

Economic woes

While COVID-19 presents an immediate problem to the new cabinet, its capabilities to resolve it could depend on the fate of global oil prices. With oil prices around $20 per barrel, Iraq faces a significant budget deficit that could lead to painful cuts in social services.

The country has requested debt deferment from the IMF after the international institution predicted a strong recovery for the country on April 14. Having established a cabinet will surely increase confidence in Iraq’s capabilities to address its international responsibilities and commitments and could help alleviate its debt obligations.

The new cabinet will also have to negotiate with some of the world’s most powerful multinationals in order to meet globally-agreed oil production cuts.

As most of the cabinet is set to be approved, the political fight over the remaining ministerial positions should indicate whether Kadhimi’s cabinet has the political support to address concerns of the Iraqi public who are facing poverty and continued violence.

 

Read also: Iraq in Stand-off With Oil Supermajors

Palestine’s COVID-19 State of Emergency Extended to June 5

Palestinian Authority (PA) President Mahmoud Abbas said the two-month state of emergency will be extended for another 30 days from today until June 5. 

Palestinians living primarily in the Israeli-occupied West Bank entered into a state of emergency on March 5 after the Abbas administration identified the first cases in the area. West Bank residents went under total lockdown, only authorized to leave their homes for essential purposes. 

Following advice from his Prime Minister Mohammad Shtayyeh and the Palestinian health ministry, Abbas decided to keep the state of emergency in place for another month, as “the outbreak is not yet under full control.”

Palestinian state-news agency WAFA reports that of Palestine’s 532 confirmed cases, 170 are in East Jerusalem, 345 are in the West Bank, and 17 are in the Hamas-controlled Gaza strip. The West Bank, with a population of three million people, has recorded just two COVID-19 deaths, and another two Palestinians died from the disease in Jerusalem. 

The relative isolation of Palestine due to movement restrictions imposed by Israel appears to have helped keep the outbreak in the territories relatively small. Israel, on the other hand, has recorded over 16,200 cases of coronavirus to date and 237 related deaths. 

The PA eased some COVID-19 restrictions on certain businesses last week in order to restart the economy but is keeping mosques and schools closed for the time being. Palestinians who work in Israel have been given the green light to head back to their jobs, but public and religious congregations remain banned in PA-controlled areas.

Authorities relaxed border controls yesterday between Jordan and the West Bank to allow around 350 Palestinians stuck across the border to return home via the Al-Karama/King Hussein/Allenby bridge crossing. 

Over 500 more Palestinians are expected to return from Jordan in the coming days, with all those returning subject to temperature checks at the border and 14 days of home quarantine. 

 

Read also: US to give $5 Million in COVID-19 Aid to Palestine After Years of Cuts

Lebanese Economic Rescue Plan Receives Broad Support

Lebanon saw hopeful progress today as national and international actors voice their approval of the government’s economic rescue plan. Lebanon has been embroiled in three concurring and interconnected crises over public health, politics, and the economy. The broad showing of support provides a moment of hope as only Lebanon’s unpopular banking sector opposes the plan.

Lebanese rescue plan

Lebanese Banks reacted with shock to the 53-page economic rescue plan the government presented on Friday, May 1. The national government aims to rebalance its economy by allowing $70 billion in losses for its banking sector. In what it calls a “bail-in,” Lebanon would take the unprecedented action of using the capital of bank shareholders to cover losses.

The Lebanese banking sector decried the plan, saying it could “further destroy confidence,” but broad support from Lebanese political actors and foreign institutions reveals the opposite. The plan received unanimous support after its approval on April 30 as many consider the unpopular Lebanese banking sector an acceptable potential casualty of the crisis.

IMF progress

Prime Minister Hassan Diab’s government approved an economic rescue plan last week in preparation for negotiations with the International Monetary Fund (IMF), seeing the plan as an important first step in securing an IMF economic rescue program. On May 1, the government signed a formal request for IMF assistance as protesters took to the street and attacked banking branches.

Kristalina Georgieva, managing director of the IMF, had a “productive” discussion yesterday with the Lebanese PM, announcing an IMF team would soon commence talks with Lebanese authorities. 

“We agreed that our teams will soon start discussions on much-needed reforms to restore sustainability and growth for the benefit of the Lebanese people,” Georgieva said.

UN Secretary-General Antonio Guterres reacted positively to the Lebanese government’s actions. 

“As the dire economic and financial situation in Lebanon is now compounded by the adverse impact of COVID-19 on the country’s economy, it is all the more urgent that the country’s leaders develop and implement the required reforms,” the UN chief said.

Breaching the blue line

In closed consultations yesterday, the UN Security Council met to discuss a 2004 resolution that called for the disbandment of all Lebanese and non-Lebanese militias in order for Lebanon’s government to realize full authority over the country. Jan Kubis, UN Special Coordinator for Lebanon, and Jean-Pierre Lacroix, UN Undersecretary-General for Peace Operations, briefed the council.

The closed consultations also offered a platform for council members to express concern over recent incidents across Lebanon’s border with Israel. 

The United Nations Interim Force in Lebanon monitors the border, and its so-called “blue line” indicates a demarcation the UN established following the conflict between the two countries. Frequent breaches of Lebanon’s airspace over the body and continued disagreements over the exact demarcation continue to fuel tensions.

The council reacted positively to the economic rescue plan for Lebanon, releasing a statement emphasizing the “urgent need for the Lebanese authorities to respond to the aspirations of the Lebanese people by implementing meaningful economic reforms.”

Hezbollah approves plan, wary of IMF conditions

Hezbollah’s leader, Sayyed Hassan Nasrallah, gave a one-hour televised speech yesterday in response to the government’s rescue plan and possible IMF support. 

Nasrallah announced Hezbollah’s support for the government’s efforts in seeking IMF financial assistance, but the controversial Shia group did indicate it worries about IMF conditions that could infringe on Lebanon’s national sovereignty.

“We are not against Lebanon requesting assistance from any side in the world,” Nasrallah said in his televised address. Hezbollah’s leader did, however, express concerns over potential conditions that could mean Lebanon goes “hand over our necks to the International Monetary Fund or any other organization,” calling for “great responsibility and strict caution.”

In an important indicator of the plan’s viability, Hezbollah’s embrace of the rescue plan could prove vital in building national support for the plan amid protests and financial hardships. With Hezbollah and international institutes on board, the government will hope the plan brings some sense of stability and hope back to its economically distressed people.

 

Read also: Berlin Cancels Annual Quds Day Rallies Upon Hezbollah Ban

Careem Cuts 31% of Workforce Over COVID-19 Downturn

In a letter to staff, Careem CEO Mudassir Sheikha said that despite cost-saving efforts, the company would have to cut jobs in the face of an 80% downturn in business and mounting COVID-19 related losses. The announcement comes after parent company Uber said on Monday that it will stop the UberEats app in eight low-performing markets, including Egypt and Saudi Arabia. 

“There is no easy way to say this, so I will get straight to the point: starting tomorrow and for the next three days, 536 of our colleagues who make up 31 per cent of Careem will leave us. We delayed this decision as long as possible so that we could exhaust all other means to secure Careem,” Sheika told employees on May 4. 

The massive global economic turn-down precipitated by the coronavirus pandemic has hit the broader transport industry hard, and ride-sharing apps such as Uber and Careem are no exception. With COVID-19 restrictions forcing regular users to stay locked-down at home, Dubai-based Careem, which operates in the Middle East, North Africa, and Pakistan, reports the activity of its core ride-hailing business has plummeted by 90%.

The company began diversifying into food delivery before the pandemic, working towards becoming a “Super App,” but food delivery is also down up to 60% as coronavirus curbs forced many food businesses to close.

“Our [overall] business is down 80 per cent and with that sort of reduction in the business, our losses are multiplying rapidly as well,” Sheikha told the National on Monday.

Balancing business and employee needs

Sheikha said he had to prioritize the company’s long term survival, and after reducing operating costs across the board, job cuts were the next logical option as the recovery timeline remains “alarmingly unknown.” Careem is currently operating under the conservative expectation “that the recovery will not happen fully until sometime late next year,” the CEO added. 

A new range of staff benefits announced earlier in 2020 are now on pause, as part of cost-saving measures, but Sheikha assured staff a generous severance package will be forthcoming. 

“While the details vary slightly from market to market, we have arranged at least three months of severance pay, one month of equity vesting, and where relevant, extended visa and medical insurance for you and your families until the end of the year,” he told employees.

UberEats gets the chop

On Monday, global ride-sharing giant Uber, who purchased Careem for $3.1 billion in 2019, announced it is canceling UberEats operations in eight low-performing markets. The decision means UberEats will stop running on June 4 in the Czech Republic, Egypt, Saudi Arabia, Honduras, Romania, Ukraine, Uruguay, and the United Arab Emirates (UAE).

“This continues our strategy of focusing our energy and resources on our top Eats markets around the world,” an Uber spokesperson told Reuters.  

UberEats in the MENA countries will transfer to Careem, in an attempt to consolidate the platform during the COVID-19 crisis, and in line with its “Super App” strategy. The company announced the “aggressive” expansion strategy in January 2020 and Careem’s CEO said it is committed to “protecting all investments related [to it] including [the] team that is working on the super app.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kuwaiti Police Disperse Egyptian Workers’ Repatriation ‘Riot’

Kuwaiti police on Sunday, May 3 broke up protests by Egyptian workers stranded in the Gulf state who were engaged in what security services called a “riot.” The Egyptian workers have been living in a shelter since the onset of COVID-19 measures in Kuwait and expressed frustrations over insufficient Egyptian efforts to repatriate them.

Crowd protests lack of repatriation

A large crowd of angry Egyptian workers had formed outside the Kabd Quarantine Center on Sunday to express their displeasure with their current situation.

“Security officials intervened and took control, arresting a number of them,” the state-sponsored Kuwait News Agency (KUNA) reported.

Kuwait depends heavily on foreign workers for manual labor, low-skilled work, and some office work, but the COVID-19 crisis has left many stranded without work or a way home.

The crowd was armed with pieces of furniture and chanted “Where is our embassy?” according to the Guardian. Videos of the event spread online as the bleak industrial terrain, surrounded with barbed wire, revealed some of the poor conditions under which many are living.

With 35 million laborers working in Gulf states like Kuwait, the protests highlighted the importance of protecting their foreign labor forces.

Officials respond

While police quelled the protests using tear gas and performing multiple arrests, it appears that Kuwaiti and Egyptian authorities took the protesters’ grievances seriously.

The Egyptian Embassy apologized for the riot and sent representatives to the quarantine center to reassure workers that repatriation flights would soon materialize.

Salaeh al-Thuwaikh, Egypt’s ambassador to Kuwait, stated that the Egyptian government is in the process of arranging the much-desired repatriation flights. The first repatriation flights should start next week, according to Egypt’s top official in the country.

Kuwaiti authorities similarly tried to ease protesters’ concerns. The government reiterated its commitment, published in April, promising that foreign workers who overextended their working visas because of COVID-19 measures will not face prosecution or fines and are free to leave the country when possible.

COVID-19 in Kuwait

The Sunday protests highlighted some of the unfortunate consequences of the strict measures that Gulf states such as Kuwait implemented. Kuwait entered lockdown on March 11, about two weeks after detecting its first case. While curfews were amended for Ramadan, for those foreign workers trapped in the country, there is little to do but wait.

Kuwait is managing to keep its outbreak under reasonable control, recording 5,278 cases with 40 deaths as of May 4, according to data provided by Johns Hopkins University.

 

Read also: How Oil Prices are Impacting Kuwait and Iraq

Top Investor Warren Buffett Predicts Further Market Trouble

On Sunday, May 3, one of the world’s most famous investors, Warren Buffett, held his company’s annual shareholder meeting. What was planned to be an hour-long event took 4.5 hours, and global investors watched the live-stream of what is usually a massive public gathering. While Buffett warned not to bet “against America,” he emphasized that no one truly knows what the future holds.

Stockpiling cash

Buffett had recently held off on making statements but his company’s annual shareholder meeting yesterday forced him to voice his opinions. Buffett struck a diplomatic tone, knowing his statements could have a major effect on markets. 

As the renowned investor tried to prevent panic, however, his company Berkshire Hathaway continued to build up its cash reserve. Since the start of the year, Berkshire Hathaway stockpiled another $10 billion for a total of $137 billion.

The fact that Buffett’s company is holding back on investing its cash has to do with enormous uncertainty in the market

While many investors attempt to “play the market” by buying cheap and hoping for a quick rally, Buffett appears wary of making such bets. 

Buffett even presented a slide in his presentation titled “‘I don’t know”’ where he reiterated that trouble in the markets is only just beginning. “Nobody knows what is going to happen,” the famous investor said, knowing what effect his prognosis would have on markets.

Berkshire Hathaway’s refusal to buy any new stock is sure to worry other investors. “The markets can do anything,” Buffett said as he again stressed the unprecedented levels of uncertainty in today’s markets.

With many corporate earnings reports due this week, a barrage of troubling news could severely depress investor enthusiasm in the near future.

The Buffett Indicator

Buffett is seen as one of the smartest value-oriented investors on the planet and has built a fortune of $73.5 billion by focusing on the true value of stocks. 

In order to gauge the true value of stocks in the market, Buffett looks at the total market capitalization of all US stocks relative to national GDP. The “Buffett indicator” means that if GDP exceeds the total value of the market, investors should buy stocks. If GDP is lower, then stocks are overvalued and investors should hold off.

The indicator has guided much of Berkshire Hathaway’s investment and partly explains its stockpiling of cash. On April 29, the White House released data from the US Bureau of Economic Analysis that predicted GDP would fall by 4.8%. While this is still less than 2008’s drop, Buffett’s remarks indicate that it could be just the beginning of a long economic crisis.

Mistakes made

Buffett highlighted the mistake he made by investing in airlines. Buffett had been famous for being wary of airline stock after failed investments in the 1990s but broke his own rule by reinvesting in US airlines in 2016. Berkshire became a major investor in US airlines and owned nearly 10% of each airline. 

Buffett admitted the investment was a big mistake as he announced Berkshire Hathaway had sold all its stock in airlines in April.

Market-oriented media outlets dubbed Berkshire’s losses a “bloodbath” as the company recorded $50 billion in losses in the first quarter of 2020. The giant losses by what is considered a “wise elder” of the investing community could result in major market panic in the coming days and weeks.

Market moves

On Labor Day, a sell-off led to the Dow Jones being down 5% as a week of gains evaporated, and Buffett’s analysis will surely lead to increased panic as the economic crisis begins to unfold. 

The trillions in stimulus provided by the US government and Federal Reserve had resulted in a recovery of the market, but it appeared to be an expensive and temporary fix.

Underlining market problems still persist. There are no indications that the COVID-19 pandemic will cease to impact production, travel, and consumption in the near future, making outlooks bleak. The Federal Reserve is providing cash to any company in trouble, but they might have started too big, too early as markets could take years to bottom out, as they did between 2000-2003 and 2007-2009.

An unpredictable future

It has become clear that markets may not fully recover, but nobody knows fur sure who will be the winners and losers. Because any company in trouble could count on the Fed’s trillions, there are fears of “zombie companies” that would not normally survive without this support.

If there is anything to take from Buffett’s statements, it is that there is too much unknown to make any proper market predictions at this point. Only a sudden miracle cure or the achievement of “herd immunity” could reverse trends, but vaccines are a long way off and doubts exist that surviving a COVID-19 infection results in complete immunity.

With uncertainty in the world and the markets, it is likely markets have not bottomed out, and could take years to do so. Previous market crashes have shown how it can take years until a sustainable upward trend can be realized. 

While many investors will undoubtedly continue to bet on markets, according to Buffett, the best investment right now is to keep your cash in your pockets.

 

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