2020 was set to be a record year for retail in the Middle East. The six-month long Dubai Expo was supposed to attract shoppers from around the world and the region’s malls prepared for ever-increasing numbers of shoppers. The coronavirus has crushed all of this hopeful expectation, with lockdowns and curfews bringing sales through retail stores to a grinding halt.
Unforeseen changes
Throughout the Middle East and North Africa (MENA), Ramadan and Eid-al-Fitr equal the Christmas season in Europe and North America. Shoppers flock to retailers for new clothes, festive food, and gifts for friends or family. But the COVID-19 epidemic meant closed mosques and few retailers outside of grocery stores allowed to operate.
These trends have created a make-or-break moment for many retailers in the region. Those who were already providing online sales, or were ready to make the transition, have come out as winners, while those lagging behind have struggled to survive.
Now that online shopping is no longer a necessity, with shops and malls reopening, it appears that consumers in the MENA region have structurally changed their consumer behavior. A study done by Ernst & Young (EY) revealed that 92% of shoppers in the UAE and Saudi Arabia had changed their shopping habits, with half of those considering it a “significant” change.
Altered paradigm
The EY survey showed a dramatically altered retail paradigm. Forty-seven percent of those surveyed signaled that in the coming two years they expect to do their grocery shopping online and 50% of correspondents said they will consciously reduce their amount of physical shopping to less frequent visits for larger purchases.
The retail landscape in the region is changing rapidly. This follows years of construction on new retail malls that hoped to generate a “casual shopping” experience, where trips to retailers is seen as a form of entertainment in itself. For malls and shopping centers the trend will precipitate a renewed focus on generating “experiences” for shoppers that they cannot have at home, mixing shopping with visits to movie theaters or culinary experiences.
Global e-commerce was worth $25.6 trillion in 2018 and the trend towards online shopping has since accelerated. Whether brick-and-mortar stores can again attract customers by providing new experiences remains to be seen as convenient online shopping is now the safer choice amid persistent worries over the global pandemic.
With oil prices nearing their highest since early March, Kirill Dmitriev, one of Russia’s top oil negotiators signaled his will to draw down production cuts on Friday June 19. Dmitriev is one of the key players leading negotiations with the Organization of Petroleum Exporting Countries (OPEC). Agreements between OPEC and the Russian-led alliance of non-OPEC countries, called OPEC+, have been one of the primary factors in the efforts to stabilize the oil market.
With demand for oil increasing as economies reopen, Russia appears to see no point in further extending production cuts. The existing agreement calls for a global production cut of 7.7 million barrels per day, from August to December. From January 2021, production cuts would drop to 5.8 million barrels per day, lasting until April 2022 when the agreement expires.
Price uptick
In April, oil prices hit their lowest price since the turn of the millennium as high global supply met an unprecedented dip in demand when flights were grounded, citizens faced lockdowns, and non-essential economic activity dissipated. In April prices hit $16 per barrel, with WTI briefly dipping into historic negative territory amid a scramble to offload futures before their expiry.
The extreme fluctuations in the already volatile oil market prompted most of the world’s oil producing countries to come together to establish painful, but necessary, production cuts in order to ease over supply that led to oil storage running out, with tankers and oil bunkers used as temporary storage to accommodate for a lack of buyers.
OPEC+
Ever since, any news around negotiations over production cuts between OPEC and the OPEC+ groups has led to swings in global oil prices. Now that demand is increasing and most OPEC members report compliance with the agreed upon cuts, meetings have revolved more around suring up lagging countries like Iraq and Kazachstan.
The current oil price hovers around $40, sufficient for Russia to balance its budgets. For many higher-cost oil producers however, the current price means losses, involuntary production cuts and even bankruptcies. The US shale gas industry, Canadian tar-sand extraction and Brazilian off-shore oil all struggle to survive at current prices, while countries like Saudi Arabia would be able to live with “lower for longer.”
OPEC
But while many OPEC members in the Gulf could make a profit on current prices, their national budgets have been based on much higher prices, leaving major gaps. A country like Iraq, that has some of the cheapest oil to extract, still needs oil prices to be at $56 per barrel in order to fund the $135 billion in estimated state revenue. The country has struggled to comply with OPEC’s agreed cuts as most of its oil production is done by foreign supermajors, leading to difficult negotiations.
Many countries of the Gulf Cooperation Council (GCC) similarly presented ambitious budgets for 2020, expecting much higher revenues than those that materialized due to the COVID-19 crisis. For these countries production cuts remain one of the few tools to drive prices up further, but it appears that major players like Russia and Saudi Arabia would prefer oil prices to not increase too rapidly, in order to prevent a resurgence in its higher-cost competitors like shale gas.
Diverging forecasts
Saudi Arabia and Russia are expected to have a much larger market-share in the near future. After a decade of losing market-share to US producers, Saudi Arabia is expected to have the largest market-share since the 1980s. With production down significantly and demand slowly returning, prices are likely to go up in the long run.
Investment bank JP Morgan Chase in early March predicted oil to hit $190 per barrel due to a “supercycle” where a downward swing in prices is followed by equally dramatic upswing. The bank’s predictions were squashed by the COVID-19 related drop in demand, but its experts remain confident that a “bullish supercycle is on the horizon,” according to CNN.
“The reality is the chances of oil going toward $100 at this point are higher than three months ago,” JP morgan’s Christyan Malek. However, uncertainty remains as economic results are highly dependent on public health successes in containing the spread of the coronavirus. BP has slashed its forecast, expecting COVID-19 to have an “enduring impact on the global economy.”
As ultranationalists within the Israeli government continue to push for annexation within the West Bank, the Middle East is confronted with the potential erasure of decades of peacebuilding. Meanwhile, Donald Trump’s United States maintains its support for Israel’s expansionist agenda, breaking with previous administrations’ commitment to a peaceful resolution to the conflict.
Since the Israeli government under Prime Minister Benjamin Netanyahu first entertained the idea of expansion into the West Bank, there has been a widespread outpouring of sympathy towards the Palestinian struggle.
One individual in particular has made international headlines in their effort to discourage Israel’s plans. On June 12, Yousef Al Otaiba—the United Arab Emirates’ ambassador to the United States—wrote an op-ed in the Hebrew newspaper Yedioth Ahronoth calling on Israelis to oppose Netanyahu’s plans for annexation.
US President Donald Trump with Israeli prime minister Benjamin Netanyahu unveiling the details of Trump’s Middle East Peace Plan. (Photo: Wikimedia Commons)
The op-ed, written in Hebrew in an attempt to speak directly to the Israeli people, appealing to the desire to end the conflict between Israel and its Arab neighbors. Otaiba, as a representative of the UAE, argued that annexation could shatter any opportunity for a peaceful solution to the conflict, and that it would throw regional stability into disarray.
Otaiba was not alone. Activists and politicians from around the world have condemned Netanyahu’s plans, placing increasing pressure on the prime minister to concede.
Whether or not Netanyahu will bow to this international pressure remains to be seen; however, with such high stakes, it is apparent that Israel’s response will greatly shape the future of the Middle East.
With or without annexation, the questions remain as to what Netanyahu envisions for Israel and whether Israel is willing to sacrifice decades of dialogue for more land in the West Bank.
The future for the West Bank
Though the government of Netanyahu tends to use the euphemism “extending Israeli sovereignty,” the Israeli government’s agenda for the settlements of Judea, Samaria, and others in the West Bank is nothing short of annexation.
PRIME MINISTER Benjamin Netanyahu points to a map of the Jordan Valley (photo credit: YOSSI ZELIGER)
The Israeli annexation proposal targets dozens of Jewish settlements in the West Bank, as well as almost all of the Jordan Valley. Collectively, this would lead to the annexation of more than one-third of the West Bank. Moreover, the acquisition of the Jordan Valley would cut off Palestine from its border with Jordan, separating the two countries with a buffer zone of more than 1,000 kilometers.
However, annexation is no insignificant matter; rather, annexation is incredibly rare and is always met with backlash and widespread opposition.
As far in the past as 1917—amidst the bloodshed of the First World War—Lassa Oppenheim, a renowned scholar of international law, remarked that: “There is not an atom of sovereignty in the authority of the occupying power.”
International law continues to enshrine these sentiments over a century after they were first uttered. To this day, the United Nations strictly forbids annexation.
When Iraq under Saddam Hussein attempted to annex Kuwait in 1990, it was met with months of widespread international condemnation, coalescing in the US-led invasion of the country.
When Russia under Vladimir Putin annexed the Crimea peninsula in 2014, there was a near-universal outpouring of criticism and demands that the territory be returned.
Now, Israel’s designs to annex large swaths of the West Bank have threatened to put an end to ongoing peacebuilding efforts between Israel and the Arab world. In response, Israel has been met with condemnation from around the world, most prominently from within the Middle East.
A different approach
Ambassador Otaiba’s op-ed posits that Israel’s next steps will decide the future for Israeli-Arab relations in the Middle East. He contends that whether or not Israel succumbs to ultranationalist pressure and continues with annexation plans will decide how the Arab world will proceed with peace efforts.
“In the UAE and across much of the Arab world, we would like to believe Israel is an opportunity, not an enemy. We face too many common dangers and see the great potential of warmer ties,” Otaiba wrote.
“Israel’s decision on annexation will be an unmistakable signal of whether it sees it the same way.”
Otaiba’s statement also appeals to the common enemies of both Israel and the Arab world. Climate change, terrorism, food security, and access to clean water, Otaiba contends, are shared interests between Israel and the Arab World, ones that must be addressed collectively rather than individually.
In particular, Otaiba argues that the UAE and Israel, as two of the most powerful and influential countries in the Middle East, have the combined ability to change the region for the better.
“As the two most advanced and diversified economies in the region, expanded business and financial ties could accelerate growth and stability across the Middle East,” Otaiba wrote.
“Our shared interests around climate change, water and food security, technology and advanced science could spur greater innovation and collaboration.”
Unlike previous attempts at voicing grievances with Israel’s agenda, Otaiba decided to speak not to the Palestinian people, but to the Israeli people. In Hebrew, Otaiba promotes the concept that Israel and the Arab world have the opportunity to work together, but that any annexation in the West Bank would shatter this opportunity.
Otaiba argues that the UAE, as well as other Arab nations, want to establish relations with Israel, but he also points out that the annexation plan would become an obstacle to this.
Although Otaiba has garnered much support through his writing, he has also attracted many critics, including several of the more militant factions vying for Palestinian liberation.
The militant mindset
Thus far, Hamas and the Palestinian Islamic Jihad organization have been the most vocal critics of Otaiba’s approach. In particular, the groups accused Otaiba and the UAE of violating the Arab Peace Initiative and of conceding too much to Israel.
Some have also referenced Otaiba’s relationship with the Trump administration as an explanation for non-belligerence towards Israel. As ambassador, Otaiba has been a close ally to Jared Kusher, who drafted the Middle East Peace Plan that established US support for Israel’s intentions to annex territory in the West Bank.
Among other grievances, many critics feel as though Otaiba’s warnings were insufficient, especially due to Otaiba’s avoidance of hostile language against Israel.
However, this was ultimately the purpose of Otaiba’s letter. Rather than resort to condemnation, Otaiba wanted to convince the Israeli people that it is in their interests and in the interests of the Arab world to avoid annexation in the West Bank in order to preserve decades of peace talks and negotiation.
United Arab Emirates environmental authorities have discovered a third, new species of turtle is nesting and breeding along its coastline.
The Sharjah Environment and Protected Areas Authority (EPAA) announced Tuesday, on World Sea Turtle Day, that it has found the first evidence that the vulnerable Olive Ridley Turtle is breeding in the UAE.
Photographers captured some unidentified turtle hatchlings crawling their way towards the sea along the beach at the Kalba Kingfisher Retreat — named after the rare Collared Kingfisher which also nests in the area. After receiving the photographs, the EPAA sent a team to the area to investigate.
“The team located several tracks on the middle and upper part of the beach, leading them to conclude that multiple turtles did successfully hatch and made it to the sea,” said EPAA Chairperson Hana Saif Al Suwaidi.
The beach where the baby turtles were located is on Sharjah’s East Coast near the city of Khor Kalba. It is part of the 500 hectare Alqurm Protected Area, which includes a tidal lagoon, mangrove forest, and beach facing the Gulf of Oman.
Prior to discovering the Olive Ridley turtles, only Green and Hawksbill turtles were known to nest in the UAE. The main Olive Ridley populations are found in the warm tropical waters of the Indian and Pacific oceans and breed primarily in Mexico and the Odisha (Orissa) area of India.
The Olive Ridley turtle is the world’s second smallest and most-abundant of the seven marine turtle species. The International Union for the Conservation of Nature classifies it as “vulnerable”, as the population continues to decline despite an end to commercial exploitation and ongoing conservation efforts.
Fortunately for the turtles who have decided to nest in the nature reserve, they will be protected by strict conservation laws. Head of the resort development company responsible for Kalba Kingfisher Retreat, Marwan bin Jassim Al Sarkal, welcomed the discovery and said his company will continue to work with the EPAA to protect the turtles and develop sustainable eco-tourism projects that promote wildlife preservation.
“Thanks to the relentless efforts of the Environment and Protected Areas Authority, (it) reflects on Sharjah’s global status in restoring, preserving and protecting its rich natural habitat and infrastructure, further contributing to the global protection of endangered wildlife and promoting responsible environmental change,” Al Sarkal said.
International observers celebrate World Sea Turtle Day on June 16. It aims at raising awareness that six out of the seven species of marine turtles are threatened with extinction, primarily because of the 8 million tons of plastic humans dump into the world’s oceans every year, which is then ingested by the endangered creatures.
Astronomer Ibrahim al-Jarwan from the Arab Union for Astronomy and Space Sciences said he predicts Eid al-Adha, the Islamic holiday to celebrate the end of the Hajj pilgrimage, is likely to fall on July 31 this year.
“The crescent of the lunar month of Dhu Al Hijjah 1441 is to be spotted on Monday, July 20, 2020, at 9.33 p.m. UAE time,” Al Jarwan said on June 14.
“July 22 will mark the first day of Dhu Al Hijjah month and Friday, July 31, shall be the first day of Eid Al Adha, according to astronomical calculations,” he continued.
Families that can afford it mark the second of Islam’s two biggest holidays by sacrificing an acceptable animal such as a sheep, goat, cow, or camel. The animal is then divided into three portions: One third for family, one third for friends and neighbors, and one third for the poor.
UAE-bound sheep stranded in Australia
Across the Gulf, thousands of live sheep arrive from countries like Australia in the lead up to Eid. One ship bound for the UAE, the “Al Kuwait,” has been stuck in Australia since May 22 after 21 of the 48 crew members tested positive for COVID-19 after docking in Fremantle, Western Australia—putting its 56,000 cargo of live sheep in limbo.
On June 13, the Australian Department of Agriculture approved an application for an alternative ship to leave with 50,000 of the 56,000 sheep originally supposed to be transported by the “Al Kuwait.” Australia has a moratorium on live sheep exports to the Gulf from June to September to protect animal welfare from the area’s extreme summer temperatures.
Kuwait renewed a plea to the Australian government to waive its moratorium on live export in the wake of a drop in international freight, which has significantly impacted fresh meat imports and supply in the Gulf state.
Kuwait’s Minister of Trade and Industry Khalid Nassir Alrowdan asked Australia’s Agriculture Minister David Littleproud to “reconsider the Australian livestock export ban during the hemisphere summer…to enhance our national food security and the Australian national economy.”
The latest request comes after the CEO of the state-run Kuwait Livestock Transport and Trading, Osama Boodai, wrote to the Australian government on April 2 asking it to “reconsider” the June to September ban.
“The current COVID-19 outbreak around the world has placed increased pressure on food supplies into the Middle East region,” Boodai said in his letter to Littleproud.
“The revered Eid Al Adha festival falls in late July and live animals are of critical importance to that occasion and we fear there will also be shortages then,” Boodai continued.
“Restricting the trade of Australian sheep puts the region’s sovereign food security at risk and damages very long time trading relationships,” Bodai warned.
It appears that the combined economic opportunity and the food insecurity issues raised by the Kuwait government forced the Australian government’s hand and pushed it to permit the one-off shipment.
Eid preparations begin
Morocco, like many Middle Eastern and North African countries, started preparing for Eid al-Adha just a few days after celebrating Eid al-Fitr. Over the past month, local authorities in Morocco tagged 4.5 million livestock, including sheep and goats ahead of the major religious holiday—a phenomenon playing out across the region.
On May 26, Moroccan Agriculture Minister Aziz Akhannouch announced some 2.6 million sheep had been selected and vaccinated in preparation for what is known in English as the “sacrifice holiday.”
“The COVID-19 pandemic did not stop us from celebrating Eid al-Fitr, but the Eid al-Adha celebration poses logistical challenges and requires good planning and organization,” Akhannouch said.
Moroccan authorities have also agreed to subside stock feed this year given the dry season and COVID-19 economic difficulties to ensure stock are in good condition for slaughter and to prevent high feed costs from impacting consumer prices.
Hajj could be canceled
In Saudi Arabia, it is shaping up to be a very different Eid al-Adha in 2020, and authorities are still considering whether or not to cancel the annual hajj pilgrimage.
In late July, some two million pilgrims usually flock to Saudi Arabia to complete what for many is a once-in-a-lifetime religious journey in the Muslim Holy Land, which ends in Eid al-Adha. Canceling the pilgrimage would be a first since the Gulf kingdom was founded in 1932 and could cost Saudi Arabia millions in visitor revenue.
Saudi Arabia has a high number of COVID-19 cases, and with the ongoing worldwide travel restrictions, the Saudi government said it will make a decision within the week about cancelling the 2020 hajj.
“The issue has been carefully studied and different scenarios are being considered. An official decision will be made within one week,” a senior official from Saudi Arabia’s Ministry of the Hajj and Umrah told the Financial Times on June 12.
One idea the ministry is considering is allowing a small number of local Saudi pilgrims, around 20% of the usual number, to complete the hajj.
“All options are on the table but the priority is for the health and safety of pilgrims,” the official said.
Dubai State Security arrested Danish crime boss Amir Faten Mekky in a “sting operation” carried out in the early hours of June 4, United Arab Emirates authorities revealed today.
A joint task force, including Dubai Public Prosecution and the Ministry of Foreign Affairs, raided the 23-year-old gangster’s residence after spending gathering intelligence to confirm his identity.
Mekky entered the United Arab Emirates using a fake passport on November 14, 2018, the Dubai Media Office said, but it is unclear what prompted the security services to suddenly zero in on the dangerous criminal.
The arrest comes six months after the sensational arrest of “Angels of Death” gang leader Radwan Al-Taghi in Dubai last December. Dubai says its security forces are currently investigating Mekky and are ready to hand him over to “the relevant authorities,” although it is unclear which country he could be extradited to.
Mekky is a high-profile Dutch crime lord with a long criminal history. He has eluded European authorities for years over his drug trafficking and money laundering activities and is wanted by INTERPOL for murder.
Despite holding Danish nationality, Mekky’s criminal activity was based in Malmo, Sweden’s third-largest city. He has faced a “handful” of murder charges over recent years, stemming from Malmo gang feuds, Swedish daily newspaper Expressen reports.
The same source says Mekky is wanted in connection with two gangland murders and a number of explosions carried out in Spain by the “Los Suecos” (Swedes) gang, which he allegedly heads.
“The high-profile arrest sends a clear message that Dubai will not tolerate international criminal activities even if the crimes have not been committed in the UAE. It also emphasized the UAE’s commitment to fulfilling its responsibilities towards combating transnational crime,” the Dubai Media Office said.
The United States Ambassador to the United Arab Emirates has praised the UAE’s national response and global aid efforts amid the COVID-19 pandemic as the Gulf state continues to play a key role in virus aid delivery.
In a recent video, the ambassador said multiple times how impressed he was by the UAE’s leadership in response to the novel coronavirus.
“The UAE has been a leader in the world in how they are approaching this disease both inside the country and with the help they are giving to many, many countries around the world,” Rakolta said in the Abu Dhabi TV video.
Rakolta applauded the UAE’s high testing numbers and pledged to treat all residents, be they UAE citizens or migrants, equally. He also expressed thanks for the UAE Ministry of Foreign Affairs’ cooperation and responsiveness, adding, “Etihad and Emirates Airline have spared no cost whatsoever, no effort to help get Americans back to the United States of America.”
“The UAE and the leaders have really shown what leadership is all about, they have been incredibly charitable with their giving to other countries, including the United States which we thank them for immensely,” the US ambassador said.
On June 2, the UAE sent eight metric tons of medical supplies to the Chechen Republic in Russia to bolster its efforts against COVID-19. The Etihad plane landed in Grozny, the capital of the Chechen Republic, carrying supplies that will support 8,000 local health workers in fighting the novel virus.
“The UAE stands by Russia in its campaign to overcome the COVID-19 crisis through international cooperation and assistance. Today’s delivery of aid represents the strong ties between our two nations, which have exerted all efforts to prioritize the health and wellbeing of our communities at every turn,” UAE Ambassador to Russia Maadhad Hareb Jaber Alkhayel said in response to the delivery.
To date, the UAE has sent $10 million worth of in-kind aid to the World Health Organization, provided aid to 98 different countries in recent weeks, and contributed to 80% of the total COVID-19 aid distributed worldwide, according to the UAE government’s dedicated COVID-19 aid Twitter account, “UAE Cares.”
