The Abu Dhabi Investment Authority, or ADIA, has teamed up with infrastructure funds operated by private equity firm 3i and Morgan Stanley to put together a £1.5 billion (Dh8.63 billion) bid to acquire the Channel Tunnel rail link.
The consortium is considering submitting an offer ahead of the August 17 deadline set by UBS, which handles the auction on behalf of London and Continental Railways, the channel reports on its website, citing people close to the situation.
ADIA did not comment on the issue so far.
The sale of the 110-km High Speed 1 (HS1) line, which links central London to the Channel Tunnel, will be the first major British transport infrastructure sale since airport operator BAA sold London’s Gatwick airport late last year.
ADIA bought a 15 per cent stake in Gatwick Airport earlier this year.
Britain began the sale of the rights to operate the country’s only high-speed railway in June, helping raise much-needed funds for the public purse.
Other bidders include Channel tunnel operator Groupe Eurotunnel which is working on a bid with Goldman Sachs Infrastructure Partners, its biggest shareholder, and with Infracapital, the infrastructure arm of Prudential unit M&G, another big shareholder.
The Channel Tunnel is a 50.5-km undersea rail tunnel linking Folkestone near Dover in the United Kingdom with Coquelles, Pas-de-Calais near Calais in northern France, passing beneath the English Channel at the Strait of Dover.
Tuesday, November 2, 2010
Industry-led UK recovery untenable, economists warn
Suddenly it seems the world’s manufacturers hammered by the recession are firing on all cylinders. Honda has posted record profits, Renault is back in the black, Airbus and Boeing are enjoying a surge in demand, Rolls-Royce is cranking up its forecasts and chemicals group BASF has just doubled its earnings.
In the UK a resurgent manufacturing sector has helped boost overall growth and business surveys have suggested activity is at its highest in more than a decade as factories scramble to meet rising demand at home and abroad.
But economists are warning this is probably going to be as good as it gets and key industry reports published today paint the same picture. The storm clouds may be gathering. For all the talk of rising exports and profitability, manufacturers in the UK remain decidedly nervous about the outlook for a variety of reasons. Public sector spending cuts spell trouble for those companies reliant on government projects, tax rises risk hitting demand and with Greece’s financial meltdown still fresh in their minds, most companies are loathe to say the eurozone is out of the woods.
At the same time business groups warn that the boost factories are enjoying from companies re-building their stocks in the aftermath of the recession cannot last. Most warn it will likely tail off before the end of the year. This inventory-building has been credited with driving the recent jumps in manufacturing output. A closely watched monthly snapshot of the sector due out this morning is expected to show business activity continued to rise in July. But economists will also be scouring the manufacturing purchasing managers’ index for signs of waning confidence.
Analysts will also be watching for any signs of businesses looking to spend again, seen as key to sustaining the recovery given that typically when inventory rebuilding wears off, investment spending re-starts.
The portents are less than promising. The manufacturers’ organisation EEF will warn today that “low levels of investment remains an Achilles’ heel”.
Its Economic Prospects 2010 report is upbeat about the short-term. Manufacturing will grow by 3.8% this year and 3.4% in 2011 outstripping growth in the economy as a whole, forecast at 1.1% in 2010 and 2.1% in 2011.
But it believes investment by manufacturing firms will grow by only 2% in 2010 after falling by more than a third during the recession.
“Investment looks like it will remain a weak point in the remainder of this year with risks and uncertainty still lingering for both manufacturers and the wider economy,” says its chief economist Lee Hopley.
She cites the outlook for interest rates as more uncertainty for businesses. Borrowing costs are set to be held at a record low of 0.5% when the Bank of England makes its latest announcement on Thursday but further out policymakers are having to weigh up fragile demand against stubbornly high inflation.
“Whilst we have more clarity over the government’s fiscal ambitions, attention is now turning to where the cuts will hit and the difficult balancing act facing the Bank of England and when the monetary policy committee will make the next move,” said Hopley.
The EEF report, compiled with accountants BDO, also highlights risks to overseas demand particularly in developed markets such as the US. The world’s biggest economy enjoyed a quick ride out of recession at the end of last year but the pace of growth has tailed off. In the second quarter growth was slower than had been expected at a 2.4% annual rate, according to data last week that sparked more talk of a double-dip recession.
British manufacturers are also wary about the prospects for the eurozone, a key trading partner. Industry groups are already noting a divergence between those companies that export close to home and those enjoying stronger growth thanks to business with emerging markets such as China and India.
Roger Bootle, economic adviser to Deloitte is gloomy about the eurozone’s prospects and what that means for UK businesses as they battle through George Osborne’s tax rises and spending cuts.
“The prospect of a trade boost, at least in the near-term, is looking rather less promising than a few months ago,” he says.
A fall in the pound has provided UK exporters with a chance to boost their competitiveness. But Bootle notes businesses are only likely to capitalise fully on that once demand has recovered sufficiently.
“About half of the UK’s exports go to the eurozone and, given recent events, we now expect GDP growth there next year of just 0.5%... So export growth is unlikely to pick up any further over the next year or two,” he adds.
A separate survey published today suggests manufacturers remain distinctly more upbeat than those businesses in the larger services sector and yet they are still wary about demand holding up. Almost two-thirds UK manufacturing firms expect a rise in business activity, according to KPMG’s global business outlook. Manufacturers in the UK have higher hopes for the year than their peers in many global economies, including China, although they were less upbeat than those in Brazil, the US and India.
But again, any confidence about activity was not translated into plans to invest. In fact investment intentions fell, according to the survey, compiled by research firm Markit.
“I fear storm clouds may still be gathering on the European horizon. There are now a number of key economies that are actively tackling national deficits and this must surely have a significant effect on the sector some way down the line,” says KPMG’s Gautam Dalal. •Business group CBI is similarly cautious. Its quarterly survey of small and medium-sized manufacturers today shows twice as many saw output rise over the last three months than saw it fall. That was the strongest outturn for 15 years and driven by rising demand at home and abroad as customers rebuilt their stocks in the wake of the recession. But looking ahead to the next three months, firms anticipate a slight fall in output and demand while for the year ahead they expect to invest less.
In the UK a resurgent manufacturing sector has helped boost overall growth and business surveys have suggested activity is at its highest in more than a decade as factories scramble to meet rising demand at home and abroad.
But economists are warning this is probably going to be as good as it gets and key industry reports published today paint the same picture. The storm clouds may be gathering. For all the talk of rising exports and profitability, manufacturers in the UK remain decidedly nervous about the outlook for a variety of reasons. Public sector spending cuts spell trouble for those companies reliant on government projects, tax rises risk hitting demand and with Greece’s financial meltdown still fresh in their minds, most companies are loathe to say the eurozone is out of the woods.
At the same time business groups warn that the boost factories are enjoying from companies re-building their stocks in the aftermath of the recession cannot last. Most warn it will likely tail off before the end of the year. This inventory-building has been credited with driving the recent jumps in manufacturing output. A closely watched monthly snapshot of the sector due out this morning is expected to show business activity continued to rise in July. But economists will also be scouring the manufacturing purchasing managers’ index for signs of waning confidence.
Analysts will also be watching for any signs of businesses looking to spend again, seen as key to sustaining the recovery given that typically when inventory rebuilding wears off, investment spending re-starts.
The portents are less than promising. The manufacturers’ organisation EEF will warn today that “low levels of investment remains an Achilles’ heel”.
Its Economic Prospects 2010 report is upbeat about the short-term. Manufacturing will grow by 3.8% this year and 3.4% in 2011 outstripping growth in the economy as a whole, forecast at 1.1% in 2010 and 2.1% in 2011.
But it believes investment by manufacturing firms will grow by only 2% in 2010 after falling by more than a third during the recession.
“Investment looks like it will remain a weak point in the remainder of this year with risks and uncertainty still lingering for both manufacturers and the wider economy,” says its chief economist Lee Hopley.
She cites the outlook for interest rates as more uncertainty for businesses. Borrowing costs are set to be held at a record low of 0.5% when the Bank of England makes its latest announcement on Thursday but further out policymakers are having to weigh up fragile demand against stubbornly high inflation.
“Whilst we have more clarity over the government’s fiscal ambitions, attention is now turning to where the cuts will hit and the difficult balancing act facing the Bank of England and when the monetary policy committee will make the next move,” said Hopley.
The EEF report, compiled with accountants BDO, also highlights risks to overseas demand particularly in developed markets such as the US. The world’s biggest economy enjoyed a quick ride out of recession at the end of last year but the pace of growth has tailed off. In the second quarter growth was slower than had been expected at a 2.4% annual rate, according to data last week that sparked more talk of a double-dip recession.
British manufacturers are also wary about the prospects for the eurozone, a key trading partner. Industry groups are already noting a divergence between those companies that export close to home and those enjoying stronger growth thanks to business with emerging markets such as China and India.
Roger Bootle, economic adviser to Deloitte is gloomy about the eurozone’s prospects and what that means for UK businesses as they battle through George Osborne’s tax rises and spending cuts.
“The prospect of a trade boost, at least in the near-term, is looking rather less promising than a few months ago,” he says.
A fall in the pound has provided UK exporters with a chance to boost their competitiveness. But Bootle notes businesses are only likely to capitalise fully on that once demand has recovered sufficiently.
“About half of the UK’s exports go to the eurozone and, given recent events, we now expect GDP growth there next year of just 0.5%... So export growth is unlikely to pick up any further over the next year or two,” he adds.
A separate survey published today suggests manufacturers remain distinctly more upbeat than those businesses in the larger services sector and yet they are still wary about demand holding up. Almost two-thirds UK manufacturing firms expect a rise in business activity, according to KPMG’s global business outlook. Manufacturers in the UK have higher hopes for the year than their peers in many global economies, including China, although they were less upbeat than those in Brazil, the US and India.
But again, any confidence about activity was not translated into plans to invest. In fact investment intentions fell, according to the survey, compiled by research firm Markit.
“I fear storm clouds may still be gathering on the European horizon. There are now a number of key economies that are actively tackling national deficits and this must surely have a significant effect on the sector some way down the line,” says KPMG’s Gautam Dalal. •Business group CBI is similarly cautious. Its quarterly survey of small and medium-sized manufacturers today shows twice as many saw output rise over the last three months than saw it fall. That was the strongest outturn for 15 years and driven by rising demand at home and abroad as customers rebuilt their stocks in the wake of the recession. But looking ahead to the next three months, firms anticipate a slight fall in output and demand while for the year ahead they expect to invest less.
Rich Indian households outnumber low income families
The growing economy has spun a wheel of fortune for Indians, with high income households outnumbering those in the low category for the first time at the end of 2009-10, according to estimates made by think-tank NCAER.
India has 46.7 million high income households as compared to 41 million in the low income category, the National Council of Applied Economic Research (NCAER) estimates on Earnings and Spendings have revealed.
“For the first time, the number of high income households is set to exceed the number of poor households in 2009-10,” the NCAER said, adding that the middle income class continued to grow.
Households earning less than Rs 40,000 per annum (at 2001-02 prices) are dubbed as low income, whereas those with earnings over Rs 1.80 lakh fall in the high income category.
Those earning between Rs 45,000-Rs 1.80 lakh per annum are considered middle income households, whose number surged to 140.7 million out of the total of 228.4 Indian million
families at the end of 2009-10.
Thus, the NCAER survey confirms that 62 per cent of Indian households belong to the middle class, which is the target of most consumer goods firms.
“The wheel of fortune continues to spin in India, with each level of household income set to move a notch higher by the end of the decade,” the survey on spending and earning patterns since 1985-86 said.
The Indian economy grew at above 9 per cent between 2005-06 and 2007-08. After slowing down in 2008-09 and 2009-10, it is projected to expand at 8.5 per cent in the current fiscal.
The data shows how the country has come a long way in the last 10 years in raising the income standards. In 2001-02, out of the total of 188.2 million households, the number of high income families was only 13.8 million, whereas those in the low income category stood at 65.2 million.
Referring to the middle class, the study said, “Their growing clout becomes even more apparent when one looks at the ownership patterns of households goods. Nearly 49 per cent of all cars are owned by the middle class, compared to just 7 per cent by the rich.”
Similarly, 53 per cent of all air conditioners are owned by middle class homes and nearly 46 per cent of all credit cards are to be found in these households.
India has 46.7 million high income households as compared to 41 million in the low income category, the National Council of Applied Economic Research (NCAER) estimates on Earnings and Spendings have revealed.
“For the first time, the number of high income households is set to exceed the number of poor households in 2009-10,” the NCAER said, adding that the middle income class continued to grow.
Households earning less than Rs 40,000 per annum (at 2001-02 prices) are dubbed as low income, whereas those with earnings over Rs 1.80 lakh fall in the high income category.
Those earning between Rs 45,000-Rs 1.80 lakh per annum are considered middle income households, whose number surged to 140.7 million out of the total of 228.4 Indian million
families at the end of 2009-10.
Thus, the NCAER survey confirms that 62 per cent of Indian households belong to the middle class, which is the target of most consumer goods firms.
“The wheel of fortune continues to spin in India, with each level of household income set to move a notch higher by the end of the decade,” the survey on spending and earning patterns since 1985-86 said.
The Indian economy grew at above 9 per cent between 2005-06 and 2007-08. After slowing down in 2008-09 and 2009-10, it is projected to expand at 8.5 per cent in the current fiscal.
The data shows how the country has come a long way in the last 10 years in raising the income standards. In 2001-02, out of the total of 188.2 million households, the number of high income families was only 13.8 million, whereas those in the low income category stood at 65.2 million.
Referring to the middle class, the study said, “Their growing clout becomes even more apparent when one looks at the ownership patterns of households goods. Nearly 49 per cent of all cars are owned by the middle class, compared to just 7 per cent by the rich.”
Similarly, 53 per cent of all air conditioners are owned by middle class homes and nearly 46 per cent of all credit cards are to be found in these households.
Chinese manufacturing falls as govt. cools overheating
A purchasing managers’ index (PMI) from HSBC and analysts Markit revealed a fall to 49.4 from 50.4 in June. Some economists said this was likely to continue into the autumn as the Chinese authorities work to prevent the economy overheating and property prices running out of control.
Commodity prices, which had recovered in recent weeks from a 25% fall in May, were expected to decline as demand from Chinese manufacturers fell. A slowdown in other major economies including the US and Japan is also expected to dampen demand for oil, copper and other commodities.
A manufacturing index backed by the Chinese government showed the slowest expansion in manufacturing in 17 months in July. The index, released by the statistics bureau and the China Federation of Logistics and Purchasing, slid to 51.2, the lowest level in 17 months.
“There is no need to panic,” said Qu Hongbin, a Hong Kong-based economist at HSBC, repeating his assessment of last month that China is having a “slowdown not a meltdown”.
China’s more moderate expansion is still expected to foster full-year growth of 9.5%, up from 9.1% in 2009, although it needs to grow at least 6% to 7% to keep up with population growth.
HSBC’s manufacturing survey covers more than 400 companies and is weighted more toward smaller, privately owned business than the government’s PMI, according to the bank. The PMI released by the logistics federation and the Beijing-based National Bureau of Statistics covers more than 730 companies.
Morgan Stanley economist Wang Qing told Bloomberg that a government campaign to close energy-inefficient businesses is likely to have contributed to a slowdown in heavy industry.
A slowdown in growth in South Korea and Taiwan underscored how Beijing’s efforts to curb a property price boom have affected the rest of Asia, where export industries have been driven by Chinese demand.
China's manufacturing contracted for the first time in 16 months in July following a clampdown by the government on property speculation and tighter credit controls.
A purchasing managers' index (PMI) from HSBC and analysts Markit revealed a fall to 49.4 from 50.4 in June. Some economists said this was likely to continue into the autumn as the Chinese authorities work to prevent the economy overheating and property prices running out of control.
Commodity prices, which had recovered in recent weeks from a 25% fall in May, were expected to decline as demand from Chinese manufacturers fell. A slowdown in other major economies including the US and Japan is also expected to dampen demand for oil, copper and other commodities.
A manufacturing index backed by the Chinese government showed the slowest expansion in manufacturing in 17 months in July. The index, released by the statistics bureau and the China Federation of Logistics and Purchasing, slid to 51.2, the lowest level in 17 months.
"There is no need to panic," said Qu Hongbin, a Hong Kong-based economist at HSBC, repeating his assessment of last month that China is having a "slowdown not a meltdown".
China's more moderate expansion is still expected to foster full-year growth of 9.5%, up from 9.1% in 2009, although it needs to grow at least 6% to 7% to keep up with population growth.
HSBC's manufacturing survey covers more than 400 companies and is weighted more toward smaller, privately owned business than the government's PMI, according to the bank. The PMI released by the logistics federation and the Beijing-based National Bureau of Statistics covers more than 730 companies.
Morgan Stanley economist Wang Qing told Bloomberg that a government campaign to close energy-inefficient businesses is likely to have contributed to a slowdown in heavy industry.
A slowdown in growth in South Korea and Taiwan underscored how Beijing's efforts to curb a property price boom have affected the rest of Asia, where export industries have been driven by Chinese demand.
India bucked the trend, with its manufacturing PMI rising slightly for a 16th straight month.
Commodity prices, which had recovered in recent weeks from a 25% fall in May, were expected to decline as demand from Chinese manufacturers fell. A slowdown in other major economies including the US and Japan is also expected to dampen demand for oil, copper and other commodities.
A manufacturing index backed by the Chinese government showed the slowest expansion in manufacturing in 17 months in July. The index, released by the statistics bureau and the China Federation of Logistics and Purchasing, slid to 51.2, the lowest level in 17 months.
“There is no need to panic,” said Qu Hongbin, a Hong Kong-based economist at HSBC, repeating his assessment of last month that China is having a “slowdown not a meltdown”.
China’s more moderate expansion is still expected to foster full-year growth of 9.5%, up from 9.1% in 2009, although it needs to grow at least 6% to 7% to keep up with population growth.
HSBC’s manufacturing survey covers more than 400 companies and is weighted more toward smaller, privately owned business than the government’s PMI, according to the bank. The PMI released by the logistics federation and the Beijing-based National Bureau of Statistics covers more than 730 companies.
Morgan Stanley economist Wang Qing told Bloomberg that a government campaign to close energy-inefficient businesses is likely to have contributed to a slowdown in heavy industry.
A slowdown in growth in South Korea and Taiwan underscored how Beijing’s efforts to curb a property price boom have affected the rest of Asia, where export industries have been driven by Chinese demand.
China's manufacturing contracted for the first time in 16 months in July following a clampdown by the government on property speculation and tighter credit controls.
A purchasing managers' index (PMI) from HSBC and analysts Markit revealed a fall to 49.4 from 50.4 in June. Some economists said this was likely to continue into the autumn as the Chinese authorities work to prevent the economy overheating and property prices running out of control.
Commodity prices, which had recovered in recent weeks from a 25% fall in May, were expected to decline as demand from Chinese manufacturers fell. A slowdown in other major economies including the US and Japan is also expected to dampen demand for oil, copper and other commodities.
A manufacturing index backed by the Chinese government showed the slowest expansion in manufacturing in 17 months in July. The index, released by the statistics bureau and the China Federation of Logistics and Purchasing, slid to 51.2, the lowest level in 17 months.
"There is no need to panic," said Qu Hongbin, a Hong Kong-based economist at HSBC, repeating his assessment of last month that China is having a "slowdown not a meltdown".
China's more moderate expansion is still expected to foster full-year growth of 9.5%, up from 9.1% in 2009, although it needs to grow at least 6% to 7% to keep up with population growth.
HSBC's manufacturing survey covers more than 400 companies and is weighted more toward smaller, privately owned business than the government's PMI, according to the bank. The PMI released by the logistics federation and the Beijing-based National Bureau of Statistics covers more than 730 companies.
Morgan Stanley economist Wang Qing told Bloomberg that a government campaign to close energy-inefficient businesses is likely to have contributed to a slowdown in heavy industry.
A slowdown in growth in South Korea and Taiwan underscored how Beijing's efforts to curb a property price boom have affected the rest of Asia, where export industries have been driven by Chinese demand.
India bucked the trend, with its manufacturing PMI rising slightly for a 16th straight month.
Newsweek sold to audio magnate Harman
Washington: Well-known international Newsweek magazine, owned by The Washington Post Co., has been sold to 91-year-old audio magnate Sidney Harman, the founder of audio equipment maker Harman International Industries Inc.
The Washington Post Company announced today that it was selling Newsweek to Harman, ending nearly half-century ownership by the company even as editor Jon Meacham announced his departure.
“Newsweek is a national treasure. I am enormously pleased to be succeeding The Washington Post Company and the Graham family, and look forward to this great journalistic, business and technological challenge,” Harman was quoted as saying in The Post news release.
Newsweek announced that Meacham, the magazine’s editor for the past four years, is stepping down.
“It has been a privilege beyond measure to have worked for Newsweek and for The Washington Post Company for the past 15 years. I will always be grateful for the opportunity the magazine gave me to serve alongside all of you,” Meacham, the magazine’s top editor since 2006, told his staff in an e-mail.
“For half a century, the Graham family created and sustained a culture in which we were able to do good, important work, and I know Newsweek will continue to do so,” Meacham quoted in the New York Times said.
Harman started a business selling FM radios in the 1950s and built it into one of the largest audio equipment companies in the world.
Newsweek, which was acquired by The Post Co. in 1961, has been struggling to find a profitable niche amid poor economic conditions and a flood of online competition.
Declines in circulation and advertising led to a nearly USD 30 million loss in 2009, and Newsweek expects to lose money again this year, a media report said.
Harman, who doesn’t envision any radical overhaul of the magazine, has vowed to retain most of about 350 staff members.
Decline in print media has led to sale or shutdown of number of magazines and newspapers in the US amid the worst economic meltdown in generations. Bloomberg LP bought BusinessWeek last year for just a few million dollars.
“In seeking a buyer for Newsweek, we wanted someone who feels as strongly as we do about the importance of quality journalism,” Post Co. CEO Donald Graham said. “We found that person in Sidney Harman.”
The Washington Post Company announced today that it was selling Newsweek to Harman, ending nearly half-century ownership by the company even as editor Jon Meacham announced his departure.
“Newsweek is a national treasure. I am enormously pleased to be succeeding The Washington Post Company and the Graham family, and look forward to this great journalistic, business and technological challenge,” Harman was quoted as saying in The Post news release.
Newsweek announced that Meacham, the magazine’s editor for the past four years, is stepping down.
“It has been a privilege beyond measure to have worked for Newsweek and for The Washington Post Company for the past 15 years. I will always be grateful for the opportunity the magazine gave me to serve alongside all of you,” Meacham, the magazine’s top editor since 2006, told his staff in an e-mail.
“For half a century, the Graham family created and sustained a culture in which we were able to do good, important work, and I know Newsweek will continue to do so,” Meacham quoted in the New York Times said.
Harman started a business selling FM radios in the 1950s and built it into one of the largest audio equipment companies in the world.
Newsweek, which was acquired by The Post Co. in 1961, has been struggling to find a profitable niche amid poor economic conditions and a flood of online competition.
Declines in circulation and advertising led to a nearly USD 30 million loss in 2009, and Newsweek expects to lose money again this year, a media report said.
Harman, who doesn’t envision any radical overhaul of the magazine, has vowed to retain most of about 350 staff members.
Decline in print media has led to sale or shutdown of number of magazines and newspapers in the US amid the worst economic meltdown in generations. Bloomberg LP bought BusinessWeek last year for just a few million dollars.
“In seeking a buyer for Newsweek, we wanted someone who feels as strongly as we do about the importance of quality journalism,” Post Co. CEO Donald Graham said. “We found that person in Sidney Harman.”
Saudi women sitting on $11.9b cash mountain
RIYADH: A large portion of the Kingdom’s wealth is in the hands of its women who are believed to be sitting on cash totaling $11.9 billion.
“The Kingdom has a veritable treasure trove of human and financial capital in the form of its women who control a large portion of the country’s wealth,” said a report released on Monday by the Cayman Islands-based asset management firm Al-Masah Capital.
Women constitute almost 45 percent of the country’s population, and have a literacy rate of 79 percent. Yet, only 65 percent of them are employed, revealing the huge potential for women employment. In fact 78.3 percent of unemployed women are university graduates.
The report, titled “The Saudi Woman — A catalyst for change,” stated that women could become a major growth driver for the country’s diversification policy with their considerable wealth, which is lying idle, being channeled into the country’s money supply.
“Increasing the contribution of women in key economic sectors can speed up economic diversification. Effective channeling of the huge funds held by Saudi women that currently yield negligible returns into enterprises or investment activities can earn profitable returns as well as boost money supply,” said Shailesh Dash, founder of Al-Masah Capital.
Saudi women are not alone. Women in the Middle East controlled 22 percent or $0.7 trillion of the region’s total assets under management (AUM) in 2009. The region, consequently, ranked fifth globally in terms of AUM controlled by women.
“Women in Saudi Arabia account for a potential pool of human and financial capital with the power and ability to bring about significant social and economic change. But, this can only be done within the right parameters,” he said, adding that the change ought to be evolutionary.
“This will not be effective and long lasting if it is done outside the current norms and social etiquettes of Saudi Arabia. For this change to be effective, it needs to grow and develop organically within the boundaries of what is acceptable and understandable in Saudi society.
“The true potential lies in this development happening in parallel with positive growth in the mindset of society. Only then will we see the real impact of the Saudi woman,” said Dash.
Saudi Arabia also had the lowest national women labor participation rate, which was put at 20.1 percent in 2009 compared to neighboring countries like Qatar, the United Arab Emirates and Kuwait.
Toward that end, establishing a just workplace for both men and women can generate significant economic value. Greater educational support for women to take up jobs in IT and communications can increase the government’s return on investments in the country’s education system.
While the government was the largest employer of women in the country, their exposure to the private sector was minimal accounting for a mere 0.8 percent of total private sector employees.
Women resources can help aid Saudi Arabia in its diversification efforts from oil wealth, fostering employment opportunities on the one hand and a business-enabling environment for women entrepreneurs on the other. This is the need of the hour given their significant human capital and financial muscle, said Dash, adding that public and private sector policy should be targeted toward it.
“The Kingdom has a veritable treasure trove of human and financial capital in the form of its women who control a large portion of the country’s wealth,” said a report released on Monday by the Cayman Islands-based asset management firm Al-Masah Capital.
Women constitute almost 45 percent of the country’s population, and have a literacy rate of 79 percent. Yet, only 65 percent of them are employed, revealing the huge potential for women employment. In fact 78.3 percent of unemployed women are university graduates.
The report, titled “The Saudi Woman — A catalyst for change,” stated that women could become a major growth driver for the country’s diversification policy with their considerable wealth, which is lying idle, being channeled into the country’s money supply.
“Increasing the contribution of women in key economic sectors can speed up economic diversification. Effective channeling of the huge funds held by Saudi women that currently yield negligible returns into enterprises or investment activities can earn profitable returns as well as boost money supply,” said Shailesh Dash, founder of Al-Masah Capital.
Saudi women are not alone. Women in the Middle East controlled 22 percent or $0.7 trillion of the region’s total assets under management (AUM) in 2009. The region, consequently, ranked fifth globally in terms of AUM controlled by women.
“Women in Saudi Arabia account for a potential pool of human and financial capital with the power and ability to bring about significant social and economic change. But, this can only be done within the right parameters,” he said, adding that the change ought to be evolutionary.
“This will not be effective and long lasting if it is done outside the current norms and social etiquettes of Saudi Arabia. For this change to be effective, it needs to grow and develop organically within the boundaries of what is acceptable and understandable in Saudi society.
“The true potential lies in this development happening in parallel with positive growth in the mindset of society. Only then will we see the real impact of the Saudi woman,” said Dash.
Saudi Arabia also had the lowest national women labor participation rate, which was put at 20.1 percent in 2009 compared to neighboring countries like Qatar, the United Arab Emirates and Kuwait.
Toward that end, establishing a just workplace for both men and women can generate significant economic value. Greater educational support for women to take up jobs in IT and communications can increase the government’s return on investments in the country’s education system.
While the government was the largest employer of women in the country, their exposure to the private sector was minimal accounting for a mere 0.8 percent of total private sector employees.
Women resources can help aid Saudi Arabia in its diversification efforts from oil wealth, fostering employment opportunities on the one hand and a business-enabling environment for women entrepreneurs on the other. This is the need of the hour given their significant human capital and financial muscle, said Dash, adding that public and private sector policy should be targeted toward it.
Better Late Than Never
Quoting official sources, a newspaper report has made the welcome disclosure that Ministry of Textile Industry is taking special initiatives to raise the capacity of such vocational and technical institutes and also to go for uniform policy structure for all of them. Moreover, significantly, to make the most of this long due move, the ministry will be seen to have done well to make special arrangements for funding of these institutes for up-gradation and enhancement of their capacity. Thus, making an objective assessment of the efforts that have been made in that direction, it was noted that when the ministry of textile was created in 2004 the administrative control of training and education institutes in specific areas were transferred to it.
Again, as these institutes were set up with the financial resources provided from the Export Development Fund (EDF), to the federal government belonged all the physical and capital assets and property of these institutes. It is, however, another matter that the national textile policy, 2009, envisaged comprehensive development of textile sector, hence also including a detailed programme for skill development to support the textile sector, more so as the entire sector continues to be badly lacking in skilled manpower.
As such, in the normal scheme of things to streamline the process, the ministry is executing an agreement with respective institutes, so as to ensure a uniform policy structure. Under the strategy now adopted, the institutes would continue to impart training in the areas of particular textile associations, as in the past, their management administered by the chairmen of respective associations. Needless to point out, too much time has been lost in making a beginning in the right direction, thereby, retarding the pace of progress in a conceptual vacuum. As they say, well begun is half done, we hope the goals now set would set the pace for the stipulated results.
Again, as these institutes were set up with the financial resources provided from the Export Development Fund (EDF), to the federal government belonged all the physical and capital assets and property of these institutes. It is, however, another matter that the national textile policy, 2009, envisaged comprehensive development of textile sector, hence also including a detailed programme for skill development to support the textile sector, more so as the entire sector continues to be badly lacking in skilled manpower.
As such, in the normal scheme of things to streamline the process, the ministry is executing an agreement with respective institutes, so as to ensure a uniform policy structure. Under the strategy now adopted, the institutes would continue to impart training in the areas of particular textile associations, as in the past, their management administered by the chairmen of respective associations. Needless to point out, too much time has been lost in making a beginning in the right direction, thereby, retarding the pace of progress in a conceptual vacuum. As they say, well begun is half done, we hope the goals now set would set the pace for the stipulated results.
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