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Friday, 7 October 2016

Angus Deaton’s economic forecasts | FT World - YouTube

Angus Deaton’s economic forecasts | FT World - YouTube: ""

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Saudi Arabia’s economic reforms have to beat the clock |

Saudi Arabia’s economic reforms have to beat the clock |

"Saudi Arabia has long relied on oil to fuel its economic growth and development. Last year, oil accounted for about three-quarters of the Kingdom’s total export revenues and around 90 per cent of government revenue. But the recent collapse in oil prices highlighted what should long have been clear: Saudi Arabia, like the other oil and gas rich nations of the Middle East, needs a more diverse development model.
Since oil prices began to drop in mid-2014, Saudi Arabia has experienced a sharp decline in GDP growth, as well as lower liquidity and credit growth. Fiscal and current-account surpluses were transformed into deficits. This year, the two deficits are expected to reach 13 and 6.4 per cent of GDP, respectively.
Moreover, despite past growth, the Kingdom’s real national wealth has declined. Oil revenues, as is the case elsewhere in the region, were not efficiently transformed into human capital, infrastructure, and the innovative capacity needed to generate productivity growth and diversify economic activity."

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Pascal’s Wager applied to Aramco float

Pascal’s Wager applied to Aramco float:

"Pascal wagered that God existed because fruitless belief was a better downside risk than damnation. By the same logic, bankers in the City and on Wall Street believe Saudi Arabia will float the Aramco oil group at a mooted worth as high as $2tn. Whatever their private doubts, they know they must behave as if the deal is on to merit a place aboard any golden syndicate.

Credible accounts from Aramco would bolster their faith. Three-year numbers would therefore be among the most hotly-anticipated pro-forma accounts in history. They should show how far the desert kingdom, not noted for its willingness to accommodate outsiders, is prepared to go to meet the expectations of foreign investors.

The numbers would need to do three things. First, they should feature a credible bottom line. Aramco’s operating costs are thought to be high. Some 93 per cent of profits are said to disappear in social charges. Second, an audited reserves estimate is required. The doctrinally-accepted figure in the oil industry is 263bn barrels."

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Dubai turns to blockchain for domestic challenges

Dubai turns to blockchain for domestic challenges:

"In the heart of Dubai’s financial district, there is an office whose form perfectly matches its function. The office, with its smooth curves, is the region’s first to have been built with a 3D printer, and it houses an organisation capitalising on other promising 21st-century technologies.

From self-driving cars to blockchain, the government’s Dubai Future Foundation is seeking to wed new technologies to the state bureaucracy and position the emirate as a Petri dish for the future, not just a sun-and-shopping tourism paradise. This is more than encouraging fintech businesses to use Dubai as their base: it is putting technology at the service of the state’s needs. At the nexus of government and business, the city is committed to experimentation to establish an era of public-private partnerships.

The DFF’s Dubai Future Accelerators programme, for example, has selected 30 companies and given them three months’ development time and access to millions of dollars of venture capital to test their technologies with local government authorities. The participants include supersonic transportation system Hyperloop and ConsenSys, a company building developer tools and applications for blockchain, the shared database system."

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