Tuesday, May 10, 2016
Saudi Arabia to hike oil production; South Africa unemployment at record high; India's stark digital divide
1 Saudi Arabia to hike oil production (Simon Jack on BBC) State-owned oil company Saudi Aramco chief executive Amin Nasser, has said that production would increase in 2016 ahead of a share sale that could value the company at over $2 trillion dollars - four times the value of Apple.
The sale of up to 5% of the state giant is an eye-catching part of a plan to double the size of the Saudi economy by 2030 and reduce the Kingdom's reliance on oil and gas. But don't be fooled. The planned diversification is not in place of fossil fuels, it's in addition.
Saudi Arabia's so called Vision 2030 will need its coffers full of oil money to spend on investment in other industries such as petrochemicals, mining, tourism and construction. It hopes to double the size of the economy and create six million Saudi jobs within 15 years.
It's a very tall order for a country that currently derives 90% of its income from oil and gas. If it succeeds, it won't be because it reined in oil production, and that could spell more trouble for other producers like Venezuela, Nigeria and, indeed, the North Sea.
2 South Africa unemployment at record high (Johannesburg Times) Unemployment has hit its highest on record, hurting efforts to convince ratings agencies Standard and Poor’s and Fitch not to downgrade South Africa’s credit rating.
Stats SA reported that unemployment had risen to 26.7% of the labour force in the first quarter of this year — the highest since the current method of collating the figures was introduced in 2008. The number of people without a job rose by 521 000 to 5.71 million.
The rand retreated more than 2% in the first quarter, partly because of the jobless rate but also because of a global commodity sell-off and a firmer dollar. The currency later recovered to trade 1.9% weaker at R15.15 to the dollar, near its worst level in a month.
After the decision by Moody’s on Friday to keep its rating steady, Finance Minister Pravin Gordhan said he intended to show other agencies that this country was on the right economic track.
3 India’s stark digital divide (Dawn) India is a global IT powerhouse but a huge majority of the population remains locked out of the benefits brought by the digital economy, the World Bank said on Tuesday.
India’s vibrant business process outsourcing sector, centered in the southern hubs of Bangalore and Hyderabad, has made it the leading exporter of IT services and skilled manpower in the developing world.
Yet nearly a billion people have no Internet access, the biggest offline population of any country, World Bank economists said at the India launch of the World Development Report 2016, Digital Dividends. Fewer than two in five Indian businesses have an online presence, compared with almost two-thirds of Chinese firms, the report found.
“Skills and access, those are the key. India has all the other elements but that is what will really make it an inclusive revolution for India,” said Onno Ruhl, World Bank country director for India. One barrier to online access for India’s millions of poor citizens is cost — a residential broadband service is six to ten times more expensive than in China.