Global Business Outlook Issue 02 2025

Beyond the dollar signs, Donald Trump’s Middle East agreements are poised to reshape the region’s development trajectory

Recasting US-Gulf relations

The Bola Tinubu administration has ushered in a period of economic uncertainty for Nigeria. The removal of fuel subsidies has plunged the country into serious financial strain, with gasoline prices soaring by nearly 500%. Additionally, between October 2023 and October 2024, the value of Nigeria's domestic currency plummeted by more than 100% following the liberalisation of the foreign exchange market. Will 2025 deliver the "renewed hope" Tinubu once pledged, or will the economic challenges facing Nigerians only deepen?

Meanwhile, in Spain, major cities are undergoing rapid transformation driven by real estate speculation and the growing dominance of tourist apartments. Skyrocketing rents are displacing long-time residents and small businesses, while international hospitality chains replace oncethriving local establishments. These developments now symbolise the broader housing crisis engulfing the European nation.

In December 2024, OpenAI introduced its latest artificial intelligence models, o3 and o3-mini, building on the earlier o1 models. These advanced "reasoning" models were evaluated using tasks designed to test general intelligence at levels comparable to that of humans. Are we closer to achieving artificial general intelligence than previously believed? Only time will tell.

Lastly, the April-June 2025 edition of Global Business Outlook will feature US President Donald Trump's recent Middle East tour as its cover story. During his three-day trip with visits to Saudi Arabia, Qatar, and the United Arab Emirates, Trump oversaw the signing of agreements worth more than $2 trillion. These deals spanned sectors including aviation, defence, technology, energy, and education. We will provide a comprehensive analysis of the strategic implications of the tour for regional and global geopolitics.

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Industry

Thames Water

Analysis

Thames Water faces breakup or bailout

GBO Correspondent

The financial troubles of Thames Water highlight the challenges facing England and Wales' privatised water industry

Sewage floating down rivers in the United Kingdom has turned into a noxious political symbol. However, a recent court decision involving Thames Water's obligations focused more on the money flow than the water and effluent flow.

Amid the chaos of England and Wales' privatised water sector, Thames Water stands out. In a last-ditch effort to escape temporary nationalisation at the end of March, the corporation, heavily indebted with roughly £19 billion, asked the court for permission to borrow an additional £3 billion from a group of current creditors.

This procedure, referred to as special administration, would protect the water supply for 16 million homes and companies in south-east England and London. However, it would also reverse Margaret Thatcher's privatisation more than thirty years ago, causing a great deal of trouble for the Keir Starmer-led Labour government and the larger water sector.

Another reason why opponents of the most recent debt agreement have called for special management is that they believe it would result in more funding for repairing leaking pipes and sewers and less for the handful of businesses that are accruing exorbitant fees as a result of Thames' problems.

Over 100 investors, bankers, attorneys, and other advisors attended the high court recently, either in two crowded courtrooms or via video conference, demonstrating the scope of the operation.

The interest expenses are egregious. Most of the time, the general public is unaware of the bond markets. However, when a business experiences severe financial difficulties, like Thames has, court cases can reveal how closely English home water rates are tied to international financing.

Two sets of possible lenders faced off against one another during the court session. An interest rate of 9.5% is being offered by one hedge fund that holds debt referred to as "class A," while the smaller group of "class B" hedge funds asserts an offer of 8%. The class A group intends to distribute the £3 billion in two lots of £750 million, after an initial £1.5 billion.

For the benefit of customers, Charlie Maynard, a former investment banker and current Liberal Democrat MP for Witney, Oxfordshire, was permitted to get involved in the case. The class A offer, he said, was "ludicrously expensive debt."

Andy Fraiser, Thames' general counsel, told the court: "You can come up with a plan which is cheaper but is not deliverable."

According to Maynard's legal team, two-thirds of the £1.5 billion would "go into the pockets of debt investors and professional advisers," including more than £440 million in fees and discounts and £245 million in interest

paid to those investors. Numerous international banks and investors showed a great deal of interest in the court case; some of them even traded the debt.

The US firms JP Morgan and Goldman Sachs, the UK banks Barclays, Lloyds Banking Group, and HSBC, the Canadian banks Scotiabank and National Australia Bank, and the French bank BNP Paribas all seemed to be online attendees. Large investors, including hedge funds, also seemed to be following.

They included hedge funds such as the Londonbased Algebris and Insight Investment, along with America's Diameter Capital, Bracebridge Capital, and Centerbridge. Additionally, well-known investors like Pimco, Corebridge, and Millennium Management were part of the group.

Although the class A group also includes hedge funds like Elliott Investment Management and Silver Point Capital, while the class Bs include Polus Capital and Covalis Capital, attendance does not always indicate

that the companies have financial exposures to Thames Water. The names of the corporations involved were not revealed by either group of creditors.

To advocate for public ownership of public utilities including libraries, railroads, and water, Cat Hobbs formed “We Own It.” She stated that to restrict the flow of funds from Thames Water, the court ought to reject the debt agreement and instead opt for special administration.

"This is merely a 'money-go-round,' and they want to continue it for as long as possible. It would be an absolute farce if it were to proceed. In the restructuring, the interests of the creditors will be given top priority, whereas, in the special administration, they would not. Armies of advisors. Even if the interest rates are high, taking risks is rewarded,” she stated.

Nevertheless, the costs paid to all of those attorneys, bankers, and public relations consultants will also cause hundreds of millions of pounds to leave Thames Water in the upcoming months. Thames has enlisted the help of the restructuring advisory firm Kroll and the "Magic Circle" law firm Linklaters.

They faced Quinn Emanuel, a class B legal firm, along with other professionals. Thames receives PR help from Edelman Smithfield,

the class A group receives guidance from Hanbury Strategy, and the class Bs are represented by Greenbrook Advisory. While rival Moelis & Company is advising the bondholders of its parent company Kemble, Thames Water has also enlisted the investment firm Rothschild & Co. to look for new equity investors to take over ownership.

Thames was incurring costs of approximately £15 million each month for restructuring, according to Alastair Cochran, the company's Chief Financial Officer.

The total cost of the process might come to over £200 million, which is a minor sum compared to the water company's enormous bank sheet but a large payout for all parties concerned. The class As, class Bs, and Thames Water all refused to provide specifics about the process fees.

Thames's rates have been increased even by the regulator, Ofwat. In its annual report released this week, it stated that it had ordered Thames to repay £6 million for work done on the business during the fiscal year 2023–2024. Lazard, Ofwat's in-house investment bank, has been brought in to provide advice. One more round. Those close to Thames Water think that if the corporation did not hire counsel, it would be criticised from the opposite side.

Whether the Thames can remain privately owned, which the business claims will save the taxpayer money on maintaining it, will be largely determined by that recommendation. The business and its creditors strongly dispute that the fees would eventually be covered by invoices, claiming that creditors will cover them when the business's balance sheet is repaired.

During an interaction with The Guardian, a Thames representative said, "Any suggestion that customers will bear costs from this process is an untrue and misleading claim that risks needlessly worrying our customers."

Customer bills won't shoot up as a result of this proposal.

“The cost of bills for the upcoming five years has already been established by Ofwat. Our strategy is still the only workable way to give the company a stronger financial foundation. Customer bills won't change if it's approved, but billions of pounds will be available for network improvements, pipe repairs, sewage treatment plant upgrades, and the preservation of clean drinking water,” the person stated.

The trading firm Jefferies, another adviser to the

class As, estimates that those billions of pounds might total an additional £7 billion. These funds will need to be restructured later this year. The fees will therefore continue to be collected.

Another firm, Teneo, estimated that even in the case of a special administration, consultants would charge £98 million to arrange finance. This would include £63 million for administration costs, £25 million for legal fees, and an additional £10 million for merger consultants. Thames has paid £5 million for PR and restructuring advice to Teneo, which may be a candidate to lead the special administration.

"This is only the first of many levies that are gradually increasing in amount. There's another fees fest coming up the road,” Maynard, whose attorneys Marriott Harrison and William Day worked pro gratis, stated.

The financial troubles of Thames Water highlight the challenges facing England and Wales' privatised water

industry. As the high court deliberates on the company’s borrowing strategy, the stakes are high, not just for Thames Water but also for the millions of consumers who depend on its services.

The outcome of this case could determine whether privatised utilities can deliver on their promises or if public ownership is the only viable path forward, shaping the future of water management in Britain.

A nation in the dark: Cuba’s energy woes

Feature

GBO Correspondent

Cuba, an island known for its resilience and revolutionary spirit, is currently facing one of the most significant energy crises in its modern history. Rolling blackouts, ageing infrastructure, fuel shortages, and an increasingly fragile economy have left millions of Cubans struggling to cope with the impacts of unreliable electricity.

We will examine the roots, scale, and implications of the Cuban energy crisis, utilising recent data, historical context, and expert insights to provide a comprehensive overview of the situation.

Everyday life of an average Cuban Blackouts lasting up to 20 hours a day have become commonplace, particularly outside Havana, where infrastructure is less robust. Food insecurity is worsening as unrefrigerated supplies spoil amid extended power cuts, directly affecting households that already spend a significant portion of their income on food. In many urban areas, running water is often disrupted because electric pumps are needed to move water from cisterns to homes.

For the average Cuban, the hardships are overwhelming. Entire families must endure relentless heat without fans or air conditioning, even during sweltering summer months. The smell of spoilt food lingers in neighbourhoods, as refrigerators are rendered useless by the frequent power cuts.

Parents face the daunting task of cooking meals with limited fuel resources, while children struggle to complete their homework by candlelight or the dim glow of a battery-powered lamp. Waiting in long lines for necessities has become an exhausting daily routine, compounded by the uncertainty of whether those items will even be available. The stress and anxiety of not knowing when electricity will

Cuba's energy infrastructure has a complex history shaped by political alliances, especially during and after the Cold War

size of neobanks from 2021 to 2023 (In Billion US

Source: Statista

Source: Statista

be restored take a toll on mental health, and many Cubans are left feeling isolated and abandoned by a system that seems incapable of providing even the most basic services.

Healthcare facilities, most of which rely on outdated generators, struggle to maintain basic services. Reports indicate that some hospitals have had to ration power, prioritising critical units like intensive care while suspending other services. The impact on public health has been severe, with increased instances of heat-related illnesses and rising mental health concerns linked to prolonged uncertainty and hardship.

Educational institutions have not been spared either. In October 2024, the government closed schools for several days, citing the need to reduce nonessential electricity consumption. This disruption in education, combined with broader economic difficulties, has added to the sense of despair among the youth of the country, many of whom believe migration is their only viable option. Indeed, between 2021 and 2023, over a million Cubans left the country, about 10% of the population, marking one of the largest emigration waves since the 1959 revolution.

Historical roots of Cuba's energy dependency

Cuba's energy infrastructure has a complex history shaped by political alliances, especially during and after the Cold War.

Throughout the 20th century, Cuba's energy needs were mostly met through support from the Soviet Union, which provided the island nation with fuel and technological assistance. With the collapse of the Soviet Union in 1991, Cuba was left without its primary supplier, plunging into a severe economic downturn referred to as the "Special Period." During this time, Cuba attempted

to restructure its economy and diversify energy sources by using biomass, wind, and solar power, yet these efforts were insufficient to meet the island's energy needs.

Cuba remains heavily reliant on thermoelectric power plants, which produce around 80% of the nation's electricity. These plants are fuelled predominantly by oil, much of which historically came from Venezuela. This dependency has become increasingly problematic as Venezuela's economic crisis has limited its ability to provide Cuba with affordable oil.

In 2024, Venezuelan oil shipments to Cuba fell to 25,000-30,000 barrels per day, a significant drop from the 100,000 barrels per day supplied a decade ago, forcing Cuba to seek alternative and often more expensive sources on the global spot market.

State of Cuba's energy infrastructure

Cuba's energy infrastructure is aged and overburdened, with most power plants well beyond their intended lifespan. The Antonio Guiteras thermoelectric power plant, located near Matanzas, is one of the largest and oldest plants, with its operations frequently disrupted due to technical failures and fuel shortages.

As of late 2024, Cuba's five main thermoelectric plants are all over 30 years old, with some approaching 50 years, significantly past their designed operational limits of 25-30 years. This has led to frequent breakdowns, decreased efficiency, and a substantial increase in the frequency of blackouts.

The Cuban National Electrical Union (UNE) has reported a high number of grid collapses recently, with four such incidents occurring in two days in October 2024. UNE officials have highlighted how obsolete equipment, lack of spare parts, and financial constraints make timely repairs nearly impossible.

The reliance on emergency measures such as floating power plants, leased from Turkey, has provided only temporary relief. These ship-based generators have limited capacity and cannot meet the energy demands of a nation with 10 million people, particularly as those demands continue to rise.

Fuel shortages and geopolitical pressures

Fuel shortages are central to Cuba's energy crisis. With Venezuelan oil shipments plummeting, Cuba has attempted to compensate with oil imports from countries like Russia and Mexico, but these have also decreased. In early October 2024, a fuel tanker carrying essential supplies to Cuba was delayed due to bad weather, further exacerbating the country's inability to generate adequate power. Estimates suggest that Cuba currently generates only about 500 megawatts on the grid, compared to the three gigawatts needed to power the entire country effectively.

The United States' trade embargo, which has been in place for over 60 years, has significantly limited Cuba's ability to invest in its energy sector. The embargo prevents Cuba from accessing credit from international financial institutions and restricts the import of technology needed to modernise its infrastructure.

According to Cuban officials, the embargo has cost the island more than $130 billion in cumulative losses. The inability to access advanced equipment

has led to stagnation in progress and forced reliance on obsolete technologies that are both inefficient and costly to maintain.

The US has also been accused of orchestrating numerous covert operations intended to destabilise the Cuban government, contributing to ongoing hardships. These actions include support for anti-government groups and efforts to undermine the island's economy, making recovery from crises like the current energy situation significantly more challenging.

Dysfunctional political apparatus

Cuba's political apparatus has long been marked by inefficiencies, a lack of transparency, and centralised decisionmaking that stifles innovation and local autonomy. The government's commitment to a centrally planned economy has left little room for market-driven reforms that could stimulate growth or attract foreign investment.

This rigidity has been a significant obstacle to economic diversification and modernisation, particularly within the energy sector. The decision-making process remains dominated by the Communist Party, with key roles occupied by individuals selected based on loyalty rather than expertise. This has resulted in poor policy implementation and an inability to respond quickly to crises, such as the current energy shortage.

Moreover, the Cuban government has often prioritised political stability over

Cuba's energy infrastructure is aged and overburdened, with most power plants well beyond their intended lifespan. The Antonio Guiteras thermoelectric power plant, located near Matanzas, is one of the largest and oldest plants, with its operations frequently disrupted due to technical failures and fuel shortages

The energy crisis has devastated the Cuban economy, which is already struggling with limited productivity and high inflation. Many businesses have had to close or reduce operating hours due to unreliable electricity

economic pragmatism, maintaining a tight grip on public discourse and dissent. State-controlled media outlets minimise the extent of economic problems, while authorities have been known to suppress protests and silence critics, as seen during the 2024 blackouts.

This lack of accountability not only increases public frustration but also restricts the government's ability to effectively leverage the collective ingenuity of its people. The inability of the political apparatus to adapt and reform has thus played a critical role in exacerbating the current energy crisis, with little indication of a shift towards policies that could create sustainable, long-term solutions.

Economic and social ramifications

The energy crisis has devastated the Cuban economy, which is already struggling with limited productivity and high inflation. Many businesses have had to close or reduce operating hours

due to unreliable electricity. The tourism sector, a crucial source of foreign currency, has also been severely affected. Major hotels in Havana, usually resilient due to backup power systems, ran out of fuel for their generators during recent blackouts, leading to a drop in bookings and revenue.

Cuba's GDP could shrink by 3% in 2024, marking the third consecutive year of economic contraction. Export earnings are still $3 billion short of pre-pandemic levels, and inflation has significantly eroded purchasing power.

The combination of high costs for imported fuel, reduced productivity, and limited foreign reserves has pushed Cuba into what officials have termed a “war economy,” austerity measures aimed at cutting consumption and conserving whatever limited resources remain.

Social unrest has been simmering, with small-scale protests emerging in response to blackouts and deteriorating living conditions. President Miguel DíazCanel's administration has taken a hard stance against dissent, deploying police and military units to prevent the spread of protests.

During the latest round of blackouts, Díaz-Canel appeared on television, dressed in military attire, warning against any attempts to disrupt public order, framing dissent as a product of foreign interference. Despite these warnings, frustrations continue to grow, particularly among younger Cubans who see little opportunity for economic improvement.

Steps towards recovery

Efforts to address the energy crisis have included emergency measures like leasing floating power plants and importing fuel on the spot market. Still, these solutions are neither sustainable nor cost-effective in the long term. Cuba has also sought to boost its renewable energy capacity, with mixed results.

The government aims to produce 24% of its electricity from renewable sources by

2030, primarily through wind, solar, and biomass. However, as of 2024, renewables make up less than 5% of the total energy mix, hindered by a lack of investment and the challenges of importing technology.

Cuba's geographical location gives it a significant advantage in harnessing solar and wind energy, and some small-scale projects have shown promise. For instance, the solar photovoltaic park in Cienfuegos is one of the largest in the Caribbean, providing much-needed power to local communities.

However, without large-scale investments and technology transfers, these initiatives remain limited in scope. The trade embargo has also made it challenging for Cuba to access the international financing needed to scale up renewable energy projects, despite some support from European nations and China.

One potential avenue for relief lies in improved diplomatic relations with the United States. During the Obama administration, US-Cuban relations improved, leading to increased remittances and tourism that positively impacted the Cuban economy. A renewed engagement could ease access to credit and technology, although current US political dynamics make such a shift uncertain. Former President Joe Biden had relaxed some sanctions, allowing for limited remittances, but broader relief has not yet materialised, largely due to domestic political pressures in the United States.

The broader implications

The energy crisis in Cuba is not an isolated incident but rather a symptom of broader systemic challenges facing the island. It highlights the vulnerabilities of a centrally planned economy that could not modernise its infrastructure or diversify its energy sources effectively.

The crisis also underscores the impact of climate change on vulnerable nations. Cuba, which has faced multiple hurricanes

in recent years, lacks the resilience to quickly recover from natural disasters, which often target critical infrastructure, further deepening its energy woes.

The migration of over a million Cubans since 2022 is both a consequence and a driver of the crisis. With an ageing population and a diminishing workforce, Cuba's capacity to recover economically is further compromised. The demographic shift will likely have lasting effects, reducing productivity and increasing the dependency ratio, placing additional strain on already limited social services.

Despite Cuba's close ties with allies such as Russia and China, these nations have limited capacity to provide meaningful assistance in addressing the energy crisis. Russia, embroiled in its geopolitical struggles and economic sanctions, is focused on maintaining stability at home and supporting its involvement in other regions like Ukraine.

China's economic growth has also slowed, with domestic priorities including a struggling real estate market and its energy demands. Furthermore, China has to manage its international loans and investments carefully to avoid overextension. Other regional allies face similar limitations, leaving Cuba largely isolated in terms of receiving substantial external support.

Addressing Cuba's energy crisis will require a combination of internal reforms, international support, and, potentially, a rethinking of US-Cuba relations. Without such changes, the crisis might persist, further eroding the quality of life for millions of Cubans and pushing the nation deeper into economic stagnation and social instability. The resilience of the Cuban people has been remarkable, but without systemic change, their ability to endure these hardships is being pushed to its limits.

Cuba's geographical location gives it a significant advantage in harnessing solar and wind energy, and some small-scale projects have shown promise. For instance, the solar photovoltaic park in Cienfuegos is one of the largest in the Caribbean, providing much-needed power to local communities

Trump's $2 trillion deals recast US-Gulf relations

Beyond the dollar signs, Donald Trump’s Middle East agreements are poised to reshape the region’s development trajectory

GBO Correspondent

United States President Donald Trump’s Spring 2025 tour of the Middle East was nothing short of momentous. Over the span of three days, with stops in Saudi Arabia, Qatar, and the United Arab Emirates, Trump presided over the signing of agreements valued at more than $2 trillion across aviation, defence, technology, energy, and education.

Greeted with lavish royal welcomes, state dinners, and even the UAE’s Burj Khalifa lit up in American colours, Trump’s visit underscored a dramatic deepening of Washington-Gulf partnerships. The White House hailed the trip as a “huge success, locking in over $2 trillion in great deals” – including a $600 billion Saudi investment pledge, a $1.2 trillion economic exchange accord with Qatar, and hundreds of billions in new trade deals with all three countries.

This massive haul of agreements signals a significant shift in tone from Trump’s first presidential foray into the region in 2017. Then, as a newly elected leader, the Republican’s focus was on arms sales and counterterrorism; in 2025, the emphasis expanded to cutting-edge tech and economic development.

“I have absolutely no doubt that the relationship will only get bigger and better,” Trump remarked in Abu Dhabi, projecting confidence that these deals mark the start of a new era in US-Middle East relations.

Surrounded by Gulf royals and a who’swho of American CEOs, Trump cast himself as dealmaker-in-chief, leveraging personal diplomacy and American commercial clout to reassert Washington’s influence in a region courted aggressively by China and others. The result was a bundle of mega-deals spanning everything from Boeing jets to artificial intelligence ventures, all forged on a foundation of mutual economic interest.

From aviation to AI, pacts galore

Trump’s itinerary – Riyadh, Doha, Abu Dhabi –brought a whirlwind of signings. In each capital, US and Middle Eastern officials inked high-value agreements cutting across many sectors. Notable deals announced during the visit include aviation, defence, technology, data, energy, education, infrastructure, and culture.

Boeing clinched historic aircraft sales in the region. Qatar Airways ordered up to 210 Boeing widebody jets (787s and 777Xs) worth $96 billion, the largest widebody purchase in Boeing’s history. In the UAE, Etihad Airways committed $14.5 billion for 28 Boeing 787 and 777X airliners powered by GE engines. These deals will upgrade Gulf carriers’ fleets and are touted to support tens of thousands of US aerospace jobs.

Security ties got a major boost. Saudi Arabia and the US signed the largest defence agreement in American history – nearly $142 billion for advanced fighter jets, missile defence, warships, and more. Riyadh is now Washington’s biggest foreign military sales customer, with active cases valued at over $129 billion.

In Qatar, Trump oversaw deals for cuttingedge weapons: Raytheon will provide a $1 billion counter-drone system, making Qatar the first international buyer of that tech, and General Atomics will sell $2 billion worth of MQ-9B Reaper drones. Qatar also inked a statement of intent outlining another $38 billion in potential defence investments – including support for the US airbase at Al Udeid and future air and naval security projects. These agreements strengthen Gulf militaries with American hardware while reinforcing US security commitments in the region.

In fact, as per the White House, the arms package was "the largest defense cooperation agreement" Washington has ever done with any country, involving more than a dozen American defence companies.

It proved to be a diplomatic victory for Uncle Sam, as it reversed the Joe Biden administration's failure of finalising a defence pact with Riyadh as part of a broad deal that envisioned Saudi Arabia normalizing ties with Israel. While the White House did not mention if Riyadh would be permitted to purchase Lockheed's F-35 jets, the cutting-edge stealth aircraft that the Kingdom has reportedly been interested in for years.

A centrepiece of the tour was unprecedented cooperation in data and artificial intelligence. The UAE will host a new five-gigawatt “AI supercampus” – the largest AI research and data centre facility outside the US – under a US-UAE tech partnership.

In parallel, Washington agreed to ease export restrictions so that the UAE can import up to 500,000 of Nvidia’s most advanced semiconductor chips for AI development, a capability previously blocked over Washington’s fears of Chinese access. Saudi Arabia struck a similar bargain: its new stateowned AI company, HUMAIN, obtained hundreds of thousands of Nvidia’s cutting-edge Blackwell AI chips, giving the Kingdom raw computing power on par with top global tech hubs.

Big American tech firms also jumped in – Cisco signed on with a UAE partner to develop local AI talent, Amazon Web Services announced cloud and cybersecurity initiatives, and Google’s Alphabet agreed to help Saudi Arabia launch a “Global AI Hub” with the Public Investment Fund. These deals marry Gulf capital with American know-how, aiming to transform the region into a leader in artificial intelligence and data services.

Several agreements advanced Gulf nations’ ambitions beyond oil. In Abu Dhabi, ExxonMobil, Occidental, and EOG Resources partnered with ADNOC (Abu Dhabi’s national oil company) on a $60 billion project to boost oil and gas output – a pact expected to create jobs in both countries and ensure stable energy supplies.

Cover Story

Trump Gulf

Trump’s 2025 Middle East foray deliberately echoed his very first trip as president in May 2017 – but with some notable twists. In 2017, Trump also landed first in Riyadh, where Saudi royals rolled out an extravagant reception and the president famously joined a sword dance amid glowing orbs and opulent decor

Meanwhile, Emirates Global Aluminium (EGA) will invest $4 billion to build a new aluminium smelter in Oklahoma – notably, America’s first new aluminium plant in 45 years –doubling US aluminium output capacity while strengthening critical mineral supply chains. In Qatar, Houstonbased McDermott secured $8.5 billion in contracts to support Qatar’s LNG expansion with offshore engineering, directly tying US expertise to Qatar’s gas infrastructure growth.

And across Saudi Arabia’s massive development projects – from the new King Salman International Airport to the Qiddiya entertainment city – American firms like Hill International and Jacobs are involved in under $2 billion worth of infrastructure and consulting contracts. These deals underscore that the partnership isn’t only about high tech – it also cements Washington’s involvement in the Gulf’s physical transformation and energy future.

Taken together, the deals paint a picture of a Middle East pivoting to a high-tech, knowledge-based future with American partnership. The breadth of cooperation – from museums to missiles – speaks to a comprehensive strategic realignment between the United States and its Gulf partners.

Shifting tone and priorities

Trump’s 2025 Middle East foray deliberately echoed his very first trip as president in May 2017 – but with some notable twists. In 2017, Trump also landed first in Riyadh, where Saudi royals rolled out an extravagant reception and the president famously joined a sword dance amid glowing orbs and opulent decor.

Back then, Trump announced a record $110 billion arms deal with Saudi Arabia (part of a promised $350 billion over 10 years), and he convened dozens of Arab and Muslim leaders to

rally against terrorism. The tone was muscular and security-focused: Trump lauded Middle Eastern allies for “driving out” extremists and pointedly refused to lecture on human rights, signalling a transactional approach.

It was a honeymoon of sorts between Trump and Gulf monarchies – but many of 2017’s grand pledges remained aspirational. In fact, out of the $110 billion in arms sales, Trump touted in 2017, only about $30 billion had been implemented by 2025. Some business deals never fully materialised; for example, a Saudi plan to buy 50 US drilling rigs resulted in only 11 delivered in the ensuing years.

The 2017 trip’s impact was also marred by geopolitics soon after – a bitter rift erupted when Saudi Arabia and the UAE blockaded Qatar just weeks later (a move Trump initially appeared to support), revealing cracks in Gulf unity.

Fast forward to May 2025 and the landscape has evolved. The intra-Gulf feud has since healed, and Trump’s itinerary notably included Doha – a sign of Qatar’s reintegration and of Washington’s intent to balance relationships with all its Gulf partners.

In contrast to 2017’s singular focus on Saudi Arabia, the 2025 tour was a triplestop diplomatic marathon, symbolically treating Riyadh, Doha, and Abu Dhabi as co-equals in regional leadership. The focus, too, had broadened. Security cooperation was still key, but economic and technological partnerships took centre stage.

One reason is the shifting regional dynamics: Gulf leaders are now focusing more on commerce than conflict. Trump capitalised on this emerging momentum.

In place of a counterterrorism summit, he headlined business forums – rubbing shoulders with CEOs like Nvidia’s Jensen Huang, OpenAI’s Sam Altman, Tesla’s Elon Musk, Amazon’s Andy Jassy, and Palantir’s Alex Karp, who all flew

in for deals. The presence of these tech titans underscored a new tone: America’s engagement is no longer just about selling weapons, but also about jointly building the Middle East’s tech economy.

Another shift was in priorities and rhetoric. In 2017, Trump made combating Iran’s influence a marquee theme, aligning with Riyadh’s hawkish stance. In 2025, while still warning Tehran to “take a new and better path” on its nuclear programme, Trump also floated prospects of a revised deal if Iran complies. At the same time, Trump shocked some observers by holding out Saudi Arabia as a model for regional modernisation, even suggesting war-torn Syria might follow suit if given economic incentives.

The geopolitical context is also more favourable to Trump’s deal-making now. The Abraham Accords he facilitated in

2020 have endured, creating new business opportunities that span Israel and the Gulf. Though Israel was not on Trump’s 2025 itinerary, the spirit of regional integration it represents hung in the air. Gulf states, flush with petrodollar wealth after recent oil booms, are eager to invest in diversification and welcome US partnerships to balance growing ties with China.

Indeed, China’s shadow loomed over the visit: in the interim years, Beijing had courted the Gulf. One must also remember that President Xi Jinping received a red-carpet welcome in Riyadh in 2022, and China’s tech and infrastructure investments have expanded across the Middle East.

The Biden administration responded by restricting exports of top-tier US tech, like advanced microchips, to Gulf nations for fear they might leak to China.

Cover Story \ Middle East

For Donald Trump, the political payoff is clear. At home, he can tout “$2 trillion in great deals” creating jobs and exports, reinforcing his image as a master negotiator delivering results. Abroad, he has

reasserted American primacy in a region where rival powers have made inroads

Trump’s 2025 deals essentially reverse that stance – offering the UAE and Saudi Arabia access to cutting-edge US semiconductors and AI technology on the condition they “keep the tech for themselves” and enforce safeguards against diversion to rivals.

As one analysis noted, many of Trump’s new agreements “broke with the policies of Joe Biden’s administration” on tech control. Gulf leaders, for their part, appeared delighted to engage on these terms –even gifting Trump a $400 million Boeing 747-8 jet (courtesy of Qatar’s Emir) for future use as Air Force One in a symbol of personal rapport.

In sum, the 2017 and 2025 visits bookend Trump’s approach to the Middle East: the first trip was about resetting alliances and striking big defence deals, while the latest was about leveraging those alliances into broader economic win-wins.

Gulf states gain big

Beyond the dollar signs, Trump’s Middle East agreements are poised to reshape the region’s development trajectory. For Saudi Arabia, the UAE, and Qatar, the deals promise not just short-term commerce but also long-term leaps in technology, infrastructure, and “digital sovereignty.”

In Riyadh, Abu Dhabi, and Doha alike, leaders have been articulating ambitious visions (Saudi’s Vision 2030, Qatar’s National Vision 2030, and UAE’s Centennial 2071 plan) to create smart, knowledge-based economies. The US partnerships announced in May 2025 directly feed those agendas in several ways:

AI technology advancements

The highlight for many in the Gulf is access to cutting-edge American technology – especially in artificial intelligence. By securing hundreds

of thousands of Nvidia’s top-tier AI chips and building massive data centres to house them, Saudi Arabia and the UAE are ensuring they can develop AI models and big data applications at a world-class level.

The ability to process and analyse one’s own data domestically, with the best hardware available. The new AI mega-campus in Abu Dhabi will reportedly have computing capacity rivalling the biggest tech labs in Silicon Valley.

Also, hand-in-hand with AI comes the realisation of smart city visions across the Gulf. Saudi Arabia’s planned city of NEOM – a futuristic metropolis of robots and renewable energy – and other gigaprojects will require sophisticated tech integration. The deals with the American companies provide vital expertise: American engineering giants such as Parsons and Jacobs are already working on Saudi smart infrastructure, with 30 major project wins valued up to $97 billion for Parsons alone, supporting thousands of US and Saudi jobs.

Those projects range from highspeed transit systems to techaugmented tourist resorts. By bringing in US partners, Gulf governments ensure their new cities are built to the highest standards and filled with the latest innovations.

Qatar, for its part, is leveraging US inputs as it builds smart infrastructure for the 2030 Asian Games and expands projects like Lusail Smart City. The $8.5 billion in LNG infrastructure contracts to McDermott also means Qatar’s energy sector will be more efficient and tech-enabled, indirectly supporting its urban development with better power and utilities.

Moreover, these ventures come with training programmes – e.g. the Quantinuum-Qatar joint venture will train a quantum computing workforce locally – ensuring Gulf nationals gain the skills to run the smart economies being built.

Crucially, digital sovereignty is a recurring theme. For instance, Saudi Arabia’s deal to buy advanced semiconductors for its PIF-owned companies means those chips will reside under Riyadh’s control, powering national projects from smart utilities to advanced R&D, rather than having to rely on foreign cloud providers who might host data abroad. The Gulf states are effectively securing the tools to become producers, not just consumers, in the technology space – a fundamental shift that these agreements accelerate.

New era of US-Middle East partnership

Trump’s 2025 Middle East tour will be remembered as a watershed in USGulf relations – one that recast the alliance in terms of enterprise and innovation. In a region historically defined by oil wealth and security pacts, the visit spotlighted a broader narrative: investments, technology exchange, and joint nation-building. Sceptics note that Trump is quick to declare victory – the true test will be implementing these deals in the years ahead. Yet there is an undeniable momentum.

For Donald Trump, the political payoff is clear. At home, he can tout “$2 trillion in great deals” creating jobs and exports, reinforcing his image as a master negotiator delivering results. Abroad, he has reasserted American primacy in a

region where rival powers have made inroads.

The fact that Saudi Arabia openly aimed for a $600 billion package ahead of his visit – and achieved it – shows the degree of buy-in from Crown Prince MBS, who has emerged as a linchpin figure for US interests. In turn, Qatar’s generous gestures (including a VIP airliner gift) and the UAE’s trillion-dollar pledges signal that even smaller states see the advantage in anchoring themselves to the American orbit.

We are likely witnessing the beginning of a new chapter in the Middle East – one characterised less by ideology and more by investment. As one regional commentator put it, Gulf leaders today are “turning petro-dollars into techno-dollars.” The deals on data centres, AI labs, and smart cities suggest a future Persian Gulf that is as much a Silicon Valley as it is an oil basin. It carries profound implications: economically empowering young populations, politically stabilising nations through growth, and perhaps easing the grievances that have driven conflict. Of course, pitfalls remain–from ensuring the technology isn’t misused or proliferated, to managing great-power rivalries as the US, China, and others jostle for influence.

Analysis

Is Spain's housing policy too late?

GBO Correspondent

Before taking office in 2018, PM Pedro Sánchez stated that Spain had been without a state housing policy for nearly ten years

It has now turned into a mockery of itself, a place where the locals have been driven out for the sake of tourism and growing capital. Combination key safes have appeared in doorways, indicating that the unit has been turned over to vacation rentals. Shops selling ceramic bulls and flamenco dolls have taken the place of a centuryold apothecary and shirtmaker that once existed on La Rambla.

Cities around Spain are gradually changing due to real estate speculation and the rise in tourist apartments; exorbitant rents are forcing out locals and traditional businesses, and neighbourhood mainstays are giving way to international chains, gift stores, burger places, and nail parlours. Such startling facts explain Spain's housing crisis.

According to recent research conducted by the Bank of Spain, nearly half of Spain's tenants spend 40% of their income on rent and utility costs, compared to the European Union (EU) average of 27%. Rents have increased by 80% over the last ten years, exceeding salary gains.

The problem has become the main concern of Spaniards and the subject of the most recent policy dispute between the ruling socialists and their conservative opponents in the People's Party (PP). Real estate speculation and the surge in tourist apartments have exacerbated the problem by increasing living expenses.

In a speech, Prime Minister Pedro Sánchez laid out a 12-point plan to alleviate what he described as the nation's "housing situation emergency." He pointed out that social housing only accounted for 2.5% of Spain's total stock, while it made up 14% in France and 34% in the Netherlands.

"We will split European and Spanish society into two types of people," PM Pedro Sánchez said.

One inherits one or more homes from their parents and can use most of their income for travel and education, while those who

work their whole lives end up as elderly people without a home.

Before taking office in 2018, he stated that Spain had been without a state housing policy for nearly ten years. He also charged that his predecessor in the PP had gambled instead on "an ideological, neoliberal policy that had disastrous social and economic consequences."

To build "thousands and thousands and thousands" of affordable social housing units for families and young people, Sánchez, whose coalition minority government has already introduced a law allowing authorities to cap "disproportionate" rent prices in some areas, announced the transfer of 3,300 homes and 2 million square metres of land to a newly established public company. In addition, he suggested tougher regulations and greater taxes for tourist apartments, as well as incentives for those who rent out vacant buildings at reasonable rates.

However, his proposal to impose a tax of up to 100% on real estate purchased by non-residents from non-EU nations, including the United Kingdom, was arguably his most striking move.

"Approximately in 2023 alone, non-EU citizens purchased approximately 27,000 homes and apartments in Spain. They didn't do it to live there or to provide a place for their families to dwell. They did that in order to conjecture,” Sánchez stated recently.

Some parts of the UK press were not happy with the proposal, which would need to be presented to parliament and may be challenged in court. One newspaper denounced the "brutal tax hike," while another referred to it as a "war on Brits' holiday homes."

The People's Party declared that it would not back the government's "xenophobic" policy in the areas it controls. The People's Party had made its own housing proposals

the day before Pedro Sánchez's address, primarily centred on tax savings.

Sánchez claimed that his government was considering prohibiting non-EU immigrants "from buying houses in our country, in cases where neither they nor their families reside here and they are just speculating with those homes," indicating that he was willing to go even further.

Over the last 12 months, the housing issue has become a top priority on the political agenda. Several large-scale protests throughout Spain in 2024 were sparked by worries about overtourism, which was primarily caused by its distorting impact on the property market.

EU buyers, and we're talking about a relatively small amount."

Providing tax benefits to individuals who rent out their apartments at reasonable prices is insufficient, according to Claudio Milano, a researcher in the University of Barcelona's Department of Social Anthropology and an authority on over-tourism, given that 3.8 million dwellings, or 14% of the country's total supply, are vacant in Spain.

Q2

Q3

Q4

Q2

Q3

Q1

Q2

Source: Statista

Marches calling for affordable housing have also taken place in Barcelona, Madrid, and other towns.

"I think that's what it is in many ways," said Ignasi Martí, director of the social innovation section at Esade Business School and head of its decent housing observatory, about the prime minister's usage of the term "housing emergency."

"People cannot access housing; the supply is lacking, and over the past few years, subpar housing conditions have become the norm," he added.

Did the solutions come late?

All of this has primarily impacted disadvantaged socioeconomic sections until recently, but now it's also impacting the middle class and working class, Martí remarked.

People in the middle class who realise they won't be able to afford an apartment and that renting is extremely difficult, as well as those who stay in Spain until they are roughly 31-years-old, are more likely to be impacted politically.

Although he admits that the 100% tax on non-resident, non-EU buyers was a show-stopper, Martí believes it might be more of an ideological ploy than a practical fix.

"It won't fix the issue," he declared, while adding, "You can't force that on

"They must take a much more aggressive approach to the issue and stop people from purchasing apartments for speculation," he stated, while noting, "That must end immediately so that we can discuss tax benefits. Before taking further action, we must extinguish the fire, which requires prohibiting speculation in apartments."

Pablo Simón, a political scientist at Carlos III University in Madrid, said, "The question now is whether the socialists and the PP could agree on how to best address the housing crisis at a time of profound polarisation and within the constraints of Spain's complex system of central, regional, and municipal government."

On the positive side, he claimed that both sides agreed on the underlying analysis, which is that Spain lacks adequate housing.

"As you would expect a party on the left and a party on the right to do, one party is betting a little more on state intervention and the other is betting a bit more on the market. However, the diagnosis is fairly similar," he added.

Spain's two largest cities have reacted coolly to Sánchez's ideas. The government is prioritising landlords over tenants and "betting on construction as a long-term panacea" instead of addressing the current crisis, according to the Tenants' Union of Madrid, which called them "insufficient, misguided, and cowardly."

Barcelona has experienced a similar reaction, with rising rents and property values driven largely by the rapid growth of Number of residential real estate transactions in Spain from first quarter 2021 to third quarter 2023

tourist apartments over the past 15 years.

The plans are ambiguous and "very generic," according to Jaume Artigues, a spokesman for the residents' group in Barcelona's most populated neighbourhood, the Eixample, where there is one tourist apartment for every 57 residents. Regardless of whether it was luxury apartments sold to investors or tourist apartments, he said, at least the government had acknowledged that speculation was the primary source of the housing problem.

"The need for affordable public housing has increased due to evictions, which is a result of the unaffordable housing that is currently available, rather than a rise in population. Speculation lies at the core of the problem, yet it perpetuates a vicious cycle," he stated.

Amidst public protests and local discontent, critics argue that current measures are insufficient and too generic, underscoring the urgent need for decisive action to curb speculation and prioritise the construction of affordable social housing.

The future of Spain’s urban landscapes and the well-being of its residents hinges on whether political leaders can bridge their ideological divides and implement effective reforms before the crisis deepens further.

Analysis

\ Housing

Over the last 12 months, the housing issue has become a top priority on the political agenda. Several largescale protests throughout Spain in 2024 were sparked by worries about overtourism, which was primarily caused by its distorting impact on the property market

Board meetings: A test of corporate governance

GBO Correspondent

What was the similarity between Disney, OpenAI and Southwest Airlines? They all encountered boardroom tensions recently, thereby grabbing the headlines for all the wrong reasons. And a couple of them got murky. Take OpenAI for example. Its CEO Sam Altman, often projected as the poster boy of generative AI, got chucked out from his own company in November 2023, only to return, all within six days. In 2024, Southwest faced a major dispute as activist investor Elliott Investment Management

intensified its boardroom battle and called for a special shareholder meeting to change the airline's leadership.

The low-cost American carrier hit back by saying that its CEO Bob Jordan was the “right leader” to successfully execute the venture's strategy to improve financial performance and drive shareholder value. And in the battle of Elliott vs Jordan, it was the latter who had the last laugh.

Tensions between corporate boards and investors persist, and it’s something completely

Effective corporate governance hinges on clear communication, accountability, and strategic decision-making during board meetings

Source: Statista

normal. Disagreements (going by human nature) are bound to emerge, be it in our friend circle or during a corporate board meeting. In the second case, improved corporate governance practices help find an amicable solution.

According to a Harvard report, what unfolded in OpenAI and other corporate biggies, since 2023 now reflects a growing consensus that many of the "disagreements" stem from poor corporate governance. This trend is backed by another McKinsey study, which revealed that around 70% of recent activist investor demands have focused on governance reform.

Neil Shah, Director of Content and Strategy at Edison Group, said, "Addressing these governance issues, especially complex topics like executive pay, isn’t straightforward. However, adopting best practices can help rebuild trust between boards and investors."

Now the question here is: what are the fixes?

Focus on regulation

"One crucial step for companies is ensuring they fully understand and comply with industry regulations. Failures in this regard have led to significant scandals, such as the collapse of the cryptocurrency exchange FTX, where poor due diligence and asset handling were partly to blame. FTX’s CEO, Sam Bankman-Fried, later admitted ignorance of many regulations, highlighting the need for boards to ensure compliance at all levels," Neil Shah added. Instead of relying solely on legal departments to handle regulations, corporate boards need a comprehensive strategy that will cover regulatory monitoring, compliance programmes, regulatory engagement, and risk management. With new regulations like the European Commission's Corporate Sustainability Reporting Directive (CSRD) on the way, boards must prepare by understanding the requirements, developing data reporting systems, and adopting frameworks like the Topics addressed

Global Reporting Initiative. This will help big businesses avoid the pitfalls of ‘greenwashing’ or ‘greenhushing’ as they navigate sustainability efforts.

"Board accountability is vital in preventing scandals and ensuring proper governance. Recent years have revealed numerous examples of companies faltering due to a lack of clear roles and transparency. One notable example is the UK Post Office scandal, where the board repeatedly failed to address management issues. Similarly, the Federal Deposit Insurance Corporation (FDIC) faced allegations of employee mistreatment that went unaddressed by its board," Neil Shah added, while suggesting boards include experts in key areas like supply chains and Environmental, Social, and Governance (ESG) to improve accountability.

These professionals will clearly define roles and responsibilities for board members, ensuring the latter can effectively oversee management, regulatory compliance, and transparency.

Improve the communication game

Neil Shah also stated that improving communication with shareholders is another key reform area every big business should look after. The use of outdated communication methods, such as paperbased ballots, has caused friction between investors and corporate leadership.

"A lack of communication has led to misunderstandings, with investors accusing companies of secrecy. ExxonMobil shareholders, for example, criticised management in 2023 for not disclosing the financial impact of its net zero proposals. Digital investor relations should become standard practice, allowing more transparent and efficient communication. This would enable boards to share documents and proposals with shareholders, while also facilitating early feedback ahead of AGMs. This approach would reduce conflicts, especially as many proxy disputes are resolved before AGMs," Neil Shah said.

Another thing corporates can do is plan the meeting ahead of time and stick as closely to the planned topics as possible. While the meeting may provide opportunities to discuss other topics, it is essential to keep the focus on the main issue at hand to ensure that the event yields a productive outcome.

The host of the meeting or an appointed attendee can take the role of guiding the discussion agenda and keeping the participating stakeholders focused on the topic. This will save everyone's time and help drive productivity within the company, apart from promoting corporate transparency.

Few other points

Apart from working on the regulation and communication fronts, businesses and their boards need to be on the same page on cyberattacks, which are becoming a regular threat. Data security, confidentiality, and system resilience should be the top focus areas in board meetings, given that any incident of data breach and subsequent blackmailing by threat actors (for ransoms) will only erode the stakeholder trust, apart from denting the affected company's brand value.

Another area where companies and their boards need to find amicable solutions is executive compensation.

In the words of Neil Shah, "While there is a strong business case for competitive executive pay, boards must be transparent and communicate the benefits of attracting top talent to investors. Benchmarking executive pay against competitors can help ensure compensation is appropriate, and clear communication can reassure shareholders that these decisions benefit the company long-term."

Another contention area is ESG policies. These policies will increasingly play a crucial role in corporate governance, particularly as regulations now require companies to promote sustainability, either through initiatives or operational activities. Boards should help the companies set ESG

targets, bring in experts, and ensure compliance. At the same time, it’s essential to communicate the impact of ESG measures to avoid shareholder dissatisfaction.

The boards should set diversity targets and appoint members to promote inclusivity throughout the company. Creating subcommittees dedicated to this goal can ensure that diverse voices contribute meaningfully to corporate decision-making.

"While issues like executive compensation and ESG will continue to spark debate, the broader challenges surrounding corporate governance are solvable. By adopting straightforward reforms, companies can significantly enhance their governance practices and meet the demands of today’s business environment," Neil Shah noted.

Effective corporate governance hinges on clear communication, accountability, and strategic decision-making during board meetings. By embracing transparency, sticking to rules and regulations, and encouraging collaboration, businesses can not only resolve boardroom tensions but also build trust with stakeholders and position themselves for long-term success.

Instead of relying solely on legal departments to handle regulations, corporate boards need a comprehensive strategy that will cover regulatory monitoring, compliance programmes, regulatory engagement, and risk management

Emirates Stallions starts real estate arm

Emirates Stallions Group, the leading conglomerate with operations spanning workforce solutions, real estate development, design and interiors manufacturing, agriculture, and landscaping, and a subsidiary of International Holding Company, recently announced the launch of Royal Development Holding, a visionary boutique real estate developer aiming to evolve spaces and elevate lives.

Royal Development Holding brings together several specialised real estate development companies, such as Royal Development Company (RDC) and Royal Architect Project Management (RAPM), and opens the door for the entry of new businesses that will enhance its capabilities and market presence.

Through the formation of Royal Development Holding, Emirates Stallions will be able to strengthen its position in the

real estate value chain while building on the trust, excellence, and innovation associated with the Royal Development Company for the past 15 years.

Emirates Stallions will now enhance its offerings to provide complete, end-to-end solutions that improve living experiences and support its long-term growth strategy by incorporating boutique real estate development capabilities.

Royal Development Holding brings together several specialised real estate development companies

AMEA Power opens 500MW wind farm in Egypt

AMEA Power has successfully commissioned a 500-megawatt wind power plant in Egypt's Ras Ghareb city, marking the largest operational wind farm on the African continent while reinforcing the country's role as a key player in Africa’s renewable energy

transition.

A joint venture between AMEA Power, which owns 60% of the project, and Sumitomo Corporation of Japan, which owns 40%, the Amunet Wind Power Plant is expected to generate about 2,500 gigawatt-hours of electricity per

year. This prevents 1.4 million tons of carbon dioxide emissions annually and is sufficient to power over 500,000 homes.

The commissioning follows AMEA Power's November 2024 opening of a 500 MW solar PV plant in Aswan. Within six months of completing both projects, the company has now brought one gigawatt of clean energy capacity online in Egypt.

The wind farm was built two and a half months ahead of schedule, included local training programmes for young people in the surrounding communities, and, at its peak, employed over 800 workers. AMEA Power's emphasis on long-term skill development, job creation, and socioeconomic development is reflected in the initiative.

Nigeria energy firm backs local capacity growth Nigeria

Asharami Energy, an upstream company of the Sahara Group, will continue leading the charge to promote inclusive growth and the creation of local content throughout Nigeria's energy landscape by making investments, conducting business responsibly, and working with upstream value chain stakeholders.

Leste Aihevba, Chief Technical Officer of Asharami Energy, stated during the fifth Nigerian Oil and Gas Opportunity Fair (NOGOF) that, for the industry to effectively contribute to Nigeria's energy security, local participation and capacity building must be strengthened.

According to Aihevba,

the industry's current trends indicate a growing use of local knowledge, which he called essential for stability, innovation, smooth operations, and sustainable production to promote economic development in Nigeria. Asharami Energy has nearly 100% local content participation, barring a few sophisticated technologies. Services covering subsurface reviews and studies, field development plans, well interventions, drilling, civil works, and oil and gas infrastructure projects, such as flowlines, pipelines, flow stations, roads, and location constructions, are all provided by local companies.

Al Fanar, Siemens tieup for clean energy efforts

In order to jointly promote decarbonisation throughout the UAE, global major Siemens Energy and Al Fanar Gas Group, one of the Gulf country's top suppliers of gas and energy solutions and the energy division of EHC Investment, have signed a strategic Memorandum of Understanding (MoU). Supporting the UAE Net Zero 2050 Strategy, the agreement was signed in Abu Dhabi during the World Utilities Congress 2025.

The two companies will collaborate to create clean energy solutions that incorporate cutting-edge digital technologies into industrial and energy infrastructure, with a focus on areas like flare gas management, hydrogen, and Power-to-X, as well as electrifying ports and vessels.

The partnership will also leverage Siemens Energy's global digitalisation experience to implement intelligent systems that optimise energy use, track emissions, and simplify operations, achieving a tangible and quantifiable acceleration of the energy transition.

Al Fanar Gas Group CEO Khaled Ben said, "This partnership is not just about technology; it's about responsibility. As a UAE company, we see it as our duty to help shape an energy future."

Jordan activates fuel plan amid Gulf crisis

Jordan's Minister of Energy and Mineral Resources, Saleh Kharabsheh, recently assured members of the Energy Sector Partnership Council that the country's electrical system is safe and stable. This confirmation comes despite the suspension of natural gas supplies due to the ongoing regional escalation.

While discussing the rising geopolitical tensions that are creating more challenges for the region, Kharabsheh noted that Jordan has developed backup plans to ensure a continuous energy supply. He emphasised the crucial role that domestic energy resources play in maintaining the Kingdom's power industry.

According to the minister, Jordan imports approximately 100 million cubic feet of natural gas from Egypt each day. Due to the ongoing crisis, the government is

currently paying more to meet its energy demands.

The minister emphasised the importance of ensuring a continuous supply of electricity to all sectors. To achieve this, the ministry is closely monitoring regional developments and collaborating with all relevant parties. The minister and council members also reviewed the draft bylaws stemming from General Electricity Law No. 10 of 2025.

Etihad Airways traffic goes up 19% in May

In May 2025, Etihad Airways, the national airline of the United Arab Emirates, carried 11.7 million passengers, a 19% increase over the same month the previous year.

The passenger load factor also increased to 87% from 84% in May 2024, demonstrating Etihad's capacity

optimisation skills while sustaining strong demand.

The aviation giant currently has 100 aircraft in operation, which supports its expanding network and service improvements. During the first five months of 2025, Etihad carried 8.4 million passengers, a

Jordan imports approximately 100 million cubic feet of natural gas from Egypt each day

17% increase over the same period in 2024. The airline also maintained an impressive average passenger load factor of 87%.

Etihad Airways CEO Antonoaldo Neves said, "With May's passenger numbers increasing by 19% yearover-year, we saw a pleasing continued growth in our momentum, underscoring our position as the fastest-growing Middle East airline. Our year-to-date results show more than eight million customers have flown with us in 2025, and our rolling 12-month figure now stands at almost 20 million, a testament to the trust placed in Etihad’s service. We reached an exciting milestone in May as our fleet number reached the 100 mark."

Etihad’s active fleet also reached 100 aircraft, supporting the airline’s growing global network.

SME lending enters a new tech era

GBO Correspondent Analysis

SME lending is changing as a result of the continuous digital revolution

The SME lending environment has changed significantly in recent years, as the introduction of advanced technologies and changing consumer needs have forced lenders to reconsider their risk management plans. One such transformation has been in the financial institutions' adoption of intelligent automation tools. Rich data sources are now enabling auto-decisioning engines, offering, in turn, a chance to improve operational resilience, save costs, and expedite the lending process.

Not only are these machine learning-based technologies improving the speed and precision of credit decision-making, but they are also ensuring that the criteria for making decisions remain clear and understandable, thereby avoiding potential selection biases.

Data analytics has emerged as the foundation of contemporary frameworks for risk management. By using extensive datasets, lenders are effectively spotting trends and abnormalities, which, in turn, is helping them proactively manage and reduce risk factors. Smart automation and advanced data analytics are now working together to usher in a new era of precise lending that is making it possible for smaller businesses to swiftly and effectively access financial resources.

The use of customer-centric strategies is becoming more and more important as lenders continue to benefit from technological developments. Developing customised goods and services that meet the particular requirements of SMEs is part of this strategy. At the same time, technology has the potential to improve the lender-client relationship by streamlining the credit approval process, reducing bureaucratic friction, and aligning them with a clear business vision.

Effective risk management requires the integration of governance and controls throughout the credit cycle. Lenders

can reduce risks and guarantee regulatory compliance by utilising machine learning methods with a focus on explainability and transparency. In order to protect against unforeseen consequences, such as biases in credit allocation, such measures are crucial.

Strong anti-money laundering (AML) regulations must be put in place in light of the growing concerns about money laundering activities. To prevent financial systems from being abused, the compliance infrastructure must include advanced transaction monitoring systems and improved identity verification tools.

SME lending is changing as a result of the continuous digital revolution. McKinsey noted that the banks and other financial institutions are utilising big data analytics and digital platforms to enhance their risk decision support systems. In addition to improving underwriting procedures' efficiency, this development also enhances portfolio monitoring procedures.

Geopolitical risks are now an indisputable fact for financial institutions that lend to SMEs in the quickly

shifting global landscape. Supervisors are stressing more and more how crucial it is for banks to be able to spot declines in asset quality and implement suitable provisioning procedures. To protect financial stability, this entails keeping a close eye on geopolitical developments and quickly adapting to new threats.

Through the use of early warning tools and systems, such proactive monitoring helps lenders stay ahead of possible financial distress. By evaluating both qualitative and financial metrics, these systems provide a safeguard against unanticipated economic downturns by identifying possible problems before they show up in the financial statements.

As fintech innovations gain traction, SMEs are increasingly looking to alternative financing sources. By facilitating faster access to capital, platforms that provide services such as invoice financing and short-term loans enhance cash flow management and lessen dependency on conventional banking techniques. These fintech platforms democratise financing by making it easier to obtain capital

Analysis \ Fintech

Source: Statista

and encouraging innovation in the expansion of SMEs.

Fintech innovation has changed the game by lowering the entry barriers for small and medium-sized businesses seeking capital. Through quicker approval processes, less red tape, and increased transaction transparency, online alternative finance platforms are promoting a more inclusive financial ecosystem. This change highlights how traditional lenders must be flexible to maintain their competitive advantage.

To successfully capitalise on these new trends, financial institutions need to create thorough strategic plans that prioritise implementing digital innovations and customer-centric methodologies. For organisational goals to be aligned, this calls for crossfunctional cooperation between the IT, risk management, compliance, and business development teams.

The incorporation of adaptive technologies such as artificial intelligence and machine learning into fundamental operational frameworks is essential to this implementation. Through the integration of these tools into routine procedures, lenders can strengthen customer engagement metrics, advance predictive analytics, and make better data-driven decisions. A flexible and responsive risk management framework is made possible by these technological advancements, which are essential for navigating the changing SME lending market.

Effectively involving stakeholders is crucial as institutions shift to these developments. Regulatory bodies, fintech companies, SME clients, and internal employees are just a few of the important parties that lenders need to actively include in the transition process.

Addressing the issues and demands of every group will be made easier with open communication and teamwork, which will promote trust and alignment with strategic goals.

Additionally, to guarantee that internal teams have the skills needed to take advantage of new technologies and procedures, continuous education and training programmes should be created. The successful implementation of creative risk management techniques across the company can be fuelled by such programmes, which can enable employees to take on the role of change agents.

It is crucial to incorporate environmental, social, and governance (ESG) factors into risk management as financial institutions grow more aware of these issues.

ESG considerations affect consumer perceptions and reputational risk in addition to being crucial in determining the ethical standing and long-term viability of investments.

Lending practices that align with ESG standards allow financial institutions to build long-term value for their stakeholders and the general public. To guarantee that lending decisions promote innovation and sustainable business practices, this entails creating risk assessment frameworks that take ESG factors into account.

The drive for ESG compliance presents a chance for lenders to stand out from the competition. Sustainable business practices are becoming more and more valued by investors, partners, and customers.

Aside from drawing in clients who care about sustainability, incorporating ESG into the lending process can strengthen moral leadership in the financial industry and provide access to green finance markets.

Prioritising ESG compliance in initiatives can also help reduce the risks brought on by shifting societal expectations and regulatory changes. Financial institutions can take the lead in a seismic shift in global finance by embracing an innovative approach to ESG integration.

The path ahead offers both difficulties and unmatched opportunities as we stand on the precipice of revolutionary shifts in SME lending and risk management. By adopting customer-centric models, embracing digital innovation strategically, and adhering to ESG principles, financial institutions can rethink their roles in the global financial ecosystem. This proactive adaptation guarantees that these institutions continue to be at the forefront of sustainable growth and innovation while also boosting resilience and agility in an unpredictable economic environment.

Lenders can further their goals while also making a significant contribution to the growth of SMEs and the overall economy by adjusting their operational plans to meet the changing needs of the market.

Going forward, the long-term success and influence of financial institutions will be determined by their vision, flexibility, and moral leadership.

Meanwhile, the foundation of the global economy is made up of small and medium-sized businesses, which account for 90% of all businesses, employ roughly 70% of the workforce worldwide, and contribute 50% to GDP.

However, banks are not following up with solutions that cater to the needs of SMEs. In light of this, banks are taking advantage of the chance to reallocate expenses to ecosystem platforms and exponential technology investments. Some banks are strategically remaking their operations to better meet the needs of SMEs rather than just responding to passing trends.

The IBM study offers strategic perspectives on the present and future of fintech in SME banking. The IBM Institute for Business Value (IBM IBV) and the Banking Industry Architecture Network (BIAN) collaborated to conduct the study, which takes advantage of the knowledge of the SME Finance Forum, which is run by the International Finance Corporation (IFC).

Fintech innovation has changed the game by lowering the entry barriers for small and medium-sized businesses seeking capital. Through quicker approval processes, less red tape, and increased transaction transparency, online alternative finance platforms are promoting a more inclusive financial ecosystem

Analysis \ Fintech

The EF market generated an estimated 20-30 billion euro in Europe in 2023, about 3% of total banking revenues

Banking digitisation: UK & US take divergent paths

GBO Correspondent

The July 2020 report from EY revealed that COVID-19 impacted the financial sector, as the need for different strategies around innovation and digital banking became apparent. As technology develops, it also results in a rise in customer expectations of banking. What fintechs have done is cash in on the sentiment, by collaborating with tech giants and offering instant and personalised services. And the broader impact has been felt across the legacy banking sector, as the latter has understood the need to go digital to remain relevant.

The report has indicated that the initial months of lockdown saw a 72% increase in the use of fintech apps in Europe. This shift has defined the new direction of 21st-century banking. With steady internet and smartphone penetration around the world, people now prefer to conduct their banking activities on phones rather than visiting physical branches. As a result, we are seeing the emergence of "digital-only banks." Legacy banks are now under pressure to convince investors and stakeholders of their strategies for effectively integrating digital options for customers. At the same time, they must reduce costs without compromising operational resilience.

Banks are now embedding the "digital" scheme of things in their expansion strategies, as the pandemic has successfully changed this generation of customers' behaviour. The trend holds for big economies like the United States and United Kingdom.

"The journey that banking digitisation has taken in both the US and UK has been less of a sprint and more of a marathon, with some twists, turns and potholes to navigate along the way. As the years have rolled on, technological innovations have gradually influenced how people interact with money. We’ve seen how embedding convenience, security and flexibility into consumers’ payment journeys

Banking & Finance Banking

In Europe, embedded finance (EF) has emerged as a popular concept, with a July 2024 report from McKinsey and Company suggesting revenues from this domain will surpass the 100-billion-euro mark by the end of the current decade

has reshaped the entire payment landscape," Alex Reddish, Head of Market Expansion & GTM Strategy at Tribe Payments, summed up things through these words.

US and UK: Two contrasting tales

Both British and American markets have lots of common characteristics: mature, wellregulated financial and payment systems, populations that have a high engagement level with financial services, and excellent telecom and internet penetration levels. However, the way each market has embraced widespread digital banking shifts tells two very contrasting stories.

Strict regulation, along with time and cost restraints, has forced the financial services industry to take a measured approach to embracing technological advancements. However, with the emergence of generative AI, particularly large language models (LLMs), organisations now have an opportunity to maximise the value of their data to streamline internal operations and enhance operational efficiencies.

However, while adopting AI, financial organisations are also facing the need to prioritise responsible data management,

strict privacy regulations and careful curation of the information they use to train their models. Whilst consumer chatbots have brought generative AI to the mainstream, the true potential of this transformative technology lies in its ability to be tailored to the unique needs of any organisation, in any industry, including the financial sector.

While the above-mentioned scenario sums up the opportunities and challenges faced by the global financial sector, in terms of going digital, it is not that every region is following the same rulebook.

"When it comes to modernising outdated banking systems and navigating complex regulatory frameworks, the US and UK have drifted in different directions, at the expense of interoperability and cross-border banking efficiencies," Reddish added.

Fintech

vs embedded finance

In Europe, embedded finance (EF) has emerged as a popular concept, with a July 2024 report from McKinsey and Company suggesting revenues from this domain will surpass the 100-billion-euro mark by the end of the current decade.

The distribution of financial products and services like loans and insurance in third-party channels is gaining importance as technology and data are facilitating instant and seamless customer journeys, and customers increasingly expect to find financial services when and where they need them, such as during a large purchase.

The EF market generated an estimated 20-30 billion euro in Europe in 2023, about 3% of total banking revenues. Over the last ten years in the continent, embedded finance volumes grew three times as fast as directly distributed loans. In 2023 and 2024, McKinsey interviewed a range of business leaders in the EF value chain, who expected consumer credit volumes to continue migrating toward embedded lending. For SMEs, these leaders expected factoring and other straightforward types of financing to become embedded as enterprise resource planning vendors and SME-supplier marketplaces provide them at the point of need.

Customers are increasingly demanding convenience and seamlessness in their customer journeys. A 2023 McKinsey survey of auto finance found that 40% of consumers already prefer online channels for financing a car purchase. They want instant access to affordable financial services such as loans and insurance, when and where needed, with the fewest possible clicks.

For merchants, embedded finance has increased sales through higher conversions, increased basket sizes, and enhanced customer lifetime value.

According to an RBC Capital Markets research report, buy now, pay later solutions are now contributing to a 20-30% increase in checkout conversion and even greater improvements in basket size.

In fact, on the supply side, the cost of offering embedded finance has been significantly reduced in recent years due to technological advances such as in applications programming interfaces, making it easier for systems to interoperate, and better and more widely adopted electronic identification schemes.

For financial services providers, embedded finance will become an increasingly important means of customer acquisition in some areas. In one major European market, McKinsey found that the acquisition cost of a qualified SME lending lead is 15 to 20 times higher than an EF lead.

The United States, on the other hand, is witnessing a battleground called "Real-Time Payment," where big tech companies and traditional banks are vying for dominance. Payment service providers (PSP) are ruling the roost now, by facilitating electronic payments between merchants and their customers by bringing all financial parties together to deliver a simple, fast, and reliable user experience.

"Because payment services don’t involve working capital and focus on a simple, fast, reliable, scalable, and ubiquitous user experience, it plays to the strengths of large Internet tech companies," F5 Financial Services stated.

Then there are various fintech companies (typically start-ups) that aim to use innovative technologies to compete with traditional financial methods in delivering different financial services. These financial services span all the major categories in banking services: trading, insurance, and risk management.

They are bringing data-driven algorithms into play to help small businesses secure personalised loans or applications to leverage cryptocurrency for loans by using blockchain’s evidence-based, chain-ofcustody smart contracts to ensure the crypto is verified and safely transferred.

Machine-learning algorithms are helping customers analyse spending trends, hit savings goals, and find areas where money

The EF market generated an estimated 20-30 billion euro in Europe in 2023, about 3% of total banking revenues. Over the last ten years in the continent, embedded finance volumes grew three times as fast as directly distributed loans

Source: scoop.market.us

Banking & Finance Banking

For many American consumers, smartphones have become an all-in-one portal for activities like financial management, bill splitting with friends, rich reward schemes and e-commerce, with the added security of tokenisation and biometric authentication

is inefficiently spent. SaaS (Software as a Solution) solutions provide credit access to people in underserved parts of the country via alternative data to underwrite users who do not have a traditional credit history. In recent years there have been over 1,500 entrants into the fintech marketplace. In 2019 alone, funding in the sector reached new investment highs, pulling in $34.5 billion across 1,913 deals. Some 24 of the 67 VC-backed unicorn fintech firms were started in 2019 and now together, they represent a combined worth of $244.6 billion.

"But because FinTech companies (startups) typically do not have the large user base and brand name trustworthiness that Big Tech companies do, and trust is one of the most important assets in the financial services industry, major financial institutions typically do not see them as much of a disruption. More often, they view fintech as an extension of their own in-house technology development. As a result, major financial institutions tend to build an ecosystem of FinTech partners to complement their own services. And sometimes, these FinTech companies are acquisition targets of major financial institutions," F5 Financial Services noted.

"These ecosystems are flourishing thanks to open banking initiatives, which 47% of banks indicated they were embracing. Such ecosystems are important for attracting and retaining customers. For example, 40% of consumers indicate their primary driver for using bank-issued credit cards is reward or point programmes that include a broad variety of partners," it added.

Even legacy banks are now spending big on IT front, with the aim of improving the overall customer experiences, apart from increasing agility when introducing new services, and lowering the cost of offerings. Because financial products are mostly digital, the role that technology plays in the banking business is becoming baked into various financial products. Technology is now defining the products.

The ability to fuse technology and financial product is now providing a competitive advantage to these banks, in terms of introducing major market disruptions. Terms like software, analytics, mobile, IoT, big data, AI, cognitive computing, multi-channel technology, automation, APIs and blockchain are being mentioned in the board meetings, in order to make financial products and offerings personalised, digital and agile as per the changing market dynamics.

Banks are keeping a close eye on the fintechs, their disruptive technologies and initiatives, ways of automating and improving critical functions like risk management, addressing audit requirements and adhering to new and emerging banking regulations. Partnerships between legacy banks and fintechs are becoming the new normal in the American financial industry.

Similar drawbacks affect both

As per Alex Reddish, Head of Market Expansion and GTM Strategy at Tribe Payments, the United Kingdom and mainland Europe have ensured that "digital banking is now second nature for many." With extensive and long-established digital channels in place for over 20 years now, consumers expect to manage their finances online with ease, thereby reflecting how convenience and access have become the cornerstones of 21st-century tech-powered banking.

Regulatory frameworks are emerging to provide guardrails to new services like AI and consumers are expecting faster, more immersive payment experiences. Banks are facing the need to ensure that they can continue to adapt and meet shifting consumer demand with dynamic, futureproof services that will keep customers coming back for more. Things have gone contactless, due to the availability of the chip and PIN infrastructures.

The United States, on the other hand, has embraced digital wallets. Tech providers have leapt into action much sooner than

their British and European counterparts, forming partnerships with banks and merchants to create wallet-based services that could provide a host of appealing services. Terms like neobanks and fintechs have become the new normal there.

For many American consumers, smartphones have become an all-in-one portal for activities like financial management, bill splitting with friends, rich reward schemes and e-commerce, with the added security of tokenisation and biometric authentication.

So, the rulebooks may be different, but we can concur here on the point that both the US and Europe have made smooth yet giant strides towards having robust 21stcentury digital banking infrastructures, yet challenges remain for them.

One common disadvantage has been the legacy banking tech. Updating outdated banking systems has arguably emerged as the biggest roadblock in the way of greater banking efficiencies for both regions.

"While traditional banks seek to overhaul their legacy systems and embrace the latest technologies to emulate the success of neobanks, these digital challengers are shifting their strategies too. A growing number of neobanks are going full circle and are now expanding into traditional banking products like mortgages and personal loans, offering customers a fuller range of services and building deeper, more meaningful

relationships," Reddish continued.

Neobanks, despite unlocking the full spectrum of advantages of digital banking, are still operating under regulatory frameworks designed for conventional banks, which in turn is restricting their pace of innovation. They also face high customer acquisition costs and relatively low revenue per customer.

"Meanwhile in the US, long-standing loyalty to credit products, driven by rewards and incentives, still plays a significant role in deepening customer trust. You only have to look at how brands with big pockets like American Express and Chase dominate consumer spending to see that in action. In a market where trust is largely the preserve of traditional banking giants, it is clear to see that digital banking providers will have to work harder to tempt them away," Reddish said.

"This is where the UK has a slight advantage, with banks and consumers having already embraced digital banking more widely, but the journey is not over yet. Banks in both regions cannot afford to be complacent when it comes to building consumer trust, developing personalised experiences, and offering tailored solutions that grab the interest of customers," he concluded.

Neobanks, despite unlocking the full spectrum of advantages of digital banking, are still operating under regulatory frameworks designed for conventional banks, which in turn is restricting their pace of innovation

Banking & Finance

BRICS+

Analysis

Why BRICS+ backs local currency trade

GBO Correspondent

While certain BRICS+ countries, such as Russia, might be more interested in accelerating transformation, other BRICS+ members might not be as keen

Political and economic purposes require the use of local currencies. These nations' reliance on foreign currencies will be lessened, and transaction costs will be reduced if they trade among themselves using their own currencies.

Due to changes in the global economy over the last few centuries, some currencies have gained value and are now more generally accepted for use in cross-border transactions. These consist of the British pound, the euro, the US dollar, and the Japanese yen. Because they originate from nations with robust economies and a long history of international trade, these currencies are valuable everywhere.

Due to their constant value and ease of use or exchange everywhere in the world, people or nations that trade using these currencies and eventually wind up collecting or retaining them view them as "safe."

However, commerce is far more challenging for nations in the “Global South,” such as Ethiopia, whose currency, the birr, is not commonly acknowledged outside of their boundaries. These nations find it difficult to generate enough revenue from exports in the main currencies to pay off their debts, which are typically denominated in those currencies, and purchase necessities on global markets. In turn, difficulties that impede economic growth and development may arise from the requirement to trade in major currencies or from the incapacity to do so.

Consequently, growth and development will be aided by even a small amount of local currency exchange between BRICS+ members. Russia, an oil exporter, is a special case. The country is subject to severe financial penalties for its war of aggression against Ukraine, even though total foreign exchange restrictions are less severe. It might be simpler to evade these penalties if it uses a range of currencies in its international activities.

Analysis \ Currencies

Politically, the main justification for utilising different currencies is the absence of sanctions. The Society for Worldwide Interbank Financial Telecommunication's (SWIFT) international payments system is one of the instruments used to make sanctions effective. Established in 1973, SWIFT is a Belgian company. For international payments and transactions, it makes it possible for financial institutions to communicate securely and uniformly. And it is pretty much the only way to accomplish this.

Following its initial application in 2012 to impose financial penalties on Iran, it has now been applied to North Korea and Russia. When a nation disconnects from SWIFT, banks struggle to execute payments, disrupting international trade and financial activities. Economic isolation and difficulties entering international markets may result from this.

One of the things driving momentum toward a new payments system that also depends less on the currencies of the nations that oversee SWIFT, such as the US dollar, Japanese yen, British pound, and euro, is the possibility

and actuality of being excluded from SWIFT's payments system.

What obstacles are they likely to encounter?

The main issue is that most currencies are not in high demand elsewhere. Furthermore, it is difficult to replace the current main currencies' global importance. For instance, India can primarily use Ethiopian birr solely in trade with Ethiopia if it acquires them. Or what will India do with the rupees if Russia permits it to purchase oil from them?

Countries looking for alternatives to relying on the dollar must think about which currencies to amass through trade as most of them export more than they import or are lower-income importers.

Alternatives are starting to appear, at least in terms of payment systems. BRICS+ is developing BRICS+ Clear of its own. Approximately 160 nations have agreed to use the system. In general, China's Cross-border Interbank Payment System functions similarly to SWIFT.

However, there is a chance that these payment options

will only serve to split the system, making it even more expensive and inefficient.

Has anyone else engaged in local currency trading?

Not all transactions use major Western currencies. For instance, the South African rand has a comparatively significant role in cross-border finance and trade within the Southern African Customs Union. The currencies of Thailand and Singapore vie for dominance in the subregion, much like throughout Southeast Asia.

The largest exporter and manufacturer of industrialised goods in the world, China, is also entering into bilateral currency exchange arrangements with other nations. The goal is to increase the global usage of the renminbi.

India and Russia have experimented with trading in the rupee as a way to get around sanctions. Since the conflict in Ukraine, Russia's oil exports to and through India have increased significantly, with the rupee and rouble accounting for almost 90% of bilateral commerce. Russia now faces the challenge of deciding what to do with all the rupees it has amassed. Indian banks hold these deposits, subsequently investing them in regional stocks and other assets.

China's "barter trade" approach is another example of attempts to avoid using major international currencies. For instance, the strategy involves China sending agricultural equipment to an African nation and receiving payment in that nation's currency. China then imports those commodities back to China after

using that money to purchase goods from the same country. After selling these commodities in China, the Chinese trader receives payment in renminbi.

One nation using this barter approach is Ghana. The digitisation of trade and payments, as well as the necessity for high levels of trust to build and preserve relationships between trading parties as individuals and as enterprises, are challenges facing the model.

Although it lacks robust rules, regulations, and industry standards, it also necessitates a certain amount of centralisation and coordination. This suggests that platforms and businesses may not be compatible, which could slow and cost transactions.

Another instance is when Ethiopian and Chinese investors benefit from birr. They purchase Ethiopian goods, such as coffee, with the birr and then export them to China. They get renminbi in China when they sell these things. Therefore, they increase Ethiopia's exports to China to transfer their earnings from Ethiopia to China.

Although there are comparatively large coordination costs, anecdotal accounts indicate that this is possible on a small scale.

Other difficulties might arise. For instance, there may be fewer dollars available overall if Chinese consumers pay Ethiopian coffee growers in their local currency rather than US dollars. Certain international transactions still heavily rely on the dollar.

There is no straightforward or readily expandable way to get rid of SWIFT or the need for large foreign currencies. The requirement is for a quick, electronic payment system that would effectively calculate and balance currency demand. Additionally, it must be dependable, replace components of the current system, and not incur additional expenditures for nations that have not yet adopted it.

While certain BRICS+ countries, such as Russia, might be more interested in accelerating transformation, other BRICS+ members might not be as keen. For example, local financial institutions must support a move away from SWIFT, and those in African nations might not feel pressured to switch to a new, less wellknown platform.

The drive among BRICS+ nations to adopt local currencies for trade represents a strategic response to long-standing economic and political challenges inherent in the global financial system.

By shifting away from dominant currencies such as the US dollar, euro, British pound, and yen, these countries aim to reduce their vulnerability to external financial pressures, avoid punitive measures like sanctions enforced through SWIFT, and ultimately reclaim greater monetary sovereignty. Local currency trade promises reduced transaction costs and improved economic cooperation among member nations, encouraging a more balanced and regionally integrated financial network.

However, many local currencies lack the international demand and liquidity necessary to replace established global currencies, and nations with trade imbalances may face difficulties in accumulating or managing these currencies. Past instances of localised currency trading in regions like Southern Africa or bilateral agreements between India and Russia depict both the potential benefits and inherent complexities of such systems.

Ultimately, the shift represents not only an economic recalibration but also a political realignment that seeks to create a more autonomous and resilient global financial architecture.

As these developments unfold, continued collaboration and innovative policy-making will be paramount for the long term.

By shifting away from dominant currencies such as the US dollar, euro, British pound, and yen, these countries aim to reduce their vulnerability to external financial pressures, avoid punitive measures like sanctions enforced through SWIFT, and ultimately reclaim greater monetary sovereignty

The fees that large and small merchants pay in Australia differ significantly

GBO Correspondent

The Australian federal government is planning to outlaw companies that impose surcharges on debit card transactions, a move that could fundamentally alter how Australians pay for routine purchases.

This idea pledges to put money back into consumers' pockets pending the Reserve Bank of Australia's (RBA) review. The central bank also released its first consultation paper in 2024, and submissions are being accepted through December. However, like with any major policy change, it's important to examine it more closely to determine its true implications for everyone.

What are these surcharges?

According to RBA data, if debit card surcharges are prohib-

ited, there might be significant annual savings of up to $500 million. And the savings might reach a staggering $1 billion a year if the government goes one step further and incorporates credit card transaction fees into the ban.

Even while these numbers seem remarkable, the savings per cardholder would come to about $140 a year when broken down. Although it's not a significant sum, it could build up for regular buyers or those making bigger purchases. Naturally, not everyone will gain the same advantages. The difference may go unnoticed by those who buy less.

According to RBA data, merchant service costs for Australian consumers are lower than those in the United States but higher than those in Europe. Businesses must pay these costs to accept card payments, which are called surcharges.

Top reasons why Australians get credit cards (In Percentage)

In the context of international regulations, the proposed prohibition on debit card surcharges strikes a compromise. Surcharges for the majority of debit and credit card transactions are completely prohibited in the United Kingdom, Malaysia, and the European Union.

Although debit card fees are prohibited, companies in the US and Canada are still permitted to charge people for using a credit card.

Traders’ viewpoint

The effects on merchants, especially small businesses, should be considered, even though the surcharge ban seems to benefit customers. The reality is that when it comes to fees related to card payments, not all retailers are the same.

The fees that large and small merchants pay in Australia differ significantly. According to RBA data, small firms pay costs that are around three times more than those paid by larger businesses.

The elephant in the room is credit cards. Although prohibiting surcharges on debit cards is a positive move, it begs the question of why credit cards should also be exempt.

The RBA's review consultation paper suggests outlawing credit card surcharges in addition to debit card surcharges. The intricate network of interchange fees and merchant expenses related to credit card transactions holds the key to the solution. Because credit card issuers offer extra services and rewards programmes, processing credit card transactions costs businesses more.

Merchants may raise their base pricing to offset these expenses if surcharges are prohibited on these. This might essentially lead to people who choose premium cards being subsidised by those who use less expensive payment methods.

Source: Finder CST

It all boils down to the ability to negotiate. Larger companies can bargain for better fees. The capacity of larger retailers to negotiate advantageous wholesale costs for handling credit card transactions is the main factor causing this discrepancy.

Accepting cards can cost small businesses anything from less than 1% to over 2% of the transaction value. This can reduce profitability, particularly for firms with narrow profit margins.

Merchants may find ways to recoup payment costs through other channels if they are fully passed on to them. This has occurred in other nations that have done away with fees. Among the possible tactics are adopting or raising minimum purchase requirements for card payments, adding new "service" or "convenience" fees for all transactions, hiking weekend and holiday surcharges, or marginally raising overall pricing to make up for lost surcharge revenue.

The lack of surcharges may also lessen the pressure on card networks to control their rates due to competition, which could ultimately result in greater costs. While some countries have succeeded in outlawing credit card surcharges, their laws governing interchange fees are typically more stringent than ours.

Are things that easy?

On one hand, the savings from banning debit card surcharges could provide Australians with a modest annual reduction in costs, especially for those who frequently make purchases or have larger transaction volumes.

This would be especially impactful for budget-conscious consumers who feel the sting of surcharges every time they use their debit cards. With savings potentially amounting to up to $500 million annually, or even more if the ban is extended to credit cards, the financial relief could be significant for many households.

However, these savings are not likely to be felt equally across the population. The average savings of $140 per person per

year may seem like a drop in the ocean for some, especially for those who do not make frequent card transactions.

The reality is that small businesses, especially those with thin profit margins, could face increased financial pressure if they are forced to absorb higher transaction fees without the ability to pass them on to consumers.

Moreover, while consumers may benefit directly from the removal of debit card surcharges, there are risks that businesses could shift these costs elsewhere.

Merchants may seek alternative ways to recoup the lost revenue, such as introducing new fees, raising minimum purchase requirements, or increasing prices. These strategies could neutralise the financial benefit to consumers or, in some cases, even exacerbate costs.

Additionally, the increased costs faced by smaller merchants may lead to reduced competition or the closure of smaller stores, which would harm the consumers the policy seeks to protect.

The policy’s proposed expansion

to include credit card surcharges may help standardise the playing field, but it could also trigger higher overall prices for all consumers, including those who do not use credit cards.

If merchants are no longer able to impose surcharges on credit card payments, they may be compelled to raise their prices to cover the additional costs, leading to an indirect price increase across the board.

The Reserve Bank of Australia’s review and consultation process provides an opportunity to balance the interests of consumers and businesses while ensuring that the payment system remains fair and efficient. Ultimately, the success of such a policy will depend on its ability to address the needs of both consumers and merchants without distorting the market or increasing costs in other areas.

The reality is that small businesses, especially those with thin profit margins, could face increased financial pressure if they are forced to absorb higher transaction fees without the ability to pass them on to consumers

Wataniya Insurance: Leading the way in customer-centric excellence

Wataniya Insurance prioritises exceptional customer service as a core component of our strategy

Wataniya Insurance has been honoured with the award for the 'Most Customer-Centric Insurance Company - Saudi Arabia', marking a significant milestone. This recognition underlines the company’s relentless commitment to its customers, which has been the cornerstone of its operations. We had the chance to meet with Haitham Albakree, the CEO of Wataniya Insurance. He shared his insights on the strategies, challenges, and plans that led to this prestigious award.

Excerpts from the interview:

GBO: How does it feel to be recognised for your efforts?

Haitham Albakree: It’s a wonderful achievement and a validation of the hard work and dedication our entire team has put in. This award is a testament to our commitment to excellence since our mission has always been to put our customers at the centre of everything we do.

Wataniya Insurance has always been known for its customer-first approach.

Can you share the core principles that drive this recognition?

We strive to base our principles on understanding, empathy, and responsiveness. We aim to prioritise listening to our customers, understanding their needs, and delivering solutions that exceed their expectations. Our customer-centric approach is built on putting the client first, and business needs second. We aim to build for the customer first, then adapt to the systems. Our goal is to foster long-term, trust-based relationships, ensuring our customers feel valued and supported at every step.

What specific initiatives have contributed to Wataniya Insurance being recognised as the most customer-centric company?

At Wataniya Insurance, our focus on customercentricity is supported by rigorous employee training in understanding customer needs and effective communication. We seek to offer easy and intuitive solutions so customers can manage their needs in the simplest and fastest way, allowing them to proceed with minimal

interruptions. We strive to commit to transparency and innovation to drive continuous improvement, ensuring we exceed customer expectations and save them time, money, and effort.

How has technology played a role in enhancing the customer experience at Wataniya Insurance?

Technology is central to our client-centric strategy at Wataniya. We are leveraging AI and data analytics to deliver personalised experiences. Our ambitions include 24/7 customer service through chatbots and seamless digital interactions via mobile apps and self-service portals. We aim to implement automated claims processing for efficiency and transparency. Our approach includes omni-channel communication and proactive notifications. Additionally, we are developing usage-based insurance and IoT integrations and using feedback tools and sentiment analysis for continuous improvement, enhancing customer satisfaction and operational efficiency.

A major challenge

Wataniya Insurance faced was shifting the organisation's mindset to prioritise customer needs, which was tackled through training and clear communication of their customer-first commitment

Customer service is a critical aspect of any customer-centric strategy. How does Wataniya ensure exceptional service?

At Wataniya Insurance, we prioritise exceptional customer service as a core component of our strategy. You can spend months to attain a client but a few seconds to lose them. This does not reflect the appreciation and dedication we have for our clients and customer service is at the forefront of this concept. The guidance provided by the Saudi Insurance Authority has been instrumental in shaping our approach. Their regulations emphasise transparency, fairness, and efficiency, which have helped us refine our service practices. We aim to ensure our employees are thoroughly trained to meet these high standards, and we maintain multiple channels for customer interaction, including social media and phone support. This framework

enables us to address customer needs effectively, consistently, and with empathy. An informed client is a happy client.

What challenges have you faced in your journey toward becoming more customer-centric, and how have you overcome them?

A major challenge we faced was shifting the organisation's mindset to prioritise customer needs, which we tackled through ongoing training and clear communication of our customer-first commitment. Changing management is never easy, but consistency and constant drive are essential. Adapting to rapidly evolving customer expectations was another hurdle. To address this, we embraced flexibility, allowing us to quickly adjust our strategies based on customer feedback and market trends. We also streamlined our processes to enhance responsiveness and

effectiveness, ensuring we could consistently meet and exceed customer expectations.

Looking ahead, what are your plans to further enhance customer satisfaction and maintain this momentum?

We are dedicated to continuous innovation and improvement. Our plans involve expanding digital capabilities, enhancing customer support infrastructure, and potentially servicing clients anywhere and anytime. We are exploring mobile apps and other technologies to better serve their needs. Additionally, we aspire to listen closely to customer feedback, adapt to their evolving needs, and expand community outreach to further engage and support our customers to ensure we remain their preferred insurance provider.

Wataniya Insurance is known for its community involvement and social responsibility. How does this align with your customer-centric approach?

Our commitment to the community is integral to our customer-centric philosophy. We are a representation of our community, and our clients are our bosses. We actively engage in social

responsibility initiatives, sponsoring local events and offering training opportunities for students at Wataniya. These efforts intend to foster stronger customer relationships and enhance community well-being, keeping us informed of what’s happening in our beloved kingdom. Partnering with local non-profits to tackle social issues and promote community development further underscores our dedication to our customers and the community.

What message would you like to convey to your customers who have contributed to this achievement?

Our customers are our partners. I can’t express my gratitude enough for their trust and loyalty. This award belongs to our customers as much as it does to us. We are committed to serving customers with excellence and will continue to put their needs at the forefront of everything we do. Thanks to all the customers for being part of the Wataniya community and for their continued support. Their feedback and support inspire us to improve and innovate continuously, and we are dedicated to maintaining the highest customer service standards.

Banking & Finance

Bank Muscat manages $259 million sukuk

The Oman Sovereign Sukuk Company launched series nine of the Sovereign Sukuk Issuance, which Bank Muscat, the Sultanate of Oman's top financial services provider, announced it successfully managed. The series had a total value of OMR 100 million. The sukuk offers a 4.65% annual profit rate and has a seven-year maturity. In cooperation with other regional financial institutions, Bank Muscat was designated as the official issue manager and collecting bank for the subscription. The bank's leadership in carrying out significant investment transactions both inside the Sultanate and throughout the GCC

Deutsche Bank

capital markets is reinforced by this mandate.

Strong investor confidence and market stability were reflected in the sukuk's competitive yield range, which included an average yield of 4.625%, a minimum yield of 4.57%, and a maximum yield of 4.64%.

All types of investors participated in the issuance, including institutional and retail investors.

The Muscat Stock Exchange (MSX) offers full trading of the sukuk at current market prices, and it is structured in line with Shariacompliant principles.

Deutsche Bank sees weaker deal-making business

As per CEO Christian Sewing, Deutsche Bank's origination and advisory business is not as strong as the German bank had expected at the beginning of 2025.

He further anticipated that things would be weaker in the second quarter than executives had planned, as companies postponed decisionmaking activities in the wake of aggressive tariff policies of the Donald Trump administration in the United States.

Deal-making has slowed this year as Trump's tariffs on trading partners have caused turmoil in markets and sparked concerns about slowing economic growth. Other big banks, including Bank of America,

have also warned of a slowdown in the business. For Deutsche Bank, origination and advisory revenue dropped by 8% in Q1 after significant gains in recent quarters.

Sewing said he was optimistic about Deutsche's other business lines, such as the corporate bank and retail bank, sticking to their targets. This is a crucial year for Deutsche Bank, as it faces a deadline to meet ambitious targets on costs and profitability. When questioned about the prospect of mergers and acquisitions as banks in Italy and Spain weigh consolidation, Sewing said that Deutsche "can grow organically."

When questioned about the prospect of mergers and acquisitions

as banks in Italy and Spain weigh consolidation, Sewing said that Deutsche "can grow organically," before concluding, “I’m not looking so much at consolidation for Deutsche Bank.”

He also said that revenue in the fixed-income and currency business will rise in Q2 compared with the previous year.

Barrick Mining seeks World Bank help

In light of the potential for the LouloGounkoto mine to come under Mali government control, Barrick Mining has requested that the World Bank arbitration tribunal step in and intervene in the country's legal proceedings. Barrick's action coincides with the government's request to place the Canadian miner's gold mine under temporary administration, which is scheduled to be decided by a local Mali court on June 2.

A person or group will be tasked with taking control of the mine and reopening it if the Mali court decision favours the government. Since January 2025, Barrick's gold mine has been closed after the country confiscated three tons of gold due to non-payment of taxes.

In a document filed with the International Centre for Settlement of Investment Disputes (ICSID), Barrick requested "provisional measures" from the arbitration panel.

Timothy Foden, of the international law firm Boies Schiller Flexner, said, "Put simply, 'provisional measures' means that Barrick has applied to the tribunal for an order requiring the Mali government to refrain from taking further actions that would exacerbate the dispute, including Mali's effort to place the mine into provincial administration." Mali, however, does not want to engage in foreign arbitration.

South Korea

South Korea considers deposit tokens

South Korea's central bank is reportedly considering the introduction of deposit tokens on public blockchains to better compete with stablecoins.

Lee Jong-ryeol, the deputy governor of the Bank of Korea (BOK), disclosed that the regulator is thinking about "a plan to link [our] deposit tokens with the public blockchain network" during his remarks at the 8th Blockchain Leaders Club in Seoul.

According to Jong-ryeol, a type of stablecoin has been introduced within the digital currency system built and operated by the Bank of Korea. As a result, it would become a centralised

token that the bank would control. The central banker did, however, add that BOK is considering combining the token with privately issued stablecoins.

He provided little information about whether the tokens would be accessible to users outside of South Korea and whether the bank would restrict access to them. The central bank would relinquish control over the tokens and allow for unrestricted cross-border trading if they were made available on a public blockchain. The move will also pit a central bank directly against the private crypto player.

Saudi Bank credit soars $118 billion

According to the April monthly statistical bulletin published by the Saudi Central Bank (SAMA), bank credit extended to the public and private sectors in the Kingdom totalled SR3,126,381 million (more than SR3.126 trillion) by the end of April 2025. This represents a 16% yearly growth and an increase of over SR443.018 billion over the same period in 2024, when bank credit was SR2.683 trillion.

Increased lending activity in several sectors, such as manufacturing, real estate, and construction, drove this increase, which was indicative of both a wider economic expansion and greater investor confidence in the Kingdom's financial future. Improved liquidity conditions in the banking industry and pro-credit monetary policies also supported credit growth.

At all levels, bank credit increased by SR146.411 billion every quarter, representing a 5% increase over the fourth quarter of 2024.

At the end of 2025's first quarter, bank credit had increased from over SR2.955 trillion to over SR3.101 trillion. Bank credit increased by SR24.420 billion, or 0.8%, every month from March 2025, when it was SR3,101,961 million. Long-term credit accounted for 49% of total bank credit.

Egypt sets new insurance rules

Egypt's Financial Regulatory Authority (FRA) Board of Directors, chaired by Mohamed Farid, has issued decision No. 69 of 2025, which establishes professional guidelines and standards for insurance and reinsurance brokerage registration and practice. The decision is part of the FRA's plan to

increase the market's professionalism and efficiency.

Its foundation is the Unified Insurance Law No. 155 of 2024, which describes the duties and registration requirements for brokers, whether natural or legal persons, authorised by the FRA to mediate

Improved liquidity conditions in the banking industry and pro-credit monetary policies also supported credit growth

insurance or reinsurance transactions in exchange for commissions or fees.

All brokers are required to register on the FRA's electronic platform under the new regulations within 45 days of the decision's effective date. The duration of registration in the authority's registry has been extended from three to five years, with the option to renew.

As a result, businesses are required to have a minimum of two board members with relevant experience, one independent and one executive. Foreign financial institutions or businesses wishing to act as brokers in Egypt must obtain permission from their home regulator and be supervised by a single regulatory body. Smaller funds and individuals will be permitted to create websites, provided they adhere to the same set of regulations.

Analysis

Will Nigerian economy bounce back in 2025?

GBO Correspondent

For Nigeria to significantly raise living standards, its growth rate must be at least 6% for three years in a row

Nigerians may be wondering if 2025 will bring the "renewed hope" that the administration of President Bola Tinubu promised, or if they will face yet another year of economic hardship. The elimination of fuel subsidies has left Nigerians with steep financial difficulties, as in just one year, the move resulted in the gasoline price increasing by almost 500%.

Furthermore, between October 2023 and October 2024, the value of the domestic currency declined by more than 100% as a result of the liberalisation of the foreign exchange market. Additionally, in an effort to combat headline inflation, which was 34.6% in November 2024, the Central Bank of Nigeria has been implementing a contractionary monetary policy, which aims to do so by lowering the money supply.

The interest rate was raised from 15% in October 2023 to 27% in September 2024. Nigerians now have lower living standards, with costs increasing multifold. The Tinubu administration also implemented a student loan programme, a new minimum wage, and tax reforms.

However, the World Bank has praised the government for taking decisive action to address long-standing issues and urged it to continue with the "reforms." The economy is projected to grow by 3.5% year-on-year, up from an estimated 3.2% in 2024, according to the NESG-Stanbic IBTC Business Confidence Monitor. The report attributes this growth to easing inflationary pressures and stabilising effects of the government’s two flagship reforms: foreign exchange liberalisation and fuel subsidy removal.

Inflation may average 30.5% in 2025, declining to 27.1% by December as high petrol costs normalise and the food supply improves. The growth projection could prompt the Central Bank of Nigeria’s Monetary Policy

Analysis \ Central Bank Of Nigeria

Committee to adopt an accommodative stance, enhancing credit access and reducing borrowing costs.

A missed opportunity?

Nigeria's economy recovered after the coronavirus pandemic, as did many other nations. The economy grew at a respectable rate of 3.6% in 2021, 3.3% in 2022 and 2.9% in 2023. The IMF anticipates growth in 2025, albeit at a muted pace of roughly 3%, which is lower than the 4% growth predicted for sub-Saharan African nations.

Lower-than-expected oil production, widespread insecurity, and a lack of foreign exchange have all contributed to the slower growth rate by making it more difficult for manufacturers to import the production inputs they require. For Nigeria to significantly raise living standards, its growth rate must be at least 6% for three years in a row.

The services sector, which grew by 3.8% in the second quarter of 2024, has been the main driver of the nation's growth. At 3.5%, the industry was the second-largest driver. In 2025, it is anticipated that the trend will continue. Manufacturing, which usually accounts for a large portion of employment, will however not grow at all.

CFG Advisory CEO Tilewa Adebajo noted that the African country has suffered a severe economic blow, losing an estimated $300 billion in GDP over the past eight years.

He attributed the decline to policy inconsistencies and poorly implemented reforms, which have led to a crippling 300% devaluation of the naira.

Adebajo stated that the nation’s GDP now stands at $200 billion, placing Nigeria as the fourth-largest economy in Africa, behind Egypt, South Africa, and Algeria. Nigeria’s 18-month economic reform programme

Economy

has delivered mixed results, largely due to poor execution and misplaced priorities.

The most significant impact has been the devaluation of the naira from 450 to over 1,700 per US dollar. Combined with the removal of fuel subsidies, these reforms have led to higher inflation, reduced purchasing power, and soaring interest rates.

The social intervention programmes meant to cushion the effects of these changes have fallen short, failing to provide meaningful relief to households and businesses. Meanwhile, the country’s borrowing has surged, exceeding $100 billion, with debt servicing costs skyrocketing from $8 trillion in 2024 to $16.3 trillion in the 2025 budget. Alarmingly, debt servicing now surpasses combined allocations for defense, infrastructure, education, health, and security, totalling $14 trillion.

Inflation and food prices

Inflation has been increasing since June 2024, when it decreased from June to August 2024. In August, it was 32%; by November 2024, it had risen to 34%. At least through the first quarter of 2025, this upward trend is probably going to continue. Given that inflation in 2019 was 11%, Nigerians shouldn't anticipate returning to pre-COVID prices anytime soon.

The Central Bank of Nigeria is probably going to continue raising interest rates in 2025 in response to the recent spike in inflation. However, since a large portion of Nigeria's inflation is structural rather than monetary, this is unlikely to significantly reduce inflation. This is because food inflation, which is currently at around 40%, won't be controlled by 2025. Farmer shortages are becoming a major concern as well.

The fact that many companies have already made investments in 2025

production and services based on 2024 input prices is another factor that will keep inflation high. In the informal sector, vendors and operators who did not profit from the new minimum wage payments will want to increase their prices in order to partake in the benefits.

Rather than reinvesting savings from subsidy removal into capital projects to stimulate growth, the funds have been channelled into debt servicing. Additionally, money supply has risen by 50%, peaking at a historic $108 trillion, undermining the Central Bank of Nigeria’s (CBN) ability to control inflation.

Foreign direct investment (FDI) is at an all-time low, with just $29 million recorded in the first half of 2024. The power sector remains underdeveloped, with inadequate transmission and distribution infrastructure hampering industrial productivity.

The Naira

The value of the naira has fluctuated throughout 2024. The naira will continue to be weak in 2025 even though the CBN's recently launched Electronic Foreign Exchange Matching System (EFEMS) is anticipated to increase transparency and deter speculation in the forex market.

The economy is reliant on imports. Therefore, the cost of imported goods will increase when the naira declines. To control price increases, the Tinubu administration suspended import taxes on certain imported foods.

However, since there are few impacted products and the policy is only temporary, it is unlikely to have an impact on price pressures.

The need for foreign currency will rise, and shortages will get worse. In 2025, the price of crude oil is predicted to drop by roughly $6 per barrel, which will lessen the amount of foreign exchange coming into Nigeria. The potential impacts of the Middle East's conflict and instability have

Analysis \ Central Bank Of Nigeria

been taken into account when estimating the world oil price.

The Nigerian foreign exchange market will face significant challenges in the final quarter of 2025 as politicians prepare for the 2026 party primaries and the general elections in 2027. Every country accumulates a war chest of money, primarily in foreign currency. The demand for foreign currencies is anticipated to rise as a result. This demand is unlikely to be met by supply, which will cause the naira to plummet.

What’s next?

In general, living conditions improve when there are plenty of well-paying jobs available, especially in manufacturing. You also need an environment that promotes innovation, entrepreneurship, and the growth of small businesses.

A thriving economy benefits a larger portion of the population by creating jobs, economic growth, and a livelier business environment. Unfortunately, in Nigeria,

none of those scenarios exist.

Increasing government investment in welfare and safety net programmes helps vulnerable groups, giving them a sense of security and a higher quality of life. Another important factor is the drop in food and energy costs. Reduced basic living expenses free up more money for people to spend on other necessities and enhance their quality of life.

The last factor that improves living conditions is increased access to infrastructure, healthcare, and education. A population that is healthier and better-educated results from increased government spending and foreign aid in these areas, and infrastructure development raises everyone's standard of living. The sad reality here is that we are talking about a utopian scenario, which won't arrive in Nigeria anytime soon.

Foreign direct investment (FDI) is at an all-time low, with just $29 million recorded in the first half of 2024. The power sector remains underdeveloped, with inadequate transmission and distribution infrastructure hampering industrial productivity

The heart of economy Trade & labour:

As human intellect improves its ability to employ human instruments, it expands the economy and creates more goods and services

An economy is, in general, a network of human labour, commerce, and consumption. Similar to language, an economy develops spontaneously from the sum of human activity. To raise their standard of living, people trade with one another.

Raising living standards is possible when labour becomes more productive. Working capital, technical innovation, and specialisation all contribute to productivity. An economy can only expand sustainably through higher productivity.

What is an economy?

Regional borders separate the majority of economies, including those of the United States, China, and Colorado. The advent of e-business and the growth of globalisation have made this difference less accurate. A deliberate government effort is necessary to constrain and artificially shape an economy, but not to generate one.

Only the limitations imposed on economic players cause the basic essence of economic activity to vary from one location to another. Everyone has to deal with limited resources and inaccurate information.

Despite having a similar history, population, and resource base, North and South Korea have quite different economies. Their economies differ greatly due to public policy.

Different parties come together to create economies. Households are the foundation in certain ways. We refer to families and individual consumers as households, and it is their consumption of goods and services that drives economic activity. Household financial choices, including investing, saving, and spending, have an overall effect on the state of the economy.

Households, on the other hand, make up the labour force. These individuals supply the labour force that companies need to run and generate goods and services. In the economic cycle, home spending is made possible by the remuneration received from being a part of the labour force.

If there were nothing to buy, what use would having money be? Furthermore, without a source of revenue, how would households be able to purchase those goods?

Companies of all sizes, from little local businesses to massive global conglomerates, support innovation and the creation of jobs. They are also essential to the production of commodities, the demand for services, and the distribution of goods.

Businesses try to scale economic growth through their profits, reinvest in R&D, and retain capital, as we will cover later in the section on economic growth. Some people disagree that the government ought to have a significant impact on the economy. Some believe that governments have a major regulatory role. In

Gross Domestic Product of the United States from 2015 to 2024 (In Billion US Dollars)

18,295.0 2016 18,804.9 2017 19,612.1 2018 20,656.5

Source: Statista

the United States, both federal and regional governments have an impact on economic stability through monetary and fiscal policies, which deal with rates and taxes, respectively.

Furthermore, government employment provides people with a source of income. Governments can also impose requirements on companies for a variety of products and services.

Capturing credit is a critical component of a rising economy. Think about a tiny business that wants to start but does not have the capital. By offering financial services like loans, savings accounts, and investment opportunities, banks help money move. A bank might lend that small business owner money to help shape an economy. Investors facilitate capital in a manner quite similar to that of banks. By donating money with the expectation that it would increase in value, investors have an impact on economic activity and the distribution of resources. The decisions made by investors influence interest rates, asset values, and the overall efficiency of financial markets.

An economy emerges when groups of individuals freely trade with one another using their unique abilities, passions, and desires. People trade because they think it improves their financial situation. In the past, people introduced money as a form of intermediation to facilitate trade.

People receive financial rewards based on the perceived value of their productive outputs. They usually focus on what will make them most valued. They then exchange other commodities and services for money, which is a portable symbol of their productive worth. An economy is the culmination of all these productive endeavours.

Economic formation

Since the beginning of a nation provides the best opportunity to study how an economy is formed, let us explore the United States during colonial times. In New England and the Middle Colonies, subsistence farming was common, and agriculture was a vital economic activity. Large-scale plantations, particularly those producing crops like tobacco, dominated the Southern Colonies. Because colonies could profit from what they were greatest at producing, this agricultural foundation supported local communities while also boosting the colonial economy as a whole.

Because colonial trade was restricted by the Navigation Acts, trade and mercantilist policies were significant. These laws placed a strong emphasis on importing completed goods and exporting raw resources to Britain. This structure impacted the early phases of the American economy and produced a set-up dependent on the British markets.

In metropolitan areas, skilled trades and craftsmanship flourished, adding to the economic diversity. The economic environment was further shaped by the emergence of cities like Boston and Philadelphia as centres for talented artisans. Think about how this has influenced modern society; these big cities still serve as a hub for labour unions.

The capacity to trade goods with other marketplaces and business prospects should also be considered. The triangular trade routes connected the American colonies to Europe, Africa, and the Caribbean.

This facilitated the movement of raw materials, completed goods, workers, and merchandise. It would have been far more

difficult for the US economy to grow without suppliers and commercial partners in the absence of this extensive and intricate network.

Expanding the economy

When a worker can more effectively convert resources into valuable goods and services, they are more productive (and valuable). This might be anything from a hockey player selling more tickets and jerseys to a farmer increasing crop yields. Economic growth is the ability of an entire collection of economic players to generate products and services more efficiently.

Growing economies quickly transform less into more. Reaching a particular standard of living is made simpler by this abundance of products and services. For this reason, productivity and efficiency are of enormous significance to economists. This is also why markets reward companies that provide the greatest value from a customer's perspective.

There are only a few ways to increase real (marginal) production. Having superior tools and equipment, or what economists refer to as capital goods, is the most evident; a farmer with a tractor is more productive than one with a little shovel.

Capital goods take time to create and construct, requiring investments and money. Delaying present consumption for future

consumption increases investment and savings. The financial sector, which includes banking and interest, provides this service in contemporary economies.

Specialisation also increases production. Workers use education, training, practice, and new methods to increase the productivity of their capital assets and skills. As human intellect improves its ability to employ human instruments, it expands the economy and creates more goods and services. As a result, the quality of life improves.

In order to examine economic growth, we will continue using historical examples by examining the United States in the years following World War II. The "Golden Age of Capitalism" is another name for this period.

For a number of reasons, the American economy had a notable expansion during this time, which roughly corresponded to the late 1940s to the early 1970s. First, returning veterans were eligible for several benefits under the 1944 GI Bill. To reintegrate millions of people into society, this provided housing, business financing, and education. This resulted in a workforce that was more skilled and had more money to spend.

Significant innovation and technological achievements also occurred during this postwar era. Manufacturing, aviation, and electronics were among the industries that saw substantial expansion. During this

In metropolitan areas, skilled trades and craftsmanship flourished, adding to the economic diversity. The economic environment was further shaped by the emergence of cities like Boston and Philadelphia as centres for talented artisans

Structural issues in the economy, such as inadequate infrastructure, a skilled workforce, or outdated technologies, impede growth. Scaling a business might be ineffective or unaffordable without a robust workforce or the infrastructure needed to make items correctly

time, television became popular and the automobile industry grew. This invention increased household consumption in addition to generating employment opportunities.

Infrastructure will be the final topic we discuss in this extremely high-level example. President Dwight D. Eisenhower started building the interstate highway system in the 1950s. In addition to enhancing communication and transportation, this infrastructure development generated employment.

To summarise all of these specific instances, it is crucial to emphasise the role the government played in this expansion. Low inflation and interest rates were a result of the Federal Reserve's comparatively steady monetary policies throughout this time. This supported a variety of economic growth in addition to the aforementioned categories.

Reduced economic development

It may seem obvious that economic growth does not occur when the contrary of the aforementioned occurs. Let us still talk about the reasons why an economy might not expand. Lack of investment is a significant problem that arises when companies lack

confidence in the economic climate, are uncertain, or have limited capital.

Production, the creation of jobs, and general economic activity are all impacted when companies are reluctant to grow. Keep in mind that banks are also involved in this investment; when they restrict credit, it becomes more difficult for companies to obtain funding for expansion.

Economic stagnation is also a result of policy-related issues. Political unrest, excessive regulations, and poorly executed or inconsistent economic policies can all contribute to a challenging business climate. An atmosphere like this can deter investment and stymie business ventures.

Structural issues in the economy, such as inadequate infrastructure, a skilled workforce, or outdated technologies, impede growth. Scaling a business might be ineffective or unaffordable without a robust workforce or the infrastructure needed to make items correctly.

Let us finally discuss external factors. Natural disasters, geopolitical tensions, or worldwide economic downturns can also hinder growth. Trade interruptions, for instance, may impact export-oriented economies.

As another example, natural disasters

can make it impossible to transport items from one place to another for production or sale. When an economy is trying to expand, there are frequently many factors beyond its control.

What is economics?

The study of economics examines how people and organisations divide up scarce resources for use in production, distribution, and consumption. It is generally divided into two subfields: macroeconomics, which focuses on the economy as a whole, and microeconomics, which concentrates on specific individuals and companies.

Economic indicators are reports on an economy's performance in key sectors. Regular publication of these reports typically influences government policy, interest rate policy, and stock performance. GDP, retail sales, and employment statistics are a few examples.

In primitive societies, people meet their own needs and wants. In feudalism, social class determines economic growth. In capitalism, people and businesses own capital goods, and production is based on supply and demand in a market economy. In socialism, everyone shares many economic functions. And in communism, a type of command economy, the government controls production.

Human activity, resource allocation, and innovation deeply intertwine with the formation and expansion of an economy. Economies naturally arise from the collective pursuit of improving living standards through trade, specialisation, and productivity. While households provide labour and drive consumption, businesses innovate and generate value, and governments and financial institutions shape and regulate the economic landscape. Historical examples such as the United States’ post-WWII growth underscore the pivotal roles of investment, infrastructure, and innovation in economic expansion. Conversely, economic stagnation can result from insufficient investment, policy missteps, structural challenges, or external

disruptions. Economic growth depends on boosting productivity and efficiency through capital goods, education, and technological advancements.

By understanding these dynamics, countries can create policies and environments that encourage sustainable growth, enhance the quality of life, and adapt to changing global conditions. Ultimately, economies thrive when governments, businesses, and individuals collaborate effectively within a stable and innovative framework.

Governments, manufacturers, and consumers interact dynamically to establish and grow economies. Technological developments, stable governance, and participation in international trade are crucial drivers of steady economic growth. Throughout history, economies have demonstrated their ability to evolve, responding to human needs and the pursuit of better living standards. At their core, economies reflect the productivity and ingenuity of their participants, from households to businesses, governments, financial institutions, and investors.

Growth stems from improved efficiency, specialisation, and the creation of capital goods. Technological progress amplifies productivity, opening pathways for new industries and innovations. Governments play a pivotal role in regulating economies, shaping public policies, and nurturing environments conducive to investment and growth.

However, challenges such as political instability, inadequate infrastructure, and external disruptions can impede economic development. Addressing these barriers requires strategic planning, collaboration, and resilience.

Ultimately, an economy thrives when its participants work collaboratively to create value, leverage resources wisely, and adapt to changing global dynamics. The interconnectedness of global trade, technological advancements, and evolving societal needs ensures that economies remain both complex and vital.

Governments, manufacturers, and consumers interact dynamically to establish and grow economies. Technological developments, stable governance, and participation in international trade are crucial drivers of steady economic growth

Analysis

Middle East crisis sparks global hunger surge

GBO Correspondent

Over 41 million people in the Middle East and North Africa region experienced severe food insecurity in 2024

The worldwide hunger crisis has worsened due to Middle Eastern conflicts, making more youngsters susceptible to malnutrition and developmental problems and maybe endangering the future of a whole generation.

According to the Integrated Food Security Phase Classification, or IPC, a global alliance that analyses food insecurity, about 160 million people worldwide require immediate aid to prevent hunger.

The Global Report on Food Crises reveals that the main causes of hunger in the Middle East and North Africa (MENA) region are the conflicts in Gaza and Sudan, even if economic unrest and climate extremes are among the leading reasons globally.

In an already climate-stressed region, these wars have exacerbated food insecurity for millions of people by causing mass migration, upsetting supply systems, and significantly reducing agricultural output.

In addition to increasing the likelihood of food shortages for more people in Yemen, Lebanon, and Syria, the fighting in Gaza has worsened the region's climatic catastrophe.

A worsening picture

According to the World Food Programme's most recent data, over 41 million people in the MENA region experienced severe food insecurity in 2024.

Nearly half of these occurred in Sudan, where 24.6 million people suffer from acute malnutrition, with 8.1 million at risk of mass starvation and 638,000 living in famine conditions.

At least 10 million people have been displaced by the war between the paramilitary Rapid Support Forces and the Sudanese Armed Forces, which began on April 15, 2023, making it the greatest internal displacement crisis in history.

Since the establishment of the international famine monitoring system twenty years ago, the IPC's declaration of a famine in Sudan is just the third official famine determination. Somalia was previously classified in 2011, South Sudan in 2017, and South Sudan once more in 2020.

Timmo Gaasbeek, a food security specialist who has worked in Sudan, claims that the famine crisis in Sudan is disproportionately affecting children, as newborns and small children are frequently among the first to die from malnutrition and starvation.

Gaasbeek told Arab News that little children and the elderly are more susceptible than adults and will be more likely to die from various illnesses like malaria or diarrhoea.

"More people die from diseases to which their bodies are not immune during famines than from a shortage of food," he said.

The World Food Programme estimates that as of November 2024, 4.7 million children under five and pregnant and lactating women in Sudan were experiencing acute malnutrition.

Death can also come from chronic hunger and malnutrition, even in places where famine has not been declared.

According to Gaasbeek, "If sustained for an extended period, even a 35% deficit in energy intake can be fatal. This level of hunger, or worse, is currently plaguing millions of people in Sudan."

Sudan has been termed "the world's biggest humanitarian crisis" due to the severe economic collapse, high food costs, weather extremes, and poor sanitation, which has led to a devastating cholera outbreak and widespread famine.

Zamzam, Abu Shouk, and Al-Salam in North Darfur were among the five regions where the IPC declared famine in December. By May, people may starve in five other parts of North Darfur, including the besieged Al-Fasher. Malnutrition at the famine level is a threat in 17 more regions.

A WFP assistance convoy took three months to reach the 500,000-person Zamzam displacement camp in North Darfur, the first region where famine was declared in August 2024, due to fighting, supply limitations, and other logistical difficulties.

The World Food Programme claimed in a statement at the time that "the combination of fighting around North Darfur's capital Al-Fasher and impassable roads brought on by the rainy season from June to September severed incoming

Economy

Source: Statista

transport of food assistance for months."

Access became possible only after Sudanese authorities agreed to temporarily open the Adre border crossing from Chad to Darfur until February 2025.

However, the devastation of Sudanese agriculture has led to years of regression, making this relief seem insignificant.

In order to reduce hunger-related mortality in Sudan, Gaasbeek estimated that approximately 800,000 tons of food aid will be needed in 2026 and 400,000 tons in 2027. This is only possible if the war is over by the time the next planting season begins in June 2025.

In Sudan, around two-thirds of the grain consumed is produced domestically, with the remaining third coming from commercial imports. However, the conflict and the economic collapse have an impact on those two factors.

"Food distribution is hampered by a number of logistical and financial issues, and consumers' limited purchasing power means that commercial imports are currently at their peak," Gaasbeek stated.

Businesses don't have the resources to import more. This implies that increasing the import of food aid is the only thing that can change anything this year.

He calculates that approximately 6 million people may perish from starvation in 2025 if assistance supplies continue to be scarce.

"Food production and imports would stagnate if the conflict continues unabated or worse escalates further, necessitating extremely high levels of food aid to

prevent mass starvation," he added.

Although official statistics on hungerrelated mortality in Sudan are unavailable, Gaasbeek calculates that approximately 500,000 individuals, or 1% of the population, perished from starvation and disease in 2024.

To help 20.9 million of the 30.4 million people in Sudan who are currently in dire need, the United Nations (UN) issued a $4.2 billion appeal for donations on January 6. Children make up over half of them.

The IPC's findings that famine was now widespread in Sudan were rejected by the Sudanese government in December 2024, citing procedural and transparency issues as well as the failure to use up-to-date field data.

Gaza: Another problem area

About 90% of Gaza's two million residents have been displaced by the conflict between Israel and the Palestinian militant organisation Hamas, which started on October 7, 2023. The conflict has also resulted in severe food insecurity, with half of the population predicted to suffer from severe malnutrition.

The World Health Organisation believes that 75,000 people still live in the besieged northern Gaza region, where the Famine Review Committee warned of "imminent famine" on November 9.

Without regular access to food or medical care, many of the displaced are struggling with the bitterly cold winter months in filthy tents that are regularly inundated by torrential rains in south and central Gaza.

Israel established a blockade early in the battle, which significantly reduced the quantity of humanitarian aid that could enter. Since October 2024, northern Gaza has been subject to stricter restrictions as Israel steps up its efforts to rid the region of Hamas combatants.

Analysis \ Famine

The UN Office for the Coordination of Humanitarian Affairs asserts that Israeli authorities made it possible for only two assistance convoys to reach northern Gaza in December, which made the hunger crisis worse.

According to the IPC, domestic food manufacturing has all but failed in Gaza, with almost 70% of the country's agriculture fields devastated and stores, factories, and bakeries damaged or destroyed.

Food scarcity is primarily impacting vulnerable children, similar to the situation in Sudan. The WHO reported 32 malnutrition-related fatalities in June, including 28 in children under five.

The World Peace Foundation and Palestinian health officials, however, believe that the number of children who have died of starvation in Gaza is much greater than official figures.

According to UNICEF, over 96% of women and children in Gaza are unable to achieve their basic nutritional demands

because they are forced to eat rationed wheat, lentils, pasta, and canned foods, a diet that gradually deteriorates their health.

The effects of starvation (like stunted growth, delayed puberty, weakened immunity, and increased risk of chronic diseases, vision, and hearing impairments) on a child's development might be permanent.

Such situations may impact children's cognitive and emotional development, potentially leading to a lower IQ and subpar academic achievement. Additionally, they have a higher risk of developing attention deficit hyperactivity disorder, anxiety, and depression.

To help 20.9 million of the 30.4 million people in Sudan who are currently in dire need, the United Nations (UN) issued a $4.2 billion appeal for donations on January 6. Children make up over half of them

To help control inflation, the Romans lacked knowledge of contemporary economic theories

Rome’s ancient battle with inflation

GBO Correspondent

Although the terminology is different, the Roman emperor Diocletian's 301 CE decree on maximum prices captures a sentiment that many people have: why is everything so pricey these days?

Diocletian's decree demonstrates how deeply outraged he and his fellow imperial officials were by the widespread inflation that had gripped the Roman Empire for the majority of the third century.

The troops' allegiance served as the foundation for the emperors' power, but inflation reduced their pay. What caused the Roman Empire to become involved in this quagmire, and how did it escape it?

The Roman Empire endured unheard-of difficulties during a large portion of the third century, including war with several Germanic tribes, particularly the Goths, and foreign invasions by the Persian Sasanians.

In addition, there were food shortages, disease outbreaks, plagues, and civil conflicts. Today, this time frame is referred to as the Crisis of the Third Century.

Economy Inflation

Key statistics related to Diocletian’s inflation and the Roman economy around his reign

Inflation Rate: Estimated to have reached as high as 15,000% during the third century (200-300 CE)

Price Controls: Diocletian's Edict on Maximum Prices (301 CE) set ceilings on prices and wages for about 1,200 goods and services across the empire

Currency Debasement: The silver content in coins dropped drastically—from nearly 90% silver in early Roman denarii to less than 5% silver by the late third century

Army Size: Increased from about 250,000 soldiers in the first century to around 600,000 during Diocletian’s reign (284305 CE), increasing the need for coinage to pay troops

Coin Minting: The number of coins minted surged significantly to meet rising military and governmental expenses, fuelling inflation

As these issues worsened, hundreds of short-lived emperors were installed and overthrown, making political stability a thing of the past.

Rome's army expanded in size in the third century as a result of the magnitude of its military issues. During Diocletian's rule (284-305), it had about 600,000 men, compared to the first century's tally of 250,000.

In order to pay the soldiers, Roman mints had to create more silver coins due to the growing army, which demanded ever-higher salaries and bonuses. Coins were used for political propaganda as well, supporting the legitimacy of a new emperor. Coins with the portrait of the next emperor were issued each time. The fact that there were so many emperors in power during the third century added to the rise in coin manufacture.

Roman currency, AR Maximinus, Denarius, Rome mint, 236-238 AD, an ancient Roman coin with an emperor's face alone on a black background, or the next emperor? New coins with his picture on them. Also, to boost economic activity, modern authorities occasionally employ "quantitative easing," which is sometimes (and perhaps incorrectly) defined as "printing more money." There may be some parallels to the enormous rise in coin manufacturing and the resulting inflation in third-century Rome.

The value of each coin declined during this period as the Roman Empire's coin supply increased. Silver became more difficult to obtain in the third century as the empire started

to decline. Debasement, the term for this process, caused a sharp decline in the amount of precious metal that was truly present in the silver coins.

In other words, their worth decreased, and people (particularly soldiers) requested more coins because they had less faith in these devalued coins' ability to hold their value. The emperor was frequently sent away quickly if they didn't accept them. Anyone who experienced the COVID-19 limits will also recognise supply chain constraints as a contributing reason to inflation.

Instability was fuelled by sickness and war, especially the Plague of Cyprian, an outbreak that resulted in a scarcity of labour. This resulted in issues with the supply chain, which contributed to the increase in product prices.

Reforming the currency

To help control inflation, the Romans lacked knowledge of contemporary economic theories. They also lacked the central banks and other institutions needed to control the highs and lows of inflationary cycles.

The manufacturing of coins, however, was under Roman supervision. During the third century, they tried to address the lack of trust in silver coins by implementing monetary reforms, which included a modest increase in the amount of silver under Emperor Aurelian (270-275).

But none of them were effective. Trust in the silver money was irreparably tarnished. When he took power at the end of the third century, Emperor Diocletian was disheartened by the political and economic turmoil he had inherited.

He established a cap on prices of almost 1,200 items for the entire empire when he issued his decree on maximum prices in 301 CE. He emphasised the effect of inflation on the soldiers in this law. The army was a crucial component that supported his imperial power. But the edict didn't work.

In addition to being unenforceable throughout the Roman Empire's enormous area, official price limitations invariably led to the emergence of a black market. During his rule, he provided Rome with some political stability, but after failing to stop the hyperinflation, Diocletian resigned and turned to growing cabbages.

A new gold unit called the solidus was added when the emperor Constantine (306-337)

restructured the currency in the fourth century.

Because of its prestige (mostly used by troops and the wealthy), high precious metal content, and better-regulated output, this unit enjoyed greater faith. Inflationary pressures seem to have decreased as a result.

In contrast to Diocletian's tense system of co-emperors, called the Tetrarchy, Constantine also restored political stability and the single rule of the empire. This stability reduced inflation. Across the empire, currency minting became more uniform and supply bottlenecks were lessened.

The dilemma of today's cost-of-living

There are valid grounds for criticism of the way governments and central banks have handled the current inflation issues. However, we can at least be grateful that high inflationary eras in contemporary economies have been and will probably be brief in comparison to the Roman Empire.

Our sophisticated ability to analyse economic data and develop ideas to curb inflation before it becomes unmanageable is largely responsible for this. Inflation weakens the social, political, and economic stability we so frequently take for granted.

While leaders like Diocletian sought to control prices through legislative decrees, these measures failed due to a lack of enforcement and trust. Eventually, Constantine's reforms, including the introduction of the solidus and a return to political stability, offered a more sustainable solution.

Modern economies, though far more complex, share some parallels with these ancient challenges. Issues such as supply chain constraints, currency valuation, and public trust remain central to addressing inflation. However, advancements in economic theory, data

In order to pay the soldiers, Roman mints had to create more silver coins due to the growing army, which demanded everhigher salaries and bonuses. Coins were used for political propaganda as well, supporting the legitimacy of a new emperor

analysis, and institutional structures, like central banks, allow contemporary societies to respond more effectively to inflationary pressures. Unlike Rome, where solutions often took decades, today's economies benefit from tools that enable faster and more precise interventions.

By reflecting on the Roman experience, we can appreciate the importance of economic stability as a foundation for societal well-being, as historical parallels offer clarity in times of uncertainty. The Empire’s struggles with inflation highlight the dangers of reactive policy and fractured governance, reminding us that although such forces can disrupt lives, strategic reforms and strong institutions, supported by better tools and data, are essential to preserving public trust, ensuring resilience, and securing long-term prosperity.

Feature \ Rome

Arecent business survey revealed that despite strong demand, growth in the UAE's non-oil private sector fell to its lowest level in four years in May, indicating the impact of US tariffs on the second-largest economy in the Gulf.

The seasonally adjusted S&P Global Purchasing Managers'

UAE non-oil growth slows amid tariff pressure

Index (PMI) dropped to 53 points in May from 54 points in April, its lowest level in 44 months. A notable increase in output was supported by strong demand conditions, even though the growth rate trended downward from its recent bullish run.

David Owen, senior economist at S&P Global Market Intelligence,

said, "From an overall perspective, the survey signals that the UAE economy is performing well, but the softer increases in output and new orders hint at momentum easing. Although businesses continued to welcome strong demand from their clients, there were some reports that competitive pressures and weaker trade amid US tariffs had weighed on growth."

He further added that the generally muted outlook for activity indicates that businesses are preparing for slower growth.

According to the survey, input stocks fell to a record level as businesses sought to reduce holdings as momentum slowed down. Egypt

Egypt briefs Goldman team on reforms

In a meeting with a Goldman Sachs delegation, Egypt's Minister of Planning, Economic Development, and International Cooperation, Rania Al-Mashat, detailed the nation's progress in economic reform and outlined government initiatives aimed at enhancing investment and empowering the private sector. Along with other bank representatives, the delegation

included Farouk Soussa, Chief Economist at Goldman Sachs International Financial Institution.

The meeting examined significant economic developments in Egypt, as well as government programmes designed to boost macroeconomic stability by facilitating an investment climate that appeals to both domestic and foreign investors and enhances the business environment.

To increase trust and credibility in the Egyptian economy, Al-Mashat emphasised that enhancing macroeconomic stability has been a top priority for the government since the start of the economic reform programme.

Promoting the macroeconomy's stability and resilience, enhancing the business and investment climate, and accelerating the shift to a green economy are the three primary pillars of this programme.

Al-Mashat emphasised that enhancing macroeconomic stability has been a top priority for the government since the start of the economic reform programme

Japan

Japan’s economy shrinks 0.2%: Government data

According to preliminary government data, Japan's economy contracted 0.2% in the March quarter, marking its first contraction in a year, as exports fell precipitously. Compared to the 0.1% contraction that Reuters polled economists predicted, the GDP data was worse.

Japan's GDP shrank 0.7% on an annualised basis in the first quarter, which was also higher than the Reuters poll's prediction of a 0.2% decline.

Exports decreased by 0.6%, subtracting 0.8 percentage points from GDP due to uncertainty brought on by the United States. The trade policies of President Donald Trump affected

Japan's export-driven economy.

On the other hand, domestic demand was a bright spot, increasing by 0.6% during the same quarter and contributing 0.7 percentage points to GDP.

However, Japan's GDP grew 1.7% year-over-year, which was the biggest growth since the first quarter of 2023 and better than the 1.3% growth in Q4.

The release of GDP data coincides with Japan's ongoing trade talks with the US, as preliminary discussions between the two parties have not yet resulted in a final agreement.

Australia’s growth slows in Q1 2025

In the first quarter, Australia's economy hardly expanded as consumers remained cautious and government spending, which was the main driver of activity in 2024, stalled to a halt.

Interest rates have already been lowered twice since February by the Reserve Bank of Australia to 3.85%, and the minutes of the May policy meeting revealed that it was willing to make an arbitrary half-point move as US tariffs soured the outlook for the world economy.

Pat Bustamante, a senior economist at Westpac, said, "The main takeaway is that the expected tentative recovery in private demand continues to underwhelm. Without a material pick-up in private demand, the economy could be set for a period of subdued growth."

According to data released by the Australian Bureau of Statistics, real GDP increased by 0.2% in the March quarter, which was a significant slowdown from the 0.6% gain in the previous quarter. Analysts had anticipated a pick-up to 1.5%, but annual growth flatlined at 1.3%, well below the 2.5% pace that was once deemed "normal."

UAE draws $45.7 billion FDI in 2024

The UAE achieved an unprecedented AED 167.6 billion (USD 45.6 billion) in FDI inflows in 2024, placing it 10th globally as a top destination for inbound FDI, according to the United Nations Conference on Trade and Development's (UNCTAD) World Investment Report 2025.

Despite an unstable global environment, the UAE has proven to be a top investment destination, as evidenced by its outstanding performance in attracting capital across key sectors, according to the Ministry of Investment's 2025 Foreign Direct Investment Report.

Under the visionary leadership of His Highness Sheikh Mohamed bin Zayed Al Nahyan, the UAE President, the UAE's tenth-place global ranking in FDI inflows for 2024 affirms its status as a land of limitless opportunities and the leading business

destination. This was announced by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister, and Ruler of Dubai.

“The United Nations Conference on Trade and Development (UNCTAD) revealed that the UAE attracted AED 167 billion (USD 45 billion) in foreign direct investment over the past year, marking a 48% growth compared to the previous year," Al Maktoum added.

Despite an unstable global environment, the UAE has proven to be a top investment destination

Jerome Powell signals Federal Reserve flying blind

The United States Federal Reserve adopted a slightly hawkish stance, expressing concern over rising inflation rather than slowing growth.

However, Chair Jerome Powell advised that this perspective should be

viewed with a great deal of caution.

The Fed's updated economic forecasts indicate that officials anticipate slow growth for Uncle Sam, while unemployment and inflation will increase. There is a

growing risk of "stagflation."

In contrast to the majority of other G10 central banks, the Fed is delaying rate cuts until further information regarding the outlook for tariff-driven inflation is available before making a decision.

Prices and economic activity will only be fully impacted after the current pause on so-called "reciprocal" tariffs ends on July 9. Given this backdrop, keeping policy "modestly" restrictive, looks reasonable.

Meanwhile, as oil prices rise due to the intensifying conflict between Iran and Israel, new geopolitical threats are emerging. Because of this, policies should be kept "modestly" restrictive. Analysts see sentiment control, especially on the inflation front, as the main goal behind the Fed's hawkish stance.

Analysis

Push past fear, start cyber security empowerment

GBO Correspondent

The promotion and implementation of cybersecurity technology often leave customers feeling bewildered and powerless

You may have seen numerous advertisements for goods and services aimed at improving your internet security. Whenever you turn on your TV, see advertisements online, or even receive in-app notifications, cybersecurity technology is likely to be promoted as the ultimate defence against online threats.

Tech businesses frequently use fear to sell their products, and cybersecurity is a big business. These kinds of campaigns frequently stem from what we refer to as the "technology vs. user cycle," which is a feedback loop that causes more issues than it fixes.

Cybersecurity firms frequently employ scare tactics to sell their products, highlighting guilt ("It's your fault if something happens!"), complexity ("Only our advanced solution can protect you"), and dread ("Hackers are coming for your data!"). They support the notion that adopting the newest product or service is the answer since customers are innately too unsophisticated to handle security on their own.

Expert cybersecurity researchers say that this strategy frequently has negative, unforeseen effects on people. Users believe cybersecurity is beyond their grasp, which makes them feel powerless rather than empowered. They might even experience techno-stress as a result of having to constantly stay up to date with new tools, upgrades, and dangers.

Recognise the way AI transforms society

This can eventually lead to resentment and indifference. Users may stop participating because they think they will always be in danger. Ironically, this way of thinking increases their vulnerability since they start to ignore easy, doable ways to defend themselves.

It is a self-replicating cycle. Users are more inclined to seek

new technology to address their issues when they feel less safe, which feeds back into the marketing strategies that initially made them feel insecure. The idea that consumers cannot handle security without their products is furthered by security companies, who then intensify their claims of panaceas.

Ironically, people may become less secure as their reliance on security products increases. They begin to disregard fundamental procedures, grow indifferent to repeated cautions, and blindly believe in unknowable answers.

As a result, individuals continue to be trapped in a cycle where they rely on technology but lack the self-assurance to use it securely, which gives those with malicious intentions even more possibilities to take advantage of them.

The evolution of cybercrime

Since the early 1990s, there have been changes in the industry. Attackers adjust to new protections and take advantage of people's increasing internet dependence. Particularly, two

The first change occurred when people realised how profitable cybercrime might be.

The shift from cash transactions and physical checks to digital payments made it relatively simple for crooks to acquire and steal money

significant changes stand out as crucial turning points in the development of cybercrime.

The first change occurred when people realised how profitable cybercrime might be. The shift from cash transactions and physical checks to digital payments made it relatively simple for crooks to acquire and steal money.

By avoiding physical boundaries and focusing on the infrastructure that supports contemporary payment methods, the shift to digital banking gave criminals the chance to increase the scope of their attacks.

In a world where cybercriminals continue to evolve and adapt, the need for a shift in mindset has never been more urgent. By rejecting fear-based narratives and embracing a community-focused, empowerment-driven approach, individuals can break free from the technology vs user cycle

The second change occurred more than ten years ago, when criminals began targeting individuals directly, rather than just corporations or governments. Attacks against ordinary people have increased, even as ransomware campaigns, business attacks, and breaches of vital infrastructure continue to garner media attention. Cybercriminals have discovered that people are more frequently trusting and less prepared than corporations, which makes them attractive targets.

Direct user targeting and digital financial systems have redefined cybersecurity. Protecting businesses and vital infrastructure is no longer the only goal; it's also about making sure the typical individual isn't left helpless. However, the promotion and implementation of cybersecurity technology often leave customers feeling bewildered and powerless.

Two females, one standing and the other sitting, gaze at a computer screen. One effective strategy to overcome the anxiety and misunderstanding surrounding cybersecurity is to ask an informed friend or coworker.

Empowering users through cybersecurity

The positive news is that you underestimate your power. Cybersecurity doesn't have to appear as an insurmountable challenge or a task best suited for experts.

By relying on reliable resources such as neighbourhood associations, nearby libraries, and tech-savvy friends, you can control your issues instead of letting fear drive you into techno-stress or indifference.

These reliable sources can cut through the jargon, offer direct guidance, and assist you in making wise choices. Imagine a society in which you can turn to a network of people who sincerely want to see you thrive rather than relying on anonymous businesses for assistance.

Suppliers of cybersecurity should offer comprehensive, user-focused tools and instruction. Furthermore, individuals should adopt strict security measures, engage in community-driven initiatives, and consult trustworthy sources for guidance.

Others who surround themselves with others who are willing to teach and assist them feel more capable and confident. Instead of rushing to purchase every new product out of fear or disengaging entirely, users can then accept technology intelligently.

This community-based strategy goes beyond personal solutions. It contributes to

a more secure and robust digital ecosystem and promotes a culture of empowerment and shared responsibility.

The ongoing cycle of fear-driven marketing and over-reliance on complex cybersecurity products has left users feeling disempowered and vulnerable in a rapidly evolving digital world. However, this cycle is not unbreakable.

By shifting the focus from fear and dependence to empowerment and community-driven solutions, individuals can reclaim control over their online safety while contributing to a more resilient digital ecosystem.

The first step toward breaking this cycle is recognising that cybersecurity is not an inaccessible, arcane science reserved for experts. It is a shared responsibility that requires both individual action and collective effort.

Simple yet effective practices, such as using strong passwords, enabling two-factor authentication, and regularly updating software, can significantly reduce vulnerabilities. These actions are not beyond the reach of the average user and, when practiced consistently, create a strong foundation for digital safety.

Equally important is the need for cybersecurity companies to adopt a more inclusive approach in how they design, market, and implement their products. Rather than preying on fear and exploiting insecurities, these companies should prioritise user education, transparency, and simplicity.

By providing accessible tools and straightforward guidance, they can empower individuals to navigate digital threats with confidence and clarity.

A key aspect of promoting empowerment is building strong, tech-literate communities. Libraries, community centres, and informal networks of friends and colleagues can significantly contribute to bridging the gap between technology and its users. These trusted spaces can serve as

platforms for education, where individuals can seek help, share experiences, and learn to address their concerns without feeling overwhelmed.

Cybersecurity is not just a personal issue—it is a collective one. When users feel empowered, they are more likely to adopt proactive measures, share knowledge, and contribute to a culture of mutual responsibility.

This ripple effect extends beyond individual safety, bolstering the security of entire communities and creating a digital ecosystem that is less susceptible to exploitation.

It is also essential to acknowledge that while technological solutions have their place, they are not a panacea. Blindly trusting tools without understanding their purpose or limitations can create a false sense of security. Instead, users should strive for a balanced approach, combining technology with personal vigilance and informed decisionmaking.

In a world where cybercriminals continue to evolve and adapt, the need for a shift in mindset has never been more urgent. By rejecting fear-based narratives and embracing a community-focused, empowerment-driven approach, individuals can break free from the technology vs user cycle. They can transition from being passive consumers of cybersecurity products to confident stewards of their digital lives.

Ultimately, the goal is not just to protect oneself but to contribute to a broader culture of digital resilience that benefits everyone. When individuals feel truly equipped, supported, and confident, they are far better positioned to navigate the ever-evolving complexities of the digital age with both assurance and adaptability.

By encouraging open communication, sharing knowledge, and working together, we can create a future where cybersecurity is no longer a source of stress or fear but a shared responsibility and even an opportunity for collective growth and empowerment.

The possibility of AGI now appears more imminent, pressing, and real to many than they had previously thought

o3 AI breakthrough: Is AGI closer than we thought?

GBO Correspondent

In December 2024, OpenAI announced the launch of its latest AI "reasoning" models, o3 and o3-mini, building upon the o1 models introduced earlier that year. The company is not releasing them yet but has made these models available for public safety testing and research access. The new AI model was tested on a task designed to assess "general intelligence" at a level comparable to that of humans.

The models use what OpenAI calls a "private chain of thought," where it pauses to examine its internal dialogue and plan before responding, which you might call "simulated reasoning" (SR), a form of AI that goes beyond basic large language models (LLMs).

According to OpenAI, the o3 model earned a record-breaking score on the ARCAGI benchmark, a visual reasoning benchmark that has remained unbeaten since its creation in 2019. In low-compute scenarios, o3 scored 75.7%, while in high-compute testing, it reached 87.5%, comparable to human performance at an 85% threshold.

The stated objective of all the major AI research labs is to create artificial general intelligence, or AGI. On the surface, it seems that OpenAI has at least taken a significant step in the right direction.

Even though there is still skepticism, many AI developers and researchers believe that something has changed. The possibility of AGI now appears more imminent, pressing, and real to many than they had previously thought. Do they have it right?

Competition in AI reasoning

OpenAI also reported that o3 scored 96.7% on the 2024 American Invitational Mathematics Exam, missing just one question. The model also achieved 87.7% accuracy

Top 10 most used AI search and developer tools among developers worldwide as of 2024 (In Percentage)

ChatGPT 81.7%

GitHub Copilot 44.2%

Google Gemini 22.4%

Bing Al 14.0%

Visual Studio Intellicode 13.7%

Claude 7.6%

Codeium 5.8%

Perplexity Al 4.9%

Tabnine 4.9%

WolframAlpha 4.3%

Source: Statista

on GPQA Diamond, which comprises graduate-level biology, physics, and chemistry questions. On the Frontier Math benchmark by EpochAI, o3 solved 25.2% of problems, while no other AI model has exceeded 2%.

The o3-mini variant includes an adaptive thinking time feature, offering low, medium, and high processing speeds. The company states that higher compute settings produce better results. OpenAI reports that o3-mini outperforms its predecessor, o1, on the Codeforces benchmark.

The purpose of the ARC-AGI test must be understood to interpret the o3 result. Technically, it's a test of an AI system's "sample efficiency"; that is, how many instances of a novel situation must be shown for the system to understand how it functions.

An AI system such as ChatGPT (GPT-4) is not very effective at using samples. It was "trained" on millions of human text examples, creating probabilistic "rules" about the most likely word combinations.

OpenAI's announcement comes as its rivals are still developing their own SR models, including Google, which announced Gemini 2.0 Flash Thinking Experimental. In November 2024, DeepSeek launched DeepSeek-R1, while Alibaba's Qwen team released QwQ, which they called the first "open" alternative to o1.

These new AI models are based on traditional LLMs. However, they have been fine-tuned to produce a type of iterative chain of thought process that can consider its own results, simulating reasoning in an almost brute-force way that can be scaled at inference (running) time, instead of focusing on improvements during AI model training, which has seen diminishing returns recently.

Grid-based problem solving

The ARC-AGI benchmark uses small grid square problems, such as the one below, to test for sample-efficient adaptation. The pattern that transforms the left grid into the

right grid needs to be identified by the AI.

Every question provides three learning examples. After that, the AI system must determine which rules "generalise" from the first three to the fourth. These are quite similar to the IQ tests users may recall from school.

Although experts are unsure of OpenAI's exact methodology, the findings indicate that the o3 model is very flexible. It identifies generalisable rules based on a small sample size. Users should avoid making arbitrary assumptions or being more detailed than necessary to identify a pattern.

Although the exact method by which OpenAI arrived at this conclusion remains unclear, there is no indication that the o3 system was intentionally optimised to identify weak rules. However, it must be capable of locating them to succeed in the ARC-AGI tasks.

It is known that OpenAI initially trained a general-purpose version of the o3 model— distinguished from most other models by its ability to spend more time "thinking" about challenging questions—for the ARCAGI test.

According to Francois Chollet, a French AI researcher who created the benchmark, o3 looks through several "chains of thought" that outline how to complete the task.

Breakthrough o3 performance results

"OpenAI's new o3 system, trained on the ARC-AGI-1 Public Training set, has scored a breakthrough 75.7% on the SemiPrivate Evaluation set at our stated public leaderboard $10,000 compute limit. A high-compute (172x) o3 configuration scored 87.5%," Chollet commented, while adding the development as "a surprising and important step," ensuring functional increase in AI capabilities, showing novel task adaptation ability never seen before in the GPT-family models.

"For context, ARC-AGI-1 took four years to go from 0% with GPT-3 in 2020 to 5%

in 2024 with GPT-4o. All intuition about AI capabilities will need to get updated for o3," Chollet commented, while adding, "The mission of ARC Prize goes beyond our first benchmark: to be a North Star towards AGI. And we're excited to be working with the OpenAI team and others next year to continue to design next-gen, enduring AGI benchmarks."

The ARC Prize, which is a $1,000,000plus public competition to beat and opensource a solution to the ARC-AGI benchmark, tested o3 against two ARC-AGI datasets: Semi-Private Eval (100 private tasks used to assess overfitting) and Public Eval (400 public tasks). At OpenAI's direction, ARC Prize tested at two levels of compute with variable sample sizes: Six (high-efficiency) and 1024 (low-efficiency, 172x compute).

"Due to variable inference budget, efficiency (e.g., compute cost) is now a required metric when reporting performance. We've documented both the total costs and the cost per task as an initial proxy for efficiency. As an industry, we'll

need to figure out what metric best tracks efficiency, but directionally, cost is a solid starting point. The high-efficiency score of 75.7% is within the budget rules of ARCAGI-Pub (costs <$10000) and therefore qualifies as first place on the public leaderboard," Chollet noted.

The low-efficiency score of 87.5% is quite expensive but still shows that performance on novel tasks improves with increased compute. As per Chollet, despite the significant cost per task, these numbers aren't just the result of applying bruteforce compute to the benchmark. OpenAI's new o3 model represents a significant leap forward in AI's ability to adapt to novel tasks.

This is not merely incremental improvement but a genuine breakthrough, marking a qualitative shift in AI capabilities compared to the prior limitations of LLMs. o3 is a system capable of adapting to tasks it has never encountered before, arguably approaching human-level performance in the ARC-AGI domain.

"Of course, such generality comes at a

The ARC-AGI benchmark uses small grid square problems, such as the one below, to test for sampleefficient adaptation. The pattern that transforms the left grid into the right grid needs to be identified by the AI

steep cost and wouldn't quite be economical yet: you could pay a human to solve ARCAGI tasks for roughly $5 per task (we know, we did that), while consuming mere cents in energy. Meanwhile, o3 requires $17-20 per task in the low-compute mode. But cost-performance will likely improve quite dramatically over the next few months and years, so you should plan for these capabilities to become competitive with human work within a fairly short timeline," Chollet remarked.

"03's improvement over the GPT series proves that architecture is everything. You couldn't throw more compute at GPT-4 and get these results. Simply scaling up the things we were doing from 2019 to 2023 –take the same architecture, train a bigger version on more data – is not enough. Further progress is about new ideas," he stated.

Is o3 an AGI?

ARC-AGI serves as a critical benchmark for detecting such breakthroughs, highlighting generalisation power in a way that saturated or less demanding benchmarks cannot. However, Chollet says that ARCAGI is not an acid test for AGI, as his organisation repeated the phenomenon dozens of times in 2024. ARC-AGI is a research tool designed to focus attention on the most challenging unsolved problems in AI, a role it has fulfilled well over the past five years.

"Passing ARC-AGI does not equate to achieving AGI, and, as a matter of fact, I don't think o3 is AGI yet. o3 still fails on some very easy tasks, indicating fundamental differences with human intelligence," Chollet commented.

Furthermore, early data points in 2024 suggested that the upcoming ARC-AGI-2 benchmark would still pose a significant challenge to o3, potentially reducing its score to under 30% even at high compute (while a smart human would still be able to score over 95% with no training).

"This demonstrated the continued possibility of creating challenging, unsaturated benchmarks without having to rely on expert domain knowledge. You'll know AGI is here when the exercise of creating tasks that are easy for regular humans but hard for AI becomes simply impossible," he added, while continuing, “Why does o3 score so much higher than 01? And why did 01 score so much higher than GPT-4 in the first place? I think this series of results provides invaluable data points for the ongoing pursuit of AGI."

Chollet believes that LLMs work as a repository of vector programmes. When prompted, they will fetch the programme that the user's prompt maps to and "execute" it on the input at hand. LLMs are a way to store and operationalise millions of useful mini-programmes via passive exposure to human-generated content.

This "memorise, fetch, apply" paradigm can achieve arbitrary levels of skill at arbitrary tasks, given appropriate training data, but it cannot adapt to novelty or pick up new skills on the fly (which is to say that there is no fluid intelligence at play here). This has been exemplified by the low performance of LLMs on ARC-AGI, the only benchmark specifically designed to measure adaptability to novelty – GPT-3 scored 0, GPT-4 scored near 0, GPT-4o got to 5%. Scaling up these models to the limits of what's possible wasn't getting ARC-AGI numbers anywhere near what basic brute enumeration could achieve years ago (up to 50%).

"To adapt to novelty, you need two things. First, you need knowledge – a set of reusable functions or programmes to draw upon. LLMs have more than enough of that. Second, you need the ability to recombine these functions into a brandnew programme when facing a new task – a programme that models the task at hand. Programme synthesis. LLMs have long lacked this feature. The o series of models fixes that," Chollet said.

For now, Chollet believes that we can only speculate about the exact specifics of how o3 works. However, o3's core mechanism appears to be natural language programme search and execution within token space – at test time, the model searches over the space of possible Chains of Thought (CoTs) describing the steps required to solve the task, in a fashion perhaps not too dissimilar to AlphaZerostyle Monte-Carlo tree search.

So, while single-generation LLMs struggle with novelty, o3 overcomes this by generating and executing its own programmes, where the programme itself (the CoT) becomes the artifact of knowledge recombination. Although this is not the only viable approach to test-time knowledge recombination, it represents the current state-of-the-art as per these new ARC-AGI numbers.

The new o3 AI model achieving a breakthrough high score in the ARC Challenge has stirred up speculation on whether the OpenAI product is an AGI. While the ARC Challenge organisers described o3’s achievement as a major milestone, they also cautioned that it has not won the competition’s grand prize, a feat which would have helped the tool to take one step toward becoming the "future AI with human-like intelligence."

However, o3 earned the high score at a time when the tech industry and researchers have been reckoning with a slower pace of progress in the latest AI models for 2024. The feat also indicates that the upcoming AI models can beat the competition benchmark in the near

future. Beyond its unofficial high score, Chollet says many official low-compute submissions have already scored above 81% on the private evaluation test set.

The ARC Challenge organisers are already looking to launch a second and more difficult set of benchmark tests sometime in 2025. They will also keep the ARC Prize 2025 challenge running until someone achieves the grand prize and open-sources their solution.

OpenAI’s o3 model has marked a significant milestone in the ongoing quest for AGI. With its record-breaking scores on the ARC-AGI benchmark and exceptional reasoning abilities, o3 represents a leap in AI’s capacity for adapting to novel tasks. While it isn’t AGI yet, its performance indicates that we may be closer to achieving human-like intelligence in AI. The competition is heating up, and the next few years will be crucial.

The new o3 AI model achieving a breakthrough high score in the ARC Challenge has stirred up speculation on whether the OpenAI product is an AGI, while the ARC Challenge organisers described o3’s achievement as a major milestone

Adapting to change: CFOs navigate tech evolution

GBO Correspondent Analysis

A recent survey revealed that more than two-thirds of CEOs believe that organisations need to revise their operational strategies to stay competitive

In addition to changing the business environment, disruptive technologies are compelling CFOs to quickly adapt their approaches and welcome innovation. Cloud computing, digital ledger technology (DLT), and the various forms of artificial intelligence (AI) all promise enormous growth and efficiency potential, but they also come with several challenges.

CFOs must comprehend the ramifications for their financial models, risk management procedures, and entire business operations as they navigate this challenging terrain, modify their business procedures, and determine how much money to invest.

The Hackett Group's vice president and principal for research, Kyle McNabb, asserts that disruptive technology is a catalyst for change.

"On the third end, it's a fantastic disruptor to this as well, and it's an equaliser when it comes to transformation," he said.

Deirdre Ryan, global financial transformation leader at EY, said, "Numerous EY clients have tried these technologies and created proofs of concept, frequently in the fields of finance, marketing, and product development."

She contends that finance leaders must get their hands dirty and comprehend these technologies. They have a significant influence on capital allocation, which is necessary to support those programmes. CFOs must be aware of the capabilities and return on investment that will be delivered.

Advanced technologies like artificial intelligence (AI), machine learning, and generative AI (genAI) promise improved financial forecasting, enhanced data-driven insights, and increased efficiency through automation.

As per Monica Proothi, global finance transformation

leader at IBM Consulting, "Generative AI is fundamentally changing the approach to business transformation by driving innovation, improving efficiency, and enabling entirely new business models."

According to market research firm IDC, global AI spending could increase by almost 50% this year alone, from $235 billion in 2024 to $337 billion this year.

Meanwhile, DLT is enhancing supply chain transparency and adding an extra level of data protection. Precedence Research reveals that the global economy invested $27 billion in DLT last year, with a 52.9% compound annual growth rate (CAGR) anticipated until 2034.

With an estimated global spending of $723 billion in 2025—a 21.5% increase from the previous year—cloud computing, the most developed of the disruptive technologies, has received the most investment.

IDC claimed that by 2027, 90% of businesses will have hybrid cloud installations, combining on-premise internal infrastructure, private cloud, and public cloud.

Craig Stephenson, global head of Tech, Ops, Data/AI, and

InfoSec Officers Practice at Korn Ferry, argues that cloud computing is having a big impact on businesses and CFOs in particular since it makes financial data accessible in real-time.

"It is increasing the accuracy of reporting and decreasing turnaround time for certain reports and duties for CFOs of public companies," he said.

Overseeing the change

Ryan from EY contends that a company's business strategy must evolve in tandem with the use of disruptive technology, which creates new business capabilities.

"We don’t always see that happen. Transformation is more than just installing software. It involves altering the organisational culture to embrace the technology and take advantage of the capabilities they offer," she said.

CFOs have a chance to change their perspectives. Based on a 2024 study from the IBM Institute for Business, which surveyed 2,000 CFOs across 26 industrial sectors, more than two-thirds of CEOs believe that organisations need to revise their operational strategies to stay competitive. The

According to Ryan, companies that successfully execute business changes strive toward a specific, realistic goal. Understanding the organisation’s goals and current procedures is "an important part of this practical vision"

authors of the paper argue that these rewrites will necessitate new operational models, technology, and skill sets.

They add that to upgrade their company’s technology infrastructure and generate value, CEOs want their CFOs to strike a balance between stability and change while collaborating closely with tech leaders.

As a result, CFOs are adopting technology more strategically. They often bring in the chief data officer and chief analytics officer, who usually have solid backgrounds in data science, as direct reports, leaving the chief information officer (CIO) to handle the crucial task of implementing the new technology.

As per Ryan, companies that successfully execute business changes strive toward a specific, realistic goal. Understanding the organisation’s goals and current procedures is "an important part of this practical vision."

Discussions about which technology will facilitate the change, which procedures will be automated, and where human resources will be reallocated to provide more value should also begin at this time.

McNabb claims that the establishment of a formal transformation office or a shift in the expectations of the board and C-suite away from the traditional three-year plan are the best signs of success.

"They’re working on a one-year set of goals and evaluating everything every quarter to see how they’re doing. And as of right now, businesses that take that approach are finding that they are better equipped to handle this transition," he added.

Accepting the journey

Implementing a corporate transformation successfully is a continuous process.

Reiterating the idea of transformation as an ongoing process necessitates a comprehensive discussion encompassing processes, technology, and operational models.

As per IBM’s Proothi, "What defines success today may look different tomorrow."

Successful transformation is not determined by a particular result, but rather by an organisation’s capacity to change, adapt, and remain flexible. In the

end, company executives must critically examine how they can modify their plans to enable long-term growth and maintain their competitiveness in a constantly shifting environment.

McNabb noted that financial institutions such as JPMorgan Chase and Jane Street Capital are always reinventing themselves: "If you do not embrace it, you have just been disrupted."

However, to compete with larger corporations, smaller businesses do not have to be featured in Fortune’s Global 2,000. Compared to some of their biggest rivals, who usually have significant investments in legacy technology, smaller businesses can shift more quickly.

McNabb contends that if smaller businesses can successfully navigate that, they may be able to use genAI to accomplish something unique and advance more quickly than a larger company could.

A target that moves

The quick evolution of disruptive technologies is one of the biggest obstacles to integrating them into business transformation. In line with Moore’s Law, which dates back 60 years, an integrated circuit’s transistor count doubles approximately every two years. Since the computational resources required to train AI models double every three to four months, AI has experienced quicker exponential growth.

According to the authors of a TechInsights research paper published in June, "AI chips represent 1.5% of electricity use over the next five years."

Given the speed at which things are changing, McNabb believes that companies will have to abandon the idea of "best practices," with its dependable, tried-andtrue methods, in favour of "good" or "emerging" practices.

He believes that good practices are those that are applied by numerous organisations and produce observable outcomes. On the other hand, a small number of companies employ innovative approaches, which

provide remarkable outcomes but may become obsolete within a year.

Similarly, companies should anticipate that any business transition will face a major challenge. A study by Oxford University’s Said Business School and EY that involved 1,646 respondents from various industry sectors, claims that these circumstances are "turning points" that call for leadership action to keep the project on track. The researchers estimate that such a crossroads event will occur in 96% of transformation attempts.

This implies significant shifts in the expectations, adaptability, and risk tolerance of corporate executives. Successful interventions have increased transformation project success rates from 6% to 72%, increased execution speed 80% of the time, and exceeded key performance metrics 31% of the time. Conversely, ineffective interventions have a 1.6-fold higher chance of producing subpar work and a 3.5-fold higher chance of lowering employee morale.

According to the authors of the Oxford/ EY study, "The core of a successful transformation revolves around establishing and preserving an environment where people can flourish, where they can experiment, learn, and take ownership of the work needed to deliver transformation, and ultimately feel good about their effort."

While the integration of disruptive technologies presents immense potential and significant challenges, it is clear that CFOs must lead the charge in adapting their business models and strategies. By embracing innovation and maintaining a flexible approach, organisations can not only navigate the complexities of digital transformation but also position themselves for sustainable growth and success. Staying agile and open to change will be key to staying competitive.

To fuel the energy-hungry technologies, British PM Keir Starmer wants to speed up investment in new small nuclear reactors

Britain’s AI future: Keir Starmer sets the course

GBO Correspondent

Opening access to NHS (National Health Service) and other public data is part of plans to position the United Kingdom as a global leader in the AI space. Ministers have announced that a multibillion-pound investment in the European major’s computing capability will "mainline" artificial intelligence, despite significant public concern about the technology's potential impacts.

Prime Minister Keir Starmer will introduce a comprehensive action plan to use AI for everything from identifying potholes to freeing up teachers to educate, to double the amount of AI computer capacity under public control by 2030.

To support the growth of AI companies, the government has proposed a potentially controversial plan to open up public data. Under this proposal, "researchers and innovators" would be granted access to anonymised NHS data to help train their AI models.

According to the government, "strong privacy-preserving safeguards" would be in place, and private corporations would never control the data.

Ministers think AI can help address Britain's weak economic development

Feature \ Keir Starmer

As the Starmer government looks to promote Britain as a destination where AI innovators feel they can establish trillion-pound enterprises, it will have expedited planning rules for data centres

and provide a boost to the economy of up to £470 billion over the next ten years, based on its own projections.

The action plan marks a change in approach from the UK government, which has previously concentrated on addressing the most pressing "frontier" risks from AI, such as those related to bioweapons, cybersecurity, and disinformation.

Starmer asserts that the AI industry requires support from the government, and tech firms such as Microsoft, Anthropic, and OpenAI have commended the initiative. The directive to "actively support innovation" will put regulators at odds with those who think their main responsibility should be to safeguard the public.

Experts advised caution regarding AI's impact on society, employment, and the environment. Recent government research revealed that the public most frequently associates three terms with artificial intelligence: "robot," "scary," and "worried."

To fuel the energy-hungry technologies, the British PM also wants to speed up

investment in new small nuclear reactors. The Post Office issue was mentioned by Susie Alegre, a lawyer who focuses on technology and human rights, "as a reminder of the dangers of putting too much faith in technology without the resources for effective accountability."

Starmer has directed all members of his cabinet to prioritise the adoption of AI. It has the power to change working people's lives in a variety of ways, from teachers customising lessons to helping small businesses with their bookkeeping to expediting planning applications.

However, the AI sector requires a supportive government that won't stand by and watch as chances pass them by. According to Stanford University rankings, the United States currently leads the world in AI, followed by China in second place and the UK in third.

An area of Oxfordshire close to the UK Atomic Energy Authority's Culham headquarters will be the first AI growth zone under the 50-point AI action plan.

As the Starmer government looks to promote Britain as a destination where AI innovators feel they can establish trillionpound enterprises, it will have expedited planning rules for data centres. In as-yetunnamed "de-industrialised areas of the country with access to power," further zones will be established.

Multibillion-pound contracts will build the new public "compute" capacity—the microchips, CPUs, memory, and cabling that physically enable AI. The government claims that the new "supercomputer" will have enough AI capabilities to play chess with itself half a million times per second.

The Ada Lovelace Institute warned that implementing AI in the public sector "will have real-world impacts on people" and demanded "a roadmap for addressing broader AI harms."

The research institute's head, Gaia Marcus, stated that in order to preserve public confidence, it was interested in learning how Whitehall will "implement these systems safely as they move at pace."

To "support AI research and innovation," the government announced plans to compile data from the public sector into a new National Data Library. Despite pledging to conduct the process "responsibly, securely, and ethically," the government did not specify which data would be accessible to private corporations.

Almost six months ago, Peter Kyle, the UK's secretary of state for science, technology, and innovation, hired British tech investor Matt Clifford to create the AI prospects action plan. The government at the time stated that if AI could boost labour efficiency, the economy may see a 1.5% annual productivity boost.

However, there are also concerns that it can result in mass unemployment, especially in professional fields like finance, law, and business management that need more secretarial work.

To boost investment in energy sources like small modular nuclear reactors and renewables, which are being pioneered to power energy-hungry AI systems, Kyle and Ed Miliband, the energy secretary, will head a new AI energy council. Campaigners around the world have expressed worries about the technology's safety and the possibility that it could produce more radioactive waste.

According to The Guardian, taxpayers will have to pay billions of pounds over the next five years for the entire increase in computer capability. The 2025 spending review is expected to provide more financial details. This investment is distinct from the £14 billion that private firms have indicated they will invest in building massive data centres in locations such as Loughton, Essex, and on the site of a former car engine plant in South Wales.

The announcement follows rumours that Finance Secretary Rachel Reeves was thinking of making significant changes to public services to aid in the government's financial recovery. She has given his cabinet colleagues strict instructions to identify areas where they can save money.

Investment is necessary to shape a

Potential for AI to outperform or surpass human capabilities

Source: Forbes Advisor

successful AI future, yet in the six months before this plan was unveiled, Labour reduced funding for AI research and Britain's first next-generation supercomputer by £1.3 billion while enacting a national insurance jobs tax that will cost digital businesses £1.66 billion.

Experts believe that access to cloud computing may become as crucial to the UK's economy, society, and security as access to the internet, electricity, or oil and gas. This is why there is a drive to expand the country's public AI hardware capacity.

According to a paper by the Demos and UK Day One think tanks, "losing access to dependable computers could be catastrophic, akin to the impact losing national broadband or electrical infrastructures would have today. It is a matter of economic and national security."

A small number of companies supply the majority of cloud computing globally, which increases the need to develop "sovereign" capacity under state control. Britain’s AI ambitions signal a new era of innovation, but balancing economic opportunity with ethical safeguards and public trust will be crucial as the government opens access to data, scales infrastructure, and positions the UK as a global AI leader.

News Technology

Apple may hike new iPhone prices

AWall Street Journal report stated that Apple is considering increasing the price of its upcoming iPhone series, which is expected to launch in the fall. However, the Cupertinobased company wants to prevent a situation in which the price increase is attributed to the American tariffs on goods from China, the country where the majority of Apple devices are assembled.

Apple executives appear to have learnt their lesson from Amazon following the Donald Trump administration's reprimand of the Jeff Bezos-owned company. Amazon may display the effects of tariffs on its customers. Following the White House's immediate designation of it as a hostile act, Amazon declared that the proposal "was never approved and is not going to happen."

Apple is currently considering linking the price increases to other advancements, such as new designs and features. To avoid tariffs, the company is now importing more iPhones from India rather than China. Current tariff policies will result in additional costs of $900 million this quarter and more. The tech giant has therefore moved more production to India in order to reduce the cost of tariffs.

Omnix unveils digital construction solutions

Omnix International, a prominent supplier of cutting-edge technology solutions and digital transformation, has announced the addition of a new suite of integrated digital construction workflows to its portfolio.

These solutions are designed

to digitalise crucial workflows throughout the construction lifecycle, radically altering the way projects are planned, carried out, and optimised through data intelligence, automation, and intelligent systems. This strategic move demonstrates Omnix's

Apple wants to prevent a situation in which the price increase is attributed to the American tariffs on goods from China

mission to spur innovation, increase productivity, and assist customers in meeting changing demands to build more quickly, intelligently, and sustainably.

The need for cutting-edge digital solutions has never been higher in the Middle East due to the region's massive projects and rapid urbanisation.

The global construction industry is still lagging in terms of digital adoption, particularly regarding lifecycle management, carbon tracking, and ESG reporting. With integrated tools that encourage better planning and enhanced teamwork, Omnix's new products directly fill these gaps. Omnix’s new offerings address these gaps with integrated tools that promote smarter planning, improved collaboration, and measurable outcomes.

Jordan SMS use soars in 2024

In Jordan's digital communication landscape, SMS technology remains essential despite the extensive use of social media platforms and messaging apps, providing real financial benefits to companies in a variety of industries. Industry insiders told The Jordan Times that SMS has developed into a reliable and effective way for companies to communicate with customers directly, particularly in industries like banking, online shopping, healthcare, and delivery services.

App notifications may be disregarded, but SMS is nearly always read. Bayan Khaled, a tech specialist and manager at a top regional SMS gateway provider stated that "it is straightforward, quick, and reliable."

Official data from the Telecommunications Regulatory Commission shows that in 2024, there were 1.434 billion text messages sent and received over mobile networks. This is a 334 million increase over 2023, or a 27% year-over-year increase.

According to experts, the increase is a reflection of both shifting personal communication patterns and the increasing use of SMS by public and private organisations for marketing campaigns and one-time passwords.

Google urges chrome update now Google

Google warned that a vulnerability found by its Threat Analysis Group has been exploited in attacks and issued an urgent Chrome update. Google also acknowledged that the problem "was mitigated on 2025-05-28 by a configuration change" that was pushed out to all platforms before this update.

According to Google, it "is aware that an exploit for CVE2025-5419 exists in the wild" and will "keep full access to details on the vulnerability restricted until a majority of users are updated with a fix for the vulnerability."

"In the event that the bug is present in a third-party library that is similarly used by other projects but has not yet been fixed, we will also maintain the restrictions," the tech giant added.

An out-of-bounds readand-write vulnerability in V8 is known as CVE-2025-5419. This kind of serious memory issue is usually discovered and resolved on the most widely used browser in the world. Even though it is only classified as high severity, it is imperative to apply the fix because attacks are already in progress. Following a separate attack warning, the Donald Trump administration has already ordered federal employees to update Chrome.

Google acknowledged that the problem was mitigated on

2025-05-28 by a configuration

change

Microsoft may exit OpenAI deal, says report

As per a report from The Financial Times, Microsoft is willing to drop its high-stakes talks with OpenAI regarding the future of their partnership. The tech giant has contemplated halting talks with the creator of ChatGPT if critical issues like the size of Microsoft's future stake in OpenAI cannot be agreed upon.

Strategic disputes over control of AI development priorities, profit-sharing schemes, and the governance framework are said to be the cause of the escalation in tensions. There are questions regarding the two companies' long-term alignment because these issues are thought to be at the heart of the recent strain. According to analysts, if these problems are not resolved, the competitive environment in the AI sector may change.

Microsoft reportedly intends to depend

on its current commercial agreement to continue having access to OpenAI's technology until 2030.

According to a Wall Street Journal report, executives at OpenAI have contemplated accusing Microsoft of anticompetitive behaviour in their agreement.

The report also stated that the two companies are in the process of modifying the conditions of Microsoft's investment in the AI startup.

Saudi to use 3D accident analysis technology

To improve the effectiveness of safety investigations and meet the highest standards for quality and efficiency in accident analysis across all modes of transportation, Saudi Arabia's National Transportation Safety Centre (NTSC) has now adopted the latest smart technologies.

According to the centre, 3D

scanning is the most widely used of these technologies, allowing specialised teams to accurately record accident scenes, document the location of the vehicle, and collect environmental information around the scene. This technology makes it possible to reconstruct the accident scene using 3D models with

Strategic disputes over profit-sharing schemes, and the governance framework are said to be the cause of the escalation in tensions

a high degree of accuracy.

NTSC has started investigating AI-powered video analysis and drone surveillance in addition to 3D scanning in order to collect vital data instantly. These tools greatly shorten the duration of investigations and improve the accuracy of evidence gathering. Multiple data sources can be integrated to give investigators a more thorough understanding of incidents from different angles.

This aids in a more expert examination of the circumstances and causes and provides decision-makers and stakeholders in the transportation industry with accurate information. This development is part of the centre's ongoing efforts to adopt the latest technological capabilities and enhance the national safety system, in line with the goals of Vision 2030.