THIS MORNING: COP26 starts tomorrow; GCC v Lebanon; Gas prices in Europe ease; Facebook is hoping a rebrand will make their problems go away.
Happy Halloween, boys and girls — and welcome to the final business day of October. The first week of November is shaping up to be particularly busy, with world politics driving the news agenda everywhere.
HERE AT HOME, it’s clear that inflation is going to continue biting. The specter of rising prices was a factor in the central bank’s Thursday decision to leave interest rates unchanged, and we have news this morning that (a) natural gas prices to industry will rise amid spiraling global energy prices and (b) that the Supply Ministry is not just hiking the cost of subsidized cooking oil, but telegraphing that bread prices for ration card holders will also have to go up. We have all three stories in this morning’s news well, below.
Climate change is the story of the week as politicians gather in Edinburgh starting tomorrow for the COP26 climate conference (official website). Host Boris Johnson has called on G20 nations to step up efforts to reduce emissions before global warming becomes “apocalyptic.”
Wait, what’s COP26 and why is it important? The two-week global climate summit is being billed as the most important COP event since the landmark COP21 when the Paris climate agreement was signed. A devastating report from the Intergovernmental Panel on Climate Change (IPCC) this year has reinforced the necessity for radical action to reduce global heating and has pushed it up the priority list of world leaders. Scientists now say that countries must halve CO2 emissions and reach net-zero by the middle of the century if we are to have any hope of limiting warming to 1.5°C. Whether a success or a failure, this month’s summit will have a big say in whether we are able to course correct and meet these targets.
President Abdel Fattah El-Sisi will be in the UK for COP26 and is scheduled to sit down with Boris on the sidelines of the summit.
Leaders of the G20 countries are having a super-busy weekend. They gathered yesterday in Rome for their first in-person summit in two years, where they “broadly backed calls to extend debt relief for impoverished countries and pledged to vaccinate 70% of the world's population against COVID-19 by mid-2022” — but appear to be struggling to reach an agreement on climate change, Reuters reports. The Rome summit wraps today and most attendees are heading straight to Edinburgh from there.
There are plenty of challenges to a climate pact — and two bis sticks in the mud. China, the world’s largest emitter of greenhouse gases, declined to attend G20 in person, as did Russia. Xi Jinping and Vladimir Putin are also giving COP26 a pass. Xi’s absence, in particular, makes it less likely we’ll see a meaningful agreement to phase out coal and up climate aid to developing nations.
G20 leaders don’t appear to have gone as far on debt relief as many would like (including the IMF), but are officially on board with the OECD’s global minimum corporate tax of 15%, the Washington Post reports. Egypt was among the 136 countries to have approved the tax at the ministerial level. The leaders want to “ensure that the new rules will come into effect at global level in 2023,” according to the two-day summit’s draft conclusions seen by Reuters.
ENERGY CRISIS- Gas prices fell by as much as 20% in Europe after Russian President Vladimir Putin ordered state-run gas exporter Gazprom to begin filling up European storage facilities by 8 November, the Financial Times reports. But the gas crunch isn’t over yet: Analysts and energy trading executives are still concerned about the looming winter energy crisis if Russia isn’t forthcoming with additional gas supply in November. “We think the sell-off has probably been overdone as we’re still quite sceptical that there will be a meaningful step-up in exports from Russia before the end of the year,” the head of European gas at one energy consultancy firm told the FT.
THE BIG STORIES ABROAD-
Are we about to see another Great Gulf Smackdown? Comments by a Lebanese minister about the Saudi-led war in Yemen have not gone down well in the GCC, with Saudi Arabia lashing out after Lebanese Information Minister George Kurdahi (yes, the former host of Who Wants to be a Mn’aire) criticized the Saudi-led military campaign in Yemen. Saudi and Bahrain have both expelled Lebanon’s ambassadors and Kuwait has kicked out its chargés d’affaires. The UAE has also withdrawn its diplomatic staff from Beirut.
Saudi Arabia has also banned imports from Lebanon, heaping further pressure on the country’s economy, which has cratered since the eruption of a severe financial and economic crisis in late 2019. Bloomberg, Reuters, and the Washington Post all have the story.
Facebook’s Meta facelift: Mark Zuckerberg on Thursday announced the rebrand of the social media giant now known as Meta Platforms. The social network on which the company built its success will become just one half of the business, with its metaverse division Reality Labs making up the other half. If you’re feeling a little lost in the metaverse, check our recent explainer here.
We’re feeling a little queasy about Meta — and it's not the VR headsets: The cynical among us might point out that a) the rebrand provides a handy distraction from the recent negative press cycle on the allegedly toxic impact of Facebook on our health, our kids, and our public discourse, and b) said allegedly toxic impact does not inspire huge trust in Zuck’s self-appointed role as the architect of this new virtual promised land. The story is getting play left right and center: Financial Times | The Verge | Reuters | BBC | Wall Street Journal.
HAPPENING THIS WEEK-
We could soon find out this week which commodities will be traded on Egypt’s long awaited commodities exchange when it launches early next year. Supply Minister Ali El Moselhy told Al Borsa last week that we should expect an announcement following a meeting set for this coming week with EGX boss Mohamed Farid and head of the Internal Trade Development Authority Ibrahim Ashmawy.
CIRCLE YOUR CALENDAR-
Tomorrow’s the start of a new month. Here are dates for some key news triggers as we enter November:
- PMI: November’s purchasing managers’ indexes for Egypt, Saudi Arabia and the UAE will land on Wednesday, November 3.
- Foreign reserves: October’s foreign reserves figures will be out sometime during the first week of November.
- Inflation: Inflation figures for October will be released on Wednesday, 10 November.
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.