Gulf rift follow-up; vaccine deals; Alshaya’s losses

The solution is.. somewhere

Saudi pundits are playing down the prospects of ending the Gulf crisis and describing recent comments from senior officials as “optimistic statements” that may or may not lead to a resolution. Here is former Asharq al-Awsat editor-in-chief Tariq al-Homayed in Okaz:

There must be a mechanism to ensure that we learn from past experiences and not repeat them because the differences are fundamental and existential, and that cannot be resolved with a handshake, but rather with real change and realising the importance of the [GCC] entity, and before that the security and stability of our countries.

I will say it again, no one would be unhappy about a resolution, if it happens, particularly if it is based on pragmatic foundations and real guarantees. What is important, and essential, is not try something that has already been tried and tested.

Kuwaiti newspaper Alrai on Saturday quoted a senior diplomatic source as saying the agreement to end the Gulf rift could be signed during the Gulf leaders summit which is scheduled to take place in Bahrain later this month, but there is a chance it might be moved to Kuwait which has played the mediator role. He added that “special Gulf committees” are currently working out details of the agreement ahead of the summit.

The question of where to sign the final agreement apparently remains a sticking point. The Saudis and their allies have long insisted that the “solution is in Riyadh” (in Arabic: “الحل في الرياض”). That line has become their mantra throughout the past three years, using it every time Qatar tried to use the channels of international organisations like ICAO or WTO, or when third parties tried to mediate. Qatar is obviously opposed to Sheikh Tamim traveling to Riyadh and prefers to mark the end of this crisis in Kuwait.

It is unclear if Jared Kushner has managed to persuade either side to meet the other in the middle during his latest visit to the region. A senior administration official told Reuters ahead of the trip that Kushner would meet the emir of Qatar in Doha and the Saudi crown prince in Neom. The White House did not release any readouts or statements on these meetings. Qatar’s state news agency published a photo of the meeting between Sheikh Tamim and Kushner. The official Saudi Press Agency did not acknowledge the Kushner visit at all.


(Not) waiting for the vaccine

Saudi health ministry spokesman Mohammed al-Abdulaali said Sunday that the government has signed “very important deals” with drug manufacturers to provide the kingdom with coronavirus vaccines. He did not provide any details on the values of these deals, the names of the companies involved or their countries of origin. Saudi pharmaceutical firm Spimaco last month announced signing a memorandum of understanding with Germany’s CureVac to offer their forthcoming vaccine in Saudi Arabia. The company’s chief executive has described the deal as part of the government’s effort to confront the pandemic.

Bloomberg says the CureVac vaccine, which like the candidates from Pfizer and Moderna uses mRNA technology, has shown good effectiveness in its early stage trials but they are yet to start Phase III clinical trials. If all goes well, they expect it to distribute in the first quarter of next year. Saudi Arabia said last August that it will conduct a clinical trial of a vaccine developed by China’s CanSino Biologics on at least 5,000 volunteers.

Russia is also said to be in talks with Saudi authorities over testing their Sputnik V vaccine in the kingdom, but a Kremlin spokesman would not say whether the Saudi royal family expressed a desire to be vaccinated against Covid-19 with the Russian drug. “You need to get in touch with the royal family to get an answer to this question, we cannot speak for the royal family,” he told reporters after President Vladimir Putin and the Saudi crown prince discussed the vaccine development during a phone call last October.

Like the rest of the world, Saudi Arabia can’t wait for the vaccine to be widely deployed and return to normal life. But some officials in the kingdom don’t seem willing to wait anymore. The General Entertainment Authority, led by royal court adviser Turki al-Alsheikh, this week unveiled a winter event to be launched in January. Called “Riyadh Oasis,” the three-month long extravaganza (music concerts, sports activities, pop-up restaurants) will take place in the desert outside Riyadh while “observing health requirements to limit the spread of the novel coronavirus,” according to a government statement.

Al-Alsheikh, part of the crown prince’s inner circle, has recently returned to the kingdom after receiving medical treatment in the US. He has urged his four million followers on Twitter to send ideas for more events to be organised in the new year. More than 6,000 suggestions were sent in, he said. Spare a thought for his staff who now must go through them all and come back to him with the best 20 ideas.

Officials at GEA and other government departments have reasons for optimism because data from the health ministry show that the number of coronavirus cases have been consistently trending down since August, and the positive vaccine news will inject a much-needed boost to the economy, not just for the kingdom but also the rest of the Gulf.

“The biggest beneficiaries are likely to be the region’s major oil producers,” Jason Tuvey, senior emerging markets economist at Capital Economics, wrote in a note to clients this week. “Behavioural changes brought about by Covid-19, such as increased working from home and fewer flights, have structurally lowered global oil demand, but these changes will probably be at least partially reversed with a vaccine.”

Prince Mohammed bin Salman has identified leisure and tourism as main engines for growth and job creations as part of his economic reform plans. Executives at the Public Investment Fund’s giga-projects said he has told them to push ahead despite the pandemic that forced the government to impose painful austerity measures this year. The task of justifying the PIF’s heavy spending while the government was cutting benefits fell to finance minister Mohammed al-Jadaan who has found himself in the unenviable position of being the face of austerity. Expect him to sound upbeat as the kingdom unveils its 2021 state budget next week.


Alshaya empire loses a giant

Abdulaziz Alshaya, a Kuwaiti businessman whose family company is one of the largest retail franchise groups in the Middle East, died this weekend at age 94. If you live in the Gulf, it is impossible escape the presence and influence of Alshaya Group. Starbucks, Pinkberry, Foot Locker, H&M, Victoria’s Secret and dozens of other global brands that now dot the streets and mall avenues of every major city in the region, are there thanks to this conglomerate which was founded in 1890.

Did you know that the first Shake Shack branches outside New York were not opened in Los Angeles or Chicago but actually in Dubai and Kuwait? Danny Meyer, the famous burger chain founder, was resistant to the idea of franchising because, according to him, “How can you franchise hospitality?” He would change his mind after Alshaya showed him their operations in the Gulf. From a New York Times profile published in 2011:

Meyer, flattered by the interest, went to Dubai, noted that Alshaya’s Starbucks were “as well run if not better than the ones on Union Square”; he told Business Insider he decided to “get a master’s degree in replication…but so far away that our audience wouldn’t watch us doing it, and at the same time give us a chance to grow.” Shake Shacks in Dubai and Kuwait are the first phase...

Alshaya’s management teams for Dubai and Kuwait came to New York for a sort of kindness boot camp, months before opening. Then Meyer sent a group of his high-H.Q. staff members to Dubai and Kuwait for on-site training. 

Critics of Alshaya say the group —and its competitors like Alhokair in Saudi Arabia and al-Futtaim in the UAE— has accelerated the spread of consumerism among the affluent Gulf populations and contributed to an unhealthy lifestyle with the fast food chains they helped popularise with young people in a region that has some of the highest obesity rates in the world. But we should also consider the wider impact of Alshaya Group on the region’s commerce, culture and lifestyle.

Long before independent speciality coffeeshops became a familiar scene in Saudi cities, Starbucks was the place to see and be seen. The branches were gender-segregated, but that did not stop desperate young men and women from going there, occupy the strategically located tables by the dividers and hope that their Bluetooth nickname would entice someone on the other side to connect with them. A Starbucks branch in Riyadh was also the scene of an infamous incident in 2008 when the religious police arrested an American businesswomen who was sitting there with a male colleague.

Today, the once-feared religious police are rarely seen since they were stripped of power four years ago. Starbucks is no longer the hot trendy spot it once was. Alshaya’s revenue plummeted by 95% by last April as the coronavirus devastated the retail sector around the world. As the pandemic accelerates the shift of consumers habit from brick and mortar retailers to online shopping, the family-owned group will hope to find new inspiration in the legacy of its late chairman to reinvent itself again.


That is all for this dispatch from Riyadh Bureau. Thanks for reading! You can send your feedback by email to: alomran@hey.com or via Twitter: @ahmed