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Gulf states seek to diversify economy by promoting historical sites



Archaeological wonder: Jabal Al-Ahmar Nabataean tombs in Madain Saleh, AlUla, Saudi Arabia © Corbis via Getty Images

As Gulf states look to diversify their oil-dependent economies, they are pinning hopes on untapped heritage tourism to foster growth.

In Saudi Arabia, magnificent antiquities, long impregnable to global tourism, are being promoted as must-do itineraries for travellers seeking undiscovered locations. Other regional states, already on the tourism map, are honing their offering away from sun and sea getaways towards visitors seeking to delve into the histories of Arabia.

Saudi Arabia’s north-western oasis of AlUla, the largest site of the ancient Arab Nabataean civilisation to be found south of Jordan’s Petra, opened to tourists in October after two years’ refurbishment.

The country’s first Unesco site, Hegra, showcases 100 tombs and facades cut from sandstone outcrops surrounding the Nabataean city of Madain Saleh on the incense trading route that reached its peak in the two centuries before and after the common era.

Nearby Dadan, a city dating back to the 1st millennium BCE, is another destination being readied for tourists alongside the rock inscriptions of Jabal Ikmah.

“Saudi Arabia wants to leave behind conservative Islamic insularity for a more globalised outlook,” says Tim Power, a consultant archaeologist based in the United Arab Emirates. “When people think of Egypt, they think of the Pyramids – now the kingdom’s leadership wants them to think of AlUla, a positive image of rich cultural heritage,” he says.

Snakes carved on a stone in Jabal Ikmah, AlUla, Saudi Arabia © Corbis via Getty Images

The emergence of this multi-billion-dollar sector has prompted Abu Dhabi’s Zayed University to develop a masters’ degree in heritage, development and entrepreneurship. Mr Power, who is advising on the course, says this “MBA for the heritage industry” reflects growing market demand.

Much of this demand has been fostered by the socio-economic opening up under the crown prince, Mohammed bin Salman, who has identified the heritage industry and cultural sector as opportunities to diversify the economy in preparation for ‘the end of oil’, as well as a way to forge a common national identity for the kingdom’s growing youth population.

On the outskirts of Riyadh, the birthplace of the House of Saud, Al-Diriyah, is being transformed into a cultural destination as part of a $17bn project called Diriyah Gate. Within the historic capital, the district of Al-Turaif will open to the public in January, unveiling several kilometres of walkways dotted with hundreds of restored buildings, alongside museum galleries and exhibitions tracing the capital’s history.

Al-Diriyah is the focus of a $17bn project that will turn it into a cultural destination © DGDA

“The Saudis want Diriyah, the kingdom’s spiritual birthplace, to take its place among the great heritage sites of the world,” says Mr Power. “They are saying our culture is relevant to the world.”

As the crown prince invites tourists in, however, the kingdom’s image as a brutal dictatorship has been reinforced by crackdowns on political dissent, including the horrific murder of journalist Jamal Khashoggi and the detention of women’s rights activists.

This vacillation between liberalisation and authoritarianism has plagued Saudi Arabia’s image, threatening to put off would-be visitors to a still conservative society where alcohol remains banned.

Advocacy group Human Rights Watch last month launched a campaign against what it describes as the government’s efforts to whitewash a “dismal rights record” by hosting major cultural and sporting events.

The rush towards cultural tourism is visible elsewhere around the Gulf.

Ras Al Khaimah, the northernmost member of the United Arab Emirates, has long pitched itself as a sun and sea destination with the added benefit of a diverse topography including the UAE’s most impressive mountain ranges.

With global tourism struck down by coronavirus, Ras Al Khaimah has turned to local demand through the pandemic. Tourist numbers suffered a decline of only 35 per cent from January to August as overseas visitors were replaced by UAE residents vacationing in the emirate.

“What made us attractive was the nature, the sprawling spaces that make social distancing comfortable,” said Raki Phillips, chief executive of the Ras Al Khaimah Tourism Development Authority. “And we believe the cultural side is a pivotal part of the allure.”

Oysters are picked off the seabed at the Suwaidi pearl farm in Ras Al Khaimah © AFP via Getty Images
A demonstration of how to open oysters to look for pearls at the Suwaidi pearl farm in Ras Al Khaimah © AFP via Getty Images

Mr Phillips says the emirate is now moving beyond nature-driven adventure tourism, including the world’s longest zip line in the world, to highlight the emirate’s history.

The government has for years been gathering information and restoring sites and creating experiences to tap a history extending back to its first settlers 7,000 years ago.

More stories from Art and Culture in the Gulf

Al Jazirah Al Hamra, abandoned in the 1960s, is the UAE’s last standing traditional village. Restored to showcase the coral-stone architecture of the Gulf coastal regions, it offers visitors an undisturbed glimpse of life before the discovery of oil, with a fort and ornate houses owned by pearl merchants.

A pearl farm in a lagoon nestled below the Hajar mountains has proved to be one of the emirate’s fastest-growing attractions, where visitors learn about the history of pearling, which died out in the 1930s with the invention of the cultured pearl.

Mr Philips believes that, over time, more than 20 per cent of the emirate’s tourism offering will be cultural.

“Ras Al Khaimah was positioned for adventure,” he says. “Now we have diversified and culture is a big part of the proposition.”

Other Gulf sites to visit

Archaeological dig with the Bahrain Fort behind © Alamy Stock Photo

Bahrain Fort: Under this singular example of a Portuguese fort, visitors can see unearthed archaeological findings that trace the entire history of the Gulf states, spanning back to the Greco-Roman period into the Bronze Age.

Bahla Fort © Alamy Stock Photo

Oman’s Bahla Oasis: Dominated by its impressive 13th century fort, the walled town of Bahla, dotted with mud brick houses, was once the sultanate’s capital and is an outstanding example of medieval Islamic architecture and historic water engineering practises.

Abu Dhabi’s garden city, Al Ain © Visit Abu Dhabi

UAE’s Al Ain Oasis: Within Abu Dhabi’s garden city, the oasis of Al Ain harks back 4,500 years, when its earliest residents tamed the desert with traditional falaj agriculture. Visitors can meander through shaded pathways beneath a canopy of 147,000 date palms.

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Emerging Markets

Toyota faces Thai bribery probe over tax dispute




Toyota is under investigation in Thailand over allegations that consultants hired by the world’s largest carmaker tried to bribe local officials in a tax dispute, according to Thai authorities, court documents and a person with knowledge of the matter.

The probe followed a filing last month in which Toyota revealed that it had reported “possible anti-bribery violations” related to its Thai subsidiary to the US Department of Justice and Securities Exchange Commission.

Toyota is one of the biggest foreign investors in Thailand, where it makes a large range of cars, vans and pick-up trucks for the local market and for export. The country is Toyota’s biggest manufacturing hub in south-east Asia. Prior to the Covid-19 pandemic, car sales had been strong in a market, where it has a 31 per cent share.

This month, Thailand’s Court of Justice said in a statement that it would take action against any of its judges found to have taken bribes. The statement, which the court described as a move to “clarify facts” in a news report on a foreign website, directly referenced a tax dispute involving Toyota.

“If the Court of Justice has received information or explicitly found that any judge committed an act of corruption to their duty, whether it is about bribery or not, the Court of Justice will resolutely investigate and punish any action which dishonours judges, undermines the neutrality of the court, or causes society [to] lose faith in the Thai justice system,” it said.

According to the court, the case involved a tax dispute worth Bt10bn ($320m) between Toyota Motor Thailand and tax authorities over imports of parts for its Prius hybrid model. 

The affair dates back to 2015, when Toyota’s Thai subsidiary was accused by local customs authorities of understating taxes by claiming that the imported Prius vehicles were assembled from completely knocked down kits, or imported parts that were later assembled in Thailand.

CKDs would have been subject to a discounted tax rate under a Japanese-Thai free trade agreement, but if the cars were fully assembled before being imported they would have attracted a much higher rate. 

Toyota appealed against a decision by customs authorities to impose a higher duty in 2015, but lost. 

Thailand’s Court of Justice has said that it had accepted a petition to review the case, but had not yet begun hearing it.

In its regulatory filing last month, Toyota warned that the US investigations regarding its Thai subsidiary could result in civil or criminal penalties, but the company has not disclosed any detail on the allegations.

In a statement, Toyota said it was co-operating with the investigations and declined to comment on the tax dispute in Thailand. “We take any allegations of wrongdoing seriously and are committed to ensuring that our business practices comply with all applicable government regulations,” it said.

The SEC and the DOJ declined to comment.

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Boris Johnson cancels India trip after Covid cases surge in country




UK prime minister Boris Johnson’s trip to India this month has been cancelled as the country battles a new variant and a surge in coronavirus cases that is overwhelming hospitals.

A joint statement by the British and Indian governments said the decision to scrap the visit scheduled for next week was prompted by the “current coronavirus situation”.

The trip, during which Johnson had hoped to discuss the prospects of a closer trading partnership with India, was initially planned to run for four days but had been scaled back. The two leaders will speak remotely instead, with plans to meet in person later this year.

The cancellation came as India’s capital city region has been put under lockdown and authorities have prohibited the use of oxygen except for essential services, as the country battles a surge in coronavirus cases that is overwhelming hospitals.

India continues to set single-day records of coronavirus cases, reporting more than 273,000 new infections and 1,619 deaths on Monday, with the number of new cases growing by an average of 7 per cent a day, one of the fastest rates in any big country.

The surge is believed to be linked to a new B.1.617 variant that was first discovered in the country.

British health officials are investigating whether the variant should be reclassified from a “variant under investigation” to a “variant of concern” following the discovery of 77 cases in the UK.

“To escalate it up the ranking we need to know that it’s increased transmissibility, increased severity, or vaccine-evading, and we just don’t have that yet, but we’re looking at the data on a daily basis”, Dr Susan Hopkins, a senior medical adviser at Public Health England, said on Sunday.

Officials in Delhi announced it would impose a strict lockdown for a week, following Mumbai and other cities that have already placed curbs on movement.

States are running short of beds, drugs and oxygen, leading the central government to restrict use of the gas. “The supply of oxygen for industrial purposes by manufacturers and suppliers is prohibited forthwith from 22/04/2021 till further orders,” the central government said.

Arvind Kejriwal, chief minister of Delhi, said “oxygen has become an emergency” in the region because its quota had been diverted to other states. He warned there were “less than 100 ICU beds” available.

The new restrictions have been imposed even as Prime Minister Narendra Modi and his ruling Bharatiya Janata party have hosted huge political rallies and allowed religious festivals attended by tens of thousands of maskless people in recent weeks.

Amit Shah, India’s home minister, told the Indian Express newspaper that he was “concerned” about the variant and the “surge is mainly because of the new mutants of the virus”. But he was “confident we will win” over the disease and said there was not yet a need to impose a national lockdown.

Bed shortages in India have forced authorities to re-establish emergency coronavirus hospitals in banquet halls, train stations and hotels that had been shut down following the previous peak in September. Crematoriums in the state of Gujarat and Delhi are running 24 hours a day, while cemeteries are running out of burial spaces.

Coronavirus patients have also been struggling to access medicines. More than 800 injections of remdesivir, an antiviral drug commonly used in India as part of Covid-19 treatment, were stolen from a hospital in Bhopal, Madhya Pradesh, at the weekend.

India is also facing a vaccine supply crunch and has frozen international exports of jabs to meet domestic demand. New Delhi pledged on Friday to increase monthly production of Covaxin, a vaccine made by Indian manufacturer Bharat Biotech, to 100m from 10m by September. The government also said last week that it would fast-track the approval of foreign vaccines in an attempt to boost supply and cleared Russia’s Sputnik V for use in the country.

The majority of the more than 120m Indians that have been vaccinated have received the Oxford/AstraZeneca jab manufactured by Serum Institute of India, the world’s largest manufacturer. The Serum Institute has struggled to increase its monthly capacity of more than 60m doses a month due to a fire at its plant earlier in the year and equipment supply shortages from the US.

Additional reporting by John Burn-Murdoch in London

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The limits of China’s taming of tech




The record fine handed out this month to Alibaba, the Chinese ecommerce giant, was a welcome step toward combating anti-competitive behaviour. The $2.8bn penalty put Alibaba and other tech companies on notice that creating siloed fiefdoms designed to trap customers and merchants within their ecosystems will not be tolerated.

It was addressing a longstanding problem. Many of China’s ecommerce companies operate “walled gardens” that prevent interactions with rival platforms. For example, Alibaba’s Taobao ecommerce app keeps users from paying for goods using the payment app of rival Tencent. Tencent’s social media app, WeChat, prevents clips from being shared directly from ByteDance’s video-sharing app. 

Last week China’s internet and market regulators signalled the seriousness of their intent. They gave tech companies one month to fix anti-competitive practices, telling them to conduct “comprehensive self-inspections” and “completely rectify” problems, following which they would need to publicly promise to abide by the rules. The aim is create a commercially open and competitive internet.

It is tempting to argue that regulators in the west could take a leaf out of China’s book. But to hold China up as an example of competitive best practice would be to ignore the elephant in the room. Although Beijing is giving its monopolistically-minded internet companies — which are almost all private enterprises — a rap on the knuckles, it shows no sign of applying the same standards to vast swaths of the economy that have been dominated by state-owned giants for decades. 

The market dominance of these behemoths of state capitalism is an issue that affects not only domestic competitors but also foreign multinationals that operate in China. A trenchant joint paper last week from the European Council on Foreign Relations, a think-tank, and the Rhodium Group, a consultancy, took aim at the increasingly unfair advantages that this system gives China.

While it is true that China has opened up sectors such as financial services to foreign capital in recent years and allowed foreign brands to win market share in luxury goods and pharmaceuticals, broad sectors of the economy remain fully or partially closed or to overseas investors. 

Often the barriers erected to block or stymie competition are informal. Authorities can deliberately favour domestic companies in public procurement, are more ready to grant approval for licenses, subject foreign firms to arbitrary inspections or require them to re-engineer products to meet idiosyncratic domestic standards.

Such drawbacks are not new. But they are taking on an extra urgency as Chinese companies become leaders in an increasing number of industries and the country’s technological prowess draws level with the US and Europe in a list of industries. The key problem now, says the ECFR/Rhodium report, is that Chinese multinationals are using the advantage of a protected home market to build up resources that they then deploy in competition with western counterparts abroad.

This sets the scene for friction. China should extend its anti-monopolistic scrutiny from its own privately owned internet companies to several state-dominated sectors of its economy, taking care to open to foreign multinationals as much as domestic competitors. If it decides against doing this — as is likely — it will be furnishing Europeans and Americans with ammunition to argue against extending access to Chinese corporations in their own markets.

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