Economy

As part of the various reforms currently being implemented in Saudi Arabia, the sponsorship system for foreign labour, also known as the "Kafala" system, has been scrapped as of Sunday 14 March. The change was introduced as part of the Labour Reform Initiative (LRI) announced last November.

Sovereign wealth funds in the Gulf countries are facing unprecedented challenges due to the rise of deficit and pressure to increase financial obligations to their public budgets. The drop in crude oil prices, caused by the pandemic last year, forced Gulf countries to increase their borrowing and thereby withdraw from their sovereign wealth funds.

Azerbaijan plans to spend up to $59 billion over the next ten years to rehabilitate the territories it has recently taken back after being for decades under Armenian control. It is a huge sum even for an oil rich country, but for President Ilham Aliyev developing the new territories now has become the primary mission of his presidency.

Bahrain expects a quick return to pre-pandemic levels in tourist arrivals when the Gulf island nation reopens the King Fahd Causeway which links it to Saudi Arabia. The causeway was scheduled to open on 31 March, but that has now been delayed to 17 May. The causeway has been closed since 8 March of last year. 

Russia tripled its gold exports in 2020 after the coronavirus pandemic had made oil and gas revenues plummet, the Russian newspaper Izvestia writes. However this year is not expected to be so good for gold producers. According to economists at Morgan Stanley weak inflation, coupled with an improving economic outlook, will continue to weigh on gold prices.