MV TELEGRAPH

DUBAI, United Arab Emirates – Abu Dhabi will deny access to almost all public spaces and schools to people who have not been vaccinated against the coronavirus, the emirate’s government announced late Monday evening.

The oil-rich United Arab Emirates announced their review of the plan in April but did not impose the restrictions. Now they are to come into force on August 20 in the capital, which has a population of 1.5 million.

“The Abu Dhabi Emergency, Crisis and Disasters Committee has approved that only vaccinated people are allowed to enter some public places after 93 percent of the target groups in the emirate have been vaccinated and public health has been preserved,” read a tweet from the Abu Dhabi media bureau.

The entry restrictions apply to shopping malls, restaurants, cafes, gyms, recreational facilities, sports activities, and any other retail store that is not located within malls or shopping malls. An exception remains for access to “essential” shops such as pharmacies and supermarkets, according to a subsequent tweet.

“The decision also applies to health clubs, resorts, museums and cultural centers, amusement parks, universities and institutes, schools and kindergartens,” the Twitter post said.

Children under the age of 15 and those with special vaccination exemptions are excluded from the new regulation.

Almost all vaccinated

Abu Dhabi boasted its high vaccination rate, now 93% of the emirate’s population according to the Ministry of Health, as part of the rationale for the move.

The United Arab Emirates as a whole has one of the highest vaccination rates in the world, with more than 15 million doses given to the overseas majority population of just over 10 million. Since all vaccines available in the United Arab Emirates require two doses, according to a calculation by Reuters, that is enough to fully vaccinate around 77% of the Gulf country’s population.

An Emirati man wearing a protective mask walks at al-Barsha Health Center in the Gulf emirate of Dubai on December 24, 2020.

GIUSEPPE CACACE | AFP via Getty Images

The announcement from Abu Dhabi met with criticism, at least online.

“They never clarify how it will affect visitors? They cannot register their vaccines with al-Hosn if they are taken in another country. Does that mean that visitors to Abu Dhabi have nowhere to go? Good luck with tourism !!! ” One Twitter user wrote in response to the news, referring to the UAE’s Al Hosn tracking and vaccination registration app.

Abu Dhabi did not indicate whether this will apply to tourists and did not immediately respond to a CNBC request for comment.

The impending entry bans for unvaccinated people so far only apply in Abu Dhabi. In Dubai, the commercial and tourism capital of the United Arab Emirates, some businesses such as bars and restaurants require a full vaccination card, but the restrictions are not universal.

According to Johns Hopkins University, the desert sheikdom has recorded 631,160 infections and 1,807 deaths from the virus since the pandemic began, and current daily infections averaged around 2,100, about half of the peak in late January.

However, the numbers do not indicate which emirates or cities the cases or deaths are recorded in. And Abu Dhabi and Dubai, the most populous emirates in the UAE, are approaching their vaccination campaigns a little differently.

Abu Dhabi only offered the Chinese-made Sinopharm vaccine as of late 2020, in line with its plan to manufacture the vaccine locally thanks to a joint venture between Sinopharm and Abu Dhabi-based technology company Group 42, commonly known as G42.

Meanwhile, Dubai offered Sinopharm, the Pfizer BioNTech vaccine developed in America and Germany, the British Oxford AstraZeneca vaccine and the Russian Sputnik V. Most of the vaccines given in the country are China’s Sinopharm, which was offered to all groups of people much earlier than the other shots. All vaccinations in the country are free.

Uncertain vaccine effectiveness

But some countries and residents are not convinced of the UAE’s efforts. It remains on the travel “red list” – which means strict quarantine on arrival or full immigration – for several countries, including the UK, a key trading and tourism partner.

And Abu Dhabi is now offering residents Pfizer syringes as well as a third or booster syringe from Sinopharm after it was revealed that an unknown number of people did not produce adequate antibodies to Covid-19 after receiving both doses of Sinopharm. The neighboring golf country of Bahrain offers the same. Several recipients of the Chinese vaccine have reported contracting Covid despite being fully vaccinated.

The United Arab Emirates government announced in December that an “interim analysis” of Phase 3 studies of the vaccine in Abu Dhabi by China National Biotec Group (a subsidiary of Sinopharm) showed 86% efficacy. But the announcement contained few details and did not reveal how that 86% figure was calculated.

In the same month, China announced that the vaccine was 79.34% effective based on “interim trial data” without releasing Phase 3 results, contradicting UAE figures.

Sinopharm has failed to respond to several CNBC requests for comment.

The World Health Organization approved Sinopharm for an emergency in May, making it the first non-Western vaccine to receive the organization’s green light. It is one of China’s two main syringes given to millions of people in China and elsewhere, especially in the developing world.

Indian People queue up at a COVID screening center at Ram Manohar Lohia Hospital,(RML) after a case emerged in Delhi causing a panic situation in Delhi India, 04 March 2020.

Imtiyaz Khan | Anadolu Agency | Getty Images

India has rolled out a slew of measures amounting to 6.3 trillion rupees ($84.9 billion) aimed at boosting the Covid-struck economy — but economists are skeptical that it will have a major impact on short-term growth.

The impact of those policies — that amount to about 2.8% of GDP — on the country’s fiscal deficit target is expected to be comparatively small.

Economists pointed out that the bulk of the support comes in the form of loan guarantees — instead of direct stimulus such as checks that are paid directly to households. Besides, some of the measures were previously announced and have already been factored into calculations.

For the current fiscal year that ends in March 2022, India’s fiscal deficit target is around 6.8% of GDP. A fiscal deficit is the gap between a government’s income and spending, and implies that the country is spending more than its revenue.

“While the headline impact of the announcements is sizeable, for much part these were credit guarantees, making the net impact on the fiscal math smaller,” said Radhika Rao, an economist with Singapore’s DBS Group, in a note on Tuesday.

She explained that some measures — such as subsidies, free food grain and support toward pediatric health — may have a likely impact on the fiscal deficit. But, there might be “some wiggle room” from a higher nominal GDP and a likely reprioritization in existing spending to minimize the risk of exceeding the fiscal deficit target.

What was announced?

Finance Minister Nirmala Sitharaman on Monday announced several support measures, including the provision of loan guarantees of around $35 billion to help small businesses and sectors adversely affected by the pandemic.

Sitharaman said the government will provide additional credit of 1.1 trillion rupees ($14.8 billion) to businesses in sectors such as health care, tourism and others.

The government will also expand the emergency credit line guarantee scheme by another 1.5 trillion rupees ($20.2 billion), from an earlier limit of 3 trillion to 4.5 trillion rupees.

The scheme allows banks and non-bank lenders to give emergency loans to eligible borrowers to run their businesses and those loans are guaranteed by the government, which covers default risks for lenders.

When first introduced, the scheme was seen as a relief for India’s micro, small and medium businesses that are under pressure due to the pandemic-hit crisis.

India also announced a credit guarantee scheme for micro finance institutions that typically lend to the smallest borrowers in the country, such as small business owners. The government will spend another $12.6 billion to provide free food grain to millions of people until November.

Stimulating growth

The latest support measures were similar to how the government responded to India’s first wave of coronavirus outbreak last year, Rao told CNBC by email. Monday’s announcement was aimed at improving the flow of credit to the worst-affected sectors and vulnerable households, she said.

“The fiscal push is predominantly on the supply side rather than a direct boost to demand, containing the extent of immediate boost to growth,” she said. The ongoing reopening of the economy and improving vaccination progress will likely be “bigger catalysts of near-term recovery,” she added.

India’s economy grew 1.6% from a year ago from January to March this year.

Economists have warned that the GDP print for April to June — the first quarter for the current fiscal year — may not paint the full picture of the crisis in South Asia’s largest economy as a result of a devastating second wave of coronavirus outbreak.

Aditi Nayar, principal economist at credit ratings agency ICRA, the Indian affiliate of Moody’s, also pointed out that the success of loan guarantees will depend on how many new loans are disbursed by the lenders.

Fiscal deficit target

Economists pointed out that the loan guarantees will have limited upfront costs for the government.

Nomura’s Sonal Varma and Aurodeep Nandi said in a note that the fiscal stimulus announced during the second wave of outbreak, including Monday’s measures, amount to about 0.59% of GDP. Along with the government’s additional spending on free Covid-19 vaccines, the total fiscal impact for the current year is expected to be around 0.65% of GDP, they said.

Still, Nomura expects India to overshoot its fiscal deficit target of 6.8% on the back of additional expenditures and potentially lower disinvestment figures. The Japanese investment bank revised up its fiscal deficit estimate to 7.1% of GDP for the current year.

Some of the economic measures from Monday, worth 2.4 trillion rupees, are spread over the next two to four years, according to ICRA’s Nayar. “Some of these had already been announced at the time of the Budget, and therefore, a portion of their cost has already been factored in,” she said in a note.

Rao from DBS estimated that there is a risk that the deficit may exceed the target by 0.3% to 0.5% of GDP.

Dry cracked earth is visible along the banks of Phoenix Lake on April 21, 2021 in Ross, California.

Justin Sullivan | Getty Images

LONDON — Major companies from across a range of sectors are increasingly concerned about the cost and availability of the world’s ultimate renewable resource: water.

The availability and relatively low cost of water does not tend to capture much attention until it effectively runs out. Yet, with the climate crisis seen as a “risk multiplier” to water scarcity, analysts warn that even companies with relatively limited financial exposure to water risk should brace for disruption.

It comes at a time when water prices are rising around the world. The average price of water increased by 60% in the 30 largest U.S. cities between 2010 and 2019, according to data compiled by Barclays, while California Water Futures have regularly jumped as much as 300% in recent years.

In a research note published June 14, analysts at Barclays identified water scarcity as “the most important environmental concern” for the global consumer staples sector, which includes everything from food and beverages to agriculture and tobacco.

Consumer staples, which was said to be the most exposed of all sectors to water risk, faces a $200 billion impact from water scarcity, analysts at the U.K. bank said.

This came down to a strong reliance on agricultural commodities, an extreme vulnerability to water price fluctuation and operational risks — including disruption from extreme events such as droughts and flooding, and fines and lawsuits linked to pollution.

Water scarcity is really important because when it runs out you have really serious problems, and because of its low price it is one of those classic externality risks.

Beth Burks

Director of sustainable finance at S&P Global Ratings

The bank found that water-related comments in company transcripts last year jumped 43% when compared to the end of 2019, which it said reflected a growing corporate awareness of the risks associated with clean water and sanitation.

Sustainable investors, meanwhile, seemed to be prioritizing other environmental concerns. “Our recent conservations with investors suggest that many are instead focusing mainly on the potential impact of rising carbon costs,” analysts at Barclays said.

The research found the potential financial impact from water risk was likely to be three times higher than carbon risk.

Cost of inaction

“Water scarcity is really important because when it runs out you have really serious problems, and because of its low price it is one of those classic externality risks,” Beth Burks, director of sustainable finance at S&P Global Ratings, told CNBC via telephone.

“It needs to be managed very carefully and thoughtfully and you don’t always have that natural pricing signal that helps us conserve it.”

Water prices do not tend to reflect its scarcity, particularly because its use is often at a very low cost or even free. However, the availability of water underpins many parts of the economy and analysts at Barclays have attributed the latest rise in global water prices with the asset’s growing scarcity.

The bank estimated that the so-called “true cost” of water was three to five times greater than the price companies currently pay, once direct and indirect costs of water shortages and other risks were incorporated.

Half loaded cargo ships pass by the low water in the River Rhine along the vineyards on November 13, 2018 in Osterspai near Sankt Goarshausen, Germany. Summer heat wave in Germany as well unfavorable wind conditions, and no rain left the Rhine – which begins in the Swiss Alps, runs through Germany, and empties into the North Sea – at record low water levels.

Andreas Rentz | Getty Images News | Getty Images

Addressing the issue of proactive water management would cost the global consumer staples sector $11 billion, the bank estimated. This puts the cost of inaction roughly 18 times greater than the cost of action.

Agricultural exposure was identified as the “key determinant” of financial risk from water scarcity, with agribusinesses — such as ABF and Tyson Foods — facing a 22% EBITDA impact, the bank said, referring to the acronym for earnings before interest, taxes, depreciation and amortization.

Of the companies most at risk, global consumer foods giant Unilever, consumer products company Colgate and cleaning products maker Reckitt Benckiser were all said to face a 40% to 50% EBITDA impact, even in the less-extreme of Barclay’s possible scenarios.

Reckitt Benckiser says it plans to be “water positive” in water-stressed locations (it currently has 20 such sites) by 2030. The company has started a series of “listening sessions” with key stakeholders to discuss climate change and water risk.

“We recognised the impact that water stress has on people, their lives, their health and also on our business,” a spokesperson at Reckitt Benckiser told CNBC via email.

“That’s why, through our brands we’ve been enabling better access to safe water and sanitation in many water-stressed locations,” they added, citing India, Pakistan and Bangladesh.

Unilever and Colgate did not respond to a request for comment.

Physical, reputational and regulatory risks

S&P Global Ratings said that while water scarcity “rarely” has a direct effect on a company’s creditworthiness, the issue can have a more subtle impact.

These risks can be physical, reputational or regulatory.

For example, in Germany, cargo barges on the Rhine River, one of the continent’s most important shipping routes, faced loading and transportation issues in 2018 as a result of critically low water levels. It resulted in production coming to a halt in places, with increased manufacturing costs and disrupted supply chains in some parts of Europe’s industrial heartland.

Elsewhere, Constellation Brands in Mexico and Coca-Cola in India have both been forced to abandon plans to build new facilities in recent years. The projects were dropped following widespread protests about the quantity of water these facilities would require.

Fines related to water pollution have also been on the rise, analysts at Barclays said.

“I don’t think water prices in themselves are likely to rise significantly because of the social implications of making that choice. So, the ways that you can potentially see the more hidden costs of water scarcity impacting financial outcomes would be through the sourcing of alternative water sources when your water is insufficient,” Burks said.

“If you’re having to pipe in water from far away, if you’re having to set up desalination to increase the amount of fresh water available, then that all comes with increasing infrastructure costs [and] increasing energy costs,” she added.

South Korea wants to open up its economy and work on travel bubble programs as it has been relatively successful in controlling the spread of Covid-19, its deputy prime minister told CNBC in an exclusive interview.

The government plans to boost consumption and further boost the economy in the second half of this year – and steps are being taken to achieve that goal, said Hong Nam-ki, who is also South Korea’s economy and finance minister.

“I would say the current government has been relatively successful at both infection control and vaccination,” he told CNBC’s Chery Kang on Friday, according to a CNBC translation of his Korean remarks. “Based on the achievements, the current government now wants to promote economic growth while maintaining such health measures.”

He said that South Korea is aiming for herd immunity by November, which would mean the virus can no longer spread rapidly as most of the population is either fully vaccinated or has become immune from infection.

By last week, 30% of the South Korean population had received their vaccinations and Hong says the country can reach 70% by September.

Our plan now is to achieve herd immunity by November – but in my personal opinion we will be able to move the schedule forward.

Hong Nam-ki

South Korea’s Deputy Prime Minister

The country has reported more than 155,500 cases and at least 2,015 deaths as of Monday, according to Johns Hopkins University – numbers that are relatively controlled compared to most Asian countries.

In contrast, India – with the highest number of cases in Asia – officially reported more than 30.2 million cases on Monday, according to Hopkins. Indonesia has 2.11 million cases while the Philippines has nearly 1.4 million case numbers, the data showed.

“Our plan now is to achieve herd immunity by November – but in my personal opinion we will be able to move the schedule forward,” said Hong.

“If the vaccination goes as planned, we believe the Covid-19 situation is under control. Then the measures to support consumption and economic recovery can be carried out without interruption from July onwards.

However, should the pandemic worsen, it would be difficult to push these growth-promoting measures, he warned.

Travel bubble?

The South Korean government plans to support travel bladder programs for fully vaccinated people, Hong said. A travel bubble is a pre-agreed agreement with another country that provides that travelers from both countries are allowed quarantine trips if certain conditions are met – such as negative Covid tests or full vaccinations.

However, whether the travel bubble will pop depends on vaccination progress and conversations with other countries, he said, declining to name those countries.

In early June, the Singaporean newspaper Straits Times reported that South Korea is exploring travel bladders with some countries, including Singapore and Taiwan, to enable quarantine-free travel for vaccinated people.

“I believe that depending on their health status, vaccination rates and the convenience of immigration, more countries will be on the list of countries in demand,” Hong told CNBC.

“I think we need to continue working with private tour operators to investigate the virus situation to decide exactly which countries,” he added.

One initiative that citizens can at least indulge in for the time being could be “flights to nowhere”, a target-free concept that some countries introduced during the pandemic.

“Even if you cannot travel abroad, no landing flights have been offered,” said Hong. “Passengers could fly all the way to Japan, hover over the Japanese sky, and then come back without landing. Lots of people showed interest in it and it was used a lot, ”he said, referring to such flights that were introduced in South Korea last year.

“So if the health situation improves and the vaccination campaign accelerates more strongly, we believe that we are going in (that) direction.”