tv Best Of Middle East 2016 Bloomberg January 1, 2017 11:00pm-12:01am EST
♪ yousef: it is the end of the year that saw the end of opec's flirtation with the free market. hello and welcome to "bloomberg markets: middle east" as we wrap up 2016 with this special holiday edition. i'm yousef gamal el-din in dubai. take it back 11 months, january 20 and oil was at $27 a barrel, 13 year lows, record stockpiles, supply outweighing demand and iran back online. something just had to give, and it did. on november 30, opec agreed to
its first production cut in eight years. bloomberg's dan has more from singapore. dan: going into this meeting, the real differences were between saudi arabia, iraq, and iran. in the weeks leading up to the meeting, iraq and iran argued had both argued they should be exempt any production tax, iraq cuts. iraq because it needed the money to fight isis, iran was lifting production from pre-sanction levels. what happened when you got into the meeting was that iran iraq finally agreed to be a part of this. it actually had the second highest production cuts after saudi arabia, and the two of them accounted for more than half of the group's total cuts. that gave some wiggle room for iran, instead of now trying to push all their oil production up to the pre-sanction limits will only have a limit of 90,000 or so barrels. everybody gave a little and took a little. once those three were in line, they were able to bring everybody else in and get behind this 1.2 million barrels per day
reduction in oil output starting for the first six months of next year. and that lifted wti prices in the u.s. as much as 10% yesterday. the big winners are oil producers, the rising oil prices lists all kinds of boats across the region. oil and gas producers, rig builders in singapore, seeing a little bit of uplift. you had energy giants in china are also benefiting from this. airliners and refiners are having a little bit of a rougher go of things today. in the long run, there is still a question in the oil market about how this will play out. morgan stanley put out a note this morning saying higher oil prices now mean you will see more investment in u.s. drilling from shale and other players. that could add to the second half of next year, leading to maybe some price instability around this time next year. so we will have to see how everything sort of shapes itself shakes itself out over the next
he is the ceo of color energy, and martin frisch, founder of mortin frisch consulting, after this was done. morten: i don't think it is going to be very sustainable. there are two things that are going to happen. first of all there is a lot of oil out in storage, both floating storage in logistics as well as in official storage. with these high prices and the flattening forward curve, some of the product will not quickly come into the market, and it will put this deal under pressure. secondly, this is christmas coming early for shale producers in north america. reporter: how sustainable is this deal, 1.2 million barrels a day, given the fact that with oil prices, you will give shale in the u.s. quite a significant floor? they will come back online. they will put more oil into this market. robin: there is a couple of questions there. it is a six-month deal. saudis always put production down anyway. after six months it will be summer in saudi arabia, production will have to go up, so the deal will come under strain again. and then shale starts coming back, will opec continue to stay with these cuts, or will he come back stronger than anticipated? reporter: a lot of the analysts we have been talking to here on
bloomberg television have told us again and again, it is done, the execution. they have put together a committee, and they are supposed to oversee the agreement it stood by. are you optimistic given the track record we have had from opec? the fact is it doesn't speak to a very significant degree of compliance. are they going to be able to turn things around this time? moten? morten: for opec, it would be good if it happens. reporter: do you think it would happen? morten: i listen to the wise old man in this industry. he is already skeptical, and i'm with him. reporter: your going to leave it with that. how about you, robin? you may comments over the weekend about not implementing the deal. pointing as well to the fact that u.s. shale recovery will be accelerated, and that will really tip the balance against opec. robin: i think the motto should be cheap, but not too much. everybody went cheap on their quotas. it will be secondly because of one or one million barrels per day, something like that. with one member start cheating, two or three isn't far away. and in it all falls apart, they feel they are being taken for a ride. reporter: a gorgeous, beautiful chart clients can pull up on the bloomberg as well, and this really shows you the latest
figures coming in from the bakers use index. look at the uptick, we are up once again. the blue parts indicating builds in the rig fleet, and the red is obviously declines. the yellow line really shows you u.s. crude output, which has jumped accordingly. again, where does this go from here, the u.s. shale story? because, some say, well, you know, you see gains until 2018, then after that things slow down , because of the permits. what does your outlook look like, morton? morten: i think the u.s. shale begun.ry has just this is going to expand tremendously. and when you look at the chart here, one very important thing, back in 2014, these rigs were running 24 hours a day, seven days a week. that is not the case today. in addition to the increasing number of rigs coming in, there is a lot of slack in this system where rigs can be more heavily
employed in the field. the bottleneck here is the hard hydraulic fracturing of crude, which needs to be rebuilt and expanded, and also they need higher prices to do so. but generally speaking, i see shale through the united states just the beginning. permian, for example over the next couple of years could add , one million barrels. reporter: this from riverside energy saying that while shale has proven to be resilient with only marginal reduce, only 1.3 million barrels are going to be in 2016 compared to the yearly average of around 10 million barrels. robin. robin: well i think, you know, as morten says, we are likely to see a strong rebound in shale. we are seeing it in the recounts rig counts already.
the question is, over the next three, four years, how much non-opec production will have been lost? and you know, we are looking at material areas like mexico. cancellation of deep water projects. how much will shale i got for that if prices go higher? deep water projects will come back, but they have a much longer leave time then shale projects. i am optimistic it will bridge that gap, but there are other concerns raised by the ia and others about some kind of investment gap. yousef: so a healthy dose of skepticism about whether the cuts will work and the global shale. david ingles take a look at how the markets played out and what investors need to be thinking about in 2017. david: it is best to start with a look back at how oil did this year. this talk of a need for agreement gaining traction as fell below $30 per barrel. prices have risen since. now we did get that deal eventually between oil producers that set oil prices to the range we are in at the moment. before i move on, expect q1 of next year to be about global inflation. that is really when we see the base effect come into play.
right now, that is really what people are talking about. now let's have a look at market dynamics moving ahead, looking interesting correlations as we enter 2017. some very interesting trends as we have noticed. let me have a look at the daily change in the oil price. this chart takes you all the way back to 2012. i think what it shows you is 2016 was still about a wild year in terms of price swings. obviously as prices fell, the swings got exacerbated, but not as bad as 2015. for the most part, we were stuck between $40 to $55 a barrel, and within that range, 4% to 5% daily swings were not uncommon. that is sort of died down in the next year. the second thing i want to bring up, have a look at this. top panel is your oil prices, the second one below is the call
correlation between oil price and equity. essentially positive correlation has returned. the benchmark is what we are using to buy index, as we did with foreign sentiment, historically it looks like this. it is positive. have a look at this five-year chart. let me shift to this so you can see that. historically it has looked like this. the past two years, it has been positive. it dipped a little bit in november, and that has actually come back up. with a this correlation positive, that may not bode well for equities in the region if investors get skeptical, a first whiff of noncompliance to that deal, they will go the other way. yeah, that is how things look. it has been a rocky 2016, and it looks to be a more interesting 2017. yousef: bloomberg's david ingles there. still to come on the program, looking to liberalize to offset the slump in oil prices, saudi arabia announced sweeping reforms this year including , changes to the capital markets. hear from the kingdom's finance minister in a moment. this is bloomberg. ♪
♪ yousef: welcome back to this holiday edition of "bloomberg markets: middle east." i'm yousef gamal el-din. so in november, saudi arabia announced an overall change the in the cabinet. that involved replacing the finance minister of two decades. the new man in the job had been running the kingdom's capital market authority overseeing a series of reforms to open up markets to foreign investment. i sat down with him in riyadh in september in his former role and began by asking how much money the kingdom hopes to attract. mohammed: well, as much as we can. but generally i think it is a matter of what the market can take, what investors are willing to put, what is happening in the region, what is happening in the saudi, what is happening in the world. it is a priority to us as far as the foreign investment is concerned, so it is a journey.
we are going through it. yousef: again, looking back to summer 2015 when the first series of reforms came through, you relaxed the restrictions for foreign investment, and there was a lot of euphoria at the time and expectations were high. the reality is that those expectations have not been met. why is that? and why is it going to be different this time around? mohammed: we are a bunch of indices. on the of investors will not look at us. they may be doing some due diligence asking around, but , they are not going to put their money in until we are on the international indices. we are international indices. we, the dow, and other stakeholders are attracting investors. next month we have an investment forum in new york, and the month after, we have another one in london, to try and support the and showing the efforts on
try and promote efforts on showing. and the abilities of the market, the exchange, and that way to listen to investors and the requirements and make sure these are met. yousef: an inclusion by the nfci would bring in millions more in terms of capital. do you think that the reforms you have undertaken that you intend to do in the future is going to be enough for an emerging markets classification? mohammed: yes. yes we have been in discussion with msci and other international indices. we have been in continuous discussion with msci. we believe that the amendments that have taken place, the presentation as these are going to happen next year, because the dow will implement in 2017, should be enough to put the target markets on the watchlist hopefully within 2017.
and then the normal is that it takes four quarters for that for the inclusion. yousef: another country being buffeted by the ups and downs in energy markets and its own economic program is kuwait. however, periods of under-spending means it has plenty in reserve. here is what the kuwait finance minister and deputy finance minister, now the oil minister, told manus cranny in kuwait city in may. anas: [indiscernible] it has been quite substantial. now we hope by the coming five years will be measures of fiscal and economic reforms that have been announced in april, the 13th of april, by the government degree, and that after five years we will be able to come back and cover all of the gdp nominated. plus, we think we will be
closing up our deficit tremendously. manus: i know this is your six-point plan, you are a man of reform. so my question to you is, a brave man enters brave reforms. you have got six points. it is a tough parliament. corporate tax, reducing subsidies, and privatization. for you, sir, what is the priority of those? i know they are stakes, but what is the priority? anas: to focus on dividing them up into issues. i would say closing on my deficit, the financial deficit, and then i i have to diversify my economy by having more private sector coming in locally and internationally leading up to the call. and i think we are willing to do that. i believe some of the rating agencies that have just issued their ratings realize this very well, and this is why we have
were turned on our existing rating, which was, which we were happy to hear and to receive this news. yet the long-term or the negative visions, negative outlook vision, is something we have to deal with in the coming eight months to show our reliable and determined level of doing those reforms. yousef: up next, the fallout from turkey's failed coup. as the country's economy to y contracts for the first time in five years, we hear reaction from the prime minister in a moment. you are watching "bloomberg markets: middle east." ♪
sustained period of political instability. here is how turkish prime minister defended the economy 10 days after the initial unrest. he was speaking to bloomberg in ankara. binali: the coup attempt had an economic impact on the turkish economy. s&p immediately cut our rating, and i think that was not an ethical thing. it was taking advantage of the situation. we have overcome a coup attempt. we have struggled to keep democracy running, and these agencies should not be rushing their decision. this was saddening for us. the turkish economy does not deserve this if you look at the indicators. it is an ideological and political decision. we have no doubt about that. what we are saying to global investors in this has come and gone, and the national will and the will of the citizens has destroyed the plotters. life is back to normal in turkey, and you can continue
your long-term investments. we will eliminate obstacles before you. we are laying out the turquoise carpet in front of investors. we have all kinds of tax incentives, investment incentives, and we are giving priority to add added investment. is it a concern to you that put might lessen and pressure on the turkish economy, the current account deficit which remains the third-largest in the g-20 nations? binali: we will continue with our large-scale investments without putting our foot on the brake. just before the religious holiday, we opened a bridge on june 30. july 26, we will have the third bridge inaugurated over the bosporus. and in the beginning of 2018, we will have the first terminal in the largest airport in europe, which will be inaugurated on december 20, and we will have the eurasian tunnel under the
bosporus which will be inaugurated. in 2016, we will lay the cornerstones of another bridge, the longest bridge in the world. without slowing down, turkey will continue its investment. riad: you mentioned the government would increase investmes in productive sectors rather than investnt on social spending but more on the investment side. that would mean the, it would in a way the growth of the economy has seen, which has been dependent on government spending. are you planning any measures beyond what you just mentioned to encourage private investment and indeed foreign investment rather than just foreign investment in bonds and stocks, but maybe also direct foreign investment into the turkish economy? binali: we are establishing a wealth management fund. it is a structure that will finance large-scale projects.
investmentsnce through this fund instead of the general budget, which will be cleared of problems. riad: when you became prime minister, you said that changing turkey into a presidential system, into a democracy, was one of your priorities. has anything changed in that after last week? for example, especially regarding the timeline of that change, are you still considering a referendum should parliament not pass it as you desire? is there a possibility of early elections? binali: an early election is out of the question. i am underlining this and being very clear about it. there are some circles who are trying to confuse the situation , saying the act party has come out strong after this and will have an ambushl election. this is not even going through our minds, and we don't find it ethical. we have power for four years, and we will use that power for the next four years.
if there is anyone who is trying to seize that authority, we will fall on their heads like a sledgehammer, and we did. from now on, if anyone is thinking about doing such a thing, they should watch their step. why a presidential system is necessary? it is necessary for stability and security. under the presidential system, there would be no one attempting such an adventure, because then an absolute political will would be in charge. a weak government would include coup plotters, and there have been several such attempts reign. the act party we have always succeeded in thwarting them. how we succeeded, because the nation was backing us. yousef: still to come on the program, egypt's battered economy has been boosted by a $12 million loan from the imf.
♪ yousef: it was a big year for egypt's economy, culminating in a $12 billion loan package from the imf, the biggest ever in the middle east, but securing it involve reforms, including floating the pound and cutting those subsidies. bloomberg's manus cranny spoke with egypt's finance minister in cairo just after the deal was signed. amr: the progress is going very, very well, even beyond our expectations, especially with when it comes to the flotation of the currency, the feedback and the results we have seen so far are very encouraging in terms of going back the markets
and the foreign currency market. which was harming to the , economy. so that so far are very positive, and the central bank in the banking sector are doing a great job. manus: talking about momentum of the conversion. i understand $3 billion approximately has been converted. is that momentum gathering? is that growing? amr: it is gathering. and it is basically the central bank and the banking system are including all the stakeholders into the system. when you are all the way, it is going to take some time, but the performance so far is great, and the results so far are really, really very good. manus: for you as the egyptian prime minister, you have to have a bandwidth of where you see the egyptian pound. where do you see that for next year? amr: we are not calling the results right now because things
will take time until they settle. but what is happening so far as , not just from -- transferring currency into the banking system, but also the feedback coming from investors with equity and bonds as well. manus: before i got in here, they said to me, how do i fit is a paid in the future of the upside of egypt if i am in the bond market? $2.5 billion in the bond market right now. next year, if this issue goes well, how much more can we see you come for next year? amr: it depends on our financing needs, and it depends on the development of basically one thing like how much investment , will come into the country, either foreign direct investment or direct investment. we will come to the market. manus: $5 billion? $10 billion? what do you envision? amr: $5 billion to $6 billion. we envisage a number like that between now and the next year,
manus: one of the aspects is, i 2017. yes, i put my money in, but i want to be solid so i can get my money out, and to that and that is where my confidence is. where are we with the backlog in terms of demand for dollars? how long will it take you to clear that backlog? give us an update. amr: look, i think the banking system is working on this in a good way. it is again the jurisdiction of the central bank of egypt, but so far we are doing this in fine in terms of really what they need, and clearing the backlog as well. so the process is taking place in a very positive way. manus: confidence, it is an interesting word, isn't it? you were at that conference last week. talk to me about the biggest question investors have had for you, the conversations you are having with foreign investors.
amr: look, it is all about confidence. the entire thing is about confidence. and confidence, and the policies that you put in. so when you decide to do something that has not been done in egypt for the last 30 or 40 years, floating the currency such a way that gives a lot of confidence. when people see that the system is credible and transparent, that gives confidence. when we do the fiscal conservation, that gives confidence, by doing right and putting together the right policies. manus: and when you get involved with the imf, there are many issues. there are many discussions. what additional tax rises are going to be necessary? what additional subsidies are coming for egypt in 2017 after the new relationship with the imf? amr: look, it is not a matter of when and how. it is a matter of the plan that has been adopted by the country. back in 2014, a plan was put for this.
, tod it was abandoned happen every year for five years or six years or what have you. it has happened 2014 and 2015 because of the sharp reduction in the oil prices, the action was not taken. but this year it has been taken. we are addressing this issue, because we know this has really hurt egypt for a really long time. so we are very serious about dealing with, re-addressing the subsidy in its entirety and giving the subsidy to the people who deserve the most and not give absolute subsidy to everyone. manus: global investors will look to egypt and they will want , to know about your foreign exchange reserves. is there a floor at which you are targeting your fx reserves as a part of this relationship with the imf? amr: look, i will not talk about specific numbers, but prior to 2011, we were having a very good reserve level, besides other
figures. we were in very good shape. i mean, we are reaching like now a sort of, all we have reached is a soft curve. remember that we have like a trade deficit, a current account deficit, and don't forget that we have taken a big hit from the tourism industry, so building the reserves is something that will take place in a very good fashion. manus: let's talk about the economy. what is it that the reality of what you have done is monumental in terms of floating the currency and withdrawing the bsies? what is a realistic growth model for egypt? nister, amr: we should expect this year something around 4% give or take. you are in a transition period, ok, transition period between action that might create some sort of, not the fastest way to
grow, but you need to see investment coming to the country. this is the most important issue. now we are seeing diverse investment coming in terms of the portfolio, either b equity or debt. the next step is to see the real economy function, functioning at full steam. one of the hangovers on the economy was the situation of the currency. now this issue is being resolved. we expect to see more, and we are working on this investment floor so that also probably will encourage and bring more investment to the country as well. manus: inflation is the other issue for you and for the nation. $.14 is the publish level. 14% is the published level. 25% is the level out on the street. what is your primary driver for succeeding and tackling inflation? amr: look, we have reached, i mean, we peaked at inflation. in my opinion, because the currency situation, traders and
manufacturers who are sourcing their foreign currency out of the foreign market has been also been affecting the inflation a , but really, it seems that the budget deficit, we expect to reduce the inflation gradually. we are targeting to go down to 10%, i mean some time next year. yousef: up next, a new year, a new u.s. president. dubai billionaire khalaf al habtoor tells us what he thinks about donald trump. this is bloomberg. ♪
♪ yousef: dubai-based billionaire khalaf al habtoor has been buying the british pound post-brexit after it weakened against the dollar and will see it expand against the euro. we also asked the property tycoon for his thoughts about donald trump's victory after he called trump a loose cannon just before the election. he was speaking to bloomberg's manus cranny.
khalaf: he is elected by the america, and we have to accept that. number one, you know, he has promised to dismantle the nuclear and canceled the agreement and arrangement between the united states of america and iran. if he will meet this commitment, then i will take the first step, my personally. there is a lot of things he promised to do. manus: there was a lot of things he promised to do. you would forget him for extreme vetting of muslims if he went undid the iranian deal? khalaf: this is talks, political talks. it will not be implemented. you cannot implement it. manus: there is a business partner already in business with trump. do you think that by trump now becoming president, that would make the sale of the properties easier, that relationship with trump? khalaf: i think we have to address him as the president of united states. we cannot address him as a
developer. he is not anymore a developer. manus: investing in america, trump in the white house, people are saying that he will go for infrastructure spend and that america will grow. would you be prepared to invest in america? khalaf: i will look and see, let us say september next year 2017, nine months, to see what he is going to implement from his promises. because has a lot of promises, which we would like to see it. this should be given priority more than anything in the world , especially for iraq and iran. , manus: iraq and iran, what do you want to see him say on iraq? we have dealt with iran. what you want to see come through on iraq? khalaf: the current administration gifted iraq to iran. and they handed -- slaves and by the iranian proxy. therefore we want iran and iraq to come back to the arabs.
mass: i don't know if that is necessarily 100% representation. some people would say that obama changed policy and pulled back. there were no more boots on the ground, he brought troops home. there is both sides. let's talk more about you, your business, and markets. i am interested. warren buffett moved a lot of money into cash before this election. did you take any preparation for the risks that the market was assuming on a trump victory? are you surprised by how the markets have reacted? khalaf: markets are positive acting positively now. it was a shock. myself, i am thinking, i positively thinking, i have am hold for a few months. to think even to make this feasibility study or look into a new project. i will wait and see if he implements what he promises. you know? then i can salute him. manus: if he does what he
promises, you salute him. let's talk about the dollar. because the dollar has an incredibly important impact. looking behind me, we have the first behind me. we look to the left, it is a little hazy this morning. he owns a few hotels in the region. one is a w just beside the hotel. the cranes you can see at work in dubai are pretty much going to this man. let's talk about the dollar and the impact on the region. strong dollar, has it hurt your hotel occupancy? are you still prepared to build like this? khalaf: just remember [indiscernible] it is not affecting us at all. manus: yeah, but a strong dollar impact of tourists coming into dubai. for me, the pound is down by 20%. this trip is costing me a fortune. khalaf: yes, but if you look at how cheap here the hotels are compared to anywhere in the world, then you will compensate the deficit of your currency. manus: let's talk about that. because you say the peg is very cheap. do you think the pegs will hold in the society, the pegs will hold against the dollar? khalaf: which one? manus: in your region, society
pegs, do you think these will hold? khalaf: these will hold. and continue in my opinion. manus: as i said, it is costing me -- i have come down from london. have you seen any impact on brexit? there is a drop in sterling. would the drop in sterling encourage you to look at u.k. assets more? khalaf: we are looking for property in england. we bought some property in england. we bought also a lot of pound. manus: you have bought a lot of sterling at this level. do you think sterling is going to go lower, and will you buy more? your building a warchest? khalaf: we brought property there now already, which is hilton wimbley. we are looking for other property as well. manus: will you be looking in central london? do youhink central london is good value? or do you think you should be looking elsewhere? khalaf: central london, nobody sells unfortunately because it is all packed, everybody is making money. manus: where are you looking?
♪ yousef: the fed's decision to raise interest rates in december for only the second time in a decade signaled a steeper path for borrowing costs in 2017. gulf countries wasted little time in following the fed. you had saudi arabia, kuwait and qatar all raising benchmarks within hours of the decision. mohamed el-erian is the chief economic advisor at al allianz. my colleague asked how much this pressure is putting on emerging markets. mohamed: em differs, like in this region, pegs to the dollar, others are free-floating.
it differs from country to country, but the bottom line is tighter conditions for the emerging world. now it is not a disaster because they can offset that through other means, but it is something that they have to pay attention. reporter: a lot of people have been interpreting yellen's comments as indicative of a thenps a more hawkish fed we have been experiencing. i found her comments particularly on the idea she does not want to run a hawk economy as an experiment. what was your take on this? mohamed: if i was to put it in one phrase, it would be beyond data dependence. i think the fed took a small step beyond being just data dependent. now it didn't come in the statement. if you look at when markets moved, they actually moved to during the press conference and , that is part of what you said, she walked back to the notion of high pressure. so people said, wait a minute. are we not just seeing a slight a rateexpectations for
hike, but in addition, this could be a fed that is tighter than we thought otherwise. i think that is what moved the market. it wasn't really much the statement as much as the press conference. reporter: have you been surprised with the swiftness with which markets have reacted to the prospect of higher inflation, fiscal stimulus from donald trump? seems like a switch was flipped, and we completely switched from the era of low inflation to , low economic growth to something new. mohamed: no, because i have always had this notion we were at artificial levels, this notion of a beach ball that you hold underwater, and at some point you let go, it shoots up much faster. no w, we were at artificial levels. now there is clear indication that the fed is less willing to keep interest rates artificially low, and the markets are reacting. now most of the action has been, as you say, on the interest rate front and from the currency front. it is going to be interesting to see what are the consequences of all that. reporter: where does this leave equity markets? mohamed: what i think is clear
is that we are in the midst of a big romancright now with three elements, higher growth, higher inflation, and more liquidity coming into the markets. why? because of the policy announcements so far of donald trump the president-elect. he has focused on elements that are progrowth, pro-inflation, and this concept of you are going to bring back money to the states, part of which will end up in the market. that is what the markets are focusing on rather than policy, in that is what has taken us such a big way over the past five weeks. reporter: now that trump is heading to the white house, and we have the potential for fiscal stimulus, how comfortable do you feel with not just equity markets, but the wider market stability, the ability of the market to handle that shift in the narrative? mohamed: i think that this pivot from overreliance on central banks to a more comprehensive policy approach is way overdue, way, way overdue. why?
because we have seen the benefits of monetary policy come down, and the costs and risks go up. and the market, sensing this pivot, and is just sensing this pivot. all we have had is an announcement. we have not had implementation. that is a good thing for the economy. reporter: is there a potential that the market has gotten ahead of the agenda? given as you say, we don't know , the details. we don't know whether it will actually happen. mohamed: there is potential if announcements do not translate into detailed design. which is tricky, and then sustain implementation. yes the markets have gotten , ahead. there is also another possibility that the markets have gotten ahead. we have only heard about the pro-growth program. there has been no repeat of the rhetoric that worried the markets so much through the elections. reporter: i wonder how much benefit of the doubt you are giving donald trump and all of
those energy related appointments we are seeing, especially sitting in your seat in dubai there, as oil is really front and center to that region and really, truly around the world. mohamed: i can only comment on the economic appointment, because these are the people that i will know, and i will give more than the benefit of the doubt. he has gone to people who are experienced. they are pro-growth. and as long as they surround themselves with colleagues who know how governments work, that would be important policy team. on oil, the major issue really is supply-side at this point. it is the extent to which opec has forged a different agreement, and different in two ways. one, it has a much more explicit inclusion of non-opec members. anchored by russia, which accounts for half of the cuts on the non-opec side, and that his is anchored by commitment at the very highest level in russia. and second, within opec, this is a much more flexible agreement. it differentiates much more among opec members. so i think the major change on the oil side is really from the supply side rather than the demand side.
>> i'm caroline hyde, this is the best ofwhere we bring you t interviews from this week in tech. coming up, the u.s. hits russian officials with sanctions over what washington said was an unpress dened interference with the presidential election. plus, the rice of the robots -- rise of the robots and whether a.i. can peacefully co-exist inside america's