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The gcc’s monetary policy of keeping up with the Joneses is firmly in place. It is steadily tightening, in line with the Federal Reserve’s latest rate increases. On March 16, the bloc’s central banks hiked interest rates by 25 basis points right after the Fed did. Although the GCC currencies’ peg to the dollar has been a long-term priority, this time, there are still pockets of weakness in global crude oil prices. This means that growth in the GCC may not keep up with monetary tightening. Moreover, higher interest rates have a chilling knock-on effect on borrowers. Those who can’t stand higher borrowing rates are left out in the cold. Small-to-medium enterprises in particular are feeling the squeeze. Faced with the steadily rising bank rates, these businesses have some tough decisions to make. Some may decide to sacrifice growth for savings on interest payments.

It’s a puzzle currently faced by many sectors of the economy. Since tightening began at the start of 2017, businesses in the tourism sector face the challenge of a higher dollar making destinations like the UAE more expensive. This pressures tourism revenues and growth plans. With further interest-rate hikes expected throughout the year, pressures on the tourism sector are likely to increase.

On the other hand, there is an upside for one important sector: banking and financial services. Higher interest rates are good for the banking sector. That’s why US banks are benefiting the most from the tightening cycle, as their margins are higher. But US fundamentals are more robust than the GCC bloc. The economy is more diversified and unlike the GCC countries, is not in the middle of extensive reforms. So, for the GCC countries’ banking sectors, increased interest rates may not lead directly to higher margins. This is because the main factor to consider is not margins, but the willingness of companies to borrow. It’s true that deposits and demand for bank bonds may increase because of the more attractive yields. Still, this doesn’t feed into income from borrowing rates.

Foreign investors are likely to be attracted by higher interest rates in the GCC countries. But then again, there is a drawback for government-issued debt. Considering the higher yields, debt issuance is expected to fall. This means reduced income from sovereign bonds at a time when revenue is needed for diversification. The more hikes there are this year, the more sovereign debt will cost the GCC states in the future.


DUBAI: Crude oil prices have fallen 10 per cent from their 2017 peaks despite a lower US dollar after the March Fed rate hike and lower US Treasury bond yields. This has happened because the world oil market has concluded that the Saudi Arabia-brokered Opec and non-Opec output cuts since December have not been deep or sufficient to offset the rise in US inventories and US shale oil output. There is also evidence of friction between Saudi Arabia and Russia on the Kremlin’s failure to cut its promised 100,000 Urals barrels in February as well as Iraq’s ambition to expand production to five MBD. Baghdad argues that its 220,000 output cut is unfair because the Iraqi army is engaged ina battle to defeat terrorists in Mosul while the Kurdish regional government in Erbil exports 600,000 barrels to global markets via land routes to the Turkish oil terminal at Ceyhan on the Mediterranean coast.

The fall in Brent crude below the psychological level of $50 and US inventories above 528 million barrels gives Saudi Arabia the political cover to roll over the Opec cuts at the next meeting in Vienna on May 25. The last thing the kingdom wants or needs at a time of fiscal austerity, Eurobond new issuance, economic restructuring and the endgame to Saudi Aramco’s floatation is a new 2015-style collapse in oil prices below $30 or lower. Russian President Vladimir Putin and

Iraqi Prime Minister Haider Abadi have no strategic choice but to boost compliance with last November’s output deal if they want Saudi Arabia, UAE, Kuwait and Qatar to continue to act as the “swingproducers” of the Opec in 2017. Despite Saudi Oil Minister Khalid Al Falih’s complaints about Russia and Iraq at the CERA energy conference in Houston, the royal court in Riyadh has issued successive statements that reaffirm the kingdom’s commitment to last November’s Opec agreement and affirmed the logic of a May 25 roll over.


Saudi Arabia’s finance minister has said that citizens would not pay taxes on income and Saudi companies would not see their profits taxed under sweeping economic reforms being introduced in the Kingdom. The collapse in oil prices after mid-2014 has pushed Saudi Arabia to contemplate a radical overhaul of all parts of its economy, including new taxes, privatisations, a changed investment strategy and sharp cuts in government spending.

Mohammed Al Jadaan sought in a statement carried by state news agency SPA to allay concern that people would be taxed as part of the ambitious reform plan. Saudis currently do not pay any income tax, nor are Saudi companies taxed on their profits. He also said a value-added tax planned for 2018 would “not be raised above 5 per cent before 2020”. The six-nation Gulf Cooperation Council are aiming to introduce a 5 per cent value-added tax at the start of next year to raise non-oil revenues. But economists and officials in some countries have said privately that simultaneous introduction in all countries may not be feasible.

EXPO 2020

Manufacturers of Arabic perfumes, essential oils, bukhoor and other fragrances from across the GCC will have a global platform to showcase their talents by producing scents for Expo 2020 Dubai.

The Expo on Sunday launched its search for producers of fragrances, from international brands to small, artisan producers in the Gulf. In the UAE alone, the market for fragrances was estimated at Dh1.5 billion in 2015, according to figures compiled by Euromonitor International for last year’s Beautyworld Middle East exhibition. The

Middle East and Africa beauty and personal care market – the fastest-growing beauty market in the world – had a retail value of Dh100 billion.

Expo 2020 Dubai is offering producers of Arabic fragrances a chance to tap the millions of people from outside the region who will visit the destination during the six months from October 2020 to April 2021. The products will be sold at selected outlets across the UAE, including dedicated Expo retail stores, as well as at the Expo site.

This is the third of up to 40 licensed product categories put out to tender by the Expo following the launch of campaigns to find manufacturers of souvenirs and food products. Najeeb Al Ali, executive director, Bureau Expo 2020 Dubai, said: “Expo 2020 Dubai will be a global destination and we are looking for fragrance producers to come forward as we want a range of scented items that will reflect the varied tastes of our millions of visitors.


TEHRAN- Iranian President Hassan Rouhani will officially inaugurate four petrochemical projects in the coming days, IRNA reported.

These projects will add two million tons to the country’s annual petrochemical output and $2 billion to its value. As National Petrochemical Company (NPC) Managing Director Marziyeh Shahdaie has previously announced, with all unfinished projects coming online the country’s petrochemical industry will witness a significant boost and annual production capacity is going to reach 72 million tons. “Petrochemical output is expected to exceed 59 million tons in the current Iranian calendar year (started on March 21) which will be an 18 percent increase year on year,” according to Shahdaie. NPC also plans to export 23 million tons of petrochemical products, worth $11 billion, in the current year. According to Shahdaie, Iran exported about 19 million tons of petrochemical products, worth near $10 billion, in the previous calendar year.


The governor of the Central Bank of Iran (CBI) Valiollah Seif announced on that banking loans paid to various Iranian economic sectors witness a 40-percent rise in the past Iranian calendar Year 1395 (ended March 20, 2017), as compared to the preceding year. More than 5 quadrillion rials (about $133 billion) of banking loans have been paid to various Iranian economic sectors in the said time, IRNA quoted Seif as saying.


The UAE’s popular ‘Concept Big Brands Carnival’, or CBBC, opened owith overwhelming response as residents thronged Sheikh Maktoum Hall, Dubai World Trade Centre, to avail benefits on shopping of luxury brands, high-end European and other brands at a minimum discount range of between 40 and 90 per cent.

“The UAE has been a very promising market and we have witnessed substantial growth over the past few years. As a platform that is conceptualised for the best benefit of consumers and brand retailers, CBBC bridges demand and supply of high-end brands in our market,” Vijay Samyani, founder and managing director of Concept Brands Group, told Khaleej Times.

“Over the 13 years, CBBC has attracted over a million shoppers from GCC with participation from hundreds of international brands. This year, we expect about 80,000 shoppers and we are all set to make their experience an unforgettable one.” The UAE’s largest fashion and beauty event – which first started in 2004 – inaugurated its 54th shopping extravaganza on Thursday with the special appearance by Bollywood’s veteran actor Govinda. The group last year organised about 14 carnivals, a number that is expected to go up to 18 this year. The carnival will expand its footprint to Oman and Kuwait this year. “Our aim is to make expensive brands available to UAE residents at affordable prices,” added Samyani. The five-day fair – which offers free entry – features a range of products over 300 world-class brands, including Hugo Boss, Lacoste, Emporio Armani, Nike, Vintage, Michael Kors, Versace, and Calvin Klein, among others. This year, two new entrants include Desigual and Scotch & Soda.


Etisalat regrets the inconvenience caused to its customers on Friday, 27 January 2017, when some of its subscribers experienced service disruption. As a token of appreciation for its customers’ understanding, loyalty and long-standing support, Etisalat is offering 1GB of mobile data and 120 local free minutes for affected customers. Etisalat mobile customers who experienced service disruption can avail the free offer by dialing *103#. A press release issued by the telecom giant said that the offer will be accessible from Friday February 3 until Wednesday, February 8 2017. Customers can access the benefits of free data and minutes on the day of subscription. In addition, Etisalat will open free access to more than 60 premium channels to eLife TV customers on February 3 and 4 (Friday and Saturday), 2017.


The vital role played by the Commercial Compliance & Consumer Protection (CCCP) sector in Dubai Economy in protecting intellectual property (IP) has won praise from tech giant Apple Inc. Ed Wilkie, Apple Senior Intellectual Property Legal counsel for Europe, Middle

East, India and Africa recently honoured officials and Intellectual Property Rights Protection inspectors from CCCP for their efforts and professionalism displayed in protecting the Apple brand and in combatting commercial fraud and counterfeiting.

Mohammed Ali Rashed Lootah, CEO of CCCP, also received a message from Scott Gelin, Director, IP Enforcement (Global) at Apple Inc. praising the efforts and commitment of Dubai Economy in ensuring commercial compliance and consumer protection. The role of IP protection in sustainable economic development and the negative health impacts of counterfeit goods were mentioned prominently in the message. “Apple Inc. is a global leader in the design and manufacturing of consumer electronics and computer software products. It has a major market share in Dubai and the UAE, which is also home to the first two Apple Stores in the Middle East,” commented Lootah. “Dubai Economy and Apple have a long history of joint campaigns aimed at tackling commercial fraud and counterfeiting. The recognition that CCCP has now received from Apple is a demonstration of our continuing co-operation in eliminating threats facing traders as well as consumers.”

Lootah added that Dubai Economy will continue its efforts to enhance happiness and satisfaction among businesses and investors through improved services and stronger IP protection, which he said will also raise the emirate’s profile as a regional and global commercial hub. Ibrahim Behzad, Director of the Intellectual Property Rights Protection in Dubai Economy, said: “We are delighted to be honoured by Apple, which confirms our keenness to support businesses in theemirate by investigating the phenomenon of counterfeiting as well as confiscating and destroying counterfeit goods thus eliminating the risk of financial loss as well as health hazards.”

Behzad added that CCCP maintains round-the-clock vigil to protect intellectual property and conducts random inspections, field visits and investigation to detect counterfeits.

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