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Dec 27, 1999

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

Gulf Arabs largely indifferent by Y2K scare

After near total silence while the western world wrung its hands over a potential computer-bug-fuelled Armageddon, unfazed Gulf Arab states have in recent days given reassurances that they are Y2K-ready.

Most waited until the final approach of the millennium to tell their people that everything is just fine, but it is only in the banking centre of Bahrain and trading hub of Dubai that anything resembling real concern has emerged.

The public remains largely indifferent either way. The New Year coincides with the slow-down of the Muslim holy month of Ramadan, when the faithful fast from dawn to dusk, and people appear immune to New Year fever.

Determining the Gulf's real readiness for any Y2K-related problems is difficult. Information in this region is seen as a privilege not a right and the notion of accountability both in the public and private sectors is rare.

Dubai in the United Arab Emirates (UAE) appears to be one of the few prepared to tell the public what it is doing to meet emergencies.

Dubai's police force, one of seven across the UAE, has cancelled all leave and put its entire personnel on alert for December 31 and in the meantime has been carrying out drills to deal with possible air crashes.

A special Dubai committee overseeing Y2K preparations on Tuesday declared all vital services, including banking, telephones, public services and oil production, were Y2K ready.

But the Gulf's apparent lack of concern or inability to inform others has had some damaging repercussions for its business abroad.

UAE complains of Gulf dairy dumping

The United Arab Emirates has complained to its allies in the Gulf Cooperation Council (GCC) that dumping of dairy products by other Gulf Arab states is damaging its industry, local newspapers reported on Tuesday.

They quoted the head of the investment department at the Ministry of Finance and Industry, Mahammed Obaid Al-Mazroui, as saying UAE dairy producers had been complaining that they were facing unfair competition from other Gulf Arab producers.

"The Ministry of Finance and Industry has spoken to the (GCC) secretariat, explaining that local dairy companies have achieved good results over the past few years on the local market," the Arabic language al-Khaleej quoted Mazroui as saying.

"But this industry has begun to face some problems lately after some Gulf companies started selling their products at prices that are lower than those in the country of origin and those in the UAE," he added.

Mazroui said that dumping violated GCC regulations, which require member states to accord each other's products the status of a national product, but demand fair competition.

Saudi prince cuts Planet Hollywood stake again

A Saudi Arabian billionaire who pumped $10 million into the cash-strapped restaurant chain Planet Hollywood, for the second time has cut his stake in the company by more than 20 percent, a federal filing made public Tuesday showed.

Prince Alwaleed bin Talal now holds 10.14 percent of the Orlando, Fla.-based Planet Hollywood International Inc., down 21 percent from the 12.83 percent stake he held earlier this month, according to a US Securities and Exchange Commission filing.

Between Dec. 6 and Dec. 15, Prince Alwaleed sold 2.69 million shares for $188,811, the filing said. He now holds 10,167,000 shares of the restaurant chain.

He reported on Dec. 7 that he had reduced his stake about 23 percent from 16.77 percent to 12.83 percent.

Jordan seeks more oil cooperation with Iraq

Jordanian Foreign Minister Abdel Ilah Khatib said here Wednesday his country was looking to increase its oil cooperation with Iraq, the official INA news agency reported.

"Jordan hopes to boost cooperation in a number of sectors, particularly the oil and commercial sectors," he said after a meeting with Deputy Prime Minister Hekmat Mezban Ibrahim Al-Azzawi.

Azzawi, for his part, said Baghdad desired to "give priority to economic and commercial cooperation with Arab countries in order to serve our common Arab interests," INA reported.

Peugeot, Iran sign big car production agreement

French car manufacturer Peugeot and the Iranian company Irankhodro have signed an agreement for the production in Iran of up to 120,000 Peugeot 206 cars per year, the two companies said here on Thursday.

The agreement had been signed in Paris late on Wednesday, they said.

Saudi hikes spending on cautious 2000 budget

The Saudi government has announced Tuesday the year 2000 budget which reflects a much more comfortable fiscal position largely due to a surge in oil prices.

The budget boosts spending by more than one billion dollars and reduces the deficit by the same amount after the economy grew 8.4 percent in 1999.

Saudi Arabia said late on Monday that it would increase spending 12 percent in its 2000 budget, but still expected to slash its fiscal deficit thanks to sharply higher oil revenues, the Saudi Press Agency (SPA) reported.

In a statement issued by the cabinet, the world's largest oil producer and exporter forecast a 30 percent increase in revenues in 2000 to 157 billion riyals ($41.9 billion) against spending of 185 billion riyals, leading to a sharply lower deficit of 28 billion riyals.

The oil-rich kingdom forecast a 44 billion riyal deficit in its 1999 budget at a time when oil prices were at 25-year lows in real terms.

In a statement accompanying the budget, the Finance Ministry said the kingdom's actual deficit in 1999 was now expected to be 34 billion riyals, a 10 billion riyal improvement on the forecast.

The Finance Ministry also said higher oil prices had enabled the kingdom to slash its current account deficit by more than 70 percent to 14.6 billion riyals in 1999.

"The state's financial and monetary policy continued to preserve the stability of prices and the riyal exchange rate, which are considered the foundation for balanced economic growth," the ministry said.

SPA said the budget was approved during Monday night's weekly cabinet meeting, headed by King Fahd.

New Saudi power tariffs to bypass

Saudi Arabia's industry and electricity minister on Tuesday said some 95 percent of the kingdom's homes would not be affected by new tariffs due to come into force in mid-January.

"Homes where monthly use does not exceed 5,000 kilowatt hours, some 95 percent of them, will not see bills increase," Hashem Abdullah Yamani told the official SPA news agency.

The new tariffs are designed to reduce the burden on the government, which subsidises the power sector. The kingdom is close to merging its four regional power firms into one company in preparation for privatisation.

Iraq submits 40 oil contracts

Iraq has submitted 40 oil contracts to the UN sanctions committee and 19 have been approved covering exports of 93 million barrels of crude, the United Nations said in a statement Tuesday.

The contracts were the first to be submitted after a three-week suspension of Iraqi oil exports over a row with the United Nations. Exports resumed on Friday after a six-month extension of the oil-for-food programme.

"One loading was completed from the port of Mina Al-Bakr, totalling two million barrels with an estimated value of 47 million dollars," the UN office of the Iraqi programme said, in reference to the week up to December 17.

Saudi prince ups stake in Beirut hotel to 100 pct

Saudi tycoon Prince Alwaleed Bin Talal has doubled his stake in a new 120-million-dollar Beirut hotel to 100 percent, his holding company said in a statement Monday.

Kingdom Holding said the prince had acquired the remaining 50 percent stake in the Movenpick Hotel from the Al-Daher family, an influential Lebanese business group.

The beachfront 284-room hotel is to open in 2001 following the signing of building contracts with construction firms Bin Ladin and Al-Mabani, the statement said.

Prince Alwaleed, through his 30 percent stake in Movenpick Hotels and Resorts, has a string of interests in hotels across the Middle East and Africa. He also owns the George V in Paris.

Bahrain approves $47 mln German steel plant

Bahrain's government has approved in principle the construction of a 47-million-dollar steel plant by German firm Egon Evertz and a consortium of Gulf investors, the Gulf Daily News reported Monday.

The plant, which will have an annual production capacity of some 300,000 tonnes, "will produce iron beams and other iron materials used in the building construction industry," the newspaper said.

Its main market is to be Gulf Arab states, where demand for iron construction materials runs to some 4.5 million tonnes per year, a third of which is imported.

Qatar, Egypt call for Arab economic unity

Egyptian President Hosni Mubarak joined his host the Emir of Qatar Shaikh Hamad bin Khalifa Al-Thani in a call for economic unity in the Arab world, during a visit to Qatar Sunday.

"We must hold an Arab summit to close ranks," Qatar's ruler, Sheikh Hamad bin Khalifa Al-Thani, told the Qatari television station Al-Jazira, "We are going to enter into a new millennium and the next battle will be economic," he added.

Egypt's President Hosni Mubarak said: "The whole world has formed economic blocs. The future belongs to economic blocs. If the Arab nation doesn't form one it will be lost." Mubarak arrived in Qatar earlier Sunday on the second stop of his Gulf tour. He came to Qatar from Saudi Arabia and is scheduled to go to Bahrain Monday.

Investcorp buys stake in IWO for $135 mln

Bahrain-based investment group Investcorp said it had acquired a 79 percent stake, worth 135 million dollars, in US firm Independent Wireless One Corp. (IWO).

The remaining 21 percent stake in the mobile phone services firm, whose market covers 6.3 million people in the northeastern

Saudia, Al-Alamiah sign internet deal

Saudi Arabian Airlines (Saudia) and Al-Alamiah Internet and Communication Company (Alamiah.net) inked in Jeddah a one-year contract to operate and maintain the national carrier'sweb site, in a move that spells better online services and customer relations, according to a press release.

Under the terms of the agreement, Alamiah.net, a leading Internet service provider in the Kingdom, will use its technology resources and management capabilities to upgrade Saudia's online services and improve the company's web services.

World Bank gives first funding to Syria in 13 years

The International Finance Corporation said on Friday it was making a $1 million investment in a Syrian irrigation technology company, the first funding to that country by the World Bank in 13 years.

In a statement faxed to Reuters in Beirut, the IFC said the equity investment was in Arab Drip Irrigation Technology Company Ltd (Adritec, Syria), an affiliate of Adritec Group International (AGI), a regional holding company specialising in irrigation systems.

"The project marks the beginning of IFC's investment operations in Syria and is the first World Bank Group project there in 13 years," it said.

"The Syrian government agreed in 1997 to repay its arrears to the World Bank, opening the way for World Bank Group activities to resume." Syria is experiencing its worst drought since the 1950s.

Saudi Arabia to pay $746m to farmers

Saudi Arabia plans to start payment of more than 2.8 billion riyals ($746 million) in arrears to farmers for their 1996-1997 harvest next week, a cabinet member said.

The Saudi Press Agency (SPA) quoted Agriculture and Water Resources Minister Abdullah bin Abdul-Aziz bin Muammar as saying that King Fahd had ordered the payments to wheat and barley farmers for crops delivered to the Grain Silos and Flour Mills Organisation.

Oil prices slide further

Jittery oil prices fell further from recent highs after a surprisingly small decline in crude stockpiles in the United States, the world's biggest energy market.

Benchmark Brent crude for February traded 55 cents lower at $24.74 per barrel despite a tight supply/demand balance wrought by Opec supply restraint during industrialized countries' peak winter demand.

Standard Bank in London forecast continued price volatility as dealers wrestle with the spectre of a lengthy supply shortage that could send overheated prices shooting towards $30 a barrel.