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Mar 06 - 12, 2000

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

Call to end Japan's contract with Kuwait

Kuwaiti members of the parliament have urged the government to follow Saudi Arabia's example and reject the renewal of a lucrative concession that has granted to the Tokyo-based Arabian Oil Company four decades of oil drilling rights.

Addressing the Assembly session, MP Saleh Al Fadalah, said the AOC had milked Kuwait for forty years while the Kuwaiti government was just watching. "Can you do what Saudi Arabia has done?" he asked oil minister Sheikh Saud Al Nasser Al Sabah referring to the Saudi cancellation of the concession rights.

The AOC's 40 year-old drilling concession expired on February 28 as Japan refused to fund a two-billion dollars railway project demanded by Saudi Arabia in return for renewal of the concession. But Japan declined to comply.

MP Adnan Abdul Samad told the house that Saudi Arabia cancelled the AOC agreement in its national interest.

Saudi annual gold sales at $5bn

Gold merchants and gold jewellery makers in Saudi Arabia estimate the sales of gold in the Saudi market at 5 billion dollars annually, 75 per cent in the form of jewellery and ornaments.

They said the slump in gold prices had encouraged Saudi investors to establish factories and workshops for making gold articles. There are now 40 major factories and 300 specialized workshops in Riyadh alone.

According to available statistics, the average per capita consumption of gold in Saudi Arabia is 30 tons higher than in India which is listed among the highest gold consuming countries in the world. India consumed more than 75 tons of gold last year.

Arab League rejects any split of Comoro Islands

Arab League chief Esmat Abdel Meguid said the League rejects the separatist designs of one of the Comoro archipelago's three islands.

The Cairo-based organisation supports the "unity, integrity and sovereignty of the Comoran territory ... and rejects any attempt by any of the three islands to separate," Abdel Meguid told.

The archipelago, one of the Arab League's 22 members, has been afflicted by a row over separatist demands by the leadership of one of the three islands, Anjouan, which has declared its independence from the Moroni government.

Oil near nine-year peak as producers meet

Crude oil prices eased slightly on Thursday to just under post-Gulf War highs as ministers from three leading producer countries met to discuss future oil output policy under pressure from the West to calm prices.

Ministers from major producers Saudi Arabia, Venezuela and Mexico were meeting in London to discuss how to ease the supply limits they masterminded a year ago, which have drained world oil stocks and trebled prices.

The producers have come under increasing fire from the United States, the world's biggest oil consumer, as US crude prices raced to $31.50 — a level unseen since the crisis over Iraq's invasion of Kuwait in 1990.

Global benchmark Brent blend for April delivery hit a nine-year high of $29.14 per barrel on Wednesday, driven up by fears over a shortage of gasoline in the run-up to the summer in the United States, when motorists take to the roads for their holidays.

Prices were down about 50 cents on Thursday as speculators banked their profits and after Iraq said it would keep exporting oil after reaching the $5.26 billion limit under the current phase of sales under UN sanctions.

Delegates from OPEC have said the producers meeting in London are set to propose that the Organisation of the Petroleum Exporting Countries raises output by 1.2 million barrels per day from April 1, and would consider the release of an additional 500,000 bpd if prices did not fall too sharply.

The plan would also see Mexico, which is not a member of the OPEC raising production by 90,000 bpd.

Call to revive Arab Maghreb Union

Maghrebian economists have called for reviving the Arab Maghreb Union (UMA), which has been unable to take off as a full-fledged regional grouping because of political differences between its five members.

The call was made by economists from Algeria, Libya, Mauritania, Morocco and Tunisia, attending a conference on procurement markets in North Africa in Rabat last week.

They said economic integration is the sole condition for the five small nations to survive in an international context, marked by an increasing globalisation.

The UMA, set up in Feb 1989 by Algeria, Libya, Mauritania, Morocco and Tunisia, has been botched up by strained relations between Morocco and Algeria over the Western Sahara issue.

Morocco accuses Algeria of backing and hosting the Polisario (El Frente Popular par la Liberacion de Sagiat Al-Hamra y el Rio de Oro), which claims sovereignty over the Western Sahara, a former mineral-rich Spanish colony controlled by Morocco since 1975.

No figure is available on global trade among the Maghrebian nations, but independent estimates say they remain very low.

Morocco's overall trade with its four partners, for instance, stood at three billion United States dollars in 1998, representing 1.8 per cent of the country's foreign trade.

Abdelaali Meknassi, a Moroccan economist, said Maghrebian countries, who have complementary economies, have to be aware that integration is the best path to take to treat the acute economic ailments hitting them.

World Bank 1998 figures show that per capita income in the Maghreb stands at 6,700 US dollars in Libya, 5,600 in Tunisia, 4,700 in Algeria, 3,200 in Morocco and 1,890 US dollars in Mauritania.

Israel breaks off contacts with Egypt on gas deal

Israel said Wednesday it has decided to break off contacts with Egypt over a possible contract for the supply of natural gas following the discovery of gas fields off its own Mediterranean coast.

"During the next few months we will examine the true potential of the recently discovered fields. Until we have done that we will freeze contacts with Egypt," Energy Minister Eli Suissa said in a statement.

Suissa said he had been waiting for eight months for his Egyptian counterpart to fix a meeting on a deal that had been expected to involve the Palestinians and also, eventually, Lebanon and Syria.

Israel had faced pressure to back off from the deal from developers of a gas field discovered off the southern port of Ashkelon in October.

Bank sees recovery in Syrian economy

The author of a new report on Syria's economy predicted that the recession of the past three years would ease in 2000, aided by higher oil prices and the country's partial recovery from drought.

"The outlook is positive. We are also encouraged by the introduction of technology, such as mobile telephones and movement towards modernisation," said Rana Shalaq, economist at Bank of Beirut and the Arab countries.

Her bank's report said the economy continued contracting last year from a gross domestic product (GDP) of $15.6 billion in 1998 and $16.5 billion in 1997, although there was no exact 1999 figure.

Kuwait stock index slips to more than 4 year low

Kuwaiti share prices took another battering on Tuesday with the main index falling to a new year low and its lowest level in some 4-1/2 years.

The KSE has been facing a downward trend since 1998 mainly due to an economic recession triggered by earlier low oil prices, lack of investor confidence, slow movement on long- promised market and economic reforms and legal battles between key investors. The Kuwait Stock Exchange (KSE) index ended the second day of trading this week down 4.5 points at 1368.5, compared with a previous year low of 1,372.2 on February 23.

The index shed 1.3 per cent in February and is currently 5.1 per cent down from the start of the year and 51.7 per cent below an all-time high recorded in November 1997.

Iraq, Turkey to significantly boost bilateral trade

Iraq and Turkey are hoping to boost bilateral trade by more than 10 times to an annual $2.5 billion, taking it back to levels before the UN imposed sanctions on Iraq for its 1990 invasion of Kuwait, officials said.

"We have both an objective to approach that figure," Iraq's Oil Minister Amir Muhammed Rasheed told reporters after signing an agreement with visiting Turkish State Minister Edip Safter Gaydali late on Tuesday night.

The two sides agreed to continue discussions on how to boost their trade in the fields of food, health, agriculture, industry and electricity, Rasheed said.

Lightning hits storage tanks

Lightning hit two crude oil storage tanks at Jordan's sole refinery, starting a fire that caused minor damage, officials said.

The refinery in Zarqa operated as normal and its crude processing units were not affected as the fire was quickly extinguished, Jordan Refinery Company officials told Reuters.

The two tanks held around 33,000 tonnes of crude. The refinery processes around 11,000 tonne of crude daily, transported by trucks from Iraq.

Bahrain, Iran signed agreement

Bahrain and Iran signed an agreement to boost trade cooperation in a further sign of warming relations between the two Gulf states.

Bahrain's official Gulf News Agency (GNA) said the two countries signed memorandums of understanding on economic, trade, environmental and sports cooperation.

Iranian Commerce Minister Mohammad Shariatmadari, who arrived in Manama on Tuesday to attend the first meeting of a joint Bahraini-Iranian economic committee, said his meetings with Emir Sheikh Hamad bin Isa Al-Khalifa and Bahrain's crown prince were fruitful, GNA said.

Kuwait grants to Lebanon

Kuwait will grant more than 16 million dollars to help rebuild power stations destroyed by Israeli air strikes on February 8, Kuwaiti ambassador Mohammad Said Al-Sallal said.

Sallal said Kuwait "has decided to offer five million dinars, or more than 16 million dollars, to help repair destruction inflicted by the Israeli aggression against electrical installations." Sallal was speaking to reporters after a meeting with Lebanese President Emile Lahoud.

Kuwait to cut oil production

OPEC member Kuwait has told customers it will cut supply through the second quarter of the year, even though OPEC has not decided policy for that period yet.

World markets — with steamy oil prices at nine-year highs above $30 per barrel — are looking for signals about OPEC's output policies after March, when the current policy of holding back crude is due to expire.

Libya scraps energy ministry

Libya's General People's Congress scrapped the energy ministry as part of a devolution of power to provincial bodies.

But the National Oil Company (NOC) will remain at central level and will be controlled by a reduced central General Popular Committee.

The restructuring was approved by Congress whose debates were broadcast by Libyan state television monitored in Tunis.

Orascom acquires Telecel

Orascom Telecom announced it has signed an agreement to acquire 80% of Telecel International, one of the largest independent GSM mobile operators in Africa, according to a press release by Spot On Public Relations dated Feb 28.

Mideast urged to integrate with world economy

Arab states are less integrated with the world economy now than they were 20 years ago and require speedy reforms to catch up, the head of the Dubai Chamber of Commerce and Industry (DCCI) said. "The degree of openness of the region's economy was 81 per cent back in 1980...It (had) sharply dropped to 44.3 per cent in 1998," DCCI Director General Abdul Rahman Al-Mutawii said.

Mutawii, who was addressing a banking conference, said the decline in economic openness was clear evidence of weak competitiveness in the region.

He said further evidence was low direct foreign investment which he put at $2.2 billion in 1996, only a fraction of the $100 billion flowing to developing countries during that year.

Mutawii said the Middle East's economic base was "non-diversified and mono-cultural", with oil as the dominant export.

He said regional states could only catch up with the world economy through promoting foreign trade and international capital flows.

Locomotive deal with France

Iran's government has endorsed a contract with France to buy 100 diesel-electric locomotives from builders Alstom for 192 million euros (dollars) to boost the country's railway services, officials said Monday.

The deal, funded by a consortium of French banks, was signed for the first time in December 1997 then scrapped for budgetary reasons. It was revived in October last year when Iran's President Mohammad Khatami visited France.

Libya seeks Malaysian oil

Libya is pitching for investments from Malaysian oil company Petronas and carmaker Proton as part of efforts to strengthen trade relations.

Abdel Hafeez Mahmoud Elzelini, secretary of the Libyan General People's Committee for Economy and Trade, blamed previous United Nations economic sanctions on Libya for the low-key trade situation.

The official Bernama news agency, which Monday ran a weekend interview with the visiting official, said Malaysia's trade with Libya shrank to 23.5 million ringgit (6.18 million dollars) last year, from 34 million ringgit in 1998.