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Apr 03 - 09, 2000

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

Bahrain, Iran to establish new maritime link

Iranian Foreign Minister Kamal Kharazi announced that Bahrain and Iran, whose once-strained relations are constantly improving, are to launch a new sea link to facilitate trade, the official Gulf News Agency (GNA) reported.

"After the opening of the new airline route between Bahrain and Iran, the two parties have decided to launch a maritime link to help trade and business," Kharazi said on his departure.

He described his visit as "fruitful", claiming that relations between the two countries were about to enter a "new era", GNA said.

Israel, Syria may miss peace by 100 metres

After 52 years of conflict, Israel and Syria are only about 100 meters (yards) apart in the search for peace.

But those 100 meters on the northeastern shore of the Sea of Galilee, of huge symbolic importance but questionable strategic value, could yet cause a summer of bloodshed in Lebanon, the proxy battlefield between the Middle East's arch-enemies.

As the dust settles from U.S. President Bill Clinton's failed summit with Syrian President Hafez Al-Assad, it has emerged that Israel was willing to return the entire occupied Golan Heights up to the pre-1967 war ceasefire line, except for a strip roughly 100 meters wide along the lake.

"For the sake of those 100 meters, we could have another war, or at least a mini-war, in Lebanon this year," said a senior diplomat involved in the peace process.

Diplomats say the proposal Clinton put to Assad as Israel's best offer, which the veteran Syrian leader bluntly rejected, would have compensated Damascus by ceding the Al-Hama hot springs to Syrian sovereignty instead.

The sources said Barak argued, with apparent U.S. backing, that he could not win a referendum to ratify a peace treaty with Syria if he "gave away" the Kinneret, as Israelis call the biblical lake which is its main water source.

Clinton came close to publicly endorsing the Israeli position on Wednesday, saying the Jewish state had made quite a significant territorial proposal and it was up to Syria to respond now by saying how Israeli concerns could be handled.

"I don't think it's enough to say: "don't like your position. Come back and see me when I like your position'," he said in a direct swipe at Assad.

Saudi did not bow to US on oil output

OPEC powerhouse Saudi Arabia said it did not bow to US pressure to increase oil production and the output hike agreed on Wednesday by the organisation was in the interests of its people.

"It is painful to hear some Arab or foreign newspapers or some televisions talk of American pressure on the Kingdom of Saudi Arabia or any other country in the Gulf," Saudi Defence Minister Prince Sultan told reporters late on Wednesday.

"Consultation does not mean pressure and our consultations are based on the interests of our people. So I assert that the position of the kingdom does not change and will not change in any way that contradicts the interests of our people," he said.

Clinton welcomes OPEC deal, Richardson credits 'forceful' US

An untidy OPEC accord to ease high oil prices has revived political strains inside the cartel that could cost producers hard-won market control, analysts say.

Iran's defiant absence from a pact to raise output by seven percent bodes poorly for the implementation of a move agreed amid resentment inside OPEC about US pressure for cheaper oil.

The cartel's disarray may cause quiet satisfaction in Washington, where bad memories remain of 1970s turmoil when OPEC held the world to ransom during the Arab oil embargo.

But the result is the cartel, in its 40th birthday year, is looking uncomfortably like its fractious former self in contrast to a year of rare cohesion born of a 1998 price slump.

A leaky OPEC at odds over output policy could eventually torpedo US attempts to calm market volatility, they said.

"It's the bad old days all over again," said Geoff Pyne of Standard Bank in London.

"On paper the numbers look good for producers, but disunity can't be good for market sentiment.

The way it's been reached raises a question over the cohesion of the group."

Meanwhile, US President Bill Clinton welcomed a decision by OPEC to increase oil production as a "positive development." "Today's announcement that OPEC members will increase production is a positive development," Clinton said in a statement late Tuesday.

US Energy Secretary Bill Richardson described the accord as "good news for the American consumers" as well as for producers and the international community.

Iran slams US intervention in OPEC talks

Iran blasted a US diplomatic campaign to push oil cartel OPEC for higher supplies, but said it would raise crude output anyway.

"The US intervention was beyond expectations. Never in the history of OPEC has this been experienced before,"

Iran's OPEC governor Hossein Kazempour Ardebili told reporters. "There was a lot of resentment and a lot of resistance." Iran, OPEC's second biggest producer, opted out of a deal by nine other OPEC members to lift supplies by seven per cent. Iran had argued for a smaller increase, complaining of external political pressure to raise supplies.

Oil steady

An agreement by nine OPEC members to raise output by about seven per cent will not put huge pressure on strong oil prices but a hint of disunity has shifted market focus to potential quota cheating, analysts said.

Saudi and Iran on different paths US light crude oil futures for May delivery were last traded at $27.15 per barrel, up six cents from the New York close.

Oil prices had fallen 70 cents during the New York day on Tuesday in anticipation of an OPEC output accord.

Oman mulls

Oman is considering allowing up to 70 per cent foreign ownership of businesses in the Gulf Arab state as part of a review of its privatisation process, the Omani economy minister said on Wednesday.

"Participation of foreign investors (in privatisation) could go up to 60 or 70 per cent," National Economy Minister Ahmad bin Abdul-Nabi Mekki told a conference in Abu Dhabi.

Foreign ownership in Omani businesses is usually restricted to 49 per cent, although Omani officials have said special permission can sometimes be granted for higher stakes.

Kuwait NMTC

National Mobile Telecommunications Co (NMTC), Kuwait's second mobiles firm, recorded a net profit of 1.76 million dinars ($5.7 million) in its first year of operation.

Approve merger

Faysal Islamic Bank said its shareholders and those of Bahrain-based Islamic Investment Company of the Gulf have agreed on a proposed merger between the two banks. A Faysal statement said the shareholders approved the linkup at an extraordinary meeting, creating a new entity, Shamil Bank of Bahrain (Islamic Bankers), with a paid-up capital of $230 million.

Japan to lend Egypt $200 mln

Japan expects to lend Egypt about $200 million in long-term soft loans to fund wind power and social development projects, officials said on Monday.

Koji Fujimoto, executive director for Africa of the public sector Japan Bank for International Cooperation, told Reuters the projects arose from President Hosni Mubarak's visit to Japan last April. Loan agreements should be completed in two months.

National Bank of Jordan

The private Jordan National Bank has bought all five branches of Lebanon-Kuwait Bank in Lebanon for 22 million dollars, a banking official said on Monday.

The transaction which took place 10 days ago gives the Jordan National Bank an 85-per cent majority stake in the Lebanon-Kuwait Bank, the official who declined to be named told.

IslamiQ dot com goes on-line for Muslim investors

An Islamic finance website which hopes to become the number one Internet portal in the Muslim world went live on Monday.

IslamiQ.com will offer a broad range of banking, financial and insurance products and services to the world's 1.2 billion Muslims, as well as offering news, e-commerce and online shopping tailored to the Islamic market.

Under the Islamic religious code Muslims are forbidden from investing in any operation which pays or accepts interest — considered usury under Sharia law — and must also shun investments in companies involved with gambling and alcohol.

IslamiQ's founders, Malaysian-born Dr Hasnita Dato Hashim and Peter Farid Faisal, a Dutch Internet entrepreneur and convert to Islam, hope to tap into the

Islamic capital market — worth an estimated $150 billion and growing at 30 percent every year — which has hitherto been restricted in choice of "Sharia approved" investments and financial instruments.

Algeria offers to speed up transfer of foreign funds

Algeria, eager to lure foreign investors into its nascent stock market and buy stakes in firms scheduled for privatisation, has unveiled new rules allowing a speedier transfer of funds.

"Foreign investors in Algeria are entitled to expatriate their net profits. The transfer is authorised by the Central Bank within 60 days," the Central Bank said in a statement obtained on Tuesday.

Investors who own shares in local firms or are partners in joint ventures are allowed to transfer the sale proceeds of their businesses should they decide to disinvest altogether, the statement added.

French businessmen arrive in Iraq

A delegation of French businessmen arrived in Baghdad Monday with a view to sealing commercial contracts under the "oil-for-food" programme, a French diplomatic source said.

The French Businesses Movement (MEDEF), headed by Thierry Courtaigne, is to examine with Iraqi officials from Tuesday "the means of increasing cooperation" betweem the two countries, the source said.

Snamproggeti wins $200 mln Qatar oil contract

Snamprogetti, the engineering subsidiary of Italian oil group ENI, has won a contract worth more than 200 million dollars (206 million euros) from Qatar, the parent company said on Monday.

The contract, signed with the Qatar General Petroleum Corporation, involves the construction of equipment for the Dukhan offshore oil field on the west coast, ENI said in a statement. Deliveries were due in 2002.

Morocco sees worst drought

Morocco on Monday declared the 1999/2000 as the worst drought in a decade and said it expected wheat imports to rise 30 per cent to 5.2 million tonnes compared with last year.

Agriculture Minister Habib Malki told a news conference that Morocco would have to buy 4.2 million tonnes of wheat and one million tonnes of barley in the 2000/1 season. He said some 70 per cent of 5.3 million hectares of the country's arable land had been affected by the drought.

Tunisia hikes petrol prices

Tunisian petrol prices were hiked by between 3.0 and 5.3 percent, distributors said on Monday, following a steep increase in world crude prices.

They said the price of unleaded petrol and high grade petrol rose to 0.690 dinars per litre, a three per cent increase.

The price of leaded petrol rose five per cent to 0.650 dinars per litre, while the price of gasoil was up 5.3 per cent to 0.395 dinars per litre.

Drought to take toll on Iraqi agriculture

UN and Iraqi officials said on Saturday that Iraq was set to suffer an even worse drought this year than last, exacerbated by international sanctions.

The Iraqi Agriculture Ministry says the Tigris and Euphrates rivers have dropped to about 20 per cent of their average flow.

"Iraq has been hit by severe drought and there was no rain, which very seriously affected the agriculture sector, both for barley, wheat and other crops as well as animals," Amir Khalil, the UN Food and Agriculture Organisation's (FAO) Iraq representative, told a news conference.

"This year the rain came very late and up to now we have seen very dry weather," he said, adding that this year`s and last year's drought were the worst in Iraq this century.

"This is really serious situation and it needs very urgent and immediate action from all those concerned." Khalil said a lack of resources and equipment were hampering efforts by the FAO and the Iraqi Agriculture Ministry to soften the impact of the drought.

Algerian exports up

The value of Algeria's total exports rose 27 per cent to $11.9 billion in 1999 from $9.4 billion in 1998 thanks to increased oil prices on the world market, the Central Bank said.

Economy grew 4.5 pct—Minister

Yemen's economy grew by 4.5 per cent in real terms in 1999 and is expected to expand by about 5.5 per cent this year, Planning and Development Minister Ahmad Mohammad Soufan said on Saturday.

He told Reuters this growth had been achieved because of economic reforms the Arab state began in 1995 with the support of the World Bank and International Monetary Fund.