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May 01 - 07, 2000

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

S. Arabia to scrap sponsorship scheme

Saudi Arabia plans to abolish regulations that stipulate foreigners must have the sponsorship of a Saudi national or company to do business in the kingdom, the Saudi defence minister was quoted on Thursday as saying.

Prince Sultan made his comments to reporters on Wednesday, Saudi newspapers said on Thursday in identical reports.

"The sponsorship system is to be cancelled and the method of cancellation will be announced soon," the papers quoted Prince Sultan as saying.

Prince Sultan did not give details or say whether sponsorship would be abolished for all foreigners in the kingdom. The latest figures show that some 7.2 million expatriates work in Saudi Arabia.

It was also not clear if the defence minister was referring to a new foreign investment law, which grants foreigners full ownership of projects and related property in the world's biggest oil exporter.

The law, approved earlier this month, stipulates that a foreign investor and his non-Saudi employees would be sponsored by their project.

Until now, foreigners had been limited to 49 per cent stakes in ventures and barred from owning property. All foreigners also need to be sponsored by a Saudi national — which investors complained hindered their activities.

The law appeared to address the main concerns of foreigners keen to invest in the kingdom but who have complained of red tape and restrictions on ownership.

Oman eases law on sponsorship

Oman is to allow foreign firms to open representative offices in the Gulf state without local sponsorship to speed up its accession to the World Trade Organisation (WTO).

"Foreign firms who want to have business representation in Oman do not need a local sponsor or to go into a joint venture with a local company anymore," a senior commerce ministry official said.

"The new law would work for foreign firms that need time to study and survey the market before making a business commitment," he said, adding foreign firms would still need sponsorship to sell or manufacture products .

Oman plans to privatise postal service

Oman plans to privatise its postal service as part of its efforts to transfer public utilities to the private sector, a senior Economy Ministry official said.

"We are planning to privatise the postal service to increase its efficiency and productivity in this growing sector" the official told Reuters adding that the move was part of the government's privatisation drive.

UAE, Egypt to boost ties in IT sector

Gitex Cairo 2000 was jointly inaugurated amid widespread fanfare by General Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Defence Minister, and Dr. Atef Obeid Egyptian Prime Minister at the Cairo International Conference Centre.

The two leaders agreed to cooperate in four areas: development and expansion of IT bases, cooperation in managing exhibitions, collaboration in the area of ports and outlets, and establishing training institutions.

Sheikh Mohammed said the UAE and Egypt would cooperate on all levels, especially in the fields of information technology and communications, leading to the use of more personal computer usage in the region.

Emaar posts net profit

Emaar Properties has posted a net profit of Dhl92.5 million for the year ending December 31, 1999.

Saudi Arabia to build $2.6b railway lines

Saudi Arabia is to build two railway lines linking the north and west of the kingdom to the Gulf coast at a cost of $2.6 billion, a transport ministry official said.

Abdullah Al-Muqbel, undersecretary at the transport ministry, told Okaz newspaper that the projects would be financed by the private sector and studies had already been completed.

Construction will take five years, he said, without giving a date for the start of work.

A 1,480-kilometre railway will link northern mines to the industrial city of Jubail on the east coast, passing through Riyadh, said Muqbel, whose country has the only rail system in the Arabian peninsula.

AFT to offer full range of solutions

Al FuttaimTelecom (AFT) is offering companies a complete range of communications requirements, voice data and imaging.

"This move was taken in response to the global trend of convergence and local market feedback," said Alan Rooke, AFT general manager.

Riyadh urged to bring in Saudi funds

Saudi Arabian businessmen said on Tuesday the kingdom, which this month approved a law opening its doors to foreign investors, needed to focus more efforts on attracting back billions of dollars held abroad by Saudis.

But they said the new law which included allowing foreigners to wholly own businesses in the kingdom for the first time, could create a better economic environment for Saudi and non-Saudi investors alike.

Iran to partially privatise oil sector

Iran plans to privatise major segments of its oil and petrochemical sectors as part of a drive to modernise the ageing industries, Oil Minister Bijan Zangeneh said.

"Our goal is to bring the energy industry up to date and increase productivity," Zangeneh said in a speech inaugurating an international exhibition of oil, gas and petrochemical technologies.

"The industry has historically been facing backwardness, and we should quickly make up for it and have a modern industry," he said of Iran's 90 year old oil industry, the main component of the Iranian economy.

Zangeneh said the government planned to invest $10 billion over the next five years to streamline its energy industry, including $4 billion for the petrochemical sector.

"We plan to change the structure of the energy industry and improve efficiency." he said.

The minister said low-technology industries in the oil sector would be transferred to the private sector, including those producing petroleum derivatives.

Privatisation would be more extensive in the petrochemical sector, covering all the refineries, he said. "We will actively support privatisation as far as the constitution allows us " Zangeneh said.

Iran's constitution, drafted after the 1979 Islamic revolution, places key economic sectors in state hands.

But the government of President Mohanamad Khatami has managed to circumvent legal hurdles and secure legislative approval for privatization of big industries, including oil and petrochemicals.

GCC sees end to aluminium tariff dispute

Gulf states are optimistic they will see progress on removing a six per cent duty imposed by the European Union on their primary aluminium exports by the end of the summer, a Dubai government official said.

"By the end of the summer we might be able to have a positive answer...provided the (Gulf Arab) countries continue to apply the maximum political pressure on the EU," Khalid Buhmaid, manager of strategic government affairs at Dubai's economic department, said.

Dubai has argued that the EU duty on Gulf aluminium exports is discriminatory as the EU has exempted a number of countries, while others must pay the tariff. But EU officials say primary aluminium is also important for EU-based aluminium producers.

Abu Dhabi mulls Dh100m firm

Abu Dhabi authorities are studying the setting up of a Dh100 million new firm, aimed at improving standards in driving, security on the roads and imparting specialist skills for trainers.

The proposed company will have a capital of Dh100 million. While the Abu Dhabi Government will hold a 30 per cent stake, police officers of Abu Dhabi will have another 30 per cent stake. A national insurance company will hold a 24 per cent stake and the training school will take the balance 16 per cent.

E-business advantages

Dubal Adopting e-business practices offers the best route to further activate inter-GCC trade, and allow small and medium enterprises to expand into the global markets, according to the secretary-general of the Federation of GCC Chambers.

And businesses can do so at minimal costs compared to what these would have been in the more traditional economies of the recent past said Mohammed Abdulla Al Mulla.

The changes that have been brought about by the digital economy would build competition among the states and companies.

Privatisation talks

Saudi Arabian Airlines is holding talks with international consultants on privatising the airline and expects to finish studying proposals within months, a senior official said in remarks published.

Qatar utilities body to slash 5,300 jobs

The newly-formed Qatar General Electricity and Water Corp (QGEWC) will slash 5,300 jobs, or two-thirds of its workforce, for low productivity and implement a policy to employ more Qatari nationals, newspapers reported.

Energy Minister Abdullah Al. Attiyah said staff from the defunct electricity and- water ministry will be cut from 8,000 to 2,700 as part of a plan to make the new corporation leaner more efficient and customer-friendly, the Gulf Times said.

Kuwait's '99 trade surplus jumps 130pc

Kuwait's current account surplus rose by 130 per cent, or 883 million dinars ($2.87 billion), to 1.558 billion dinars in 1999, the Central Bank said on Tuesday.

Central Bank figures showed 1998's revised current account surplus was 675 million dinars.

Central Bank figures said the broad balance surplus was 713 million dinars in 1998. The value of Kuwait's oil exports in 1999 rose to 3.357 billion dinars from 2.582 billion in 1998.

Net capital and financial outflows by the general government and financial sector rose to 1.688 billion dinars last year.

Elf Petroleum Qatar to invest $350m

Elf Petroleum Qatar a part of Belgo-French oil giant TotalfinaElf, said it would invest $350 million over the next three years to expand oil production capacity at its offshore Al Khaleej concession.