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May 08 - 21, 2000

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

Saudi crown prince plans 55-day Latin America trip

Saudi Arabia's Crown Prince Abdullah plans a 55-day trip to Latin America for talks aimed at attracting foreign investment to his country, diplomats said on Wednesday.

They said the crown prince, who runs the day-to-day affairs of the world's largest oil exporter since King Fahd had a stroke in 1995, would begin his tour at the end of May.

Upon his return, King Fahd would probably leave for a holiday in Spain, his second since last year when he spent the summer at his palace in Marbella on his first overseas trip in five years.

Abdullah will visit Brazil, Argentina and Venezuela where he will discuss a summit of oil producers planned for September in Caracas.

The crown prince is seen as the driving force behind the kingdom's new investment law, which for the first time allows full foreign ownership of projects and related property as well as talks with foreign oil companies on investing in the kingdom's lucrative energy sector.

Diplomats say the crown prince is determined to see the kingdom diversify away from oil revenue and open up its economy to more private investment. A delegation of Saudi businessmen would probably accompany the crown prince on his trip, the diplomats said.

The Saudi heir apparent would also hold a one-day visit to neighbouring Yemen before his Latin American trip, they said.

It would be the first visit by a high level Saudi official to the Arab state since the 1991 Gulf War, when some Arabs saw Yemen as siding with Iraq which invaded Kuwait in 1990.

The diplomats said the aim of the trip was to give a boost to negotiations between the two countries over a border dispute going back to the 1930s. The two countries signed a memorandum of understanding in 1995, setting up several joint committees to try to resolve the dispute. Though the two sides have held border demarcation talks for several years, there has been little tangible progress.

Dubai clinches 20-year concession on Djibouti port

Dubai Ports Authority (DPA) signed a 20-year contract on Monday to manage and operate the port of Djibouti, during a visit to the Gulf emirate by Djibouti's President Ismael Omar Guellah.

It was DPA's third international port management contract, after Beirut and Jeddah in Saudi Arabia.

The Djibouti president, during a signing ceremony at Dubai's Jebel Ali port, stressed "the excellent location" of his country on East-West shipping routes and as a gateway to Africa.

Djibouti's underused 15-berth Red Sea port, serving a potential market of 380 million people on the Horn of Africa, can handle between 300,000 and 400,000 containers a year but its 1999 traffic amounted to only 120,000 containers.

Iran to issue visas

Iran opened a visa section on its Gulf island of Qeshm, a free trade zone with more liberal rules for foreign visitors, to boost tourism to the mainland.

The new Foreign Ministry office in Qeshm, which most foreigners can visit without a visa, allows visitors to secure a visa to the mainland, the official news agency IRNA reported.

"The move was taken because of the growing number of foreign tourists and businessmen travelling to the free trade zones.

They faced problem travelling to other parts of the country," Behrouz Boushehri, head of Qeshm free zone, told IRNA.

Oman holds trade fair

Oman opened its first trade fair in sanctions-hit Iraq, a country with which Muscat has kept good ties despite Baghdad's 1990 invasion of Kuwait.

Sudan now self-sufficient in oil

Sudan has stopped importing oil products and will soon begin exporting motor gasoline, or petrol, as a new refinery near Khartoum moves towards full capacity, an Oil Ministry official said.

Hassan Ali El-Tom, undersecretary at the ministry, told Reuters in an interview that the complex refinery with a residue fluid catalytic cracker near El-Geili, 70 km (44 miles) north of the capital, was now at 80 to 85 per cent of its 50,000 barrels per day (bpd) capacity.

Yemen says foreign assets rise

The Yemeni central bank's foreign assets rose 33 per cent in 2000 to more than $1.8 billion as a result of stringent economic reforms, a bank official said on Tuesday.

The official told Reuters that the foreign assets stood at $1.865 billion on May 4, up from $1.4 billion at the end of 1999, and $981 million at the end of 1998.

Iran economy grows

Iran's economy, dominated by oil production, grew by 2.4 per cent in the year to March, Central Bank Governor Mohsen Nourbakhsh quoted as saying on Tuesday.

Nourbakhsh said Iran's exports grew by 49 per cent to about $19.5 billion, including $16 billion in oil exports, in the year which ended on March 19.

Imports grew by 14 percent to about $12.5 billion, the official IRNA news agency quoted him as saying.

Ground set for economic revolution in Iran

Iran's parliament has laid the groundwork for wide-ranging privatisation, clearing the way for President Mohammad Khatami to end years of state controls, an influential Iranian deputy said.

But he warned that the oil-rich state's entrenched bureaucracy could block Khatami's five-year plan for the economy, announced last month to bring in market reforms.

Parliament recently approved much of the privatisation programme, targeting key energy, communication, banking and transport sectors for the first time since the 1979 Islamic revolution.

"Khatami's government got all it had asked for and more. Now the conditions are set from a legal perspective for the government to take long strides towards privatisation," Mohammad Baqer Nobakht told Reuters in an interview.

Nobakht is a senior member of the parliamentary commission which studied Khatami's economic reforms and is one of the reformist president's supporters voted into parliament in large numbers last February.

The state controls over 80 per cent of the economy. Past governments have defended state ownership, arguing the government is best placed to ensure the nation's interests.

After the 1979 Islamic revolution, its leaders seized private banks, insurance companies, major industrial units and land owned by the rich.

But the state-led policies of the past, inspired by the socialist overtones of the revolution, have brought the economy to a virtual standstill. The bloated state bureaucracy and huge subsidy programmes absorb much of the revenue from oil exports. Unemployment is rising, worsened by the scarcity of private investors and inefficiency in the public sector.

Saudi-Iran petrochemical cooperation urged

Saudi Basic Industries Corp (SABIC), the Middle East's biggest petrochemicals producer, said on Sunday cooperation with Iranian firms could help the industry in both countries compete globally.

The comments by SABIC Vice Chairman and Managing Director Mohammed Al-Mady at a conference in Tehran echoed calls by senior Iranian officials for more regional cooperation and reflects growing links between oil giants Iran and Saudi Arabia.

"We believe SABIC and Iranian producers can work together to mutual benefit, and we look forward to exploring various manufacturing and marketing options," Mady told the conference.

"Such cooperative efforts could become increasingly important in a more competitive petrochemical market environment," he said.

Iran, which is aiming to double annual petrochemical capacity to 30 million tonnes by 2005, could benefit from SABIC's sales network in Asia and Europe, Mady added.

Saudi calls off investment briefing

Saudi authorities have called off a briefing due on Tuesday for foreign oil companies aiming to invest in the country's energy sector, industry sources said.

The sources told AFP that the move would delay a second round of talks between 12 international oil companies and a Saudi ministerial negotiating committee that was due to take place six weeks after the briefing.

Arafat, Mubarak discuss

Palestinian President Yasser Arafat met Egyptian President Hosni Mubarak for talks that focused on renewed problems in Palestinian-Israeli peace negotiations in Israel.

"The current negotiations in Eilat were halted," said Foreign Minister Amr Moussa after the meeting between the two leaders. "He (Arafat) said the lack of progress in the peace process needs a renewed drive and look into the issue."

Kuwait seeks mediators

Kuwait has asked countries which have good ties with Tehran to mediate in a dispute over Iranian drilling in an offshore gas field claimed by the emirate, a Kuwaiti oil source said.

The source would not name the countries, but Kuwaiti Oil Minister Sheikh Saud Nasser al-Sabah last week paid a short visit to Saudi Arabia and delivered a message to Saudi leaders.

Gulf emirate sets up free trade zone

The Gulf emirate of Ras Al-Khaimah is to establish a free trade zone that aims to attract companies looking to trade with Iran and boost regional commerce, newspapers reported.

Foreign companies will be allowed 100 per cent ownership and goods will be exempt from customs duties and companies from taxes.

OPEC may leave quotas unchanged

Saudi Arabia's oil minister said on Monday if oil prices remain stable near current levels then the Organisation of Petroleum Exporting Countries may keep current output quotas when it meets in June, but this remains to be decided.

The minister, Ali Al-Naimi, speaking in Los Angeles, said he was happy with current oil prices but that it was premature to forecast what action would be taken when OPEC holds its next ministerial meeting.

"If the market stays as stable as it has been recently then we may do nothing in June but it remains to be decided," Naimi told a press conference ahead of a meeting of the World Affairs Council.