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Jun 19 - 25, 2000

Saudi, Mexico oil ministers hold secret talks

Oil ministers from leading exporters Saudi Arabia and Mexico were in private talks in the Netherlands on Wednesday to compare notes on how best to ease oil prices that are running near record highs. Reuters reporters at the venue for the talks said the discussions began at 1430 GMT after Saudi Arabia's Ali al-Naimi and Mexico's Luis Tellez arrived at about midday on Wednesday at Schiphol airport.

The ministers, close allies that led a year-long campaign in 1998 to lift low prices, were meeting just a week before OPEC is due to decide whether or not to lift exports.

The Organisation of the Petroleum Exporting Countries' leading producer Saudi Arabia wants to ease oil prices after the extra output that was supplied by OPEC in March failed to cap a rally. US oil prices rose above $33 a barrel on Thursday as dealers cited confusion over OPEC policy but later fell after news of the talks, ending at $32.75. Prices have risen almost a $3 over the past three trading days. Riyadh's key non-OPEC ally Mexico also wants lower prices and Tellez has made in recent days that he thinks OPEC should make available additional oil to world markets. OPEC must settle its differences on how to deal with prices that are well above its ideal range of $22-$28 a barrel.

Some other OPEC producers believe crude stocks are building quickly enough to avoid the need for more cartel oil. They blame a shortage of new green gasoline in the United States which on Wednesday pulled US gasoline futures to a new nine-year high of $1.09 a gallon.

High prices have been exacerbated by OPEC's decision last week not to implement a mechanism that would have released 500,000 barrels a day after a basket of its crudes rose above $28.

Industry sources have said that Riyadh believes 500,000 bpd is not enough to lower prices and that the group might need to add as much as one million barrels daily when it meets on June 21 in Vienna.

Big economic challenges facing Syria's Bashar

A story circulating in Syria tells how Bashar Al-Assad refused to pay four pounds out of a 14-pound ($21) taxi fare in London because he thought the driver had not taken the most efficient route.

The swift rise of Bashar to the helm of the Syrian government in succession to his father has raised hopes among businessmen that chronic mismanagement and state interference in the economy will come to an end.

Bashar is seen behind recent steps to corral corruption despite his reluctance to talk about reform in detail. He has made only general statements about the damage corruption does to growth and the need to spread the Internet widely in Syria.

Over the past few months a number of senior officials, including a former transport minister, have been sent to jail and their property confiscated. Hikmat Shehabi, Syria's army chief for years, left for the United States last week after allegedly being targeted for graft.

A new government regarded as being under the sway of Bashar came to office in March. It amended laws in order to allow possession of foreign currency and the full repatriation of capital in investment projects.

But private sector figures criticised this pro-investment programme as too vague and lacking a timetable.

Syria's $18-19 billion gross domestic product places the country on a level with Lebanon, a much smaller country with a largely free market.

The economy still relies largely on a good harvest and healthy oil prices, the source of most government foreign exchange. At a maximum of $1,000 per capita annually now, GDP has failed to keep up with population growth in recent years.

Iran prepared to share Caspian resources

Iranian President Mohammad Khatami told a summit of regional leaders Saturday that Tehran was prepared to share the natural and energy resources of the Caspian Sea in an equitable manner.

"To show our goodwill we are ready to adhere to the principle of sharing equitably the resources of the Caspian," Khatami said at the opening of a summit of the Economic Cooperation Organisation, which includes four of the five states bordering the Caspian.

Previously Tehran had only called for a collective legal framework to determine the distribution of the resources of the Caspian, which is rich in oil and gas reserves.

Khatami urged that the Caspian Cooperation Organisation, formed when the Soviet Union broke apart to produce five littoral states instead of just two, be reactivated to work out how a share system would operate.

Iran has refused to recognise bilateral accords on exploiting the Caspian's oil and gas and has lost a great deal of ground to its northern neighbours, particularly Azerbaijan, in doing deals with multinationals.

Saudi opens to applications for foreign investment

Saudi Arabia's General Investment Authority (GIA) has started accepting applications for foreign investment licences as part of a move to open up the kingdom's economy, the authority's head said.

The governor of the GIA, Prince Abdullah bin Faisal bin Turki, was quoted in recent press reports as saying the first "one-stop shop" for investors began operations on June 4 in the Red Sea city of Jeddah, with others due to follow.

The aim is to open up and make procedures speedy and transparent," the prince said, adding that the shops would cater for all investors in the kingdom.

The GIA was set up in April to provide the investment mechanism after the kingdom approved a foreign investment law, allowing foreigners 100 percent ownership of projects and ending a 49 per cent limit.

The law, aimed at promoting economic diversification in the oil-rich kingdom, also allows foreigners ownership of related property, relaxes sponsorship rules and lowers tax on foreign-owned projects to 30 per cent from 45 per cent.

Gulf emirate opens another free trade zone

The Gulf emirate of Ras al-Khaimah opened a free trade zone on Tuesday aiming to attract companies which trade with Iran and boost regional commerce.

"We invite foreign-owned companies ... or individuals or groups wishing to open a free zone establishment to explore the opportunities in Ras al-Khaimah," the zone's president, Sheikh Faisal bin Saqr al-Qassimi, told a press conference.

The first phase of the project cost five million dollars and covers an industrial zone of 117 hectares (290 acres) and a technology park of 71 hectares (175 acres).

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

"Our proximity to Iran, a large market, will be an incentive for many international companies to open operations here," Ossama al-Omari, the zone's project manager, said when the project was announced in May.

Yemeni official visits Iraq to discuss trade

Yemen's Transport Minister Abdul-Malek al-Sayani has arrived in Baghdad to discuss trade deals with Iraq under the UN oil-for-food programme, Iraqi newspapers reported on Wednesday.

They quoted the official Iraqi News Agency (INA) as saying that Sayani, who arrived on Tuesday, would deliver a message from President Ali Abdullah Saleh of Yemen to President Saddam Hussein.

Yemen has repeatedly called for an end to United Nations sanctions imposed on Iraq for its 1990 invasion of Kuwait.

Yemen, one of the poorest Arab states, angered Kuwait and other Arab nations and lost huge financial support for perceived backing of Iraq during the 1990-1991 Gulf crisis.

Dubai stock market climbs

The Dubai Financial Market (DFM) index moved higher in the week to Tuesday ending back at the level it was launched at in March after a boost from activity on banking stocks, traders said.

The index closed at 100.00 points in a shortened week due to a public holiday for the Prophet Mohammad's birthday on Wednesday. Last week it closed at 98.13 points.

Saudi's new economic vision may not please the US

The recent comeback in oil prices may have given the Saudis something to cheer about after the 1997 oil price crash when prices reached as low as $10 per barrel.

Yet Al-Saud, rulers of the Arabian Kingdom are facing up to new realities of unprecedented socio-economic and political developments facing their country today.

With the world's largest oil reserves, Saudi has played and continues to play a pivotal role on the world oil market. On the other side of the board stands the US as the world's largest oil importer.

Over the past several decades Saudi and the US seemed to have been in total agreement over world oil policy. But that no longer seems to be the case as the Saudis feel the costs of such an agreement may be too high to accept.

Cairo shares plunge

Cairo share indices plunged to new year-lows on Sunday, prompted by a collapse of key shares that provoked what brokers said was a state of panic.

Shares in one-time market leader Media Production City fell by the maximum five per cent allowed by the bourse, or 1.97 pounds, to 37.61 in low volume of 8,547 shares. Two weeks ago the stock was trading above 50 pounds, after a late March high over 70 pounds, in record share volumes that reached two million.

Brokers said investors were reluctant to buy as the last day for being eligible for the firm's 18 per cent capital increase was last Thursday.

Kuwait withdrew over $80 bln from reserve fund

Kuwait has withdrawn or held back a massive 25.5 billion dinars (83.6 billion dollars) from its "Reserve Fund for Future Generations" since it was set up in 1976, the finance minister disclosed on Sunday.

Sheikh Ahmad Abdullah Al-Sabah, in response to a parliamentary question obtained by AFP, said a large chunk of the withdrawals was made after Iraq's invasion of the oil-rich emirate in 1990.

The state withdrew 6.22 billion dinars (20.4 billion dollars) between August 1990 and March 1991, the duration of Iraqi occupation, "to meet most of the state financial requirements", he said.

By law, 10 per cent of oil-rich Kuwait's revenues are transferred into the reserve fund.

But the Gulf Arab state failed to transfer 1.54 billion dinars (5.05 billion dollars) representing the accumulated amount in deductions from revenues between 1990 to 1999, said Sheikh Ahmad.

Expats allowed to retire in Bahrain

Bahrain has decided to allow expatriate workers to retire in the emirate, a first in the oil-rich Gulf monarchies, as part of efforts to boost the private sector, newspapers reported on Sunday.

The interior ministry brought the new law into effect the previous day, laying down conditions.

"The system is being implemented in the wake of government directives to attract foreign investment and foster the commercial, tourism and real estate markets in Bahrain," said undersecretary Sheikh Rashid Mohammad bin Khalifa al-Khalifa.

Applicants must have worked in Bahrain for at least 15 years and hold a minimum fixed deposit or other investment of 5,000 dinars (13,100 dollars) in Bahrain, as well as a clean police record and health insurance.

Retired expatriates will be granted renewable five-year residency permits under their own sponsorship, unlike foreign workers who need local "sponsors" in the Gulf Arab states.

Iraq expects poor 2000 harvest

Iraq expects a poor harvest this year due to acute drought and a lack of fertilisers and equipment, a senior government official said on Saturday.

"Lack of fertilisers, agricultural machinery and the means of spraying planted areas, let alone drought, will badly affect this year's harvest," agriculture ministry undersecretary Basil Dalali told a news conference.

"Iraq is facing a severe drought for the second season exacerbated by the embargo, which has very seriously affected the agriculture sector," he said. Iraq has been isolated by UN sanctions since its 1990 invasion of Kuwait.

World Bank to investigate Industrial zone

World Bank President James Wolfensohn promised to investigate International Finance Corporation (IFC) funding of the Jordan Gateway industrial zone to be built along the Jordan River according to a report by the Mediterranean Free Trade Zone Monitor (MFTZ).

The location of the project, in undeveloped rural areas on both the Israeli and Jordanian banks of the Jordan River, has led to objections to the project by both Israeli and Jordanian environmentalists.

Internet online banking service

Jordan based Arab bank has announced a major advance in customer service through the introduction of an online internet online banking service, according to a press release.

The service provides customers with a number of services, such as accounts balance summary, account statement, fixed deposits-loans inquiry and funds transfer.

It also enables the customer to correspond with his-her branch via secure electronic mail, order a chequebook, and change the mailing address.