Sep 04 - 10, 2000

Egypt outlines measures to kickstart economy

Egyptian Prime Minister Atef Obeid outlined a plan to kickstart the economy, including curbs on imports and a programme of support for "honest debtors" in arrears, in remarks published on Tuesday.

Obeid said in interviews with the editors of Egyptian newspapers that a key aim of the plan was to control the unhealthy increase in supplies of goods, especially imports, whose growth he said was "dangerous", having doubled in under 10 years. But he did not specify how imports would be controlled.

Obeid attributed the current market recession to money frozen in unsold goods and unused production capacities.

"Most of these capacities and goods were funded through borrowing...," said Obeid, adding that borrowers failed to sell their excess goods or reactivate their unused capacities and so they fell back on repaying their obligations to banks.

Egypt has suffered an intermittent pound liquidity crisis, as well as foreign exchange shortages, over the past year, which have been accompanied in recent months by an apparent slowdown in economic activity.

Corporate results have fallen short of expectations, the stock market has recently dipped to lows not seen for nearly four years, and the prices of core commodities like cement and steel have been depressed.

Another objective of the plan is support for honest investors who are falling behind on repaying their loans, so as to help pull the market out of its current recession, he added.

The remarks appeared to indicate that the banks would give some debtors more time to repay their loans, with government help. Egypt's four biggest state banks still dominate the banking sector. Analysts say some have problems with bad debts and that may be one factor delaying bank privatisation.

Iran moves to spend oil windfall on job creation

Iran is rushing to invest billions of dollars in surplus oil revenue to revive the stagnant economy and address chronic unemployment, officials said on Monday.

But economists say structural reform, not a big cash infusion, is the key to sustainable economic recovery.

President Mohammad Khatami's government has sought parliament's approval to start at once using an estimated $6 billion in extra revenue Iran has earned from oil exports in recent months.

Parliament, where a majority are allied with Khatami, has agreed to give urgent reading to the bill, but has yet to discuss the details.

Iran's current budget forecasts earnings of $15.7 from export of each barrel of crude, but Iranian crude has been selling at an average of $25 per barrel in recent months.

The country already earned about $4.6 from crude exports in the first quarter of the year which began on March 20.

Anticipating the rise in oil revenue, Khatami's five-year economic plan, launched in March, calls for creation of a special reserve account to save any oil earnings beyond budget forecasts.

The accrued funds would be used to offset possible budget shortfall after March 2002, a provision designed to protect the oil-dependent economy against future crude price fluctuation.

To ease reliance on oil, Khatami's plan also limits crude revenue spending to $56.6 billion over the next five years.

But, facing dire economic prospects and worsening unemployment, the government seeks to invest surplus revenues in job creation or lend them out to private businesses.

Khatami has been under pressure to shift attention from his political and cultural reform programme to the ailing economy.

Saudi expects economic growth above 3%

The Saudi cabinet Monday approved the country's seventh five-year economic development plan running till 2005, which predicts a 3.16 per cent annual growth rate in gross domestic product (GDP), the official SPA agency reported.

The plan expects annual growth of 4.01 per cent in the non-oil sector, whose proportion of GDP would rise to 71.6 per cent by the end of 2005, against 68.4 per cent last year, according to a report published by SPA.

The private sector should see annual growth of nearly 5.04 per cent, thanks to the support of the Saudi government, it said.

"The Saudi kingdom is working to encourage the private sector in such a way as to allow it to take part in development projects to diversify the national economy," the report continued.

In April, a new law aimed at attracting foreign capital came into effect in Saudi Arabia. It gives foreigners the right to own 100 per cent of industrial companies, while previously they could only hold 49 per cent of companies established in the country.

Qatar economy to grow at nominal 20%

The economy of the Gulf Arab state of Qatar is expected to post a nominal 20 per cent growth this year, mostly due to high world oil prices, a senior banker said on Wednesday.

"Gross domestic product (GDP) growth will be mainly generated by sharp increases in export volumes, centred on the energy sector," said Fawzi al-Khatib, chief economist and senior manager of the economic and planning department at Qatar National Bank.

"GDP is expected to rise by 20 per cent to 53.3 billion riyals ($14.64 billion) in 2000 from 44.4 billion riyals," he told Reuters ahead of the publication of a report by the bank, in which the government has a 50 per cent stake.

Qatar had said in July its economy grew by 8.9 per cent in 1999 thanks to high oil prices and a rise in gas exports. The rise in growth followed a 7.4 per cent contraction in 1998.

Fawzi said the oil and gas sector, the main source of income for the OPEC member, would constitute 50 per cent of GDP. The sector will grow by 33 per cent this year to $7.26 billion from $5.5 billion in 1999, he said.

Oman discovers new oil and gas fields

Oman said on Wednesday it has discovered new oil and gas fields in the south and central parts of the Gulf Arab state. The Minister of Oil and Gas Mohammed bin Hamed Al Rumhy said in a statement to Reuters the new sites, discovered by the state-run Petroleum Development Oman (PDO), have a potential daily production of 12,200 barrels of crude and 63 million cubic feet of gas.

The Sakhia field in the south would have a production capacity of 6,200 barrels of oil a day and Ghafeer, which is also in the south, was expected to have an output of 6,000 barrels a day, the statement said. The statement added that gas was discovered in Makarim in central Oman with an expected daily production of 46 million cubic feet.

OPEC crude scores year high

The price of OPEC's basket of seven crudes rose further on Tuesday to a year high of $31.37 a barrel from $31.22 on Monday, the OPEC news agency said on Wednesday, quoting the OPEC secretariat.

That left the price above the group's target $22-$28 price band for the twelth consecutive working day.

Under an informal mechanism agreed between OPEC producers in June, if the basket stays above the $22-$28 band for 20 working days or below the range for 10 working days, crude production will be adjusted by 500,000 barrels a day either way to try to bring the price back into the range.

The OPEC basket comprises Algeria's Saharan Blend, Indonesia's Minas, Nigeria's Bonny Light, Saudi Arabian Light, Dubai of the UAE, Venezuela's Tia Juana and Mexico's Isthmus.

Iran to build cement plant in Syria

Iran is planning to build a $200 million cement plant in Syria with a capacity of 1.5 million tonnes per year, Industry Minister Gholamreza Shafei said on Thursday.

"We are in the final stages of negotiations on signing a contract to build a $200 million cement plant in Syria and we hope to conclude the agreement soon," he said.

Shafei was speaking to Reuters after inspecting Iran's pavilion at the 47th Damascus International Trade Fair along with the Syrian Minister of Economy and Foreign Trade Mohammed Imadi and Planning Minister Issam al-Zaim.

Bashar meets Lebanese leaders

Syrian President Bashar Al-Assad held talks on Wednesday with two Lebanese government ministers ahead of the second round of elections in neighbouring Lebanon where Syria is the main foreign power broker.

Presidential spokesman Joubran Kourieh said that Bashar held separate meetings with Najib Mikati, minister of public works and transport and Suleiman Tony Franjieh, minister of agriculture, housing and cooperatives.

There has been speculation in Lebanon that Mikati, who won a seat in the first phase of the parliamentary election on August 27, would be among candidates to head Lebanon's next government.

President Bashar has already met several Lebanese leaders including parliament speaker Nabih Berri, Prime Minister Selim Al-Hoss, and former Prime Minister Rafik Al-Hariri as part of efforts described by diplomats as aiming at reducing tensions which proceeded the election.

Egyptian exports to Iraq

Egypt's exports to Iraq will reach 1.2 billion dollars this year, compared with 400 million dollars in 1999, Egyptian Economy and Foreign Trade Minister Yussef Butros-Ghali said Wednesday.

"Egyptian exports will reach two billion dollars next year," Butros-Ghali added at a meeting with his Iraqi counterpart Mohammed Mahdi Saleh, the official Egyptian news agency MENA said.

Egypt's main exports to Iraq include cereals, sugar, medicines, medical equipment and cars.

Libya-Lebanon in trade deal

Libya is to give Lebanon 5,000 tonnes of oil under an agreement aimed at strengthening relations between Tripoli and Beirut, Libyan foreign ministry spokesman Hassuna Shaush told AFP Wednesday.

The deal also provides for Lebanon to buy Libyan fertiliser, while Libya will purchase 15,000 tonnes of Lebanese apples and an unspecified quantity of tobacco.

In June Libya lifted a six-month suspension on visas for Lebanese visitors to the north African country, while its ambassador offered Tripoli's help in rebuilding southern Lebanon after Israel ended its 22-year occupation.

Lebanese vote

Many Lebanese hope the new parliament that emerges from current elections will redress a stumbling economy, fight corruption and reform a sectarian political system little changed since the 1975-90 civil war.

"We want the new parliament to bring activity to the country. We need to live. We need money and our weak economy drags us down," said Saeed, a taxi driver and father of four.

Walid Shoukair, an analyst for the London-based Arabic-language newspaper al-Hayat, said the new parliament should work on legislation to attract much-needed foreign investment, create jobs and boost industry.

Syria to issue banking secrecy law soon

Syria will soon issue a law on banking secrecy, Economy and Foreign Trade Minister Mohammed Imadi said on Monday.

"We will take the necessary action to issue a law on the banking secrecy soon and continue to work to improve the investment climate in Syria," he said in a speech at the opening of the Damascus International Trade Fair.

Banks in Syria, which were nationalised when the ruling Arab Socialist Baath Party took power in 1968, are all owned, operated and managed by the government. There has been no law on banking secrecy in the country.

Saudi Arabia hikes permits fees

Saudi Arabia has decided to increase the fees for renewing residence and work permits for those foreigners living and working in the kingdom.

The charges for new permits and for their renewal have been increased by 100 and 50 Saudi riyals, respectively per annum.

According to a royal decree, to be promulgated soon, copies of which were made available to the local press, SR600 will be charged, against SR500, for renewing the residence permits and SR150 will be charged for work permit against the current SR100.

Iran develops radar detector

Iran has successfully developed an electronic radar detector, defence minister Ali Shamkhani announced on Saturday. The development is the most significant of eight military research programmes that have recently been successfully concluded, the minister said in comments quoted by IRNA.

Algerian PM resigns

Algerian Prime Minister Ahmed Benbitour on Saturday presented his government's resignation and was replaced by President Abdelaziz Bouteflika's chief of staff, Mr Ali Benflis.