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Dec 18 - 28, 2000

Jordan to 'pinch' citizens with 2001 budget

Jordan's projected 2001 state expenditure aimed towards narrowing a chronic deficit to help IMF-directed reforms rejuvenate the economy, Finance Minister Michel Marto said Wednesday.

But Marto told parliament the 2.3 billion dinar ($3.24 billion) state expenditure in 2001 entailed a controversial gasoline price increase to offset partially a 180 million dinar shortfall due to higher world oil prices.

"This proves to people, who may have wondered about our ability to not only invest capital, but to make good returns on it, that we can, indeed, do that," he said.

"(Higher oil prices) entail raising petroleum prices, but taking into consideration lessening the impact on low income groups and industries," Marto said.

The new gasoline prices would be decided soon and would come into effect early next year.

Total state spending in 2001 was projected to rise around 14 per cent from an readjusted 2000 budget figure, with most of the expansion in capital investments to spur growth.

The government earmarked 470 million dinars for capital investments, a 50 per cent increase on 2000 to spur growth.

The 2001 budget targets reducing the deficit, excluding foreign aid to 380 million dinars or 6.0 per cent of gross domestic product (GDP) compared with 6.8 per cent this year.

Grants from donor countries, traditionally used to cover some of the budget shortfalls, would reduce the budget deficit target to around 2.2 per cent of GDP.

"Reducing the deficit to six per cent is very important and would vindicate our structural reforms," Marto told Reuters.

But a sharp rise in world oil prices has strained the budget finances despite a favourable deal with Iraq that supplies the kingdom with most of its energy needs at concessionary rates, Marto said.

Arafat, Israelis meet as bloodshed continues

Palestinian and Israeli leaders discussed how to rescue Middle East peacemaking and stop the worst Israel-Palestinian violence in years, saying afterwards contacts would go on but giving little sign of a breakthrough.

Neither side ruled out an eventual resumption of full peace negotiations after a meeting between Palestinian President Yasser Arafat and Israeli Foreign Minister Shlomo Ben-Ami that ended early on Friday, but indicated that more work lay ahead before the stalled process could be firmly back on track.

The latest casualty was a Palestinian killed by Israeli soldiers in Gaza on Thursday. Islamic activist said his death was the latest in a series of Israeli assassination of Palestinian activists.

In Jerusalem, Israeli police planned to be out in force near the Al-Aqsa mosque, where Muslims are to pray on the third Friday of the holy month of Ramadan. A Palestinian was killed on the second Friday after prayers at the site.

The site has been a focus of a wave of Israeli attacks against Palestinians in which at least 300 Palestinians have been killed.

Arafat met Ben-Ami and Prime Minister Ehud Barak's senior aide, Gilead Sher, for four hours starting late on Thursday at the Erez Checkpoint on the Israel-Gaza border amid stepped up international pressure to revive peace talks.

Ben-Ami and Sher have helped steer peace negotiations during Barak's 18 months in office.

"You cannot say the talks were good or bad," senior Arafat aide, Nabil Abu Rdainah told Reuters. "The meeting was a part of the contacts to try to establish a ground to rescue the peace process and to talk about the future of that peace process".

Israeli army radio said the sides agreed to renew talks next week and resume security cooperation that had mostly broken off.

Bahrain body proposes two parliament chambers

A newly-appointed Bahraini committee has recommended the setting up of two parliament chambers including an elected one in the Gulf Arab state, newspapers reported on Thursday.

They said the recommendations were made by the 46-member Supreme National Committee appointed by Bahrain's Emir Sheikh Hamad bin Isa Al-Khalifa to draw up a national charter as part of promised political reforms in the conservative state.

The English-language Bahrain Tribune said the committee recommended that the "parliament in Bahrain should be made up of two chambers the Shura (consultative) Council with appointed members and a parliamentary council with elected members".

OPEC cut a real option

Concerned about slipping oil prices, the OPEC cartel will review its production ceiling at the extraordinary meeting it has called for Jan. 17, Kuwait Oil Minister Sheikh Saud Nasser al-Sabah said on Thursday, adding a cut of around one million barrels per day (bpd) was an option.

"The question is why are we meeting on Jan. 17 before the ordinary meeting in March? The idea is that forecasts indicate a weakness in price in Q1 2000, therefore (OPEC) resolutions must be taken (in January) to safeguard oil prices and their stability," the minister told Reuters in an interview.

"If prices continue to fall, then any decision is possible and all options are available," added Sheikh Saud who is seen as a price hawk. When pressed for a figure, he said "it could be a million bpd or more than a million according to market needs." OPEC's export price has plummeted by 20 per cent to $25 per barrel over the past two weeks, as fears of a heating oil shortage in the United States this winter have subsided.

Lebanon, Egypt, Syria to initial gas deal

Egypt, Lebanon and Syria will sign an initial agreement Friday for exporting Egyptian natutral gas to the other two countries, officials told AFP on Wednesday.

The deal will be sealed by Lebanese Oil Minister Mohamad Abdel Hamid Beydoun and his visiting counterparts, Egypt's Sameh Fahmi and Syria's Mohamad Maher Al-Jammal, they said.

Officials said earlier this week that the deal had been due to be signed Thursday by the Egyptian and Lebanese ministers, in the presence of Lebanese Prime Minister Rafiq Hariri.

On Monday, the Jordanian official news agency Petra reported that Amman was examining the possibility of joining Lebanon and Syria in the regional scheme to import gas across the Mediterranean Sea.

Hariri, during his trip to Cairo last month, reached a deal to import gas from the Egyptian coastal city of El Arish to the port of Tripoli in north Lebanon, before re-exporting it to Syria and Turkey.

Saudi offers financing to boost non-oil exports

Saudi Arabia is to offer trade financing of up to 85 per cent and other facilities to boost non-oil exports to help diversify its petroleum-dominated economy, the Saudi finance minister said on Tuesday.

Under newly approved rules, the state-funded facilities would be offered for Saudi exports comprising a minimum of 25 per cent value added locally, the official Saudi Press Agency quoted Minister Ibrahim al-Assaf as saying.

Assaf said priority would be given to Saudi companies with a high per centage of Saudi personnel and to export operations with larger financial and economic returns, the agency said.

The minister expressed "hope that the programme would contribute to developing and spreading Saudi exports in world markets, and help Saudi exporters increase their sales and expand trade activities overseas".

Saudi Arabia's non-oil exports, including petrochemicals, rose to 5.9 billion riyals ($1.6 billion) in the second quarter of 2000, up 10 per cent year on year.

Syria settles most of its foreign debts

Syria's foreign debts are under control and the government which took power in April has been servicing them regularly, Minister of State for Planning Issam Al-Zaim said on Tuesday. He told Reuters in an interview the total debt due to Arab and foreign governments and funds that is handled by his ministry about two thirds of total debt stood at $3.384 billion on June 30 this year.

Giving the first detailed account about the status of Syria's foreign debts and loan servicing, Zaim said around 27 billion Syrian pounds ($586 million) were allocated in the government's budget this year to service foreign loans. "We have now controlled the foreign debts and are servicing our loans in a regular way. This has greatly improved our economic status image abroad. It paved the way for international monetary institutions to deal with us and to resume supplying us with new loans and grants," he said.

Tunisia to grant a private GSM licence

Tunisia will award its first private GSM mobile telephone licence to foreign operators during the first half of 2001 in a bid to liberalise the telecommunications sector, a minister said on Tuesday.

"The operation of granting the private GSM licence to foreign investors would be completed in the first half of 2001," Economic Development Minister Abdellatif Saddam told a news conference.

The country's only global system for mobile communications (GSM) licence is held by state-owned Tunisia Telecom firm which is enjoying a monopoly in the sector.

Tunisia Telecom's GSM network has a capacity of around 50,000 subscribers since it started operating the mobile telephone service in 1996.

Microsoft

Microsoft Gulf and Eastern Mediterranean (GEM) announced that it will continue to play a leading role in the development of the IT industry in Jordan by opening a local office in Amman.

The announcement was made at a press conference, attended by Deputy Prime Minister of Jordan, His Excellency Doctor Mohammad Halaiqa, and marks the beginning of a series of initiatives designed to foster a dynamic and thriving information technology industry in the country.

Iraq okays UN deal extension

Iraq agreed on Monday to another six-month extension of an oil-for-food deal with the United Nations and prepared to resume exporting its crude.

Iraq's official notification to the UN of its approval ended weeks of speculation over the humanitarian programme and the fate of Iraqi oil flow to world markets.

An Iraqi oil official said oil exports were ready to roll once weather permits in the southern port of Mina Al-Bakr.

Kuwait oil earnings top $8b

Kuwait's oil revenues in the first five months of the 2000-2001 fiscal year have reached 8.29 billion dollars, 32 per cent more than estimates for the entire nine-month year, a think-tank said Saturday.

Egypt, Iraq to set up free trade zone soon

Sanctions-hit Iraq will sign a deal "soon" to set up a free trade zone with Egypt as part of wider moves towards removing tarrifs in the Arab world, government newspapers said on Saturday.

Egyptian Prime Minister Atef Ebeid, who was quoted making the announcement, gave no details on the bilateral deal, but Arab League sources said last week that Egypt, Iraq and Libya intended to set up a trilateral free trade zone.

Lebanon borrows $400m eurobonds

Lebanon raised 400 million dollars in four-year eurobonds Thursday, the first major financial transaction by Prime Minister Rafiq Hariri since he formed his government at the end of October, Minister of Finance Fuad Saniora said on Friday.

Saniora said the government raised 100 million dollars more than it had initially expected.

The financial institutions, J.P. Morgan and Credit Suisse-First Boston, loaned the money at a 9.5 per cent interest rate, 4.1 percentage points higher than the standard US market rate, said Saniora.

The cash injection will help Lebanon restructure its public debt, of which 65 per cent is shouldered by Lebanese banks, 25 per cent by Middle Eastern banks and 10 per cent by European institutions.

Lebanon, Iraq agree to reopen oil pipeline

Lebanon and Iraq have agreed to reopen their oil pipeline via Syria which had been shut for 20 years, Finance Minister Fouad Siniora was quoted as saying on Friday.

The Lebanese daily Al-Mustaqbal, affiliated with Prime Minister Rafik Al-Hariri, quoted Siniora as saying Lebanon and Iraq had reached a "preliminary agreement" to reopen the pipeline which stretches between Kirkuk in northern Iraq and the port city of Tripoli in northern Lebanon.

Siniora, at a news conference after a one-day visit to Baghdad, also said Lebanon was working to boost its economic cooperation with Iraq within the UN oil-for-food programme.

He said the Syrian part of the pipeline between Kirkuk and Homs in Western Syria had already been repaired.

Syria, Iraq and Lebanon were in talks to rehabilitate the pipeline between Homs and Tripoli, he said.

Yemen sees new era

Yemeni President Ali Abdullah Saleh said on Thursday his country's relations with its rich northern neighbour Saudi Arabia were set for a major improvement that would include joint oil projects.

Saleh was speaking a day after the Saudi-Yemeni Cooperation Council (SYCC) held its first meeting in 13 years on Wednesday and announced that Saudi Arabia had agreed to reschedule Yemen's $331 million debts to it and extend $300 million in fresh loans.

Sainsbury's to pull out of Egypt

British retailer Sainsbury's, which opened its first supermarkets in Egypt last January, has decided to pull out of the Egyptian market and sell its shares to an Egyptian investor, the state-owned daily Al-Gomhuriya said in its Sunday issue.

Sainsbury's-Egypt, a company where 20 per cent of the capital is held by partner Arab Group, opened 114 chains in a year in the Greater Cairo area.