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Dec 25 - 31, 2000

Saudi Arabia announces SR215 billion budget

Saudi Arabia has announced a balanced national budget for the first time in seven years, with both expenditure and income during the fiscal 2001 projected at Saudi Riyal (SR) 215 billion (US $57.33 billion approximately).

The budget was endorsed by the Council of Ministers at a meeting chaired by King Fahd.

The budget projects an increase of 16.2 per cent (SR30 billion) in expenditures over last year. For new development projects SR67 billion were allocated. It has set an staggering SR53.3 billion, almost 25 per cent of total outlay, for education and manpower training, eight per cent higher than the allocation for this sector during the last fiscal year, 14.2 per cent of the total outlay was earmarked for health services, 2.7 per cent for transport, 5.2 per cent for industrial and agricultural sector and the remaining 53.2 per cent are allocated under other heads.

The budget envisages to create more than 27,000 jobs in the health and education sectors to absorb the swelling number of unemployed among the Saudis.

Due to buoyant oil market throughout last year, the kingdom's GDP has recorded an impressive growth of 15.5 per cent during the previous fiscal year, King Fahd noted with satisfaction during the cabinet meeting. The GDP last year was recorded at SR618 billion against SR535 billion in 1999. The growth was attributed to increase in oil prices and domestic production. The petroleum sector was expected to make a growth of 39.4 per cent at current prices. Growth in private sector was estimated at 3.13 per cent, industry by seven per cent, construction three per cent, electricity and gas sector four per cent and transport, storage and communications sector grew by three per cent.

According to preliminary data provided by Saudi Arabian Monetary Agency (SAMA), current account is estimated to have recorded a surplus of SR55.6 billion during 2000. Non oil exports were estimated to have grown by 10.2 per cent in 2000, reaching a figure of SR24 billion.

Bahrain heads towards monarchy

The Gulf Arab state of Bahrain took a step towards democracy, with a high-level committee approving a plan to restore a directly elected parliament suspended 25 years ago and form a constitutional monarchy.

The committee, appointed by Bahrain's Emir Sheikh Hamad bin Issa Al-Khalifa, approved the national charter as part of a modernisation programme aimed at adapting to the country's "principles, foundations and values," the official GNA agency reported.

"We have made our first steps on the road to democracy," declared a committee member, Ibrahim Beshmi, after the charter was adopted.

The committee assigned to examine the changes, presided over by Justice Minister Sheikh Abdallah Ben Khaled Al-Khalifa, had been meeting overnight Monday, and "unanimously approved" the project before it is submitted for final approval Saturday by the emir, the agency said.

A text of the plan, cited by GNA, stipulates that the executive power will be an elected parliament and a Majlis Al-Shura, or consultative council.

The committee also outlined plans to "adapt the constitution to transform the state into constitutional monarchy," the report said.

It said the committee had underlined the necessity to consider the "principles, foundations and values upon which society is built."

After approval by the emir, the reforms are set to be subject to a referendum, official sources said without giving a date for a vote.

Bahrain's emir had announced Saturday that his Gulf Arab state, a close ally of the neighbouring kingdom of Saudi Arabia, was to restore a directly elected parliament, after the house was dissolved in 1975.

Bahrain could declare itself a kingdom without any change in the ruling system, a senior official said on December 6, reacting to Arab press reports that the emir planned to declare himself king.

Dialogue to resume in Washington, says Arafat

Palestinian leader Yasser Arafat said on Sunday that Israeli and Palestinian delegations would hold separate talks on the peace process with US officials in Washington in the coming days.

"Two delegations will go to Washington in the next few days to examine with the US administration the ways of supporting and safeguarding the peace process and confirming what has already been concluded," Arafat told reporters.

It would be the first major effort to revive negotiations since the collapse of the Camp David peace summit in July and the explosion of Israeli-Palestinian violence in September.

Palestinian information minister Yasser Abed Rabbo said earlier that the Palestinian delegation would leave for Washington on Tuesday.

Mideast 2000 economies grew 5.1% on high oil

Economic growth in the Arab countries of the Middle East, excluding Iraq, averaged 5.1 per cent in 2000 thanks to higher oil prices, a UN report said Tuesday.

Hazem Biblawi, secretary general of the Beirut-based United Nations Economic and Social Commission for Western Asia (ESCWA), said the estimated 2000 growth compared with only 2.6 per cent in 1999 and 1.7 per cent in 1998.

Presenting an ESCWA report, Biblawi said the growth was due "principally to the improvement in petroleum revenues due to rises in production and prices." The ESCWA is made up of Saudi Arabia, Egypt, the United Arab Emirates (UAE), Bahrain, Iraq, Kuwait, Lebanon, Oman, Qatar, Syria and Yemen, as well as the Palestinian territories.

Total oil revenues rose 70.8 per cent from a year earlier to 166 billion dollars, the report said.

Consequently, the six members of the Gulf Cooperation Council (Saudi Arabia, the UAE, Bahrain, Oman, Qatar and Kuwait) posted the strongest growth, averaging 5.8 per cent.

Egypt, Jordan and Yemen posted 3.2 percent growth rates, Syria was at 1.5 per cent growth and Lebanon at a rate of 1.0 per cent.

Oman's 9-month net income up

Oman's net revenues in the first nine months of 2000 rose by 37 per cent to 1.5 billion rials ($3.9 billion) compared to the same period a year earlier thanks to the firm oil price, a finance ministry official said on Saturday.

He put total net revenues in the first nine months of 1999 at 1.096 billion rials. "Net oil revenues accounted for 75 per cent of the total net revenues in this period since Oman earned $11.24 per barrel of oil more than the previous nine months when it sold its crude at an average price of $15.27 per barrel," he told Reuters. He put net oil revenues in the year to September at 1.13 billion rials up from 676.8 million rials and natural gas income 45.5 million rials from 38.8 million rials. Other revenues like custom duty and corporate taxes dropped due to a slow down of the private sector's economy, he said without giving specific figures. The Gulf Arab state's economy heavily depends on oil revenue that made up 65 per cent of its income in 1999.

Lebanon, Egypt, Syria signed $1b gas deal

Lebanon, Egypt and Syria signed on Friday a memorandum for an agreement to build a regional gas pipeline worth $1 billion, Egyptian Oil Minister Sameh Fahmy said.

The pipeline, which would market Egyptian and Syrian gas, would start near Arish in northern Egypt, run under the Mediterranean to Lebanon and then on to Turkey and Jordan via Syria.

The agreement stipulated the establishment of two companies to build and operate the pipeline within three to four years.

Two firms will be set up by the three countries and the private sector to build and run the pipeline.

Al-Sharq (Orient) company will build and operate a 400 km (250 miles) sea pipeline, running outside Israeli territorial waters, and market Egyptian gas.

The second firm, The Arab company, will build and operate a 400 km (250 miles) land pipeline and market the Syrian and Egytian gas.

Syria plans incentives for industrial sector

Syria plans to revitalise its industrial sector with an expected package of tax breaks and cuts in raw material import duties, officials said.

The leadership of the ruling Baath Party met on Wednesday under the chairmanship of President Bashar Al-Assad and agreed to reform both the private and state industries, a presidential spokesman said.

Spokesman Joubran Kourieh said the meeting of the Regional Command (RC) of the party discussed the status of the industrial sector and how to direct it to serve the economic development of the country.

Decisions would be adopted in the next few days, he told Reuters without elaborating.

Kuwait bourse slips

Kuwaiti stocks fell 1.08 per cent in the week to Thursday in more active trading as investors brushed off government promises of econonic reform, traders said.

The Kuwait Stock Exchange (KSE) index ended the week at 1,340.7 points, down from 1,355.4 a week earlier. It has lost some seven per cent this year.

"The economic situation in the country is sluggish. We hear nothing but words.

There are no reforms," a trader told Reuters.

"The government is lost and doesn't know what to do anymore.

People have lost confidence in their statements," another trader said.

Iraq to help reopen oil pipeline with Lebanon

Iraq will send technicians and experts to Lebanon to rehabilitate a branch of the Iraqi-Syrian oil pipeline which used to carry Iraqi crude through Syria to the Lebanese northern port city of Tripoli, an Iraqi newspaper said.

"Iraqi oil experts will start soon to extend technical help to their Lebanese counterparts to reoperate the pipeline," Al- Qadissiya newspaper said on Tuesday.

It said rehabilitation of the pipeline was discussed during a visit paid by Lebanese ministers of trade and finance to Baghdad earlier this month.

Emirates 'delighted' by superjumbo launch

The Dubai-owned airline Emirates, which in July placed the first order for the Airbus superjumbo, reacted with "delight" on Wednesday to the production launch of the European consortium's A380.

"All of us at Emirates are delighted, but not surprised, that the supervisory board of Airbus has given the green light to build the A380," said Sheikh Ahmad bin Said Al-Maktoum, the airline's chairman.

"With air travel set to double in 15 years, a move towards larger aircraft such as the A380 is the practicable way to meet passenger demand," he said in a statement, a day after Airbus Industrie announced the launch of production.

Kuwait plays down Saudi oil production dispute

Foreign Minister Sheikh Sabah Al-Ahmad Al-Sabah on Monday denied that Gulf oil giants Kuwait and Saudi Arabia were in dispute over reducing production to halt a slide in prices.

"Kuwait and Saudi Arabia have never been any day in dispute over oil," Sheikh Sabah, who also heads the emirate's Supreme Petroleum Council, told reporters in parliament.

Kuwaiti Oil Minister Sheikh Saud Nasser Al-Sabah said last week that OPEC will likely reduce oil production by a million barrels a day starting in January if crude prices continue to go down.

Kuwaiti royal says taxes may be in store

Kuwait's foreign minister on Saturday floated the idea of imposing taxes on Kuwaitis, who pay nothing for cradle-to-grave government services.

"Is it reasonable for the government to continue spending when citizens don't contribute?" said Sheikh Sabah, asked about the issue by journalists.

"Everything at its right time," he said, without more detail.

Sheikh Sabah recently said Kuwait was determined to implement economic reform in Kuwait, where more than 93 per cent of the 220,000 active-population Kuwaitis are generously paid by the government for relatively short work days.

The kingdom's private sector is dominated by foreign labor.

US: Syria is obedient on Iraqi oil supplies

The US State Department said on Tuesday it had Syrian assurances that Syria would not break the rules on sanctions against Iraq, despite reports that Iraqi oil is crossing the border through a pipeline.

Oil industry sources say that Syria is receiving 150,000 barrels a day of Iraqi crude through the recently reopened pipeline. Syrian officials have denied the oil is flowing.

A US State Department official, who asked not to be named, said: "The Syrian government is continuing to tell us that it doesn't intend to break the sanctions. To our knowledge they haven't reached a final agreement with Iraq." "We would view a violation with great concern and note that it is the obligation of all UN members to respect UN resolutions," she added.

Iraq calls for new 'realistic' US policy

The official press urged the next US administration Thursday to work out a new "realistic" policy to deal with Iraq.

"It would be stupid for the new American administration to follow the reasoning put forward in the early 90s," said Babel, which is run by President Saddam Hussein's eldest son, Uday.

"That would show a deep ignorance of the radical changes which have since taken place, particularly with regard to Iraq," the daily said.

Israeli officer admits 'shoot to kill' policy

A senior Israeli officer has admitted that the army has been operating a "shoot to kill" policy against Palestinians it suspects of committing attacks against settlers or soldiers, public radio reported Thursday.

The officer, whose identity and rank were not disclosed, said the policy had "succeeded in thwarting terrorist attacks," the radio reported, adding that most operations were carried out by snipers.

Palestinians have accused Israel of "state terrorism" over the killings, with at least 10 activists were assassinated in pinpoint attacks in recent weeks.

Oil import

State-owned Indian Oil Corp (IOC) is expecting to buy more crude from Iraq in the first quarter 2001 and is cutting back on spot oil imports, an Indian industry official said on Monday.

IOC was the first customer to begin loading Iraqi crude last week after Baghdad stopped exports because of a row over pricing of its barrels in December.

India later said it had used diplomatic channels to avoid paying a surcharge that Iraq was demanding for its oil over the price approved by the United Nations.