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Feb 14 - 20, 2000

  1. International
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  6. Gulf

Deadlock in talks unleashes attacks

The escalation in violence on the Lebanese-Israeli front over the past week has been described by political analysts as a fallout from the deadlock in the Syria-Israeli talks.

"This is the natural outcome of the deadlock in Syrian and Israeli talks," say Nizar Hamzeh, a professor at the American University of Beirut.

"Trapped with a deadline, the two players [Israel and Syria] are trying to secure what they can. The deadlock has given Hizbollah more liberty to maneuver," he added.

Hizbollah, or Party of God, is a Muslim guerrilla group fighting a war of attrition against Israel, trying to oust it out of the 850 sq km it occupies in South Lebanon since 1978.

Backed by Iran, morally but also allegedly with arms supplies, Hizbollah is also allegedly supported by Syria, who uses it as a pressure tool on Israel to recuperate the Golan Heights it lost to Israel during the 1967 Arab-Israeli war.

Over the past 10 days, the number of casualties in the ranks of the Israeli army and its allies in South Lebanon, the South Lebanon army, has grown considerably, taking everybody by surprise.

The increase in quantity was accompanied by an increase in quality and precision, allowing Hizbollah to score direct hits, killing six Israeli soldiers and wounding another nine in just 10 days.

Last Sunday, Hizbollah also succeeded in killing, Aql Hashem, a top Israeli officer and deputy commander of the militia. The sixth Israeli casualty fell Tuesday, in an attack the Hizbollah launched in retaliation for Monday's air raids.

The past few days has seen reports published in newspapers, mainly in Israel, claiming that Iran had stepped up its supply of arms to Hizbollah.

Oil eases, price surge attracts profit-takers

Crude prices in Asia edged lower on Thursday after New York's rally overnight attracted some profit taking. March New York Mercantile Exchange (NYMEX) crude last traded at $28.72, down five cents from the New York close.

The contract surged 75 cents in New York after the latest US stock data showed inventories were at their lowest levels in over a decade.

US crude prices have risen 12 percent this year.

In January NYMEX crude rose to $29.95 per barrel, the highest levels since the Gulf War.

Prices have almost trebled from the low of $10.35 hit in December 1998, boosted by a concerted policy of output cuts by the Organisation of Petroleum Exporting Countries (OPEC) and some other producers.

Mexican Oil Minister Luis Tellez moved late on Wednesday to calm worries that oil stocks were too low and prices too high.

Economics takes back seat at Iran poll

The rough-and-tumble politics of Iran's factional struggle has pushed key economic issues off the agenda of next week's parliamentary polls.

As a result, many of the most crucial questions that will face the 290 deputies during their four-year terms are getting short shrift from the more than 6,500 candidates as they campaign for the February 18 contest.

Analysts say this phenomenon will hurt the conservatives, who have been unable to use the economic hardship of ordinary people against the policies of moderate President Mohammad Khatami and his pro-reform allies.

On the surface, the case for a vigourous economic debate appears clear-cut. Among the pressing issues facing the next parliament are: Foreign trade and the future role, if any, of the private sector in what remains a state monopoly. This would require major changes in existing laws.

- Privatisation and, beyond that, the broader question of the state's place in the economy.

- Foreign investment and the role of multi-nationals.

Existing laws restrict foreign investment in Iran's most attractive sectors, such as mining and energy. This will also require significant legal reform.

At the same time, annual inflation, at around 20 percent, remains a constant worry, while unemployment is rampant, particularly in less-developed areas. Figures published on Tuesday showed unemployment ranging from 31 percent in Lorestan province, in the west, to a low of 8.8 percent in Semnan province, to the north.

'Islamic banks need regulation'

Islamic financial institutions need to establish an internationally accepted regulatory system to ensure continued growth, Bahrain's central bank governor said on Tuesday.

"The Islamic financial community must accept that their institutions have to be regulated and supervised to international standards," Bahrain Monetary Agency (BMA) Governor Sheikh Abdulla bin Khalifa al-Khalifa said.

"Ultimately, their ability to grow and compete will be dependent on international acceptance of the regulating regime under which they operate," he told a banking seminar.

Islamic banks do not deal in interest — the core of the Western banking system — as it is considered by many Moslems as usury, banned by sharia.

There are some 200 Islamic financial institutions globally serving the world's 1.2 billion Muslims.

Oman to invite bids for two gas pipeline projects

Oman will soon invite bids for two natural gas pipeline projects in the Gulf Arab state worth some $600 million, an oil and gas ministry official said on Tuesday.

"The tender board is going to invite bids any time now for the construction of the two natural gas pipelines which we expect to cost around $600 million," Khalifa al Hinai, the ministry's technical adviser, told Reuters.

He said the first pipeline would be built from central Oman to the northern city of Sohar, which the government is promoting as an industrial city, and the second would transport gas from northwest Oman to the southern city of Salalah, where a private power plant is planned.

Saudi plans water projects worth $171 mln

Saudi Arabia plans to build several water purification and desalination stations across the kingdom at a cost of 643 million riyals ($171 million), a Saudi newspaper reported on Sunday.

The Arabic-language daily Al-Eqtisadiah quoted Agriculture and Water Resources Minister Abdullah bin Abdul-Aziz bin Muammar as saying the plans involved three major projects and 50 smaller schemes, including digging for underground water.

The projects include a water purification plant to be built on the King Fahd dam in southwestern Saudi Arabia with a capacity for 40,000 cubic metres (1.4 million cubic feet) per day, the newspaper said. The dam, which has capacity for 325 million cubic metres, was opened in 1998.

Tunisian team starts Iraq trade talks

A Tunisian delegation began talks on Saturday with Iraqi officials aimed at concluding trade deals under Iraq's oil-for-food deal with the United Nations.

The Iraqi News Agency INA said Tunisian Trade Minister Mondher Zenaidi led a team of more than 40 businessmen in the talks.

Iraqi Trade Minister Mohammed Mehdi Saleh told Zenaidi that Baghdad sought to "increase and expand economic and trade between the two sisterly countries," INA said.

Iran's first sugarcane plant opened

Iranian President Mohammad Khatami inaugurated the Islamic republic's first sugarcane refinery in the prosperous southwestern Khuzestan province.

The plant, named "Khomeini", has a nameplate capacity of 100,000 tonnes a year, and is located on the Shoaybieh plain, the radio said.

The refinery will produce 40,000 tonnes of refined sugar in the first year, 70,000 tonnes the second, ramping up to full capapcity in year three.

Federal body on utilities to be set up

A Federal Electricity and Water Authority (Fewa) will soon be set up here for power generation and distribution and production of desalinated water in the northern emirates.

Announcing this during the course of his inaugural address at the 25th annual Middle East Electricity conference, Humaid bin Nasser Al Owais the UAE Minister of Electricity and Water, said: "The electricity and water utilities under the ministry's jurisdiction will be converted into an authority, to be known as Fewa. It will be responsible for power and water utilities in the northern emirates."

He added: "With this, the UAE will have four main electricity and water authorities. They will have opportunities to plan, develop and operate their generation, transmission and distribution systems independently. "

Microsoft bullish on Egyptian Internet market

Microsoft Corp hopes a monthly Internet package deal offered jointly with Compaq Computer Corp and Citigroup's Citibank will help a broad segment of Egypt's population to surf the worldwide web.

"A similar initiative in Turkey had great success and sold around 100,000 packages in four months last year. The same scheme also was a huge success in South Africa," Microsoft Sales Manager Ehab Abdel Aziz, coordinator of the "Internet Baladna" or "Egypt's Own Internet" programme told.

"Egypt has only 650,000 personal computer owners out of a population of 65 million, which is a penetration rate of just one percent," he said. "In Turkey and South Africa, the normal penetration rate is 10 to 15 percent.

Free zone for e-commerce set up in Dubai

Vice-President and Prime Minister of the UAE and Ruler of Dubai Shaikh Maktoum bin Rashid Al Maktoum, issued a decree Saturday setting up a free trade zone for electronic commerce and technology.

The UAE news agency, Wam, said the decree also established an independent body, the Free Zone Authority headed by General Shaikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Defence Minister, which would operate under the Dubai government to spearhead the emirate's drive to become a regional centre for electronic commerce, technology and information.

Gen. Shaikh Mohammed in October announced plans to set up the zone which, he said, would be the first of its kind in the world and would be called Dubai Internet City.

The Dubai government would invest $200 million in setting up the zone, to be based on the outskirts of Dubai.

Arab free-trade zone talks under way in Cairo

Arab finance and economy ministers and their representatives began a two-day meeting here Wednesday on the creation of an Arab free trade zone by 2007.

The talks are the latest in a series aimed at hammering out the role of Arab monetary, development, agricultural and investment funds in the creation of this zone, first proposed in a 1996 Arab League resolution.

The Arab League's 22 members began reducing customs duties on reciprocal goods by 10 percent annually in January 1998. Members have 10 yelks, presided over by Iraqi Trade Minister Mohammed Mahdi Saleh, are focusing on ways to increase inter-Arab investment as well as remove taxes.

Duties have so far been reduced by 30 percent.

Fourteen Arab countries — Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, the United Arab Emirates — have so far signed up to the zone.

Inter-Arab trade is worth about 160 billion dollars.

 Saudi still debating foreign entry into oil sector

Saudi Arabia's finance and economy minister was quoted on Wednesday as saying the kingdom was still studying how to allow international oil companies to invest in its huge oil and gas sectors.

The London-based Asharq Al-Awsat quoted Ibrahim Abdel Aziz Al-Assaf as saying that the subject of investments in the oil and gas sectors was "being studied at the highest level." "This pertains to all the companies that have submitted proposals," he said in comments he made to Asharq Al-Awsat.

Major international companies, including Mobil Corp, Royal Dutch/Shell Group, Chevron Corp, Texaco Inc and Total Fina have presented proposals for investments in Saudi Arabia's huge oil sector after Crown Prince Abdullah invited major energy oil firms to submit their views.

The kingdom's 260 billion barrels of oil reserves, the world's largest, have been off limits to Western companies since nationalisation in 1975.