Apr 16 - 22, 2001

Egypt must reform under EU agreement

Egypt faces a greater need to adopt economic and trade reform as it moves toward signing a free-trade agreement with the European Union (EU), both EU and Egyptian officials say.

The agreement, which was initialed in January and is expected to be signed in a few months, "will prompt Egypt to move forward" on reforms, according to Michele Villani, an EU official who took part in a conference here this past week.

In 1991, Egypt embarked on a series of economic reforms, including the partial or full sale of state-run companies, but the program has slowed down in the last few years.

Villani and other participants at a two-day conference, which ended Friday at a hotel in Ain Sukhna on the Red Sea, studied Egypt's obligations under the free trade accord, or association agreement, and the benefits Egypt would gain from the deal.

Under the accord, the EU market will open completely to all Egyptian products, including agricultural goods, while the Egyptian market will be opened on a smaller scale to European products. The accord also calls for political, cultural and social dialogue.

For Villani and Vittorio Ghidi, who looks after the EU's affairs in Cairo, the agreement will allow Europe "to increase the flow of investment into Egypt."

The deal will also be a double-edged sword for Egypt by increasing its capacity to compete, but also bringing stiffer competition at a time when the country is experiencing economic difficulties, Ghidi said.

Egypt is facing economic stagnation and a liquidity crisis as a result of excessive spending in the public sector and state-run banks, analysts say.

Investors are also discouraged by the lack of transparency provided for by the country's economic regulations.

Oman urged to push reform to sustain boom

Independent energy producer Oman must develop the private sector to sustain a 2000 economic boom fuelled by higher oil prices, economists said on Thursday.

They said the Gulf Arab state must reduce red-tape, promote local industries and revive shelved projects to lure private investors and diversify its energy-dependent income.

Oman this week revealed that increased crude revenues, which hit 20-year highs in 2000, helped narrow its 2000 budget deficit to 117 million rials ($303 million) from a projected 349 million rials. GDP also grew by 26.7 per cent last year, rising to 7.6 billion rials from six billion rials a year earlier.

"Oman needs to balance its current financial strength and help the private sector compete with global challenges now that the country has joined the World Trade Organisation (WTO)," Nasser Al-Mughairy, an economist at Abu Tamam Financial Consultancy, told Reuters on Thursday.

"Since the government is now in sound financial position it must also create new sources of expansion to boost private investments to avoid possible economic slowdown when the oil prices go down again," he said.

Oman pumps some 900,000 barrels of crude a day. Oil and gas revenues contributed 80 per cent of its income in 2000, up from 70 per cent in 1999.

The Gulf Arab sultanate has reduced corporate tax and increased foreign ownership to 70 per cent ahead of joining the WTO last year. It also announced plans to set up industrial projects worth $7.6 billion over the next five years to boost the private sector, including chemical and aluminium plants.

The International Monetary Fund on Wednesday praised Oman's reform measures but said that the government should do more to boost the economy's medium-term prospects as oil prices are forecast to decline in the coming years.

Saudi-Iran accord

Saudi Interior Minister Prince Nayef bin Abdul Aziz said the accord he is expected to sign with Iran next week will have a positive impact on the security and economy in the Gulf, newspapers reported Thursday.

"This accord will have positive repercussions on the security and economic situation in the two countries, as well as the whole of the Gulf region," Prince Nayef said.

The prince is expected in Tehran on April 15 to sign a security accord that was originally due to be inked in February.

Prince Nayef has said the accord, which has taken two years to negotiate, focuses on the fight against crime, terrorism and money laundering, and surveillance of borders and territorial waters.

Beirut blast sparks civil war memories

A parcel bomb left on a doorstep badly injured three Druze women, including the sister and niece of a member of parliament, when it blew up at Aley, east of Beirut, Wednesday, a relative said.

A police source denied there was a political motive but Druze leader Walid Jumblatt called the blast "a terrorist act," suggesting it was linked to his criticism of Syria's military presence in Lebanon.

Information Minister Ghazi Aridi, a member of Jumblatt's Progressive Socialist Party (PSP), also saw political motives behind the attack, calling it "a letter bomb addressed to the whole of Lebanon."

7 Arab countries owe $1.84 billion: Iraq

Seven Arab countries owe Iraq more than $1.84 billion, Iraqi newspapers said on Saturday.

The amount of money due to be paid to Iraq by a number of Arab countries up to March 31, 2001 was $1,844,664,000, the papers quoted Finance Minister Hikmat Mezban Ibrahim as saying.

He named the countries as Saudi Arabi, Syria, Bahrain, Kuwait, Somalia, the United Arab Emirates and Egypt, the papers, including the official al-Iraq and al-Jumhouriya, said.

In 1999, Iraq said its frozen assets in these Arab countries reached $1.7 billion. Any increase was likely to have been accounted for by interest accruals.

The papers said the money owed to Iraq covered loans offered by Iraq, oil exports, official bank deposits and profits of jointly held Arab companies before the 1991 Gulf War over Kuwait.

Iraq's assets abroad, the bulk of them in U.S. and European banks, were impounded when it invaded Kuwait in 1990.

Israel aggressions set off international concern

Israeli rockets swept the Gaza Strip and other areas on Thursday as international pressure grew to halt the bloodshed.

The new Israeli attacks continued despite a meeting of Israeli and Palestinian security chiefs at the US ambassador to Israel's home late on Wednesday night at which there was no breakthrough in agreeing on measures to keep forces apart.

In a sign of growing international concern, Jordan's Foreign Minister Abdulilah Al-Khatib on Thursday met Palestinian leader Yasser Arafat, and the United States and Russia issued a joint statement calling for an end to violence.

Palestinian officials said Israeli soldiers killed one Palestinian and wounded another when they fired on the pair near the Israeli military junction of Kissufim in southern Gaza.

Oil prices slip

Oil prices dipped slightly on Monday as doubts gathered over whether OPEC member countries would fully comply with a four-percent output cut agreed last month.

Reference benchmark Brent North Sea crude for May delivery fell to 25.13 dollars a barrel, from $25.17 at Friday's close.

In New York, the light sweet crude May contract dropped 20 cents to 27.06 dollars on Friday.

Iran for close ties

Iran's supreme leader called for more cooperation between Iran, India, Russia and China on Thursday during a meeting with Indian Prime Minister Atal Behari Vajpayee, the official IRNA news agency said.

Ayatollah Ali Khamenei said "colonialist countries" were opposed to such cooperation, making it imperative for eastern countries to strengthen their ties.

Iran's President Mohammad Khatami went to Russia last month in a visit which angered the United States.

Iran sees such ties as undermining the grip of unilateral US sanctions which have badly hurt Iranian industry.

Iran, India sign six pacts

Iran and India signed six agreements on Wednesday to boost cooperation in the energy sector and other fields including trade and technology.

Iran's state television, which reported the signing of the bilateral agreements, did not say if the two sides had finalized plans to lay a pipeline to transfer Iranian gas to India.

Mutawakkil arrives in Qatar

The Taliban foreign minister arrived on Saturday, hoping to convince Qatar to recognize his government as Afghanistan's legitimate rulers.

Foreign Minister Wakil Ahmed Mutawakkil said the current visit to Europe by the head of the leading Afghan opposition group would serve only to extend the protracted civil war.

Kuwait cabinet okays mly accord

Kuwait's government on Sunday approved a joint defence pact with its fellow Gulf Arab states and said it would submit it to parliament as a draft law.

"In order to unite efforts to achieve joint defence (among Gulf Arab states) and to safeguard their security...the cabinet has approved the joint defence pact of the Gulf Cooperation Council (GCC)," the cabinet said in a statement. The six nations are: Saudi Arabia, Kuwait, the UAE, Qatar, Bahrain and Oman.

Emirates wins

Emirates, the ambitious national carrier of the Gulf emirate of Dubai, announced Wednesday it has been voted airline of the year 2001 in a survey presented as the largest ever of its kind.

Singagpore Airlines finished second, Cathay Pacific third, British Airways fourth and Thai Airways fifth.

Royal Jordanian

Royal Jordanian, Jordan's national airline, is preparing to launch regular flights to Iraq, challenging a decade-long international ban, Foreign Minister Abdel Ilah Khatib says.

"Royal Jordanian, which has already launched a number of (charter) flights to Baghdad, is on its way to taking measures to ensure the regularity of civilian flights to Iraq," the official Petra news agency quoted Khatib as saying from Washington where he was accompanying Jordan's King Abdullah II on a US tour.

Saudi group

Riyadh-based Al Hokair Group, one of Saudi Arabia's leading entertainment and amusement product manufacturers, is planning a US $137 million expansion across the Middle East and North Africa.

The Group says it will showcase its plans at the forthcoming Theme Parks and Fun Centres (TPFC) trade exhibition, which will be held at the Dubai World Trade Centre from April 24-26.

Iraq makes 'breakthrough'

Iraq has secured an independent source of oil revenue outside UN control and its exports have returned to normal after three months of turmoil, the Middle East Economic Survey (MEES) reported Monday.

Exports last month under the United Nations oil-for-food scheme averaged two million barrels per day (bpd) with production totalling 2.6 million bpd, including deliveries to Iraqi refineries and cross-border trade with Jordan, Turkey, Syria and the Gulf, the industry newsletter said. Iraq's average output in 1999 and 2000 was about 2.5 million bpd.

Palestinian economy

The Palestinian economy has suffered losses of 3.86 billion dollars due to the Israeli blockade of the Palestinian territories since the start of the six-month-old Palestinian uprising, according to a report by the Palestinian finance ministry Sunday.

"The total losses incurred by the Palestinian economy since the blockade and Israeli aggression against the Palestinian territories mounts to 3.86 billion dollars," the report said.

Kuwait sets up authority

OPEC member Kuwait, faced with years of economic slowdown despite surplus generated by high oil income, on Sunday set up a "committee for development and economic reforms" the Cabinet said in a statement.

The committee, which is headed by Foreign Minister Sheikh Sabah Al-Ahmad Al-Sabah and includes several ministers, is to oversee the implementation of a long-awaited programme of economic reforms, also appropved by the cabinet.

Bank assets rise

The combined assets of banks operating in Kuwait rose to 14.133 billion dinars ($46.035 billion) at the end of February from 13.793 billion in January, Central Bank figures published on the Internet on Sunday show. Assets amounted to 13.115 billion dinars in February, 2000.

GIC profits surge

The Kuwait-based Gulf Investment Corp. (GIC) on Sunday announced a 47-percent surge in net profit to 111.7 million dollars in 2000, after excluding 44.3 million dollars of exceptional gain from the previous year.

Oman seeks $500 mln for minerals

Oman hopes to raise up to $500 million from private investors to develop its mineral sector and revive an industry that stopped exporting seven years ago, a government official said on Saturday.

"We are preparing a comprehensive master plan for the entire mineral sector, which we will soon present to the private sector, so we could raise up to half a billion dollars and start exporting again," he told Reuters.

The official said the state-run Oman Mining Company (OMC) had already started talking to a subsidiary of Japan's Mitsubishi Corp on possible investments.

Bus deal

Egypt is working to seal a contract to sell Iraq 300 buses within the UN oil-for-food programme, an Egyptian transport official said.

"We hope to sign a contract to sell 300 buses within the UN oil-for-food programme. Prices will be very tempting and lower than those in Egypt because of the absence of customs duties," Nagui Naguib said, without giving further details.