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June 11 - 17, 2001

Khatami heading for sweeping victory

Iran's President Mohammad Khatami was headed for a landslide re-election victory on Friday, but powerful conservatives wasted little time in accusing his reformist allies of extensive fraud.

All indications pointed to a huge Khatami win late in the evening when the conservative-led Guardians Council, which has the power to reject any result, announced widespread problems with the balloting. "There were numerous irregularities which went against the interests of the people," Council spokesman Gholamhossein Elham said in an interview with state television. "There was notably the loss of many voting slips." But the interior ministry, which supervises the elections and is headed by a close ally of the president, swiftly denied the charges — setting up what may well be the latest of Khatami's serious showdowns with his conservative rivals.

"Until now, we have received no information on these so-called irregularities," ministry election official Ali Mohaghar said, warning against "misinformation aimed at disturbing public opinion".

The interior ministry official who had originally been set to supervise Friday's election was banned from holding public office after being convicted of vote-rigging in last year's parliamentary polls, won by reformists. The Guardians Council, which has used its veto power to block key parts of his reform agenda, annulled a number of results in that election.

The main pro-reform party, led by Khatami's brother, said its exit polls showed the president cruising to more than 75 per cent of the votes cast. Although final results were not due until Saturday, Mohammad-Reza Khatami, head of the Islamic Iran Participation Front, said the expected mandate would make his brother's second-term government "much more solid".

OPEC output unchanged

OPEC members have informally agreed to leave official oil output unchanged following Iraq's suspension of exports.

But the Organization of Petroleum Exporting Countries delegates also agreed to meet again for an emergency session on July 3 to decide how best to respond to Iraq's stoppage of U.N.-administered crude sales.

"OPEC and the market needs time to assess if Iraq's decision will cause a crisis," Reuters quoted Qatari Oil Minister Abdullah al-Attiyah saying following two hours of talks in Vienna on Tuesday.

Saudi Oil Minister Ali al-Naimi indicated that OPEC would probably need to take action and add to production if the outage lasted for the month that Iraq is threatening.

"We do not know what Iraq's game plan is," Reuters reported Naimi saying. "Will this last a day, a week, a month? We don't know what the game plan is."

But with output at 24.2 million barrels daily, OPEC ministers have said ample crude inventories and stable prices mean there is no need to panic over Baghdad's decision.

Iraq halted its 2.1 million barrels in daily oil sales on Monday as a protest against the U.N. Security Council's decision to extend by one month, instead of the usual six, the programme under which Iraq can sell oil.

OPEC members produces 40 per cent of the world's oil needs.

Although Iraq belongs to OPEC, it does not participate in production agreements with the group's other 10 members.

Iraq's OPEC representative, Taha Humud Musa, was quoted by Reuters as saying supplies would stay on hold for at least the duration of the extension to early July.

Non-OPEC member Russia said on Tuesday that it would not boost oil exports in response to Iraq's cut, saying OPEC could pick up the slack.

Jordan, Egypt to sign gas pipeline deal

Jordan and Egypt will sign on Tuesday a final agreement to build a pipeline to carry Egyptian natural gas to Jordan, the first phase of a distribution project that would cover Lebanon, Syria and Turkey, officials said on Monday.

They said the accord would be signed at the end of a two-day meeting of the Jordanian-Egyptian higher committee due to start on Monday in the Jordanian capital, Amman.

The committee, headed by the Egyptian Prime Minister Atef Obeid and his Jordanian opposite number Ali Abu Al-Ragheb, is scheduled to discuss bilateral cooperation in various fields, including natural gas.

On Sunday, the Egyptian cabinet approved a plan to export Egyptian gas via the pipeline for 30 years starting from 2003, Egypt's Information Minister Safwat el-Sherif said in Cairo.

Arab Bourse Report

Lebanon's bourse index soared 7.8 per cent and Kuwait's KSE became the year's best performer in a week ofgains on most Arab stock markets, Bakheet Financial Advisors (BFA) reported Saturday.

Lebanon's BLOM advanced 7.8 per cent to 525.58 points.

Another high-flier was the KSE index which gained 1.7 per cent to close the week on 1,575.20 points, up 16.8 per cent since year start, the best performance among Arab bourses in 2001.

Egypt's Hermes Financial Index, in contrast, fell 1.8 per cent to 6,537.40 points, weighed down by a 6.6 per cent decline in MobiNil. The index has slumped 14.7 per cent since the start of the year.

In Saudi Arabia, the NCFEI index closed the week down 1.3 per cent amid a market correction in the electricity sector and a profits plunge by most blue chips, BFA said. The all-shares index fell to 2,352.51 points.

Bahrain's BSE index, driven by gains in the banking sector, was up 1.4 per cent, closing on 1,721.03 points.

Qatar rose 1.3 per cent to 244.51 points, accumulating an increase of 15.7 per cent since year start.

The other six Arab bourses in the review moved less than one per cent from the previous week.

Oman's MSM weakened 0.8 per cent to 165.92 points, and the Al-Quds (Jerusalem) index of the Palestinian territories by 0.5 per cent to 168.57 points.

The Al-Quds index, hit by the ongoing Israeli-Palestinian conflict, has dropped 18.8 this year.

Jordan's ASE index inched up 0.6 per cent to close on 141.08 points, while Morocco's CSE index closed on 658.48 points, up 0.2 per cent, and the NBAD index in the Emirates was barely changed, closing on 2,507.25 points, up 0.1 per cent.

Unchanged was the Tunindex in Tunisia that stayed at 1,385.47 points.

World oil prices stabilize

Oil prices simmered but came off the boil on Monday after OPEC said it was ready to make up any shortfall left by Iraq's decision to halt exports in protest at US-British efforts to impose new sanctions.

Benchmark Brent North Sea crude for July delivery was selling for 29.17 dollars a barrel, from 29.07 dollars on Friday evening. In New York, light sweet crude July futures gained 25 cents to 28.18 dollars a barrel in early trade. Markets took comfort from the comments of energy chiefs from the Organisation of Petroleum Exporting Countries (OPEC) arriving in Vienna for a ministerial meeting starting Tuesday.

Several OPEC ministers reassured consumers they would plug the gap left by Iraq if needed. But OPEC President Chakib Khelil said the oil cartel would not increase production at Tuesday's ministerial meeting.

Finger on trigger: Israel

Israel and the Palestinians played a tense waiting game on Sunday after Palestinian leader Yasser Arafat pledged a ceasefire following the deadliest suicide bombing in years, but militants vowed to pursue the intifada, while Israeli radio warned strikes had been ordered.

"Our finger is on the trigger to ensure the security of the citizens of Israel," Israeli Defence Minister Binyamin Ben Eliezer warned.

That was highlighted by an Israeli public radio report, saying the government had ordered strikes against Palestinian extremists responsible for most anti-Israeli bombings in recent years, and that the Palestinian Authority itself may also be targeted. "The government has ordered the army to take action against members of the Hamas and Islamic Jihad organizations, and such operations are already underway," Israeli public radio reported. The report followed meetings chaired by Prime Minister Ariel Sharon with his inner security cabinet and the full government to weigh the response to Friday night's attack at a beachside nightclub in Tel Aviv that killed 19 young people plus the bomber.

Syrian vice-president collapses in Lebanon

Syrian Vice-President Abdel Halim Khaddam collapsed on Sunday while making a speech in Lebanon broadcast live on television, but Lebanese officials later said he had only suffered indigestion and would soon leave hospital.

"Excuse me, I cannot carry on," Khaddam said before sliding to the floor while addressing tens of thousands of people at a rally. Television viewers saw the 68-year-old vice-president fall to the floor and he was rushed to hospital in the northern port city of Tripoli.

Lebanese and Syrian state television said he was in satisfactory condition, after earlier reports that he had suffered heart problems.

CIA chief set for talks

CIA chief George Tenet was due to hold separate meetings with Israeli and Palestinian leaders Thursday, facing a tough task to bolster a tenuous Middle East truce as sporadic violence flared on the ground.

"The goal ... is to start serious discussion at the security level about how to make sure the ceasefire continues," State Department spokesman Richard Boucher told reporters in Washington.

Tenet, whose mission signals a greater US role in the Middle East under a previously reticent President George W. Bush, is to meet Israeli Prime Minister Ariel Sharon and Palestinian leader Yasser Arafat later Thursday, officials on both sides said.

Israel, which has voiced skeptic about Arafat's ceasefire call on Saturday, said it wants Tenet to push for a "complete halt to violence" and for the jailing of Palestinian activists behind anti-Israeli attacks.

"At present we would have to give Mr. Arafat a failing grade on his performance," Sharon aide Dore Gold told.

Mubarak holds talks with Tenet

Egyptian President Hosni Mubarak held talks on Wednesday with CIA Director George Tenet on the rising tensions in the Middle East, security sources said.

The meeting came at the start of a tour of the region by Tenet aimed at trying to restore security cooperation between Israel and Palestinians after eight months of escalating Israeli attacks.

Neither Mubarak nor Tenet gave any statement after their talks, sources said.

US officials announced on Tuesday that Tenet would visit Israel, several Arab countries and possibly the Palestinian territories, but declined to give his exact itinerary.

Iraq wants UN resolution that lifts embargo

Iraq warned Wednesday it would not accept any UN Security Council resolution that did not allow for a comprehensive and unconditional lifting of the crippling 11-year-old embargo.

"Iraq refuses any resolution the Security Council might adopt, unanimously or by majority, in whatever form it may be, if it does not include a lifting of the embargo, without restrictions and conditions," Vice President Taha Yassin Ramadan said.

Ramadan was talking to reporters after opening a ministerial meeting of the Arab Economic Union, the first of its kind to take place in Iraq since the 1991 Gulf War.

Saudi king swears in new advisory council

Saudi Arabia's King Fahd swore in on Monday the 120 members of the Shura consultative council, the kingdom's only representative body which he expanded last month.

The official Saudi Press Agency said the new all-male council, which has no legislative powers, took an oath before the monarch in the port city of Jeddah.

The new council, which includes retired senior officers, professionals and academics, will again be led by the Islamist Sheikh Mohammad Ibrahim bin Jubair, a former justice minister.

It replaces a 90-member council which ended its four-year term this year.

King Fahd appointed 30 new members in May to the Shura Council, which was set up in 1993 to bring about gradual popular representation as part of long-awaited political reforms.

The expansion was the second in the council's history.

MPs block Kuwait Airways budget over losses

Kuwaiti MPs, angered over decade-long sustained losses by Kuwait Airways and reports of mismanagement, Tuesday blocked the carrier's budget for the fiscal year which started April 1.

Kuwait Airways has projected a deficit of 103.6 million dollars for the 2001-2002 fiscal year to go with hundreds of millions of dollars of accumulated losses since the 1990 Iraqi invasion of the emirate.

Only 19 MPs voted for the budget, well short of the necessary 32, while 18 voted against and six abstained.

Spending at the airline is estimated at 761.6 million dollars, while revenues are projected at 658 million dollars.

Dubai pardons customs officials in graft case

Dubai's deputy ruler Sheikh Mohammad bin Rashid Al-Maktoum on Monday pardoned seven customs officials, including the former chairman of the World Customs Organisation, who were sentenced for graft in April.

The United Arab Emirates official news agency said Sheikh Mohammad, who is also defence minister, issued the amnesty to coincide with Prophet Mohammad's birthday and after the men sent him a plea for mercy.

"Those involved in the customs graft case have been pardoned on this holy occasion and because they have shown that they are aware of the crime that they committed," the agency said.

In April Dubai, one of seven emirates that make up the UAE, sentenced former customs chief Obaid Saqr Busit and two top aides for illegally amassing millions of dirhams (dollars).

Iraq, Egypt, Libya and Syria sign free-trade accord

Iraq, Syria, Egypt and Libya on Thursday signed a joint free-trade accord between the four countries, an Iraqi official said.

The accord was sealed by ministers or representatives from the four countries taking part in the ministerial meeting of the Arab Economic Union (AEU) in Baghdad, the official said.

"It is an important step on the way to establishing a common Arab market," said AEU secretary general Ahmad al-Juili, who called on Arab countries to join the accord.

Iraq has already signed bilateral free-trade accords with Egypt, Syria and Tunisia, despite being under crippling sanctions since invading Kuwait in 1990.

Kuwait to slice foreign firms' tax to 25%

OPEC member Kuwait has decided to move ahead with a key component of a major economic reform and liberalisation programme, proposing a cut in tax on foreign firms to a maximum 25 per cent from a current 55 per cent ceiling.

Finance Minister Youssef Al-Ibrahim told Reuters on Monday that the governmemt agreed on the cut during its weekly meeting on Sunday. The amendment to the tax law has yet to be sent to parliament for approval.

Parliament is due to start its long summer recess at the end of this month. Over the past year, Kuwait has been pushing ahead with draft laws and amendments to reform the economy and encourage foreign investors into the small country.

The local stock market, one of the largest and liveliest in the Arab world is now open for trading by all foreigners.

Iraq resumes pumping oil to Turkey

Iraq resumed pumping oil to Turkey's Mediterranean port of Ceyhan on Sunday after a one-day halt, a senior Turkish energy official told.

"The flow resumed this morning, but we do not know how long it would continue," Gokhan Yardim, the head of the state gas and oil company BOTAS said.

Iraq turned off the taps of the pipeline early Saturday, hours before announcing that it would halt exports under a UN oil-for-food programme on Monday.

Baghdad said the cut was due to a shortfall in production, but made no explanation to Turkish authorities about why the flow resumed on Sunday, Yardim said.

Iraq announced the suspension a day after the UN Security Council extended the program by one month to gain time to modify the 11-year-old embargo on Iraq and outline the so-called "smart" sanctions, to which Baghdad is vehemently opposed.

Canon starts up Jebel Ali logistics hub free zone

The first consignment of Canon goods has arrived at the CWT-SML Logistics warehouse in the Jebel Ali Free Zone today: a milestone in Canon Middle Eastís ongoing success story in this region to improve availability of product for its customers.

Previously, Canon was represented in the Middle East only through a marketing and sales support presence, which changed in March when Canon Middle East ZZ-LLC was established as a full-fledged regional subsidiary.