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Jan 29 - Feb 04, 2001

Kuwait ups spending in new budget

OPEC member Kuwait will boost spending by an annualised 10 per cent in the 2001/02 fiscal year, raising net expenditure in a new draft budget to a projected 5.274 billion dinars ($17.264 billion).

Finance Minister Sheikh Ahmad Al-Abdullah Al-Sabah disclosed some figures of the proposed April/March budget after presenting a detailed report to a parliamentary committee.

The committee reviews the draft budget before sending it to the full elected parliament for approval.

Sheikh said oil revenue, the main source of income, was calculated at an OPEC quota of 2.141 million barrels per day and an average price of $15, compared with $13 for the current fiscal period and $10 a barrel in the 1998/99 fiscal year.

Kuwait's output quota drops to 2.021 million bpd as of February 1 as part of an effort by OPEC to shore up prices.

Kuwait has said OPEC could cut output further if prices fall.

Sheikh Ahmad said the budget was calculated at a barrel production price of 400 fils and an exchange rate of 305 fils to the dollar. There are 1,000 fils to the dinar.

The minister put oil income in the new budget at a projected 3.263 billion dinars and non-oil revenue at a forecast 568.5 million dinars, a total of 3.8315 billion dinars.

The projected net deficit, which officials expect to disappear if Kuwaiti crudes stay above $21 a barrel, is projected at 1.4425 billion dinars, rising to a gross 1.8257 billion dinars after allocations are made to a foreign investment fund.

By law, Kuwait must deposit 10 per cent of its total budget income with the state's Kuwait Investment Authority (KIA) which runs a global portfolio worth some $60 billion.

The measure, Sheikh Ahmad said, raises projected gross expenditure to 5.6572 billion dinars.

Jordanian parliament approves $3.2 bln budget

Jordan's parliament has approved a 3.2-billion-dollar budget for 2001, with spending up 14 per cent from a year earlier and a deficit representing six per cent of gross domestic product.

The 2.3-billion-dinar budget (3.243 billion dollars) was approved late Thursday by a vote of 52 out of the 80-member lower house, and with eight abstentions, after three days of debate and a fist fight between two deputies.

Deputies had threatened to vote against the budget if the government went ahead with plans to raise the cost of petrol at the pumps to make up for a shortfall in revenues.

Last week, Prime Minister Ali Abu Ragheb said petrol prices would remain unchanged "for the moment", justifying the turnaround by the fact that crude prices had dropped since November, when the 2001 budget was planned.

The bulk of the 14 per cent spending increase will be devoted to capital investments.

The deficit of 380 million dinars (around 535.8 million dollars), which excludes grants, is unchanged from 2000 in GDP terms.

On Thursday Abu Ragheb told parliament the government would try to implement a 12 per cent cut in expenditures across the board in response to a recommendation made by parliament's financial committee.

Most of the 67 deputies who spoke during the debate also asked the government to fight "nepotism and corruption". There were also renewed calls for a cut in relations with Israel.

As the debate came to an end Thursday, two MPs traded blows and insults, after accusing each other of making statements undermining national unity.

State television interrupted its live coverage of the session as independent MPs Khalil Attiyeh and Ahmad Al-Abbadi clashed briefly before being separated by their colleagues.

The pair was strongly chastised by Speaker Abdel Hadi Majali, who accused them of "injuring democracy" in Jordan and ordered them to kiss and make up.

Armenia-Iran pipeline project to begin

The construction of a gas pipeline that would transit Iranian gas to the former Soviet republic of Armenia will begin this year, Armenian Energy Minister Karen Galustyan said Wednesday.

The 140-kilometre (48-mile) pipeline should cost some 138 million dollars and should be completed within months, Galustyan said.

Armenia will begin the construction by building a section of the pipeline between its southern towns of Megri and Kadzharan, a project worth some 26 million dollars.

The exact price for Iranian gas supplies was not yet determined, the minister said.

An international consortium including Russia's gas giant Gazprom, France's Gas de France, Iran's National Gas Company and Armenia's energy ministry will be created for the building of the pipeline.

Jordan, Iran discuss water project cooperation

Jordan decided Sunday to send a delegation to Tehran to discuss Iranian participation in a water project, as the two countries pledged to boost their commercial exchanges, an official source here said.

Jordanian Trade Minister Wasef Azar, meeting with his Iranian counterpart Mohamad Shariatmadari, said a Jordanian team would soon go to Tehran "to look at Iranian participation" in pumping water from the underground basin at Disi in the south of the kingdom.

Shariatmadari said he hoped Jordan would "decide quickly on Iranian participation in this project." The Iranian minister was in Amman with parliament speaker Mehdi Karubi, the highest-ranking Iranian official to visit Jordan since the 1979 Islamic revolution.

The Iranian and Jordanian trade ministers also looked at "ways to encourage joint investments and increase bilateral exchanges, which did not go over 13 million Jordanian dinars (18 million dollars) in 2000." They also stressed the need to sign agreements to prevent double taxation and promote joint investments.

Iraq to sign free trade agreement with Syria

Iraq will soon sign a free trade agreement with Syria similar to that signed with Egypt last week, Iraq's Deputy Prime Minister Tareq Aziz said on Sunday.

"We are going to sign a similar agreement with the Syrian leadership," Aziz told reporters.

Iraq, still under UN sanctions for its 1990 invasion of Kuwait, signed a free trade agreement with Egypt on Thursday during a rare visit to Cairo by Iraqi Vice-President Taha Yassin Ramadan.

The agreement, which needs to be ratified by Egypt's parliament, was expected to boost Egyptian exports to Iraq to $1 billion a year.

Aziz did not say whether he or other Iraqi official would travel to Syria to sign the agreement or if Syrian officials would come to Baghdad.

Ties between Syria and Iraq, ruled by rival factions of the Baath Party, were broken because of differences over Iraq's 1980-1988 war against Iran and invasion of Kuwait in 1990.

Saudi seeks $160 bln investment

Oil-dependent Saudi Arabia needs to invest up to $160 billion over 20 years to turn the kingdom into a "semi-industrial" country, a senior Industry Ministry official said in remarks published on Sunday.

Saleh al-Hosseini, undersecretary at the Ministry of Industry and Electricity, told the pan-Arab Al-Hayat daily that an unspecified per centage of those investments could come from foreign investors.

Hosseini said ministry studies showed the kingdom "needed to invest about 30 billion riyals ($8 billion) annually over 20 years to turn the kingdom into a semi-industrial state", the London-based newspaper said.

Hosseini said the kingdom planned to double the contribution of the industrial sector to its gross domestic product (GDP) to 20 per cent by 2020.

Saudi Arabia, the world's largest exporter of oil, is trying to reduce its dependence on crude which provides the kingdom with more than three quarters of its revenues.

Oil prices trickle down to $26

The price of oil eased back to $26 a barrel on Thursday morning, when traders awaited fresh inspiration from the US market.

Reference Brent North Sea crude for March delivery was selling for $26 a barrel, from 26.26 at the previous close.

In New York, the benchmark light sweet crude March contract closed down 52 cents at $29.05 on Wednesday.

The basket price used by the Organisation of Petroleum Exporting Countries to help set output quotas edged up to $25.39 a barrel on Wednesday, from $25.33 Tuesday, the OPECNA news agency reported.

Egypt shares seen booming

Egypt's equity market, which has seen share prices halved over the last year, is set to soar as soon as uncertainty over currency policy is removed, analysts said on Wednesday.

Many foreign equity investors are calling for the pound to be floated and for greater clarity and transparency in macroeconomic policy, especially on the currency.

Saudi bourse dips nearly 2%

The Saudi stock market lost 1.8 per cent in the week ending Thursday as oil prices continued to ease despite OPEC's decision to cut output to stabilise the market, Bakheet Financial Advisors (BFA) reported.

The NCFEI all-shares index in the world's top oil exporting and producing country closed the week at 2,297.15, down from 2,339.07 points the previous week.

NBB

The National Bank of Bahrain (NBB) said Wednesday it posted a net profit of 44 million dollars in 2000, up slightly from 42.4 million dollars a year earlier.

Opposition criticises Bahrain's political reforms

The exiled Bahraini opposition charged Wednesday that the political reforms planned in Bahrain would transfer powers to a king at the expense of parliament, which is to be restored after 26 years.

"The government wants to force the people to sign a blank check transferring all the powers of parliament to the king," Mansur al-Jamri, spokesman of London-based Bahrain Freedom Movement, told AFP.

"What use is parliament if, from a constitutional point of view, all the power lies in the hands of the king?" he asked.

The emir, Sheikh Hamad bin Issa Al-Khalifa, said Tuesday that a national charter to create a constitutional monarchy and restore parliament would be put to a referendum on February 14 and 15.

"All Bahrainis, men and women, are invited to go to polling places to give their opinion on the proposed national charter," he said in a decree.

US oil firms

Despite Washington's entrenched hardline stance towards Baghdad, US oil companies are filling up to the rim with Iraqi oil as their European counterparts stand in the cold and watch as innocent bystanders.

"It's astounding. Washington is making the loudest noise over Iraq and yet the US remains the principal destination for Iraqi barrels," said an oil executive.

"And most European oil majors whose governments have the most liberal attitude towards Iraq are refusing to touch the stuff."

Kuwait MP

A leading Kuwaiti opposition lawmaker on Monday launched a bitter attack in parliament against a controversial government plan to allow oil majors to produce in the OPEC member and said it was a "sell out" deal.

MP Ahmad Al-Saadoun, a fomrer three-time parliament speaker, told the government "the 'Kuwait Project' should be renamed 'Project to sell Kuwait'".

Emirates bans European beef imports

The United Arab Emirates (UAE) has banned all beef imports from the European Union, Scandinavia and eastern Europe because of fears of "mad cow" disease, according to a decree published Monday.

The Agriculture and Fisheries Ministry said the ban also covered imports of fodder from the same countries.

The UAE, which imports about 30,000 tonnes of meat a year, is the first Gulf state to ban Scandinavian and east European beef.

Earlier this month Qatar urged the Gulf oil monarchies to reach a consensus on meat imports after Saudi Arabia banned EU beef and mutton. A week ago Bahrain banned EU beef imports.

Egypt's OT wins

A subsidiary of Egyptian-based regional cellular operator Orascom Telecom (OT) has won a bid for a Syrian GSM mobile phone licence on a 15-year contract, it said on Sunday.

Oman-India urea project

A planned Indian-Omani urea plant has faced a new delay and the decision to build the $969 million project will be decided by the Indian cabinet next week, diplomats and project officials said on Sunday. "The future of the project is in the hands of the Indian cabinet," said Sanjiv Kohli, first secretary at the Indian embassy in Muscat. He would not elaborate.

In June, an official from Oman India Fertiliser Company said the construction of the plant was due to start early this year.

Algeria signs $2 bln oil and gas deal

Algeria's state oil and gas giant Sonatrach on Saturday signed a $2 billion investment deal with Malaysia's Petronas and France's Gaz de France (GdF) for the exploration and development of an oil and gas field over the next 25 years, company officials said.

Under the terms of the agreement, Petronas will take a 45 per cent share of the project located in southern Algeria, Gaz de France 25 per cent and Sonatrach 30 per cent.

The three companies will work together on finding new oil and gas fields and build a 380-km (240-mile) pipeline.

The deal covers "the exploration, development and exploitation in partnership of hydrocarbon resources, particularly gas resources estimated at around 140 billion cubic metres (5 trillion cubic feet) in the Ahnet region 1,400 km (870 miles) south-west of Algiers," a Sonatrach statement said.

Oman to invite investors

Oman plans to invite private companies to bid for three of the largest operational power plants in the Gulf Arab state, an Electricity Ministry official said on Saturday.

"Unlike the previous power privatisation projects, we are now going to privatise existing plants which are fully operational. The plants will be managed by private companies which will relieve the ministry's responsibility of running the power stations," the official said. He said it would be the first time Oman had opened an existing plant to private investors.

The official said the three plants have a total power capacity of 1.6 gigawatts.

Arab banks set for good profits

Arab banks are poised for another year of significant growth after their combined 2000 net profits rose 12 per cent to $9.3 billion on the back of improved oil prices, the Union of Arab Banks said on Friday.