Feb 12 -
Khatami's economic reforms stranded by 'old guards'
President Mohammad Khatami's hopes of liberalising
Iran's economy remain a distant dream in the face of political
uncertainty and opposition from an entrenched revolutionary
establishment with vested interests.
Khatami has launched an economic recovery programme
promising to curb the state's massive role in the economy and
encourage private business activities.
His goal is to reform an economy seen as
inefficient, sharply boost growth and investment, and create about
800,000 jobs a year for the booming young population.
"We have problems in economic liberalisation.
We can't persuade the private sector to take over state companies from
the government," Jamshid Pajuyan, an economist, told Reuters.
"Since Khatami's goals hinge on healthy
private activities, I do not see us achieving those goals any time
soon in the future," he said.
The state controls more than 80 per cent of the
economy, a fact which has led to mismanagement and widespread
Confusing laws and political infighting have
discouraged major foreign and private local investment.
Past efforts at privatisation have generally failed
amid deep-seated resistance from revolutionary old guards, senior
bureaucrats or the state-affiliated labour groups.
Steps taken by this government to privatise some
state holdings and liberalise the financial market are yet to show
The government has also failed to touch billions of
dollars in state subsidies, aimed at protecting the poor and averting
Such assistance, covering a range of essential
items from food and medicine to energy, are seen as a discouragement
to fair competition and as conducive to corruption.
Tunisia's foreign direct investment up 125%
Foreign direct investment in Tunisia soared 125 per
cent to 1.100 billion dinars ($802.9 million) for 2000 and created 22
per cent of the total new jobs for the year, official figures showed
"Foreign investment rose to 1.100 billion
dinars in 2000 compared with 488 million dinars in 1999, resulting in
an increase of 125 per cent," the Cooperation and Foreign
Investment Ministry said in a report.
About half of the investment came from the sale of
two cement plants to foreign investors and the construction of a new
power plant awarded to an international consortium, according to the
Receipts from the two privatised cement plants were
at 362 million dinars while investment in the 470 megawatt
combined-cycle plant at Rades area, near Tunis, was at 151 million
The construction of the Rades power plant, granted
to a foreign consortium in 1997 in a 20-year build-own-operate
concession, started in 1999 with an investment of 44 million dinars.
More than 100 new firms, established by foreigners
in 2000, invested about 500 million dinars, mostly in the
Total foreign investment for the 1997-2000 period
reached 2.9 billion dinars compared to 1.7 billion dinars targeted in
a government plan, according to the ministry data.
The total number of foreign companies reached 2,139
by the end of 2000, creating a total of 192,000 jobs which included
14,750 new jobs in 2000, accounting for 22 per cent of total jobs
created by the whole economy.
The Tunisian current account deficit is expected to
be at about $600 million forend of 2000, or 3.0 per cent of the
country's Growth Domestic Product (GDP).
Forecasts put the current account deficits at 2.9
per cent of GDP in 2001 and more than 3.0 per cent in 2002.
Iraq, Jordan sign drafts of free trade agreement
Iraq on Wednesday said it had signed drafts of a
free trade agreement with Jordan, the official Iraqi News Agency (INA)
"We have agreed on of the clauses two drafts
of a free trade agreement put forward by the two sides," INA
quoted Trade Minister Mohammed Mehdi Salehas saying after signing
minutes of the meetings of the Iraqi-Jordanian committee with Jordan's
Trade and Industry Minister Wasef Azzar.
"The drafts will be submitted to the two
countries' governments to be ready for signing later on," Saleh
Saleh said they had also agreed on boosting
commercial cooperation under the oil-for-food programme.
Sudan calls for regional Arab unity
Sudan's Foreign Minister Mustafa Ismail urged the
Arab world to unite as one nation, faced with the new situation
resulting from the election of hardliner Ariel Sharon as Israel's
"The region is headed for a state of no-peace,
no-war, which we should face with a strategy based on removal of Arab
conflicts and disputes," Ismail told a press conference.
The minister warned Arab states against
"failure of taking seriously" the situation he said would
arise in the Middle East after Sharon's election victory.
Saudi looking for $25 bln investment in gas
Saudi Arabia is looking for investments up to 25
billion dollars to see through a gas project in the south of the
country, economic daily Al-Iqdissadiya reported Wednesday.
"The volume of investment needed for the gas
project in the Jawaher area of southern Saudi Arabia amounts to some
25 billion dollars," the paper said, adding that an agreement on
exploiting gas reserves would be reached with international companies
According to the paper, Riyadh will be studying
with seven international firms "ways of developing the gas field
in the Jawaher region in the Rub Al-Khali area" to the south of
It says it is one of three major gas projects in
southern Saudi Arabia, with another in the Red Sea area and a third in
the Shaybah area.
Oil price touches $30 a barrel
Oil prices touched 30 dollars a barrel for the
first time in more than two months on Thursday, with technical buying
dominating the morning's trading, dealers said.
Brent North Sea benchmark crude for March delivery
pushed up to 30.00 dollars, having closed at 29.91 dollars on
Wednesday. Prices were last this high on December 4.
New York light sweet crude March futures gained 90
cents on Wednesday to 31.25 dollars.
Traders said that buying interest was keen because
the Brent March contract is due to expire in the early part of next
week, and dealers want to ensure they are not short of oil.
Analysts continue to point to factors such as
fitful Iraqi exports and refinery bottlenecks for the rise in crude
and refined product prices.
Iran to fly first domestic made plane
Iran's first-ever domestically made passenger
plane, built with technical assistance from the Ukraine, will make its
first test flight this week to mark the anniversary of Iran's 1979
Islamic revolution, press reports said Tuesday.
Ukrainian Prime Minister Viktor Yushenko, expected
to arrive in Tehran later Tuesday, will be among the guests invited to
witness the first flight Wednesday of the medium-haul Antonov AN-140
plane (Iran-140), the English-language Iran News said, citing Mohammad
Islami, head of the Iran Aircraft Industries Co.
Dubai to spend over $1.3 bln on airport
The Gulf emirate of Dubai is to invest 1.36 billion
dollars in a new terminal for its airport to handle 45 million
passengers by 2015, civil aviation chief Sheikh Ahmad bin Said al-Maktoum
"We have laid out five billion dirhams (1.36
billion dollars) for the airport's expansion and the building of a new
terminal," said Sheikh Ahmad, also chairman of the Dubai-owned
Work on the new terminal, designed by France's
AČroports de Paris (ADP), will begin in 2002 and finish in 2005, by
which time the airport will be able to accommodate 22 million
passengers, he said.
The airport "is expected to have a capacity of
45 million passengers from 2015 against 12.3 million in 2000," he
Foreign oil cos
Yemen will sign prospecting agreements with foreign
oil companies aimed at doubling production to one million barrels per
day (bpd) and boosting reserves, Oil Minister Mohammad al-Wajih said
Our main objective is to increase reserves and
boost production to one million bpd within five years, Wajih said in
an interview with Al-Hayat newspaper.
Egypt postpones minister's trip
Egypt has delayed a trip to Iraq by its economy
minister to give him more time to prepare for talks to activate the
two countries' new free trade agreement, Egypt's official news agency
said on Tuesday.
Economy and Foreign Trade Minister Youssef
Boutros-Ghali and a delegation including more than 170 businessmen had
been due to leave for Iraq on Friday.
Kuwait expected to name new oil minister
Kuwait is expected to name a new oil minister after
Sheikh Saud Nasser Al-Sabah asked to be replaced after three years in
the job, political sources said on Thursday.
They said that Sheikh Saud, seen as an oil price
hawk within the Organisation of the Petroleum Exporting Countries
(OPEC), declined another cabinet position in the country's new
government which is expected to be announced within a few days.
Arab Bank weathers Middle East turmoil
Arab Bank Group, one of the Middle East's major
financial institutions, said on Monday its healthy 2000 earnings were
the result of better utilisation of its diversified portfolio despite
a difficult business climate.
Arab Bank chairman Abdul Majeed Shoman said a
healthy 10.9 per cent growth in the bank's $28.5 billion balance sheet
reflected its financial strength and a diversified global reach with
over 400 branches and offices worldwide.
"Arab Bank was able to overcome a difficult
political situation by its more efficient utilisation of assets,"
Shoman told Reuters after announcement of a 6.9 per cent rise in 2000
profits to $241.2 million.
SABIC net up
Saudi Arabia's industrial giant Saudi Basic
Industries Corp (SABIC) said on Tuesday it made a 3.63 billion riyal
($968 million) net profit in 2000, up 112 per cent from 1.71 billion
it made in 1999.
Saudi economic council takes over privatisation
Saudi Arabia said on Monday its Supreme Economic
Council would take overall charge of planning and implementing the
kingdom's privatisation drive.
The official Saudi Press Agency said the cabinet
approved a measure granting the council "the responsibility of
overseeing the privatisation process and following up on its
implementation and the required coordination between state
The cabinet said the economic council would specify
the "activities to be privatised" and form a strategic plan
Iran 9-month oil income up
Iran's earnings from petroleum exports soared 62.8
per cent to $18.6 billion in the nine months to December on strong oil
prices, Central Bank Governor Mohsen Nourbakhsh said on Monday.
Nourbakhsh said the $18.6 billion income covered
exports of crude oil, gas and petroleum products, the official IRNA
news agency reported.
He said gross domestic product (GDP) was expected
to rise 5.2 per cent in the current Iranian year which ends on March
Foreign debt was down to $8.1 billion at the end of
the nine-month period on December 20, from $10.4 billion at the
beginning of the year.
Arab Fund lends Tunisia
Tunisia on Monday signed a 25 million dinar ($81.84
million) soft loan with the Arab Fund for Economic and Social
Development (AFESD) to help finance road projects in the North African
The Kuwait-based AFESD said in statement the
22-year loan, including a five-year grace period, carries a 4.5 per
cent annual interest rate. The loan will partly finance a project to
develop the country's road network by expanding them and building a
new 67 km (42 miles) highway.
The Bahrain-based investment group Investcorp on
Sunday announced profits of 70 million dollars in 2000, down 44 per
cent compared to the previous year.
Spain's Costa Blanca Real estate
Real estate on Spain's Costa Blanca is to come
under the spotlight next week at two exhibitions in the UAE.
Abbey National Offshore, the offshore arm of
Britain's fourth largest high street bank says the east coast of the
Iberian Peninsula is experiencing a property boom with real estate
prices currently recording double-digit annual per centage growth.
Jordan cuts interest rates
Jordan's central bank cut interest rates by
one-half per centage point Saturday in a bid to stimulate the economy,
said the bank's governor, Omaya Tukan.
The discount rate was cut to 6 per cent, the weekly
refinancing rate to 7 per cent and the interbank rate to 5.125 per
Tukan said he is now looking for a cut in rates by
the banking sector that would lead to "promoting economic
activity in the country." He said the rate cut was justified by
"the stability of the monetary situation and ... of the Jordanian
dinar's exchange rate." Added to that, he said, is a
"sufficient level" of foreign exchange reserves, now
estimated at 1.9 billion dollars, compared with less than one billion
Lebanon still on money laundering list
Lebanon should be removed from the OECD's blacklist
of suspected money launderers in June, the secretary general of the
Association of Lebanese Banks, Makram Sader, said Friday.
The Organisation of Economic Cooperation and
Development's financial action task force on money laundering (FATF)
said Thursday that none of the 15 countries listed as
"non-cooperative" in its anti-money laundering campaign had
been removed from the list, despite "impressive strides"
taken by some toward transparence.
Sader said Lebanon's continued presence on the list
was not due to the existence of money laundering operations, but to
the absence of legislation required by the FATF.
Egypt pound-dollar fair value seen at 3.96
The fair value of the Egyptian pound, if it were
freely floated instead of pegged, would be 3.96 to the dollar,
according to the mean of estimates by seven economic analysts
contacted in a Reuters survey on Thursday.
This compares with the official rate of around 3.85
introduced last week under a "managed peg" system. The seven
analysts' estimates ranged from 3.9 to 4.0.
Their forecasts for fair value of the pound at the
end of March ranged from 3.85 to 4.25 per dollar, with a mean of 4.0.