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 1. INTERNATIONAL   2. INDUSTRY
 3. FINANCE  4. POLICY
 5. TRADE  6. GULF

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GULF

Mar 18 - 24, 2002

UN Security Council resolution 1397

On 12 March 2002, the United Nations Security Council adopted its first resolution explicitly calling for an Israeli and a Palestinian state "side by side" in the region. Fourteen Security Council members voted for, none against. Syria abstained. The full text of resolution 1397 (2002) reads as follows:

The Security Council, Recalling all its previous relevant resolutions, in particular resolutions 242 (1967) and 338 (1973),

Affirming a vision of a region where two States, Israel and Palestine, live side by side within secure and recognized borders, Expressing its grave concern at the continuation of the tragic and violent events that have taken place since September 2000, especially the recent attacks and the increased number of casualties,

Stressing the need for all concerned to ensure the safety of civilians,

Stressing also the need to respect the universally accepted forms of international humanitarian law,

Welcoming and encouraging the diplomatic efforts of special envoys from the United States of America, the Russian Federation, the European Union and the United Nations Special Coordinator and others to bring about a comprehensive, just and lasting peace in the Middle East,

Welcoming the contribution of Saudi Crown Prince Abdullah,

Demands immediate cessation of all acts of violence, including all acts of terror, provocation, incitement and destruction; Calls upon the Israeli and Palestinian sides and their leaders to cooperate in the implementation of the Tenet work plan and Mitchell Report recommendations with the aim of resuming negotiations on a political settlement;

Expresses support for the efforts of the Secretary-General and others to assist the parties to halt the violence and to resume the peace process;

Decides to remain seized of the matter.

Saudi banks see lower business

The performance of Saudi banks is expected to recede this year as a result of low interest rates and an economic slowdown, economists said.

The kingdom's nine commercial banks listed on the stock market boosted net profits by around six per cent last year benefiting from relatively strong crude prices, an upswing in non-oil sector and growth in deposits without interest, which are termed as non-interest bearing (NIB).

"Saudi banks are poised to face a tougher business environment in 2002," said Saudi National Commercial Bank in a study. "This will be reflected in lower demand for credit as well as slowdown in the growth of NIB (deposits), which is the major source of income for Saudi banks as they make up over 46 per cent of total bank deposits." The study said Saudi banks performance last year was also boosted by higher investments by most banks and a sharp decline in commission expenses.

It showed net profits by the nine listed banks grew to around 8.16 billion Saudi riyals ($2.17 billion) in 2001 from SR7.64 billion ($2.03 billion) in 2000.

The Saudi American Bank emerged as the biggest gainer for the second year running, with profits of nearly SR2.25 billion.

AL Rajihi Bank came second, netting around SR1.54 billion, while profits of Riyadh Bank stood at SR1.35 billion.

An increase in their operating income reflected a business upturn in the kingdom, although oil prices last year were nearly $4 below their 2000 level of around $27.

The study showed the operating income of the nine banks increased to around SR15.9 billion last year from nearly SR15 billion in 2000.

While commission income declined by around $533 million, expenses on commission were slashed to nearly SR8.6 billion last year from SR11.32 billion in 2000.

GCC to form customs union next year

The Gulf Cooperation Council (GCC) finance ministers in their recent meeting have cleared the last snag towards the creation of a GCC customs union, within the next 10 months, by agreeing on a mechanism for the collective distribution of import duties and a possible compensation fund, newspapers reported here.

The varying level of import tariffs within the six-member GCC has been a major stumbling block towards a GCC economic union on the lines of the European Union. In order to overcome this problem, the GCC states have been bringing their custom tariffs at par over the last years. Consequently, the UAE announced increasing the import duties to four from the earlier one per cent and Saudi Arabia announced decreasing its import tariff to five per cent from a minimum of 12 per cent on most of the items earlier. Once this was resolved, the issue of distribution of import duties was the last problem the GCC finance ministers were required to overcome before moving ahead with the task.

British firms in race for Iranian contracts

Several British firms are in the running for multiple contracts, valued at 17.15 million, coming up from the development of a coal mine in Iran.

Iran has emerged as the fastest growing market for the UK in the Middle East and North Africa, with a 53 per cent increase in exports between January and November last year.

The mining sector, in particular, is seen as offering good potential to further develop UK interests in Iran, according to a report in Opportunity Middle East, which is brought out by The Middle East Association in alliance with Trade Partners UK. Recently, Cementation Skanska won a 10.85 million subcontract as part of a 102 million project to develop a coal mine in Tabas. It will be Iran's first mechanised underground mine and is expected to produce 1.5 million tonnes of coking coal for steel production annually.

20 banks, FIs eye bond issue

Over 20 banks and financial institutions (FIs) both local and foreign have approached the Dubai 2003 body seeking participation in the Dh1.5 billion bond to be launched by the Dubai Government.

The lead managers and co-managers to this bond, the first ever bond to be issued by the government, will be decided on within two weeks, confirmed Ibrahim Belselah, general coordinator of Dubai 2003.

Mufti call to promote true image of Islam

The Qatari Grand Mufti Sheikh Ahmed bin Hamad Al Khalili has stressed the need for collective effort to counter the problems faced by the Muslim Umma (Nation) and promote the true image of Islam.

Sheikh Al Khalili, who met with Dr Mohammed Masjid Lamaie, Director of the International Centre for Dialogue Among Civilisations in Iran, hailed the key role played by Iran in this regard.

Three killed in Ramallah

Israel's ongoing occupation of the West Bank's capital claimed three more lives on Wednesday, including that of an Italian photographer.

Italian photographer Raffaele Ciriello was standing with two other members of his crew in the centre of Ramallah, when hit by six bullets from an Israeli tank machinegun. He died from his wounds shortly afterwards.

Other deaths included an Israeli army Lieutenant Gil Badihi and Colonel Abu Fadih, deputy commander of Arafat's Force 17, who were killed during clashes.

Israelis pull out of West Bank towns

The Israeli army says it has withdrawn from three West Bank towns to coincide with United States peace envoy Anthony Zinni's visit to the region.

Dozens of tanks were seen heading out of Ramallah, which houses Yasser Arafat's West Bank headquarters, accompanied by volleys of gunfire from jubilant Palestinians.

Troops have also left Qalqilya, Tulkarm and the Gaza Strip refugee camp of Al Boureij, but still remain in parts of Bethlehem.

The withdrawal, in effect, marks the end of Israel's biggest ground military operation for at least 20 years.

The Israelis have described the military pull-back as a goodwill gesture designed to help Mr Zinni's efforts, but the Palestinians have dismissed the moves as a political trick. The troops were said to be forming security cordons around all the areas from which they had withdrawn.

Yemen makes debut in GCC meeting

Yemen for the first time officially took part in a meeting of the GCC when its education minister attended the Arab Bureau of Education held at Burj Al Arab.

Gulf heads of state last year in their summit decided to ask Yemen to take part in matters relating to GCC educational organisations.

Cheney arrives in Oman

U.S. Vice-President Dick Cheney arrived on a two-day visit during which he will hold talks with His Majesty Sultan Qaboos, it was announced.

EU in intensive efforts for truce

The European Union called Israel's phased troop withdrawal from the West Bank city of Ramallah necessary but not enough, and said it was engaged in intensive efforts to achieve a Middle East ceasefire.

"It was a necessary decision but not sufficient," Josep Pique, foreign minister of EU president Spain, said on the eve of an EU summit in Barcelona.

Emirates likely to order more jets

Emirates airline, which plans to triple its jetliner fleet by the end of the decade, said it may order more planes as it considers flying to new destinations in Russia, Bloomberg reports from Dubai.

The airline, which has already ordered or signaled plans to buy aircraft worth as much as $22 billion, is considering services to Moscow and St. Petersburg, Russia's two largest cities, said Mike Simon, the carrier's director of corporate communications.

Nespak to tie up with Qatari firm

 

The state-owned National Engineering Services Pakistan Ltd (Nespak) is stepping up its regional presence by foraying into Qatar, a top official said.

Nespak is tying up with Arab Engineering Bureau, one of the largest engineering consultancy houses in Qatar. The office will be opened in the next two months.

Oman sour crudes surge

The Asian market for sour Oman crude edged up bolstered by unexpected early Korean end-user demand.

Traders said that one Korean refiner has bought nearly two million barrels, or four cargoes of May Oman crude at around MoG plus seven plus eight cents a barrel. Branded the first major end-user buying for May, this knocked the market out of recent sticky MoG plus five/plus seven cents range.

Al Ghurair to invest Dh360m in grain sector

Al Ghurair group said it has concluded plans to invest over Dh360 million in the grain industry, which includes the financing of the new 1,300 tonnes flour mills and 80,000 tonnes silos being set up in Sudan.

Elaborating on the ongoing projects undertaken by the group, Al Ghurair said, the Sri Lankan project which will have a 1,000 tonne flour mill and 60,000 tonnes silos is being set up at a cost of $30 million jointly with the ETA group.

Cleric asks Iranians not to celebrate Norooz this year

Ayatollah Ali Meshkini, Head of the Assembly of Experts, urged Iranians not to celebrate Norooz, the traditional Iranian new year, to express solidarity with the Palestinians fighting against the Israeli occupation and to mourn Imam Hussein.

"In a situation like this when our Muslim brethren in Palestine are being brutally killed by the Zionists, how can we celebrate Norooz?" asked Meshkini. He went on to call Israeli Prime Minister Ariel Sharon a "war criminal who must be executed after a fair trial."

UAE sets deadline for Dolphin Energy equity bid

The five shortlisted international oil companies (IOCs) to take a 24.5 per cent equity stake in Dolphin Energy Ltd (DEL) must submit bids by April 6, after which one will be selected by mid-year.

The five oil majors are BP, Conoco, ExxonMobil, Occi-dental Petroleum and Royal/Dutch Shell.

Currently, the UAE Offsets Group (UOG) holds 75.5 per cent of DEL while France's TotalFinaElf holds 24.5 per cent.

VoA gets commitments

Voice of America (VoA) claims to have "received commitments" for airing in Abu Dhabi and Dubai of its regional pilot project.

The project, which is set to start soon, will operate from Washington and the Middle East broadcast centre in Dubai, where a VoA delegation visited last week.

Saudi cable firm wins UAE deal

Saudi Arabia's Riyadh Cables & Metals has bagged a Dh20 million contract for supply of power cables to UAE's AbdulJalil Industrial Development, part of the Al Fahim Group.

The contract was signed earlier this week between Dr. Fadi Semaan, general manager, sales and marketing for the UAE with the Saudi company, and Aamer Al Fahim, managing director of Al Fahim Group.

Bush: Saddam 'will be dealt with'

US President George W Bush has continued his rhetoric against Iraq, saying Saddam Hussein is a "problem" and "we are going to deal with him."

"I am deeply concerned about Iraq," Mr Bush told a Washington news conference. "But the first stage is to consult with allies and friends, and that is exactly what we're doing."

He was speaking as Vice-President Dick Cheney wound up talks in Egypt with President Hosni Mubarak, who said he was ready to pressure the Iraqi leader to accept the return of United Nations weapons inspectors.