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 5. TRADE  6. GULF



Mar 25 - 31, 2002

Saudi 'economic outlook gloomy'

After two years of financial euphoria, Saudi Arabia is back on a thorny economic path where there may be no way out for years to come.

The pessimistic outlook for the Middle East's largest economy was contained in a recent report by the Energy Information Admi-nistration (EIA), a branch of the U.S. Department of Energy.

The EIA began its report with a warning that Saudi Arabia, the top Middle East crude oil exporter to the U.S., is not a secure oil supplier on the grounds it is located in a volatile region.

The report said Riyadh enjoyed its best financial years in 2000 and 2001 since the end of the oil boom 18 years ago because of a surge in crude prices. But it a reversal of that windfall this year and the years ahead.

"Saudi Arabia's geographic position in the politically volatile Gulf is a factor of concern for its major customers including the U.S.," said the report, published in the Paris-based Arab Oil and Gas Magazine.

While strong oil prices turned its 2000 budget deficit into a large surplus and slashed its 2001 shortfall, a decline in prices this year will combine with the kingdom's decision to cut output to mark the end of its happy days.

The EIA said Saudi Arabia's dilemma was underscored when oil prices dropped sharply after the September 11 attacks in the U.S.

It expected its revenues this year to recede to around $49.6 billion from $58.2 billion in 2001 and nearly $68 billion in 2000. Real economic growth could also be below zero compared with 1.3 per cent in 2001.

It cited Saudi government projections of a $12 billion budget deficit this year and said it could disappear only if the kingdom tightens its belts, oil prices average $22 a barrel and its production climbs to 8 million bpd.

Rains help boost Fujairah water levels

Heavy rain which fell in Fujairah and other parts of the East Coast on Monday night has filled most valleys and even flooded some, helping to increase water levels in dams and bolster underground water storage.

Ibrahim Abdul Rahman, Director of the Eastern Agricultural Zone in Fujairah, said the rain had filled some big and small valleys such as Wadi Al Basirah, Wadi Fai, Wadi Al Sidr, Wadi Murbed, Wadi Dafta, Wadi Al Taibah and Wadi Al Abadelah.

Abdul Rahman said: "The people of Fujairah and the East Coast, especially farmers, welcomed the heavy rain."

The rain started at around 9 pm on Monday and lasted for around half-an-hour in Fujairah city and two hours in Dibba and adjacent villages.

Abdul Rahman said Dibba Al Fujairah recorded the highest amount of rain 21mm, Fujairah city 13.2mm, Khor Fakkan 18.3mm, Kalba 13.5mm, Masafi 14.6mm and Dhadnah 18 mm.

"The downpour was very good for the farmers, although they expected more. The rain, which will hopefully continue as the sky is still cloudy, will benefit the East Coast's 5,929 farms.

Mattar Saleh Al Kaabi, Director of Dibba Al Fujairah Municipality, said there was heavy rain again around 4.30am, but just for 15 minutes. Showers, however, continued till 7am.

"Rain filled the Al Basirah valley dam, which is the latest to be built by the Ministry of Agriculture and Fisheries in the East Coast. The water level reached 5 metres."

He added that other small valleys such as Wadi Al Ayeynah, Wadi Sanad and Al Abadelah were also filled.

Tourists head back to Egypt

Egypt's tourist industry has started to show signs of recovery, with holidaymakers attracted by the prospect of cheap breaks.

The downturn in global travel following last year's attacks in the United States had a major impact on Egypt's economy.

Tourism is a major foreign income earner, but destinations like Sharm-El Sheikh on the Red Sea witnessed an 80% fall in arrivals in the two months after September.

Up until a few months ago the beaches were still empty but now they are filling up.

Most of the people are Egyptians and Palestinians, who are attracted to Sharm-El Sheikh because it is cheap and easy to get to.

"Seventy per cent of the people here now are from Muslim countries, mainly from Egypt, Jordan, Lebanon or Saudi Arabia," said one tour operator.

Israel in new West Bank raids

The action came shortly after security talks broke down. Dozens of Palestinians have been arrested after Israeli tanks were sent into the West Bank in overnight raids.

An Israeli Army statement said a member of the Islamic militant group Hamas was among detainees.

A soldier from Palestinian leader Yasser Arafat's presidential guard had also been arrested, Palestinian officials said.

The action came shortly after senior Israeli and Palestinian security officials failed to agree on a ceasefire, despite intense US pressure.

Qatar sees no Opec supply hike in June

No dramatic changes to current positions are expected from the June meeting of Opec, either on oil prices or on production levels, according to Qatar's Minister of Energy and Industry.

"There will not be any more changes to what it is now. There is sufficient demand from the consumer markets, and I see no reason to cut production," said Abdullah bin Hamad Al Attiyah.

"The current price is fair, very balanced and brings stability to the market. The mid $20s is very reasonable for the consumers. If there are any major changes, Opec will always act to any situation in the oil market, including further increases in prices."

The minister added that Qatar was not feeling overwhelmed by the various gas development projects taking place in neighbouring markets.

Iran's leader rules out US talks

Iran's supreme leader, Ayatollah Ali Khamenei, has ruled out negotiations with the United States as a way of resolving current tensions between the two countries.

The Ayatollah's remarks came five days after the chairman of the US Senate Foreign Relations Committee, Joseph Biden, had offered to open talks with members of the Iranian parliament and intellectuals.

The offer was cautiously welcomed in reformist circles but strongly attacked by hardline conservatives.


Boeing hopes to have a firm commitment from Emirates airline on its $6.6 billion order for 25 B777s by mid-year with expectations of the announcement being made at the UK's Farnborough air show.

Emirates signed a letter of intent for the 25 Boeing 777- 200s and 300s during the Dubai air show in November.

Fish resources to be assessed

The UAE is to benefit from New Zealand's long fishing experience by awarding a company a contract to assess its fish resources within plans to develop the marine wealth.

The Environment Research and Wildlife Development Agency (ERWDA) said it had assigned Bruce Shallard and Associates of New Zealand to carry out the study on fish resources in the UAE waters.

It said the survey is part of a five-year environment strategy and is intended to assess fish and marine resources in the UAE waters and obtain improved estimates of stock size of different fish species.

Bahrainis sceptical about Arab Summit

When it comes to the peace process in the Middle East or the March 27-28 Arab Summit in Beirut, Bahrainis are as sceptical as most other Arabs.

According to an electronic survey being conducted by the Ministry of Information, 52 per cent of the 7,600 people who have participated in it said the summit will be "useless".

Seventy six per cent were against resumption of the peace process while 96 per cent said they supported the continuation of the Palestinian Intifada against the Israeli occupation.

Only 23 per cent support the 'Peace for Land' negotiations, while 88 per cent called for reviving the Israel boycott policy.

Ninetyone per cent of Bahrainis want all contacts with Israeli Prime Minister Ariel Sharon stopped immediately.

Qaboos, Ibrahim discuss regional, bilateral issues

His Majesty Sultan Qaboos bin Said of Oman and Iraqi Vice-President Izzat Ibrahim discussed the situation in the region and bilateral relations.

"The two sides exchanged views on strengthening cooperation between the two countries," an official statement broadcast by Oman Television said.

Present at the meeting was Sayyid Fahd bin Mahmood Al Said, Deputy Prime Minister for the Council of Ministers Affairs, who had earlier welcomed Ibrahim at Salalah Civil Airport.

Cheney returns without mandate on Iraq

U.S. Vice President Dick Cheney leaves the Middle East, lacking a mandate for action against Iraqi President Saddam Hussain but playing a card aimed at winning an Israeli-Palestinian ceasefire.

Cheney returns to Washington after a 12-country, 10-day trip to Britain and the Middle East.

The trip sought support for further steps in the U.S.-led war on terrorism and Washington's campaign to deprive Iraq of weapons of mass destruction.

Mohammed opens e-Hosting Centre

An equal joint venture between Dubai Internet City (DIC) and IBM, the e-Hosting Centre has gone operational, with trial tests to be gone through over the next two weeks.

Investments in the new facility run into the millions of dollars, according to the promoters.

General Sheikh Mohammed bin Rashid Al Maktoum, Dubai Crown Prince and UAE Defence Minister, opened the DIC-based facility, the first in the Middle East.

The project took nearly 12 months for completion.

OMV eyeing major Abu Dhabi projects

Austria's leading oil and gas group, OMV is optimistic of becoming an active player in Abu Dhabi's upstream sector.

"We have had talks, but Abu Dhabi is yet to respond. We are optimistic," said Dr. Ruttenstorfer Wolfgang, chief executive of OMV.

The company initiated talks with Abu Dhabi last year to undertake exploration and production of medium sized oil and gas projects.

UAE invests Dh1.2b in Makkah project

About Dh1.2 billion worth of capital from UAE-based investors, has been pumped into a Dh6 billion housing and commercial project in Makkah, it was announced at the opening of the Investment and Property Show.

UAE investors have contributed about 20 per cent of the capital to build the massive project which is being built on the former site of a 200-year-old fort built by the Ottoman rulers of the western province of Hejaz.

The management of the project aims to get about 40 per cent of the capital from the UAE, said Dr Saleh Al Habib, general manager of Opinion Marketing and Advertising Consultants.

24 job categories will be fixed for Omanis

Some 24 low-paid job categories will be set aside exclusively for Omanis within the next four years as part of a drive to boost Omanisation and minimise joblessness among nationals.

According to an official statement released by the newly-formed Joint Omanisation Committee (JOC), the move was also meant to reduce dependence on expatriates who make more than 25 per cent of the Sultanate's 2 million population.

Bahrain, Iraq discuss bilateral ties

His Majesty Sheikh Hamad bin Isa Al Khalifa, King of Bahrain, received the visiting Vice-Chairman of the Iraqi Revolutionary Command Council Ezzat Ibrahim, Bahrain News Agency (BNA) said.

Earlier, Ibrahim, who landed in Manama, held official talks with the Bahraini Prime Minister Sheikh Khalifa bin Salman Al Khalifa.

The two officials, BNA said, discussed "bilateral relations and means of boosting them in addition to ways of insuring the success of the forthcoming Arab Summit in Beirut on March 27-28.

Israel built 34 new colonies

Israel has created 34 new Jewish colonies in 12 months under Prime Minister Ariel Sharon, jeopardising Israeli security and obstructing U.S. peace efforts, the Israeli Peace Now Movement said.

Israeli lawmaker Didi Remez said an aerial survey conducted by Peace Now in recent weeks revealed that 34 new colonies had been set up on occupied West Bank land, in violation of stated public policy, since Sharon's election in February 2001.


NBAD: National Bank of Abu Dhabi (NBAD) reported record profits of Dh608 million for 2001, which represents an 18 per cent growth over 2000.

Fujairah Bank: National Bank of Fujairah (NBF) recorded a profit of Dh70.1 million last year, an increase of 36 per cent. The shareholders have approved an increase in capital to Dh386 million and a bonus issue of 11.5 per cent, together with a cash dividend of 5 per cent.

Abu Dhabi Coop: Helped by higher sales and investment income, Abu Dhabi Cooperative Society (Abu Dhabi Coop) has earned a net profit of Dh64.2 million for 2001, a 5.7 per cent increase over the previous year.

Adnic: The Abu Dhabi National Insurance Co (Adnic) announced it earned a net profit of Dh143.5 million, a small increase over 2000.

Al Habtoor gets franchise for Ralliart

Al Habtoor Motors, the official dealers of Mitsubishi in the UAE, have been awarded the franchise for Ralliart which is a separate division of Mitsubishi that caters to the motorsports activities market.

Ralliart, established in 1984, will be based at Al Habtoor showrooms to provide competition parts to rally drivers who drive Mitsubishi vehicles in local and regional championship events.

Sharjah airport

Sharjah International Airport reported cargo throughput of 415.59 million kilos through its freight terminals in 2001.

Millions celebrate Persian New Year

Tens of millions of people from Asia to the Middle East were bringing in the new year on Wednesday by celebrating the ancient festival of Nowruz.

In some countries, the festival has taken on an increased significance since the collapse of the Soviet Union and the fall of the Taleban in Afghanistan.

Nowruz, or Persian New Year, is held on the first day of spring and marks the beginning of the calendar year in Iran and Afghanistan, Kurdish areas of northern Iraq and Turkey and some Central Asian republics.