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 5. TRADE  6. GULF



April 15 - 21, 2002


The United States voiced support for Prime Minister Ariel Sharon before Secretary of State Colin Powell's arrival on a peace mission, despite Israeli defiance over its West Bank military offensive.

The Israeli army launched new raids in the West Bank before dawn but also said it pulled back from 24 villages under intense pressure from Washington, the Jewish state's chief ally.

But a top aide to Palestinian President Yasser Arafat denied that Israeli forces had pulled out of 24 West Bank villages, calling the claim made just before U.S. Secretary of State Colin Powell arrives a "big lie."

"I deny the Israeli statement that it has pulled out of 24 villages, this is a big lie," said Nabil Abu Rudeina, quoted by the official Palestinian agency Wafa.

"This is just a manoeuvre for the international community. Israel aims to carry on with terrorism and Nazi plans against our people, our holy land," he said.

Abu Rudeina said any villages the army had left were in areas of the West Bank officially under Israeli security control.

Powell arrived in Tel Aviv. The chief U.S. diplomat will meet in occupied Jerusalem with Sharon. He is set to meet with Arafat in Ramallah.

Israel's latest moves sent a mixed message to U.S. President George W Bush, who has led international calls for an immediate end to the 13-day-old military onslaught.

But comments by White House spokesman Ari Fleischer indicated Washington remains firmly behind Israel, despite its criticism of the fierce West Bank offensive.

"The president believes that Ariel Sharon is committed to peace to finding peace in the region," Fleischer told reporters in Washington.


Any attempt to restrict supply and boost oil prices by Opec may hand market share to non- Opec producers, notably Russia, and encourage substitution into other fuels such as gas, according to a report prepared by Standard Chartered.

"The world's economic recovery is under threat from events in the Middle East. The immediate impact has been on the oil price, which has risen by over 30 per cent this year," says the latest 'Economic Bulletin'.

"Opec itself may be one of the biggest losers. The group now represents only 40 per cent of world production." According to the report, a small rise in oil prices would be welcome for the Gulf states, which together produce 12.8 million barrels a day.

"But the problem is that the rise in prices has been so large and rapid. Concerns that the violence could spill over and disrupt deliveries added a considerable premium to the price," the report added.

"Further anxiety was added by Iraq's call, later echoed by Iran, that Arab nations should use oil as a weapon against Israel and its allies. "Higher oil prices will slow growth in the major economies, by diverting consumer spending and pushing up costs for business."

The report suggested that Saudi Arabia's source of strength is also an "area of vulnerability", and mirrors the problem facing the rest of the region as well.

"So complete is the dominance of oil in the economy that Saudi Arabia is very exposed to changing prices. Spending has continued to rise while revenues have declined.

"Falling production last year meant that the Saudi economy grew by only 1.2 per cent, insufficient to maintain, let alone improve, living standards given a population growth of 3.4 per cent per annum. Unemployment is now a widespread fear in Saudi Arabia," the report has warned.


UAE investors who do business in Sudan will be allowed to repatriate profits free of tax under an agreement signed between the two countries.

Dnata is also in talks with Sudanese authorities to handle operations at Khartoum airport. Another agreement was signed on double taxation.

Ghaith Al Ghaith, Emirates' Commercial Operations Director, who was part of a 70-member high-level delegation on board Emirates' inaugural flight to Khartoum, said the two agreements will pave the way for the smooth flow of business and protect the interests of investors. They will also further enhance the strong ties that the two countries already share.

He said Dr Mohammed Khalfan bin Kharbash, Minister of State for Financial and Industrial Affairs, signed the agreements with Abdul Rahim Hamdi, Sudanese Minister of Economy and Finance.


The government of Bahrain signed two blended loan agreements for $255 million to finance the construction of the 700 MW expansion of Al Hidd Power and Desalination Station.

The agreements were signed with BNP Paribas and HSBC, Bank of Bahrain and Kuwait, and Bank of Tokyo-Mitsubishi, the four mandated lead arrangers.

The feasibilities include a $200 million loan supported by ERG, the Swiss Export Credit Agency, and a $55 million Islamic finance Ijara wa Iktina facility. Kuwait Finance House and the Islamic Development Bank have joined the $55 million facility as Islamic co-arrangers.

BNP Paribas (Suisse) is the facility agent for the ERG-supported loan and HSBC Amana Finance is the facility agent for the Islamic tranche.

This the first time that an Islamic facility and an ERG- backed loan have been structured jointly in the Middle East for a project of this nature.


Pakistani livestock and meat will be available in the UAE market next week, following the UAE's decision to lift a ban imposed two years ago. The decision was widely welcomed by the Pakistani community, particularly restaurant owners, who said their businesses had been feeling the effects of the ban.

"This is a great relief for us and our customers, who always demand meat from Pakistan," said Mohammed Younus of Pak Ghazi restaurant in Sharjah. Animal traders have already started placing their orders to resume the imports.

An average five to six tonnes of meat were imported from Pakistan daily, before the ban was imposed. Thousands of animals, including goats, sheep and cows, were also imported monthly.


Ali Naimi, the Saudi Oil Minister, has assured markets and oil-dependent economies that there will not be a squeeze in the supply of oil. Oil prices in the international marketplace immediately edged lower in response to the soothing from the world's largest oil exporter.

The price of crude oil has been rising steadily since January, and surged over 5% on Monday due to fears of reduced output from the Middle East.

"I do not believe anything could threaten reliability of supplies on the global level," said Mr Naimi, according to local press reports.

"We have proven in many previous crises that Saudi Arabia and Opec are reliable and stable source of oil supplies."


The UAE Date Palm Research and Development Programme has successfully introduced 10 new varieties of date palm in the country and plans to introduce 18 more this year.

The programme has also achieved the target of producing 40,000 plants, and has set a new goal of producing 100,000 date palms this year, according to an achievement report of the programme, which operates from UAE University.


Saudi Arabia raised more than 50 million riyals by midnight in a telethon held to help Palestinians in the Occupied Territories.

The telethon was broadcast live by the official Saudi TV and the Dubai-based Middle East Broadcasting Corporation (MBC). By 10.30 pm, the drive netted 46 million riyals, in addition to gold jewellery, and other material donations.

Some people, mostly from Saudi Arabia, even donated their plots of land, valuable items, clothes and other materials.


The Arab Trade Financing Programme (ATFP) announced a net profit of $35.5 million for 2001, slightly lower than the $40 million earned in the previous year. A four per cent dividend on the paid-up capital has been declared.


Gulf Air is enhancing its presence in two of the four partner states Bahrain and Abu Dhabi which do not have their own carriers, as part of the airline's corporate and route restructuring plans aimed at spurring growth, a company official said.


Cupola Group has posted a net profit of $18.283 million for the year ending June 30, 2001 against a net of $18.1 million the group has made for the year ending June 30, 2000.


The Sharjah Economic Development Department is hosting a seminar on international trade and its impact on the UAE.

Sheikh Tariq bin Faisal Al Qasimi, chairman, will deliver the inaugural address.


Hezbollah guerrillas in Lebanon have offered to hand over a captured Israeli colonel if Palestinian fighters trapped in the West Bank town of Jenin are allowed to go free.

Hezbollah's leader, Sheikh Hassan Nasrallah, said he would release businessman Elhanan Tennenbaum, a reserve Israeli army colonel held by the guerrillas since October 2000, if Israel spared the lives of about 100 Palestinian guerrillas in Jenin.


Tony Blair has gone all out to calm MPs' fears over possible action against Iraq amid a welter of Commons questions about the issue. Mr Blair was grilled by MPs from all sides at a stormy Prime Minister's Question Time.

He told them Britain will not be rushed into a new offensive against Saddam Hussein. But he stressed that he remained committed to a "regime change" in Iraq.


The UK has accused Iraqi President Saddam Hussein of depriving his people of vital food and medicines through his oil embargo.

Oil exports from Iraq have been halted for the next month in protest at Israel's military campaign against Palestinian cities.

Foreign Office Minister Ben Bradshaw said the people of Iraq were suffering already and would now lose out on supplies through the UN "oil for food" programme.


Iraq has lost more than $400 billion since United Nations sanctions were imposed in 1990, said Mohammed Mahdi Saleh, Iraqi Trade Minister.

Iraq's trade with Arab countries made up more than 50 per cent of its total trade, compared with less than 10 per cent average of inter-trade between Arab countries, the Iraqi minister said in an exclusive interview with Gulf News in Beirut recently.

"Iraq lost more than 1.6 million people, and some 6,000 children die every month because of the unfair sanctions. We have also lost more than $400 billion, including $200 billion in oil revenues and the same amount in destruction of projects and establishments during the past 12 years," said Saleh. He hailed the economic cooperation with the UAE.


Iran Khodro Co, which claims to be the Middle East's biggest carmaker, says Iranian made cars will be imported by the UAE in three months.

The 1.8-litre Samand, the first car to be wholly designed and built in Iran, will be sold directly through the company's own new showroom in Dubai.

The company plans to sell 1,000 Samands in its first year. "The cars are aimed at Iranian expats and will sell for around Dh37,000," said A.R. Ghane, executive manager, Automotive Components Technology General Trading, the spare parts division of Iran Khodro, which already has offices in Dubai.


His Highness Sheikh Saqr bin Mohammed Al Qasimi, Member of the Supreme Council and Ruler of Ras Al Khaimah, officially opened the Gulf Pharmaceutical Industries latest plant, Julphar VI.

In his opening speech, read by Sheikh Saud bin Saqr Al Qasimi, Chairman of the Ras Al Khaimah Emiri Court and Chairman of Board of Julphar, the Ruler said that Julphar had been able to occupy a very respectable place worldwide in the pharmaceutical industry, as its six plants were among the best in the world.


Twenty-two Arab ministers of tourism would discuss the latest issues in the region including easing of visas to encourage tourism among Arab countries at an annual conference to be held in Dubai from May 4.

The Arab Tourism Conference will receive extra attention as most European leisure travellers are still shy to fly in the aftermath of September 11.


Multiple airports in Sharjah form a viable option for future expansion, sources said. A ready option is available in Khor Fakkan, which already has an airstrip and a modest-sized terminal, now in disuse, they said.

They added that the emirate, which stretches from the west coast to the east on the Arabian Sea, offers potential to set up satellite airports to service tourists.


Thuraya Satellite Telecommunications Co has no plans to bring in additional shareholder capital to finance its near term capacity and network expansion, confirmed a top official.