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GULF

May 13 -19, 2002

ARAB STATES URGED TO TACKLE FISCAL DEFICITS

The Arab League's top monetary official urged member states to give priority in their reforms to tackling fiscal deficits to spur economic growth and avert possible social unrest because of unemployment and high cost of living.

Dr. Jassim Al Manai, chairman of the Arab Monetary Fund, said efforts should concentrate on tackling both the internal and external financial gaps as they are stifling economic performance and causing joblessness and inflation.

Manai, who was addressing Arab economic officials at a training session at the Abu Dhabi-based AMF, said heavy borrowing by some Arab states to shore up the budget shortfall is among the main causes of high inflation and slow growth.

Manai, a Bahraini, said several Arab states are suffering from persistent budget deficits because of the lack of such policies while others are reeling under chronic external deficits in the current account because of lower export of goods and services as well as poor investment income and high remittances and capital outflow.

Most Arab states have announced reforms to tackle persistent economic and financial problems resulting from flawed policies, decades of state control of the economy, lack of incentives for national exports and investment, and slow growth.

AMF figures showed the combined Arab budget deficit was slashed to only $946 million in 2000 from a mammoth $32 billion in 1999 but the decline was caused by a surge in oil prices as most oil producing members recorded surpluses.

The figures showed the oil price surge to nearly $27 a barrel boosted the total Arab revenues to $196.8 billion in 2000 from around $147 billion in 1999.

The deficit was slashed despite a sharp rise in spending to $197.7 billion from $179.8 billion in the same period.

HIGH TURNOUT IN BAHRAIN MUNICIPAL ELECTIONS

In what was described by senior officials as "an historic event", large numbers of Bahrainis turned out with overwhelming enthusiasm and happiness to elect, for the first time in decades, their municipal councils' representatives.

Government officials, opposition leaders and independent local observers have all told that the civic polls, in which 300 candidates, including 31 women, have contested, were "fair and neutral".

In 26 out of 50 districts the results of which were out last night, there were no women winners. The turnout, officials said, ranged between 40 per cent and 80 per cent in different districts.

Forty-eight municipal seats were contested while two unopposed candidates in the Southern Governorate had been declared winners on Wednesday night by election authorities.

Speaking to reporters after casting his vote in Western Refaa, Prime Minister Sheikh Khalifa bin Salman Al Khalifa told reporters that it was "an historic day for Bahrain," and called upon all citizens to safeguard "this great accomplishment."

Men and women turned out in large numbers in all polling stations for the first civic polls in the country since 1957.

While, Sheikh Abdullah bin Khaled Al Khalifa, Minister of Justice and Islamic Affairs declared the process "free, fair and successful", Sheikh Ahmed bin Ateyyatullah Al Khalifa, Election Executive Director, said that the turnout was encouraging. "I am quite satisfied with the numbers and also the orderly way the polls are being executed," he told Gulf News.

Independent politicians and observers said that it was an obviously good start on the path of democracy. "The level of participation is more than what had been expected by all political groups," Abdul Rahman Al Nuaimi, leader of the opposition National Democratic Action Society (NDA) told.

PEACE CONFERENCE MOVES AROUSE ARAB FEARS

The Secretary General of the Arab League Amr Mussa, says a US proposal for a new Middle East peace conference is part of plot to create a new regional order dominated by Israel.

Mr Mussa said he believed that Israel backed by the United States wanted to impose peace on its own terms, regardless of Arab interests.

Echoing a widely-held view in the Middle East, Mr Mussa was speaking in Cairo before a meeting with key Arab foreign ministers.

They are due to discuss the latest moves to resolve the crisis in the Middle East.

The meeting will hear a report from Saudi Arabia on the outcome of the talks its leader, Crown Prince Abdullah, held with US President George W Bush.

MILITANTS LEAVE BETHLEHEM CHURCH

Thirteen Palestinian militants have left the Church of the Nativity in Bethlehem after five weeks of Israeli siege and are reported to be on their way to exile.

After being led through metal detectors and manually searched by Israeli soldiers they boarded buses which are now believed to be heading to Ben Gurion airport in Tel Aviv.

Under an internationally-brokered agreement the 13 men are to be flown to Cyprus on a British military plane.

They militants are on Israel's "most-wanted list", and Cyprus has said it will give them temporary sanctuary while their final place of exile is determined.

The second group due to leave the church consists of 26 Palestinian militants who are to be sent to the Gaza Strip under a deal reached with Israel.

KUWAIT CURRENT ACCOUNT HIT HARD

Kuwait said its 2001 current account surplus slipped 41.7 per cent in 2001 to 2.626 billion dinars ($8.59 billion) as weaker world oil prices brought a $3.2 billion decline in oil exports.

The small state of 2.2 million people, 65 per cent of whom are expatriates, saw the value of oil exports drop in 2001 to 4.591 billion dinars from 5.578 billion dinars in 2000.

Kuwait Central Bank figures published on the internet put the current account surplus at a revised 4.501 billion dinars in 2000 from an earlier 4.561 billion dinars. The surplus for 1999 was just 1.541 billion dinars when Kuwaiti crudes averaged $16.73 a barrel.

But oil prices climbed over the next two years before Kuwait saw its oil income decline during a rollercoaster 2001 with world oil prices dropping in Q4 after the September attacks against landmarks in the United States.

OIL PRICES SLUMP

Oil prices slumped on Tuesday as the market braced itself for the resumption of Iraqi oil exports after a month-long stoppage, a move that will ramp up world supply even as prices are already weakening.

Benchmark Brent North Sea crude for June delivery plunged 65 cents a barrel to $25.10 here by late trading. The market was shut on Monday for a public holiday.

In New York, the light sweet crude June contract extended Monday's decline, dropping five cents to $26.12 a barrel.

The losses followed news that Iraq, which exports around two million barrels of oil a day under the UN-supervised oil-for-food programme, some 40 per cent of which ends up in the United States, was set to resume oil exports on Wednesday.

UN LIKELY TO MODIFY SANCTIONS AGAINST IRAQ

The United Nations is very close to an accord on the modification of existing sanctions against Iraq, and that a decision on a significantly modified list of sanctions will be announced soon, French diplomatic sources say.

France has long fought against existing sanctions against Iraq, and newly-reelected President Jacques Chirac has never hidden his belief that existing sanctions are considerably unfair.

UN BLASTS ISRAEL FOR ASSAULT ON PALESTINIAN CITIES

The UN General Assembly on Tuesday voted to condemn Israel's assault on Palestinian cities and its rejection of a UN fact-finding mission into its army's actions in the Jenin refugee camp.

The resumed emergency session of the 189-nation assembly approved the Arab resolution late Tuesday, 74 to four, with 54 abstentions. The United States voted against it.

FUJAIRAH WOOS INVESTORS

The Port of Fujairah is planning to attract investors to set up a drydock for repairing ships as part of the port authority's new policy of attracting investments to develop its maritime business.

Captain Mousa Murad, director general, told that the port authority is ready to offer all facilities and services for investors to set up business at the port with great support from the local government.

INSURANCE SECTOR DRAGS EMNEX DOWN

The Emnex closed a marginal 0.72 point down to close at 1,976.18 with the insurance sector facing the biggest loss of 10.71 points before settling at 1,191 points.

Financial services sector was the biggest gainer, the last trading day of the week, with a 9.38 points gain before closing at 2,120.12. While the Islamic sector remained unchanged at 923.33 points, property and telecom sectors suffered 1.41 points and 6.30 points respectively.

In the financial service sector, while both Dubai Investment and Invest Bank lost 5 fils each, Shuaa Capital remained unchanged at 85 fils. National Bank of Sharjah counter saw a trading of 132,879 shares for Dh936,797 taking the closing price up by 1fil.

National Bank of Dubai, on the other hand, gained 85 fils as 29,075 shares changed hands. Heavy trading, to the tune of 196,000 and 306,838 shares respectively, took place at First Gulf Bank and Invest Bank counters.

SAUDI STOCKS POISED FOR STELLAR YEAR

Saudi Arabian stocks are poised for a stellar 2002 if oil prices remain firm, although the Arab world's largest bourse may see a correction in the short term after climbing to recent record highs, economists said, according to a Reuters report from Dubai.

The index bucked a global trend to surge 19 per cent so far this year, pushing past a long-standing 2,700-point psychological barrier, on stronger prices for oil, the kingdom's main revenue earner, as well as lower interest rates and earnings gains by blue-chip companies.

SADDAM 'TO FACE REFERENDUM'

Iraq is to hold a referendum later this year to decide whether President Saddam Hussein should remain in office, according to state radio.

The vice-chairman of the Revolutionary Command Council of Iraq, Ezzat Ibrahim the country's second-in-command is said to be chairing a committee to ensure a "successful result" in the ballot.

Saddam Hussein won a similar referendum in 1995, when according to official figures more than 99% of the voters supported the president.

GCC LEADERS TO BACK ARAFAT

GCC leaders are expected to express support for Palestinian President Yasser Arafat and the reconstruction of damaged areas in the West Bank when they hold summit talks in Jeddah in the second half of this month, GCC officials said.

The leaders from the six-nation Gulf Cooperation Council will meet in the Red Sea port just after mid-May for consultative deliberations ahead of their annual summit late this year.

MUBARAK TO MEET SAUDI CROWN PRINCE

Egyptian President Hosni Mubarak said on Wednesday he would meet Saudi Crown Prince Abdullah soon and that the talks might include the Syrian president, Egypt's official Middle East News Agency (MENA) reported.

DSF TO TARGET NEW MARKETS

The 2003 Dubai Shopping Festival will target new markets, especially the CIS, according to Saeed Mohammed Al Nabouda, DSF CEO. The timing of Dubai Shopping Festival 2003 (DSF) has also been rescheduled to January 15 to February 15.

EMIRATES WIN AWARDS

Emirates airline was voted the best airline and Dubai International Airport the best airport in the region in the first Business Traveller Middle East Awards 2002.

AL TOMOOH ADDS TWO NEW PROJECTS

Al Tomooh, which finances small and medium enterprises floated by UAE nationals, has added two new projects, which raises the total number of such projects to 22 and are collectively financed at Dh13 million.

Al Tomooh will hold an exhibition during the final quarter of this year for those projects that are financed by it. A plan is also underway to upgrade overall performance.

OCCIDENTAL TAKES 24.5PC STAKE IN DEL

Occidental Petroleum is taking a 24.5 per cent equity in Dolphin Energy Ltd (DEL), the joint venture company responsible for implementing the ambitious multi-billion Dolphin Gas Project.

Occidental Petroleum will now join France's TotalFinaElf which has a 24.5 per cent equity in DEL and the UAE Offsets Group (UOG) which holds a 51 per cent equity.

TOURISM IN DUBAI

Qatar, which is taking steps to become the region's leader for conventions and conferences, aims to complement Dubai' tourism industry instead of competing with it, said Sheikh Abdulla bin Ahmed Al Thani, chairman of Qatar National Hotels.

GLOBAL HAWALA MEET

The UAE Central Bank announced it is sponsoring an International Conference on Hawala to be held in Abu Dhabi on May 15 and 16.

Around 30 countries will be participating in the conference including countries from the region, the U.S., western Europe and Asia.