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

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GULF

June 03 - 09, 2002

UAE'S TRADE SURPLUS WITH JAPAN DECLINES

The UAE's trade surplus with Japan has been narrowed to $10.4 billion in 2001 from $12.3 billion in 2000 due to a 13.3 per cent fall in exports to that country.

Total trade slumped by almost 11 per cent to $15.5 billion in 2001, mainly due to the slide in both value and volume of crude oil that Japan imported from the UAE. Crude oil alone contributed 62.8 per cent of the total trade between the two.

The UAE slipped back to second place behind Saudi Arabia among Japan's regional partners, following the 10.9 per cent decline in bilateral trade, from $17.4 billion in 2000, according to figures released by the Dubai office of the Japan External Trade Organisation (Jetro).

Japan's imports from the UAE stood at $12.739 billion compared to $14.675 billion in 2000. Exports, however, rose by 1.35 per cent to $2.574 billion from $2.539 billion.

UAE continued to be Japan's largest supplier of mineral fuels, supplying around 18 per cent of its total imports. From sixth position in 2000, the UAE climbed down to eighth among Japan's major suppliers of goods and services in 2001, contributing 3.7 per cent, as against 3.9 per cent in 2000, of its total requirements.

The first three positions in 2001 went to the U.S. (18.1 per cent), China (16.5 per cent) and South Korea (4.9 per cent). In 1999, the UAE was in the ninth position with a contribution of 2.9 per cent.

The value of Japan's world trade during 2001 stood at $756.7 billion compared to $861.8 billion in 2000. Both exports and imports contracted during the year, reflecting the persisting recession in the Japanese economy. Exports were down by 15.7 per cent to $405.2 billion and imports by 7.8 per cent to $351.6 billion.

Japan's imports from the UAE were down by 13.3 per cent in 2001 to $12.944 billion from $14.883 billion in 2000. The fall was attributed mainly to two factors. One was the decline in the price of crude oil and petroleum products and the other was the decline in the volume of imports of these two items.

IRAN'S PRESIDENT RULES OUT US TALKS

The reformist Iranian President, Mohammad Khatami, has ruled out talks with the United States and asked his supporters in parliament to toe the official line on the issue.

Some reformist deputies had been outspoken advocates of opening a dialogue with Washington, despite President George W. Bush's inclusion of Iran in his "axis of evil".

But hardline conservatives are vehemently opposed to any talks with Washington.

It is an issue that refuses to go away, despite three public statements of mounting severity from the country's Supreme Leader, Ayatollah Ali Khamenei, ruling out talks.

Now his reformist counterpart, President Khatami, has come out with a clear call to his followers to drop the issue.

It came during a visit to the reformist-dominated parliament by the president and his cabinet.

Mr Khatami told the deputies that Iran's basic policy was one of detente with all countries of the world but he said that when a big power spoke to Iran in a bellicose, insulting, humiliating and threatening manner, Iran would neither negotiate nor show the slightest flexibility.

He asked all those who were talking about possible negotiations with the US to abide by the regime's general policies and not to do anything against the country's interests or dignity.

Some reformist parliamentarians had angered the supreme leader by keeping the issue alive in a closed door colloquium on the future of relations with Washington.

The question now is whether the president's words will succeed in shelving the affair.

He has already been criticised by some of the more impatient reformists for not being assertive enough in pushing the reform process forward against hardline obstruction.

SAUDI ARABIA PLANS TO PRIVATISE SWCC

Saudi Arabia's slow restructuring of its water and power sector is finally looking up with the kingdom rolling out plans to privatise the Saline Water Conversion Corp (SWCC) as the first step, officials said.

"The SWCC is in discussion with the Supreme Council to privatise the corporation. We hope a decision will be taken this year," Ahmed Al Mudaiheem, deputy governor for projects and technical affairs at SWCC, said on the sidelines of Meed's 'Power in the Middle East' conference.

"Privatisation could mean offering part equity to a foreign or local partner," he said. Formed in 1974, the SWCC is government-owned and is responsible for desalination of some 2.8 million cubic metres per day of water and 4,000 megawatts of electricity.

EU ALLOWS UAE TO EXPORT FISH PRODUCTS

The EU Steering Committee has included the UAE among the countries permitted to export fish products to EU countries, an EU source said.

"A decision was made on May 20, declaring the UAE's fish products meet the EU's technical and health requirements.

"Under the decision, the UAE will be able to export fish products to the 15 EU members," the source said.

Rashid Khalfan Al Shuraiki, Undersecretary of the Ministry of Agriculture and Fisheries, welcomed the decision, which, he said, will benefit fishermen in the UAE.

He said the ministry has been working along with the General Secretariat of the UAE Municipalities and the Ministry of Foreign Affairs to obtain EU approval for fish exports.

Al Shuraiki said the ministry will work with the secretariat to set a time table for the implementation of the agreement with the EU.

ISRAELI TANKS MOVE ON NABLUS

The Israeli army has made a fresh incursion into a Palestinian-controlled area of the West Bank this time into the city of Nablus.

Tanks and armoured personnel carriers surrounded a refugee camp on the edge of the city, only one night after a similar raid on Hebron.

The move came after the US envoy to the Middle East, William Burns, met Palestinian leader Yasser Arafat at the start of a new drive towards peace in the region.

Backed by covering fire from helicopters hovering overhead, the Israeli troops entered Nablus in about 40 tanks and armoured personnel carriers, Palestinian witnesses said, heading for the refugee camps of Balata and Askar.

UAE AMONG FAST DEVELOPING NATIONS

Heavy investments in human development have turned the UAE into one of the fastest developing nations, according to a United Nations report.

The report said it was considered to be a backward nation with high death rates and meagre services. But it is among the fast developing nations today with a surge in education services and life expectancy, a steep decline in infant mortality rate and the absence of epidemics.

In just 10 years, the UAE has jumped from the 77th rank in 1990 to the 45th rank in the list of nations, as classified by the UN Development Programme (UNDP) as countries with high human development levels and better development prospects in the future.

MORE FIRMS SEEK LISTING ON ADSM

Encouraged by the moves made by Q-Tel and Sudatel, more non-UAE companies are approaching the Abu Dhabi Securities Market (ADSM) for listing on its bourse.

Speaking on the new developments on the securities market, Khalid Al Suwaidi, manager awareness, ADSM said, Q-Tel got listed, and talks on the listing of Sudatel at advanced stage.

DUBAI-AFGHAN CARGO MOVEMENT JUMPS

Cargo movement towards Afghanistan has gone up by 20 per cent from Dubai, since the installation of the present interim government in December, shipping officials said.

"We expect another 30 per cent increase in cargo movement towards Afghanistan in a few months, once the aid agencies begin supplying materials and commodities to rebuild the country," said Martin J. Aranha, managing director of West Star Shipping Services.

RAK TO IMPLEMENT MAJOR PORT PROJECT

A major project will be sponsored by the Ras Al Khaimah Government to improve the emirate's port and provide it with all the necessary requirements, said Sheikh Faisal bin Saqr Al Qasimi, head of Ras Al Khaimah Free Trade Zone Authority (RAKFTZA).

During the last two years, the number of registered companies at RAKFTZA reached over 100 with total invested capital of Dh120 million, including one ship building and maintenance company investing around Dh40 million, Sheikh Faisal said in a speech read by Ousamah Al Omari, free zone director, to mark the second anniversary of the zone.

GULF AIR TO PRESS ON WITH RESTRUCTURING

Gulf Air emphasised on continuity and restructuring to build a stronger, customer-centric airline following Qatar's decision to withdraw from the management of the airline.

US CONDEMNS ALGERIA POLL VIOLENCE

The United States has condemned violence in Algeria which marred the country's first parliamentary elections for seven years.

A State Department spokesman said Washington supported the elections and would continue to encourage Algeria in its bid for greater democracy.

Algerian authorities said voter turnout was low as many voters particularly in the north-eastern Berber-speaking Kabylie region heeded a call by opposition parties to stay away in protest.

Observers say parties of the current ruling coalition are expected to hold on to power.

It is not clear when the official results will be known.

The BBC correspondent in Algiers, Heba Saleh, says most people regard the election as irrelevant, because the parliament is unable to hold accountable the government or the miltary clique who hold real power in Algeria.

BAZAAR TO RAISE FUNDS FOR PALESTINIANS

Dubai residents have been urged to patronise a huge weekend charity bazaar to help raise funds for Palestinian families in the occupied territories.

The bazaar, organised by the Emirates Bank Group (EBG) Social Club, will be held from 10am to 10pm at the Dubai Airport Expo.

Abdulhakim bin Mansour, president of EBG Social Club, said: "This charity bazaar follows the initiative of General Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Minister of Defence, to provide support to the Palestinians."

UAE 'OFFERS LEAST RISK AMONG ARAB STATES'

A Western body specialised in assessing political and economic risks around the world has classified the UAE as one of the countries having the lowest risks, and this means investors should not worry much about their funds in the emirates.

The UAE is placed 27th and on top of all other Arab countries in terms of low political, economic, financial and investment risks, according to London-based periodical Euromoney, which releases risk assessments for 185 countries twice a year.

The UAE was given 79.32 points in the Euromoney 100-point risk indicator and the report clarified that if a country gets higher points then its risk is lower.

RETAIL FUND IN WEEKS

Emirates Financial Services (EFS) is to come out with a retail fund in weeks, which would be sector-specific, according to a senior official. The money under management by EFS is estimated at about Dh300 million.

DNATA USES NOMAD TO HANDLE CARGO

Dnata has migrated to Nomad, the new container cargo management system from Mercator, the information technology division of Dubai-based Emirates Group. Nomad is a Web-based solution providing ground handling agents and airports tools to manage containers and unit load devices (ULDs) effectively.

OMAN SAYS OIL PRICES ARE REASONABLE

Oman's Minister of Oil and Gas, Dr. Mohammed bin Hamad Al Rumhy, said current oil prices were reasonable and acceptable.

"The oil prices which range between $20-$25 per barrel are reasonable and acceptable to both the consumers as well as the producers," the Omani Minister said after signing a deal with Oman Hunt for the exploration and production of oil and gas in Sharqiya (eastern) region.

UAE EXPO IN TEHRAN

The second UAE Commercial Exhibition will be held in Tehran next June under the patronage of General Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Minister of Defence, Wam reports from Dubai.

REGULATION OF HAWALA

The good news is that the recent hawala conference did not go overboard in condemning the practice and instead called for regulation of the unofficial exchange mechanism. This was better news than I had expected, though I am sure the odd speech equating hawala with terrorism must have been made.

US WELCOMES LIBYA'S 'LOCKERBIE OFFER'

Libya's reported offer of compensation over the bombing of a Pan Am flight in 1988 has been welcomed by US Secretary of State Colin Powell as a "step in the right direction".

"We are waiting to see what the actual Libyan offer is. It's not yet formally put on the table", Mr Powell said.

There is still confusion about the precise status of any deal after Libya denied suggestions by a New York law firm that it offered $2.7bn to compensate the victims' families as part of a deal to lift United Nations sanctions.

ARAFAT SIGNS 'CONSTITUTION'

Palestinian officials say Yasser Arafat has finally signed a de facto constitution that defines his powers.

Mr Arafat has ignored the Palestinian Basic Law since it was adopted by legislators five years ago, but he has come under increasing pressure at home and abroad to institute political reforms.

The Palestinian Basic Law is essentially a constitution that details the division of powers and the rights and freedoms of Palestinian citizens.

Legislators have been asking Mr Arafat to sign it into effect since its adoption by legislators.

PROFIT FALLS AT SAUDI TELECOMS MONOPOLY

Saudi Arabians gearing up for the chance to buy shares in the country's national telecoms monopoly have received a fresh insight into its finances.

Saudi Telecommunications Co (STC), set up in 1998 as the first step in a process towards privatising Saudi telecoms, has said it achieved net profit of 3.47bn Saudi riyals ($928m) in 2001, down 12% from 3.95bn riyals the year before.

The company said the fall resulted from payments of 790m riyals to temporary staff and 600m riyals to an early retirement fund.