Mid-year projections suggest the two Gulf countries,
who depend heavily on oil for state coffers, have substantially improved
their economic outlook with higher-than-expected crude revenues.
Opec's Gulf producers, that also include the UAE,
Kuwait and Qatar, appear in a better position than most in the
organisation to weather any reversal in oil prices now holding strong
around $25 a barrel.
Sharp pressures born of bad fiscal management in
leading non-Gulf Opec members Venezuela and Nigeria are raising oil
market concerns about the burden of Opec's tough output curbs on those
By contrast, all five Gulf producers are watching
their crudes selling several dollars above modest budget assumptions.
Prices for Iranian crudes are running at an average
of $23 per barrel, well above the $17 a barrel price budget forecast for
the fiscal year ending March 20.
That would give the country an oil revenue surplus of
$4.1 billion in this fiscal year, if prices remained stable, according
to central bank calculations. This in addition to foreign exchange
reserves which now stand at $17 billion.
This leaves Iran in a strong position to deal with
any short-term price downturn, analysts said. But Saudi Arabia and Iran,
which have the biggest economies in the Gulf, remain vulnerable to falls
in oil prices, which depend on everything from the weather to an
economic recovery in the United States, the world's biggest energy
INVESTMENT IN MANUFACTURING SECTOR RISES
Total capital investment in UAE's manufacturing
sector is on the rise and reached Dh4 billion in 2000, which was 41.3
per cent of capital formation in the whole economy that year, according
to a report released by the National Bank of Dubai.
The sector witnessed a seven per cent growth during
the last few years and its contribution to UAE's GDP rose to 19.3 per
cent last year from 16.5 per cent in 2000 and 13.8 per cent in 1996.
The manufacturing sector's contribution to UAE GDP
last year rose to Dh30.5 billion. It ranked second, and its biggest
industries were aluminium, pet-roleum products and fertilisers.
UAE's industrial exports rose from 70 per cent in
1995 to 78 per cent last year, said the paper.
The value of these exports were affected by prices in
global markets. Aluminium and fertilisers were UAE's largest exports.
Output in the manufacturing sector grew in real terms
from Dh17 billion in 1996 to over Dh24 billion in 2000.
This sector also witnessed a 12.8 per cent growth in
the number of manufacturing units between 1998-2000, reaching 2,153 in
While commenting on a study on the country's economic
performance in 2001 and predictions for 2002 released recently, Sheikh
Humaid bin Ahmed Al Mualla, UAE Minister of Planning, said that despite
the decline in GDP, the non-oil sector held 72 per cent of the GDP,
reaching Dh179 billion.
Total value of investment reached Dh58.7 billion in
2001 against Dh57.4 billion in 2000, putting the rate of investment to
GDP at 23.6 per cent.
"This is a good indication for the improvement
of the economic situation in other sectors and a proof of the ability of
the national economy in overcoming hurdles resulting from the decline in
oil revenues," Sheikh Humaid said.
ISRAEL LAUNCHES FRESH ATTACK ON GAZA
Israeli tanks and bulldozers have rolled into Gaza
City, flattening three buildings and leaving two Palestinians seriously
They destroyed a police post and two metal workshops,
in what was the second operation to be carried out in the Gaza Strip in
Israel has been roundly condemned by Western and Arab
nations alike for an air strike on Gaza City on Monday night which
killed 15 people, including nine children.
In the latest operation, tanks and a bulldozer pushed
their way into the city and flattened a small Palestinian military
intelligence position as well as a metal workshop, before blowing up
another workshop in a blast across the city.
GCC HEADING FOR SLOW GROWTH THIS YEAR
The economy of the GCC leapt more than 22 per cent in
2000 to record the highest nominal growth in the world, but receded in
2001 and is expected to remain slow this year as prices slip back and
member states produce less crude.
In nominal terms, the combined GCC's GDP peaked at
$321.4 billion in 2000 after jumping 22.6 per cent over the previous
year, thanks to a surge in oil prices to above $27 and higher production
by most members.
Such developments are a clear indication that GCC
economies are still highly influenced by global oil markets despite
economic reform programmes and an ongoing campaign to lessen reliance on
The six members have reported a substantial progress
in their economic diversification drive, with the oil and gas sector
receding to between 30 and 50 per cent of the GDP, depending on
production and prices from nearly two-thirds.
But revenues from oil and gas sales still account for
more than 70 per cent of the total income of most member states.
IRAN PRESIDENT ATTACKS US WAR PLANS
Iranian President Mohammed Khatami has accused the
United States of warmongering and warned that any prospective military
action against Iraq could seriously threaten regional stability.
"We wish to caution the great powers against
further interference in the affairs of this region and against the
exacerbation of the flames of war," he said.
"We live in a very frightening situation... we
have witnessed that war has never been so much promoted in the US."
Mr Khatami, speaking to journalists while on a visit
to Malaysia, added that the current Bush administration's policy of a
sharp divide between good and evil nation states was "neither in
the interest of the US nor in the interest of today's world".
DEADLINE LOOMS FOR SAUDI GAS DEAL
The future of a landmark $25bn gas deal between Saudi
Arabia and western energy firms is hanging in the balance.
The deal represents the first major foreign
investment in the Saudi energy sector since it was nationalized in 1975.
But the conditions of the agreement have been fought
over since it was first agreed in June 2001.
The oil firms have now been told to submit their
final offers, with Saudi Foreign Minister stressing his determination to
press ahead with the liberalisation of the energy sector "under all
Unnamed sources and press speculation has repeatedly
suggested that the deal is on the verge of failure.
Such a failure would be an acute embarrassment to
both the foreign minister Prince Saud al-Faisal and Prince Abdullah who
were keen advocates of the deal.
KUWAIT LEADS ARAB MARKETS IN GROWTH
Arab stock markets did well generally during the
first half of the current year with Kuwait leading the pack with a 30.7
per cent growth followed by Qatar, which witnessed a growth of an
impressive 23 per cent with the lowest price/earnings ratio of around
With the kind of activities taking place in UAE's
financial arena like the announcements of several bonds, Dubai 2003,
DIFC, and the likely long-term bond from Emirates airline, and moves by
a few listed companies like Oasis Leasing to open up to foreign
investment, the UAE's stock markets are also set to make a comeback in
the second half of this year.
UAE IS SECOND MOST POPULOUS STATE IN GCC
The population of the six-nation GCC grew by nearly
nine million over the past decade to reach around 31 million at the end
of 2000, an annual increase of about one million people, according to
The high growth of around four per cent was a result
of a continued influx of expatriate workers and long-standing policies
in the 21-year-old Gulf group of encouraging nationals to have more
children so that they become a majority in their home country.
The combined GCC population stood at 21.89 million in
1990 and recorded a high growth over the following years to reach 25.99
million in 1995. It increased by an average of one million annually in
the ensuing years and most of the growth was in the local population.
ACTION ON IRAQ NOT IMMINENT, SAYS BLAIR
British Prime Minister Tony Blair said an attack on
Iraq was not imminent but held out little hope for negotiations about
weapons inspectors returning.
"We are all getting a bit ahead of
ourselves," Blair told reporters in his Downing Street office.
"It is not imminent, we are not at the point of decision yet. There
are many issues to be considered before we are at the point of
ZAYED, ABDULLAH HOLD TALKS
President His Highness Sheikh Zayed bin Sultan Al
Nahyan received at his Geneva residence King Abdullah of Jordan.
The leaders reviewed various Arab issues and
developments in the Palestinian occupied territories. They discussed
ways to pull the peace process out of its current stalemate. They also
discussed fraternal relations between the two countries.
USED GOODS MARKET GROWING RAPIDLY
Low and middle income groups are increasingly being
attracted to the used electronics market which has recorded a phenomenal
growth over the last three years.
Used televisions, VCRs, refrigerators,
air-conditioners, washing machines, computers, CD, VCD and DVD players,
video cameras, irons and photocopy machines are easily available in
these shops in the Sharjah Industrial area.
MUBARAK SAYS SHARON SABOTAGING PEACE
Egyptian President Hosni Mubarak accused Israel's
Ariel Sharon of deliberately seeking to sabotage recent peace efforts by
ordering a strike on a residential area in Gaza City that killed 15
Speaking after talks in Paris with French President
Jacques Chirac, Mubarak said the Israeli prime minister had sought
deliberately to wreck efforts involving the Palestinian side to halt the
chain of violence.
KUWAIT AHEAD OF THE REST IN TELECOM LIBERALISATION
Broadly speaking, Kuwait is generally not known for
having the most liberal business environment within the GCC.
However, in the telecommunications sector, the Kuwait
economy stands out — unlike the rest of the GCC, not a single monopoly
firm controls telecom services.
This phenomenon has positive implications for
consumers, the government and the telecom sector at large.
Two firms, Mobile Telecommunications Co (MTC) and
National Mobile Telecommunications Co (Wataniya) provide the GSM
services. The government has minority stakes in both firms and acts as a
regulator of the industry.
GULF CRUDES LANGUISH
The Abu Dhabi crude market was in a lull, seeking
direction after a surprise buying spree by Japanese buyers that lifted
premiums to double digits ran out of steam.
Japanese end-users appeared to have mostly covered
their September requirements, and the outlook for the Abu Dhabi market
was unclear given uncertainty over remaining regional demand.
Kenya, at least, was expected shortly to issue its
regular tender to purchase Murban. It is expected to seek about 600,000
barrels, its usual purchase volume, traders said.
Some traders said Murban was most recently sold at
Adnoc plus 12 cents per barrel, similar to the last deals confirmed
BAHRAIN RETAINS ARAB TOP SPOT IN HDI
For the second consecutive year, Bahrain has come at
the top of the Human Development Index (HDI) among the Arab states,
according to this year's Human Development Report (HDR).
Enthused by a 27 per cent increase in cargo tonnage
last year, Qatar Airways has signed a contract with EADS for the
conversion of an Airbus A300-600 freighter in early 2003.
OMAN SIGNS $100M GAS PLANT ACCORD
The Omani government on Tuesday signed a $100 million
contract to build the Saih Nihayda gas plant.
The contract was won by a joint venture between SNC
Lavalin of Canada and a local company, Al-Hassan Engineering.
IRAQ SAYS FLEXIBLE ENOUGH IN UN TALKS
Iraq said that it had shown enough flexibility in
talks over the return of UN arms inspectors and they needed a new remit
to prevent future disputes.
"We have shown enough flexibility. We said in
the Vienna round of talks that monitoring and return of inspectors
should be part of a comprehensive solution," Foreign Miniser Naji
Sabri said in an interview in the London-based Arabic daily Al Hayat.