GULF

 

Sep 16 - 22, 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

ARABS NEED $370B IN INFRASTRUCTURE INVESTMENT

Arab states need to pump at least $370 billion in the next four years to expand and modernise their infrastructure that has been eroding in the absence of proper maintenance because of lack of funds, according to official estimates.

As the financial resources of most regional states are limited and oil revenues in the Gulf are expected to remain modest in the near future, Arab governments must push ahead with plans to privatise infrastructure facilities to ensure sufficient financing.

Around $100 billion in capital expenditure is needed in the electricity sector alone as regional power needs are projected to peak at 100,000 MW at a growth of nearly 10 per cent, the Abu Dhabi-based Arab Monetary Fund (AMF) said in a study.

The rest will be pumped into transport and communications, water projects, roads, construction, and other infrastructure facilities.

"According to World Bank estimates, Arab countries need to invest more than $370 billion in infrastructure projects by 2006," the study said.

"Taking into consideration the recent economic developments in the region, efforts to rationalise expenditure in member states and plans to expand the private sector's role in the domestic economy, governments are expected to finance a maximum 85 per cent of those projects while nearly 15 per cent, or $60 billion, will come from the private sector.

"For this purpose, Arab states need to step up efforts to attract foreign capital and hasten plans to privatise their infrastructure facilities to ensure sufficient funds for new projects and for operation and maintenance of such facilities in the future."

It said lack of funds in most Arab states had allied with flawed management to adversely affect their infrastructure and hit performance and efficiency of some projects.

MIDEAST-U.S. TRADE PLUMMETS 20-26PC

Middle East trade with the U.S. has fallen by some 20-26 per cent since the events of September 11, a senior U.S. trade official told a Washington conference on U.S.-Arab relations.

Molly Williamson, U.S. deputy assistant secretary of commerce, said total U.S. trade for the first six months of 2002 is down by 20-26 per cent in comparison to the corresponding period last year.

This should lead to a fall in the overall annual trade between the U.S. and the Middle East, which stood at $65 billion in 2001, Williamson said.

"The events of 9/11 have had a profound impact on U.S.-Arab trade relations. To pretend otherwise would be irresponsible," she told a gathering of American business executives, Arab and U.S. officials, and Arab affairs analysts at the U.S.-Middle East Policy-makers conference in Washington.

Williamson noted, however, that the fall in trade cannot be solely blamed on the mutual uncertainty in the business communities of both sides created by the 9/11 tragedy.

She said the economic slowdown in the U.S. partly exacerbated by 9/11 was another key factor leading to the slowdown in trade. Despite the slowdown, Williamson pointed to two key exceptions Jordan and Morocco.

U.S. trade with Jordan has grown by 26 per cent in the first six months of 2002, mostly due to the U.S.-Jordan free trade agreement only one of four such agreements that the U.S. has worldwide.

U.S. trade with Morocco has also grown more than 50 per cent in the first six months of 2002 compared to the corresponding period.

OIL PRICES LIFTED BY IRAQ FEARS

The threat of a war with Iraq has continued to push up oil prices, with analysts warning that further price rises are likely.

The price of US light crude oil has risen 8.7% in the last four days alone, and on Monday stood at $30.20 per barrel.

The $30 per barrel mark is considered crucial benchmark in oil prices a breach of that level usually indicates a potentially serious threat to supply.

Ministers from the Organisation of Petroleum Exporting Countries (OPEC) are due to meet later this month to discuss market conditions and production levels.

ISRAEL DESTROYS EIGHT PALESTINIAN HOMES

Israeli forces destroyed eight Palestinian houses in pre-dawn raids in the Gaza Strip yesterday, including the home of a dead militant's family, witnesses said.

Shooting erupted between the Israeli troops and Palestinians as tanks and armoured bulldozers moved into the Shijaia neighbourhood east of Gaza City. One Palestinian was seriously hurt, Palestinian officials said.

Israel has added house demolitions to its measures to combat the almost two-year-old Palestinian uprising for independence in the West Bank and Gaza Strip, hoping this will deter militants behind suicide bombings and other attacks.

Three houses were destroyed in Shijaia, two in Maghazi refugee camp in central Gaza and three in the Rafah refugee camp in southern Gaza which is near the border with Egypt, witnesses and Palestinian security officials said.

LUXURY AUTO SEGMENT TO GROW 3-3.5PC

While the market could still be in for a flat year of sales, the luxury end of the automobile sector could tweak out a 3 to 3.5 per cent growth, according to a senior industry source.

According to estimates, the luxury end could account for about 35,000 units annually in the Gulf and the Levant.

"The top end is still growing and is an attractive market. Growth has been helped by players such as Jaguar, Audi and Volvo aggressively targeting it," said Robert Bailey-McEwan, regional managing director of BMW Group M.E.

"Despite the competition, we have been able to increase our market share significantly."

On its part, BMW is readying for the handover of the Rolls Royce marquee to its ownership from January 1.

UAE MANUFACTURING HOLDS 15.1PC OF GDP

Buoyed by growing industrial investment, the manufacturing sector accounts for 15.1 per cent of the UAE's GDP, the second largest contributor after the mining (crude oil and natural gas) sector.

Excluding the mining sector, the manufacturing sector's share of the GDP is 19.6 per cent. The manufacturing sector's output to the country's GDP (at base price) of Dh217.0 billion stood at Dh32.7 billion in 2001, the latest Central Bank figures showed.

This, however, is slightly lower than the previous year when the manufacturing sector's output stood at Dh33.1 billion. The UAE's GDP at current prices and by major expenditure categories reached Dh248.3 billion.

TRADERS COMPLAIN OF ILLTREATMENT

Fruit and vegetable vendors at Al Hamriya market have complained of "harsh treatment" by Dubai Municipality inspectors.

Stall tenants say that the inspectors have recently imposed harsh penalties on those who violate their verbal instructions and treated them "inhumanly".

They said inspectors are seizing their goods without warning or justifiable reason, and mistreating their workers.

MINISTRY KEEN TO SUPPORT DATE FARMERS

Al Ouha's Date Marketing Centre of Al Ain has received 7,598 tonnes of dates from the farmers of northern emirates, valued at Dh812, 328 million.

Ahmed Sultan Al Halami, Undersecretary of the Ministry of Agriculture and Fisheries stressed the ministry's keenness to support farmers in the UAE by providing them with the best palm seedlings to improve the quality of their product, as well as offer agriculture guidance.

PRIVATISATION DRIVE MOVING GRADUALLY

The Qatari Government desires to implement an ambitious privatisation programme, but only if market conditions permit. Reducing budget burden is the primary goal of the programme, reflecting the state's worrying financial position.

For one, the 2002-2003 budget forecasts a deficit of 1.8 billion Qatari riyals. For another, Qatar's external debt was estimated to amount to $13 billion at the end of 2001, representing more than 80 per cent of the country's gross domestic product.

UAE GIVES MOROCCO $300M GRANT

The Abu Dhabi Fund for Development (ADFD) has granted Morocco $300 million for the funding of Al Funaideq Free Port in the northern part of the country. The project on completion will provide job opportunities for more than 200,000 Moroccans.

Agreement on the granting of the amount, granted in line with the directives of President His Highness Sheikh Zayed bin Sultan Al Nahyan, was signed in the presence of King Mohammed VI of Morocco, with Sheikh Hamdan bin Zayed Al Nahyan.

IRAQ FACES WEAPONS DEADLINE

America is pressing the UN to issue Iraq with a deadline for the return of weapons inspectors within weeks.

US Secretary of State Colin Powell is starting an urgent round of talks with key UN members after President George Bush, in a speech to the UN, warned of military action.

Iraqi officials dismissed Mr Bush's speech, in which he accused Iraq of stockpiling weapons of mass destruction, as "lies".

ARAFAT TRIES TO FORM NEW CABINET

A "landmark" decision Palestinian leader Yasser Arafat is looking to build a new administration following the resignation of the entire cabinet.

The team of ministers quit en masse on Wednesday after Palestinian deputies threatened to reject the line-up in the first such challenge to Mr Arafat.

PALESTINE'S ECONOMY 'IMPOSSIBLE TO FIX'

The renewed fighting between Israelis and Palestinians over the past two years has pushed the Palestinian economy into "de-development", a United Nations report has warned.

According to the UN Conference on Trade and Development (Unctad), as much as $2.4bn (1.5bn) has drained out of the economy of the West Bank and the Gaza Strip thanks to closures, mass unemployment, and the flattening of most infrastructure by Israeli tanks and helicopters.

$40,000 RCA AID

The UAE Red Crescent Authority (RCA) has offered $40,000 in support of humanitarian programmes of the Sudanese Al Zubair Charity Organisation.

The money will be used to drill 10 wells for drinking water in different parts of Sudan. A cheque for the amount was handed by UAE Ambassador in Khartoum Isa Al Nuaimi to the organisation's Director Ibrahim Amin.

FEWA OPENS BIDS

The Federal Electricity and Water Authority (FEWA) has opened bids to implement three drinking water projects in the Northern Emirates.

Mohammed Khaleel Al Shamsi, Director of FEWA Public Relations, said the cost of the three projects is Dh 5 million. Implementation will start in October.

ARTIFICIAL LAKES

Six new artificial lakes are being constructed at a cost of Dh44 million to collect rain water, as part of a project by Dubai Municipality's Waste Water Department.

EMIRATES, FRENCH RAIL SIGN DEAL

Emirates and SNCF French Railways have signed a deal under which travellers will have rapid air/rail links between Dubai and six major French cities via Emirates' daily flights to Charles de Gaulle Airport in Paris.

Lille, Lyon, Nantes, Rennes, Bordeaux and Avignon are already on the plane-to-train map, with three more cities joining soon  Marseilles, Montpelier and Nimes.

QATAR'S ECONOMY

The International Monetary Fund said that Qatar's economy was healthy and strong, but urged the country's government to make it stronger and more resilient.

The IMF said that Qatar's economy grew 7.2 per cent last year in spite of the global economic slowdown, after a stronger 11.6 per cent in 2000. Prices last year dropped 0.7 per cent, after growing by 1.7 per cent the in 2000.

IRAN TO GET WORLD BANK MONEY

The private-sector financing arm of the World Bank is to make its first investment in Iran since 1974.

The International Finance Corporation [IRC] plans to take a 20% share valued at $2m (1.3m)  in an Iranian leasing company. It will also lend the company a further $3m.

But the World Bank's biggest shareholder, the United States, is expected to oppose a deal.

SAUDIS CONFIRM BAGHDAD TRADE FAIR

Saudi Arabia has confirmed that it has given the go-ahead for a trade fair in Baghdad.

The fair, leading Arab newspaper Asharq al-Awsat said, is scheduled for 1-11 November.

It will be the first time Saudi businesses have had official sanction to set up shop in the Iraqi capital since the two nations broke ranks ahead of the 1991 Gulf War.

SAUDI TELECOM TO BE PRIVATISED

Saudi Arabia will complete its biggest privatisation in two decades, with the hoped-for sale of a 30% stake in Saudi Telecom by the end of the year.