GULF

 

Sep 23 - 29, 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

SAUDI ARABIA: LOOKING FOR FOREIGN INVESTMENT

The Saudi Government seems more determined than ever to open up its economy to foreign investors. The drive towards economic liberalisation dates back to late 1999 with the inception of the Supreme Economic Council (SEC).

Headed by Crown Prince Abdullah, SEC is charged with forming and implementing economic policies for the kingdom.

In April 2000, on the advice of SEC, the Saudi Government passed the foreign investment law (FIL), which went into effect a month later. With its 18-point laws and 24 executive rules, the FIL is designed to attract foreign investments in the kingdom.

To this end, the Saudi Arabia General Investment Authority (Sagia) was set up to regulate and promote foreign investments.

Prince Abdullah bin Faisal bin Turki was appointed head of Sagia. A dynamic professional, he has previously served as governor of the Royal Commission for Jubail and Yanbu.

Sagia acts as a one-stop-shop its Investors' Service Centre houses representatives from various government bodies, thereby eliminating the need for foreign investors to run through numerous departments. The law promises a maximum of 30 days for processing of investment licence applications.

The FIL contains a number of positive characteristics including guaranteeing equal treatment of local and foreign investors all are entitled to apply for cheap credit from the Saudi Industrial Development Fund (SIDF).

Amongst others, the law allows for full ownership of companies and grants foreign businesses the right to own land it provides protection against expropriation of property without just and fair compensation. Also, the law eliminates local sponsorship of foreign investors.

DUBAI BECOMES INDUSTRIAL POWER

Dubai has emerged as the biggest industrial power in the UAE as it steps up its drive to attract capital and expand its manufacturing base to gradually replace unpredictable oil export earnings, official statistics showed.

The emirate, dubbed the Middle East's transshipment centre, accounted for almost half the UAE's industrial investment of around Dh28.5 billion, showed figures by the Ministry of Finance and Industry.

"Dubai ranked number one in the Emirates in terms of the number of industrial units, which totalled 854 and investment of Dh13.3 billion at the end of 2001," the Ministry said in a study published in the Abu Dhabi Chamber magazine, Eqtisad Abu Dhabi.

It said Abu Dhabi ranked second in industrial investment, which stood at around Dh7.5 billion. But it was fourth in the number of factories, put at 235.

Sharjah was the third biggest industrial investor, with a capital of around Dh2.9 billion, while investment stood at Dh2.8 billion in Ras Al Khaimah.

The study said industrial investment in the UAE gained momentum nearly five years ago, with an average $1 billion pumped into manufacturing projects.

The investments, some of which are joint projects with foreign partners, covered nearly 2,334 factories providing more than 188,000 jobs. Nearly a third of those jobs are provided by Dubai, while around 56,000 jobs are based in Sharjah and 26,400 in Abu Dhabi.

A breakdown showed chemicals received the lion's share of the capital, with around Dh4.14 billion. It was followed by food and beverage with an investment of nearly Dh3.2 billion, metal products with around Dh1.04 billion and garments with Dh254 million.

OIL PRICE PLUMMETS ON BAGHDAD OFFER

News of Iraq's agreement to re-admit weapons inspectors for the first time since December 1998 has triggered a slump in the price of oil.

Prices fell by as much as 5% in early trading but recovered after the US reacted with scepticism to the offer and said it would still look for a U.N resolution to force Iraq to disarm.

By the US close, the price of a barrel of Brent light crude one of the benchmarks for the oil business was down 55 cents to $27.97.

The change takes the pressure off the oil cartel Opec, which is meeting to discuss quotas in Osaka later this week.

The Opec basket price, which is $3 or so cheaper than US crude, is now well within Opec's preferred $22-28 range.

IRAQ SEALS NEW SUPPLY DEALS WITH EUROPEAN FIRMS

Iraq has sealed new supply contracts with European oil companies and expects higher UN-supervised exports as a result, a senior Iraqi oil official said.

Baghdad on Monday informed a number of international oil companies that it had scrapped its illicit surcharge on oil sales and invited them to buy crude direct from Iraq for the first time in two years.

"We have signed some contracts with European refiners and other deals are in the pipeline," a senior Iraqi oil official told Reuters. "We expect our export levels to increase now that we have secured more customers."

A European oil executive confirmed that he received a crude contract from state oil marketer Somo and was forwarding it to the UN for requisite approval.

ISRAELI TROOPS BESIEGE

The Israeli army has laid siege to Palestinian leader Yasser Arafat's compound in the West Bank town of Ramallah, hours after a suicide bomb in Tel Aviv killed five people.

Tanks rolled in sparking an exchange of gunfire that injured two security guards.

There was a large explosion in Ramallah early on Friday, and smoke could be seen coming from the Palestinian leader's compound.

One report quoted witnesses saying Israeli forces blew up a building next to Mr Arafat's office, but there was no immediate comment from the Israeli military.

During the night, about 20 Palestinians wanted by the Israelis left the compound and gave themselves up.

OPEC HOLDS OIL OUTPUT STEADY

The Opec oil cartel announced on Thursday that oil production would remain unchanged, but an extraordinary meeting had been called for December to reassess the Middle East political situation.

The Organization of Petroleum Exporting Countries issued a communique saying production output for the last quarter of 2002 would remain unchanged at 21.7 million barrels of oil per day, aimed at maintaining a targeted price range of 22 to 28 US dollars a barrel.

"The price band is still there, we have not abolished it, but we are not slaves to it either," Opec president Rilwanu Lukman said.

He said the cartel could adjust the price and production as it saw fit and he estimated a war premium of three to four dollars per barrel had been factored in after oil broke through the 30-dollar mark in August.

UN ARMS INSPECTORS

Iraq, under intense worldwide pressure, agreed to allow UN weapons inspectors back into the country without conditions after almost four years, UN Secretary-General Kofi Annan announced on Monday.

President Bush in his speech to the UN General Assembly on Thursday put the international community on notice seeking action in effect telling it that the US was willing to go it alone if it failed to act.

IRAQ CAN'T BUILD NUKES: FRANCE

French Army Chief of Staff, Jean-Marc Kelche, says he's "quite confident" that there are no nuclear weapons present in Iraq, and that as far as he knows Saddam Hussein doesn't possess the means of making them. "On that question," he notes, "nobody has ever offered us any radical proof."

IRAQ SET TO REMOVE OIL LEVY

Iraq appears ready to spare major oil companies its controversial surcharge in a bid to convince the United Nations the illicit fee is gone for good, Western oil executives said on Monday.

Iraq may be attempting to re-engage commercially with top oil companies as part of a campaign to stave off US-led military action to topple Iraqi leader Saddam Hussein.

SAUDI ENVOY TO LEAVE LONDON

The Saudi ambassador to London is leaving his post to become a cabinet minister, months after he provoked anger with a poem praising a suicide bomber.

Ghazi Algosaibi Saudi Arabia's representative in Britain for the past 10 years will head his country's Ministry for Water, formerly part of the Agriculture Ministry.

He sparked controversy earlier this year by writing a poem in praise of Palestinian suicide bombers which was published in a London-based Arabic newspaper.

PRICES FAIR FOR IMPORTING NATIONS: AL NAIMI

Saudi Oil Minister Ali Al Naimi said that oil prices, close to $30 a barrel for U.S. crude, were fair for both petroleum producing and importing countries.

"Prices are okay for producers and consumers," he told reporters during an Opec meeting that kept group's output limits in place for the fourth quarter.

"This is not a decision we took lightly. We had to take account of many uncertainties including Iraq," Naimi said.

NEW CARGO SYSTEM

Mercator, the Dubai-based information technology division of Emirates Group, has unveiled its new-generation cargo ground-handling system, Chameleon.

It is designed to transform the way cargo is handled throughout the freight and supply chain and will spearhead an overhaul of the group's cargo systems.

EU SAYS IDEAL TARGET PRICE FOR OIL IS $20 A BARREL

The European Union said that its ideal target price for oil is $20 a barrel and the bloc would like an output increase from producers.

The EU has long been worried about fluctuations on international energy markets and rises in prices as the 15-member bloc is heavily dependent on imports.

"As we consider that the normal price is $20 a barrel it is clear that the Commission would rather have a production rise which allows a fall in prices," said Gilles Gantelet, spokesman for European Energy Commissioner Loyala de Palacio.

MOVES TO EASE MID-EAST WATER TENSIONS

The United States is trying to defuse a water dispute between Israel and Lebanon which Israel has said could lead to war.

An American water expert has held talks with Lebanese leaders in Beirut, to discuss the project aimed at diverting water from the Wazzani, a border river.

The Wazzani is a tributary of the Hasbani river which flows into the Jordan a major source of drinking water for Israel.

Israeli Defence Minister Binyamin Ben Eliezer has said the Hasbani water system provides 10% of his country's water, and that Israel could not tolerate a diversion.

BRITISH BUSINESS EYES IRAQI OPPORTUNITIES

An organised group of British businesses plans to take part in the annual Baghdad International Trade Fair for the first time since the Gulf War in 1991.

A number of "medium to large" British companies are expected to attend, Saad Hadi of organisers Oriental Exhibitions told BBC News Online.

UAE STARTS REGISTERING PATENTS

The Industrial Property Directorate has to date registered nine patents in the UAE.

The first patents started getting registered only this summer.

The directorate, which operates under the Ministry of Finance and Industry, has been in existence for several years, with the patents themselves having been pending approval, but the issue of the Copyrights and Trademarks laws earlier this year has seen a spurt in its activities.

DIB OFFERS HOME FINANCE

Dubai Islamic Bank (DIB) is offering home finance packages to expatriates and GCC nationals, apart from UAE nationals, interested in investing in the local real estate market.

The home finance options that DIB will offer will be open to investors earning a minimum monthly income of Dh8,000 and entail providing finance of up to 80 per cent of the property value, for a period of up to 12 years.

KUWAIT COPTER ENGINE DEAL

GE Aircraft Engines has won the $30 million (Dh110 million) contract to supply its T700-701C helicopter engines to Kuwait. These will be fitted out on Kuwait's new fleet of 16 Boeing AH-64D Apache Longbow attack helicopters.

SAUDIS URGED TO WAIVE CUSTOMS DUTIES

A senior Dubai Chamber of Commerce and Industry official has urged the Saudi Government to waive customs duties on products and commodities manufactured by UAE industries.

Abdulrahman G. Al Mutaiwee, chamber director general, met Hamoud Farraj bin Thader, consul general of Saudi Arabia in Dubai, who said such a step will strengthen trade ties.

MUBARAK'S SON TAKES KEY PARTY POST

The Egyptian President, Hosni Mubarak, has appointed his son, Gamal, to a leading position in the ruling National Democratic Party (NDP).

Gamal Mubarak has been made the party's political secretary, with responsibility for developing its thinking on a range of issues.