GULF

 

Oct 07 - 13 , 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

GCC RECORDS TRADE SURPLUS WITH JAPAN

A festering deficit in the GCC's trade with the European Union has been offset by a large surplus with Japan over the past few years and this surplus has enabled the six members to maintain their strong current account position.

Between 1998 and 2001, the GCC countries recorded a cumulative surplus in their trade of goods with Japan of around $96 billion and the figure is expected to exceed $120 billion by the end of this year, according to official figures.

Statistics by the Japanese External Trade Organisation (Jetro) showed the GCC enjoyed its highest trade surplus with Japan in 2000, when it stood at around $34.9 billion because of a surge in exports due to a sharp increase in oil prices.

In contrast, the GCC suffered a $6.5 billion deficit in its trade with the EU in 2000 while the surplus with the U.S. has remained negligible.

While the six members have reported a persistent surplus with Japan over the past two decades, their previous surplus with the EU has turned into a deficit because of volatile crude prices, higher EU exports and trade barriers against Gulf exports.

Despite a $4 decline in oil prices in 2001, the GCC's trade balance with Japan remained as high as $30.3 billion and it is expected to be between $25-$30 billion this year.

The GCC's total exports to Japan stood at $38.5 billion in 2001 while their imports were around $8.2 billion. Oil and gas account for the bulk of Japan's imports from the GCC while exports cover mainly vehicles, electronics, machinery and equipment.

Japan is the top importer of Gulf oil, receiving more than 70 per cent of its total crude needs. It has also boosted imports of liquefied natural gas from the UAE and the two other main Gulf LNG plants in Qatar and Oman.

UAE GARMENT UNITS 'SHOULD DEVELOP BRANDS'

Only high value-added manufacturers who can take advantage of the quality infrastructure can survive in the medium term, according to Emirates Industrial Bank (EIB) in its outlook for the local garment sector.

"Those countries which are manufacturing purely on the basis of quota allocations will face a very challenging situation in three years. This is true for all the GCC countries currently engaged in garment manufacture," the report added.

Quotas, under which a particular country can export garments to the U.S., are to be fully dismantled in 2005.

In the interim, Jordan continues to benefit from the preferential treatment meted out by the U.S. Exports from there are exempt from any duties.

"Some of the manufacturers in the GCC are likely to relocate to Jordan as is already happening and some may move to the source of labour," according to the report.

In 2001, the UAE's garment exports recovered slightly to $185 million from a low of $160 million in 2000. But they continue to be a long way from the peak of $250 million in 1997.

"A major reason for the slump is the slowdown in the U.S. economy and falling demand from West Europe. The other reason has been the migration of the industry to other locations within the region, namely in the Gulf and other Arab states," the EIB study said.

"The initial decline may have been caused by the substitution of low value-added garments by high value-added ones, but this is no longer the cause of the decline.

The current downturn is part of a global phenomenon where garment exports of several countries have suffered because of a demand slowdown.

GCC TO HAVE LARGEST OUTPUT OF ALUMINIUM

With the remarkable development of the Gulf aluminium industry during the last few decades, the GCC is expected to be one of the largest producers of aluminium products in the world within the next six years, said an Emirates Industrial Bank report.

This important industry started 30 years ago, with an aluminium factory in Bahrain, Alba, with an annual capacity of 150,000 tonnes, followed by another factory in Dubai (Dubal) with a similar capacity, the report said.

Both factories have continued to expand over the past three decades, with the production capacity multiplying to reach one million tonnes every year in recent times, with this figure equally divided between Alba and Dubal.

This year, both Dubal and Alba have announced that they will implement new expansion, which will increase Gulf production by 39 per cent to 1.46 million tonnes by 2006, compared with 1.05 million tonnes now.

Such an increase includes Alba's share of 46 per cent to 750,000 tonnes by 2006 compared with 514,00 tonnes this year.

SAUDI GAS DEAL 'STALLED AGAIN'

A landmark $25bn (16.1bn) gas deal between Saudi Arabia and western energy firms is reportedly facing yet more delays.

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.

Saudi Arabia has reportedly put last-ditch concessions on the table in the hope of averting the collapse of year-long negotiations.

But the western firms are now thought to be unable to meet an October deadline, saying they need more time to examine Saudi's final offer.

One local newspaper report suggested that firms would be given an extra month's leeway.

S. ARABIA, RUSSIA, IRAN FLAY US OVER AL QUDS

Saudi Arabia, Iran and Russia on Wednesday condemned a US congressional bill recognizing Israeli-occupied Al Quds as the Jewish state's capital as contravening international law and UN Security Council resolutions.

The Saudi Press Agency quoted a spokesman as saying that the bill is "in contradiction with US policy" in the region.

Saudi Arabia "followed with deep concern and discomfort the news about the bill issued by the US Congress ... which recognizes Jerusalem (Al Quds) " as Israel's capital, the spokesman said.

The kingdom "sees this decision as contravening international law and violating security council resolutions, including Resolutions 252 of 1968 and 267 of 1969 ... which call for reversing all measures that could change the status quo in Jerusalem," the spokesman added.

GULF FURNITURE IMPORTS CLIMB TO $2.8B

Annual imports of furniture and interior products to the Gulf rose to $2.8 billion in 2001 and are poised for a further growth as the trend shows, industry officials at a specialised interior and furnishing exhibition, said.

Index 2002, the 12th version of the region's largest furnishing and interiors exhibition, was opened at the Dubai International Exhibition Centre (DIEC) by General Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and the UAE Defence Minister.

"The latest information, drawn from trade statistics and estimates issued by individual countries, puts the region's furniture and interiors products imports at $2.8 billion last year.

"We have seen a 10 per cent increase in furniture and interiors products imported into the Gulf for 2000 with a further 6 per cent rise in 2001," said Joe Berger, commercial director of dmg Index Exhibitions.

OIC WORRIED

A US Congress bill demanding the American embassy in Israel be moved from Tel Aviv to occupied Al Quds will only heighten Muslim resentment, the Organization of the Islamic Conference warned on Tuesday.

MANY UAE BANKS LAGGING BEHIND IN EMIRATISATION

The UAE has made headway in its ongoing campaign to find jobs for nationals in its fast-growing banking sector, but more measures are needed to ensure all banks comply with the employment ratio set by the federal cabinet.

A survey conducted recently by the Ministry of Labour and Social Affairs showed the number of UAE nationals working in the country's 47 banks more than doubled to around 2,988 at the end of 2001 from 1,278 at the end of 1995.

INVESTORS FLOCK TO MEADOWS OFFERING

Emaar Properties said the latest release of its premium villa project, The Meadows, has met with tremendous investor response.

Bookings are open to UAE and GCC residents at the Dubai Marina sales centre, seven days a week, from 10 am to 8 pm. The opening phase was launched in June.

BP CONTRACTS

Two contracts signed by BP Marine recently have lifted the sales in Oman's refuelling operation in the southerly port of Salalah to around 35,000 tonnes a month from October.

However, the bunkering service, which began in mid-February, is expected to receive a further boost when it resumes supplying fuel at anchorage this month.

AN AMBITIOUS PLAN TO REVAMP OIL INDUSTRY

Bahrain authorities seem determined to overhaul the petroleum sector as part of wider efforts to boost economic development, which plays a vital role in the economy. In 2001, it accounted for 71 per cent of state income, 73 per cent of exports and 17.2 per cent of the GDP.

Against this backdrop, the government is pushing for a series of projects in the petroleum sector.

Bahrain's oil production and reserves are relatively small. Production from the country's only onshore oil field of Awali amounted to around 37,500 barrels per day in 2001. Total reserves are estimated at 130 million barrels, expected to last until 2013 at current production rates.

ISRAEL 'REHEARSES ARAFAT'S EXPULSION'

The Israeli military has been practising a military operation to seize Palestinian leader Yasser Arafat and fly him into exile, reports say.

Israeli security forces have confirmed the news, first reported in Israel's Maariv newspaper, to international news agencies.

Some members of the Israeli cabinet are known to be in favour of expelling Mr Arafat but have faced opposition from other ministers, the military and the United States.

Troops continue to be stationed around Mr Arafat's compound in the West Bank city of Ramallah after an operation last month in which they destroyed nearly all the buildings there.

EMIRATES

Emirates will fly to three more countries by the end of the year, adding Russia, China and the U.S. to the 45 countries it flies to.

SULTAN FOR MORE COUNCILS

His Highness Dr Sheikh Sultan bin Mohammed Al Qasimi, Member of the Supreme Council and Ruler of Sharjah, called for the formation of consultative councils throughout the country.

OMAN HAILS GCC PLEDGE ON JOBS

Juma'ah bin Ali bin Juma'ah, Oman's Minister of Manpower, praised the GCC Supreme Council's resolutions on efforts to provide jobs to nationals and facilitate labour movement in the GCC states.

He was speaking at the opening of the 19th session of the GCC Labour and Social Affairs Ministerial Council, held at Al Bustan Palace Hotel.

ANGER SWELLS IN ARAB

The new U.S. law that requires the Bush administration to recognise Occupied Jerusalem as the capital of Israel has evoked public anger and criticism throughout the Arab countries.

A survey conducted by Gulf News in various Arab countries showed that the new law mirrors the U.S. bias towards Israel and an indication of a new trend in the American policy that ignores Arab countries.

MORE NATIONALS IN BANKING SECTOR

Of a total 135 more employees employed by the banking sector in the first half this year, an overwhelming 126 were UAE nationals.

Data released by Ahmed Humaid Al Tayer, Minister of Communications, and head of the Human Resources Development Committee of the Banking Sector, showed the number of nationals employed in the commercial banking sector had jumped 4.22 per cent

RESEARCH AND THINK TANKS SHOULD BE ENCOURAGED

One of the most important factors for positive and long lasting change is the encouragement of think tanks that engage in research and analysis.

The independence and depth of analysis that these organisations bring is always a huge resource to the policy planning process, ranging from politics, foreign policy, and economic and financial policy down to social strategies for change.

DUCAB COMPLETES DH120M EXPANSION

Ducab has completed a Dh120 million expansion to upgrade the manufacturing capability of its two medium voltage (MV) cable lines.

The upgrade of the second manufacturing line installed in 2001 and devoted solely to the manufacturing of 11kV and 33kV cables has resulted in doubling Ducab's capacity for medium voltage cables.

E-GATE PROJECT GETS RESPONSE

The e-Gate, launched by the Dubai Naturalisation and Residency Department (DNRD) at the Dubai International Airport, in association with the Dubai Department of Civil Aviation, has drawn an enthusiastic response from frequent travellers.

More than 2,500 people have completed the registration process for the smart card since the service was introduced last month.

FUJAIRAH AUTUMN FAIR 2002 OPENS

Fujairah Autumn Fair 2002 was officially opened by Sheikh Hamad bin Saif Al Sharqi, Deputy Ruler of Fujairah.

The international consumer fair, which runs until October 18, is the biggest to date in the emirate, with 114 exhibitors from over 12 countries in the region.

The event is being staged for the first time by the Fujairah Chamber of Commerce, Industry and Agriculture, in partnership with the Fujairah Exhibition Centre.