GULF

 

Oct 21 - 27 , 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

PRIVATISATION TAKING OFF SLOWLY IN SAUDI ARABIA

Privatisation is progressing cautiously in Saudi Arabia. In 2000, Crown Prince Abdullah bin Abdulaziz declared that it was a strategic choice for the Saudi economy.

But the Supreme Economic Council, which is mandated to form and implement economic policies, justifies the slow progress to the nature of required structural changes. The council has focused its efforts on developing the regulatory environment. Nevertheless, privatisation is now taking shape; telecommunications, electricity, industrial zones, ports, airports, airlines and a host of others are on the agenda.

Privatising the telecommunication sector has the priority. In late 1997, the cabinet authorised the formation of Saudi Telecommunications Co (STC). It was corporatised in 1998 as a joint-stock company and permitted to operate on commercial basis. In 2001, the government passed the telecommunications act and later set up Saudi Communications Commission as the telecommunications regulator.

The authorities plan to sell off 30 per cent of STC by year-end in the form of initial public offering. But foreign investors are barred from investing in the telecommunications sector; the infamous negative list prohibits foreign investments in some 20 areas.

Separately, unconfirmed reports have suggested that a handful of investors plan to set up a private telecommunication company to compete with STC. The planned privatisation of the telecommunications sector will serve as a test for selling other public assets.

The authorities intend to seek local and foreign investment in the electricity sector reflecting the prohibitive cost involved in expanding power supply. The required investment for producing 50,000 mega watts by 2023 is projected at $63 billion. The planned expansion is essential to meet needs of industrial users and growing population.

US PLEDGES TO INTRODUCE NEW IRAQ RESOLUTION

The United States pledged to introduce shortly a new U.N. resolution, which diplomats said offered compromises that could delay any U.S.-led attack against Iraq. But the envoys said France, which is leading the resistance to the original U.S. draft resolution, has not signed on yet.

"It now all depends on Washington and Paris," said one U.N. Security Council diplomat close to the negotiations.

U.S. Ambassador John Negroponte told the council during a public debate that Washington did not want to use force but would do so if Iraq did not give up weapons of mass destruction that Baghdad denies it still has.

"We are considering the reactions we have received and will be placing before the council, in the near future, a resolution with clear and immediate requirements requirements that Iraq would voluntarily meet if it chooses to cooperate," he said.

The U.S. moves came as nation after nation lined up before the Security Council to warn Washington against military action and say weapons inspectors had to go to Baghdad first and do their job.

A key difference in the new U.S. proposals, aimed at breaking a monthlong deadlock, is sending U.N. arms inspectors back to Iraq to search for banned weapons and giving their report more weight, as most nations want, the envoys said.

To this end, U.S. Secretary of State Colin Powell, in New York to address a Catholic charity dinner, spoke to U.N. weapons inspector Hans Blix.

The United States softened language that gave it explicit automatic authorization to determine when to launch a military strike but the new U.S. draft is still expected to contain the threat of military action.

ISRAELIS KILL EIGHT IN GAZA

Israeli tanks shelled houses in the Gaza Strip, killing eight Palestinians and wounding 35.

The deaths in Rafah refugee camp were likely to fuel tensions that are already high following army raids against militants in which civilians as well as militants have been killed. The United States has criticized such raids. Palestinian witnesses said the tanks opened fire on a cluster of houses when militants shot at the bulldozers, which were near the border.

"We have eight martyrs," said Ali Moussa, the director of Rafah hospital. "We have 35 people wounded. Most if not all are in critical condition."

Witnesses said the dead and wounded were civilians who had been inside their homes, and that two women were among those killed. They said they had seen dismembered bodies and that heavy fire had prevented ambulances from reaching the injured.

YEMEN GETS FRESH $2.3BN LOAN

Yemen has won a $2.3bn loan from the World Bank and a long list of donors to help it support a three-year anti-poverty campaign and by extension, fight the causes of terror and insecurity.

The announcement of the money followed a meeting in Paris to report on the country's development plans, and comes two weeks after an explosion on a French tanker off Yemen which many believe was a terrorist attack.

The new money will partly help redress what Yemen sees as an imbalance in aid. Despite deep-seated problems, and a per capita income of just $450 a year, Yemen said it received only a fifth of the average support for low income countries.

The poverty many Yemenis face is inextricably linked with security, Prime Minister Abdulkader Ba Jamal said.

ISRAEL ISSUES THREAT IN WATER ROW

Israel has warned that it reserves the right to defend its water resources as Lebanon went ahead with a project on a river near the two countries' border.

Foreign Minister Shimon Peres told parliament that Israel did not and would not "tolerate unilateral measures".

His speech came just before Lebanon inaugurated a new pumping station on a river a mile (1.6 km) from the border a move the Israeli Government has said could provoke war.

The installation will draw water for irrigation and drinking from a tributary of a river that feeds the Jordan River and Sea of Galilee Israel's largest freshwater reservoir.

LEBANON ASKS TO BORROW $5BN

Lebanon, already crippled by a $29bn (19bn) debt mountain, is seeking more loans to help service its existing debt.

The cash-strapped country will ask donors for a further $5bn in long-term, low-interest loans at a meeting in Paris.

Finance Minister Fouad Siniora said the extra $5bn could be used to pay-off existing, high-interest loans.

The massive public debt has been eating up most of the government's cash and choking economic growth.

Lebanon's public debt amassed during the rebuilding phase after the 1975-90 civil war has now ballooned to the equivalent of about 170% of the country's economic output.

Lebanon has been working hard to swap local currency debt for cheaper, hard currency bonds.

IRAQIS VOTE FOR SADDAM IN REFERENDUM

Iraqis voted massively, some with their blood, in a referendum which ushers in seven more years of President Saddam Hussein's rule and keeps Baghdad on a collision course with the United States.

"Turnout was absolute and the yes vote was absolute," the government's number two, Ezzat Ibrahim, said.

"The people are voting unanimously for their leader," he told state television as the 1,905 voting centres closed around the country.

UAE VOICES CONCERN OVER IRAQ SITUATION

The UAE voiced concern at the delay in settling ensuing questions of the Iraqi case since 12 years and pleaded with the international community to activate pre-emptive diplomacy to avoid a third Gulf war that will have grave consequences.

The remarks were made by the UAE's Permanent Ambassador to the UN Abdul Aziz Al Shamsi before the Security Council special session on Kuwait-Iraq issue.

WATER MISUSE GROWS SHARPLY

The excessive extraction of water and its improper use is a pressing problem and needs to be addressed immediately, a senior official of the Environmental Research and Wildlife Development Agency said.

Announcing a two-day symposium in Al Ain on Water Resources Management: Recent Developments in the UAE and the Netherlands, Majid Al Mansouri, the agency's Secretary General, said the emirate is faced with a situation where aquifers (layers of rock or soil able to hold or transmit water) have been over- exploited for about 20 years.

DWTC TO TAKE MORE SHOWS OVERSEAS

The Dubai World Trade Centre (DWTC) is studying expanding some of its shows abroad, after taking Gitex to Riyadh, Cairo, Beirut and Hyderabad.

The gold and jewellery and foodstuffs shows are expected to be among the prospective exhibitions. Madras and Kerala also proposed hosting the Indian Gitex edition but DWTC has no plans to move it from Hyderabad.

BAHRAIN BUSINESS TO HAVE SAY IN POLICY

Bahrain's business community will have an important input in all future economic decisions, the Bahrain official news agency, BNA, quoted Prime Minister Sheikh Khalifa bin Salman Al Khalifa, as telling members of the Bahrain Chamber of Commerce and Industry.

"The government will take into consideration the views of the chamber and the private sector prior to any decision or legislation related to the national economy," Sheikh Khalifa said during a visit to the chamber.

ADSB, HALMATIC SIGN PACT

Abu Dhabi Ship Building (ADSB) and UK-based Halmatic Ltd, have signed a strategic cooperation agreement under which ADSB will soon be producing a range of composite vessels using Halmatic designs and technical support.

The pact was signed in the presence of HRH Prince Andrew, Duke of York, who visited ADSB and toured the Mussafah shipyard.

DIB TO LAUNCH MOBILE ATM NETWORK

Dubai Islamic Bank will launch a network of mobile ATMs, by which a client can have his banking requirements met at a location where he can derive maximum convenience.

These mobile ATMs, initially to be introduced in Dubai and later in the other emirates, will be placed at strategic locations where there is a very high possibility that DIB's clients will be in the vicinity.

MID-EAST OIL 'TOO COSTLY' FOR EUROPE

The cost of protecting the West's Middle East oil supplies is about a dollar a gallon, a UK Government minister says.

Peter Hain, the Europe Minister, said this cost should be reflected in transport and other domestic policies.

Ultimately, he said, no amount of money could guarantee secure oil supplies, especially in the next few decades.

He urged a rapid effort to develop renewable and low-carbon replacement fuels.

FAMOUS EGYPTIAN LIBRARY REOPENS

The formal opening of the Library of Alexandria in Egypt, rebuilt on the site of the original destroyed by fire in the 4th Century AD, has taken place.

The ceremony was attended by the Egyptian President, Hosni Mubarak, and some 3,000 dignitaries from around the world, including France's President Jacques Chirac, President Carlo Ciampi of Italy and Greece's President Costas Stefanopoulos.

MIXED FORTUNES FOR SAUDI BANKS

Results from banking groups in Saudi Arabia have revealed mixed fortunes in the kingdom.

While the kingdom's largest bank, National Commercial Bank (NCB), reported a leap in profits of almost 30%, Al-Rajhi Banking and Investment Corporation (Arabic) saw a 22% fall.

Arabic, the kingdom's second largest bank, blamed unfavourable world conditions for the drop in profits.

The bank has experienced difficulties this year after becoming involved in the Enron collapse in the US, and being named in a lawsuit filed by victims of September 11.

DCA AWARDS DH600M DEALS THIS YEAR

The Department of Civil Aviation (DCA) has awarded Dh600 million worth of contracts to firms this year under its ambitious $2.5 billion expansion plan for Dubai airport's Concourses 2 and 3 and Terminal 3, said a senior DCA official.

UAE FA LAUNCHES GOLD MEMBER CARD

Defending their controversial decision to impose a fee on local media, thereby giving them the honour of covering the local league matches and press conferences, the UAE Football Association launched its Gold Member Card at a press conference held at the Association's headquarters.

YEMEN AND GCC SIGN PROTOCOL

Yemeni President Ali Abdullah Saleh sponsored the signing of a protocol following which relations between Yemen and the GCC took an official form. He confirmed Yemen's resolve to develop relations with the GCC countries to serve their common interests.

UAE INVESTMENTS

The UAE and Sudan signed an MoU under which they will exchange expertise and encourage joint investments in the oil and gas sector. Sudanese Oil Minister Ahmed Al Jaz, who is here for the energy conference in Abu Dhabi, also called on UAE businessmen to invest in Sudan, especially in view of the changes that occurred in legislation and services.

SHARJAH'S MASTERPLAN

Sharjah will develop a masterplan aimed at easing investor norms and attracting foreign direct investment. The plan will include seeking acreage from the government for development under its supervision and subsequent parcelling off to project promoters.