GULF

 

Nov 18 - 24 , 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

OIL PRICE SLIPS ON IRAQ ACCEPTANCE

Oil prices have fallen to their lowest levels for eight months after Iraq accepted a United Nations (UN) resolution to allow weapons inspectors to return to the country.
The threat of an attack on Iraq had bumped up oil prices because of fears that supplies would be disrupted.

But the Iraqi ambassador to the UN, Mohammed al-Douri, said that Iraq accepted the resolution "unconditionally".

Brent crude oil prices, the benchmark figure, slipped $1 to $22.72 a barrel on the news.

Oil prices had risen as high as $31 per barrel in September as the threat of a US-led attack on Iraq caused concern over supplies.

Since then, prices had already fallen back as it became clear that overproduction by a number of major oil-producing states had bumped up stocks.

The Iraqi parliament originally rejected the UN ultimatum but said it was up to President Saddam Hussein to make the final decision.

Market watchers said the decision had removed some of the so-called 'war premium' from oil prices.

"Until the decision was announced, there was an element of uncertainty," said Lawrence Eagles at GNI research.

UN inspections on disarmament were launched in 1991, when Iraq was expelled from Kuwait.

A US-led coalition led the move after the Gulf War.

However, inspectors withdrew in 1998 after a dispute over access to presidential palaces.

The Iraqi decision to now re-admit the inspectors met with some scepticism.

Many people still believe there will be a US-led war on Iraq, even if it now happens later rather than sooner.

Kevin Norrish, oil analyst at Barclays Capital, said the Iraqi decision "puts off the likelihood of war for several weeks at least, until early December I would have thought."

UAE'S EARNINGS FROM OIL, GAS MAY DROP

The UAE's earnings from crude oil exports and gas exports are expected to slip by around 8 per cent to $23.2 billion this year, while its foreign debt is likely to remain unchanged at nearly $18 billion, according to official Arab figures.

UAE's oil and gas revenues totalled nearly $25.3 billion in 2001, and crude output cuts by the country in line with an agreement among producers would depress those earnings by 8.2 per cent to around $23.2 billion, the Abu Dhabi-based Arab Monetary Fund (AMF) said.

"The decline is due to developments in the oil market, mainly fluctuating prices and production cuts by most producers," the AMF said in its quarterly economic bulletin on 12 Arab countries whose stock markets are linked to its database.

The fund, the Arab League's main financial organisation, forecast the UAE's economy would grow by around 1.7 per cent this year and pick up by 3.1 per cent in 2003 following a decline of around 3.7 per cent in nominal terms in 2001.

"The UAE's gross domestic product will grow by nearly 1.7 per cent this year despite developments in the global oil market, specifically in production and prices," it said.

The report put the UAE's external debt at around $18 billion and expected the level to remain unchanged by the end of this year. It also expected the country's financial reserves minus gold with the International Monetary Fund to stabilise at around $14 billion, the third largest cash reserve in the Arab world after those of Saudi Arabia and Algeria.

According to the bulletin, the decline in export earnings will combine with an estimated 1.5 per cent increase in imports to depress trade surplus to nearly $13.1 billion in 2002 from around $15.2 billion in 2001 and $14.7 billion in 2000.

WONDER BOY FROM IRAN HAS HOLY QURAN ETCHED IN MEMORY

Mehyar Hussein Boor from Iran not only has the entire Holy Quran etched in his mind, but he will also tell you there are 77,807 letters in the Holy Book.

The 10-year-old boy is a miracle of Almighty Allah according to participants at the Dubai International Holy Quran Award started in Dubai. Mehyar is probably the youngest ever to have memorised the entire Quran. The boy, who otherwise cannot read, write or speak Arabic, learnt the holy book when he was six years old in only six months.

CONFLICT WITH U.S. 'IS NOT OVER'

The newspaper of President Saddam Hussain's eldest son said the conflict between Iraq and the United States was not over despite Baghdad's acceptance of a new UN resolution on disarmament.

"Our allies and brothers should realise that the problem with the American administration and its ally Britain is not over. Perhaps it is resuming again," said Babel, Iraq's most influential newspaper, owned by Uday.

It said the U.S. government's "arrogant and cowboy-like" policy was untrustworthy.

Iraq accepted a tough new UN resolution that gives Baghdad one last chance to disarm and paves the way for weapons inspectors to return after a four-year absence. Babel said Iraq's compliance with the resolution reflected Baghdad's goodwill, denying it had weapons of mass destruction.

LNG HELPS TRANSFORM OMANI ECONOMY

Oman's proven gas reserves stand at 29 trillion cubic feet, though it's not comparable to 500 trillion cubic feet Qatar has, the Sultanate has made momentous strides in developing the sector, notably the liquefied natural gas industry.

Progress in the sector is one of the successful efforts by Omani authorities to reduce the economy's dependence on oil. Its development dates back to 1992 when the government approved findings of a feasibility study by Shell.

Oman LNG was set up in 1994. In 1996, Korea Gas Corp agreed to buy 4.1 million tonnes per year of LNG for 25 years. The agreement paved the way for the construction of two trains in Sur, south of Muscat, with 6.6 million tonnes per year capacity for $2.6 billion.

Oman LNG raised $2 billion for the project, making it one of the largest loans ever for a single project in the Gulf. The firm has since refinanced the loan.

ARAB PRESS RELIEVED, IRAQ DEFIANT

Some Arab newspapers reflect relief at Iraq's acceptance of the UN resolution on disarmament. But in Iraq itself Babil, the paper owned by the president's son, insists the resolution is a violation of UN principles.

"What now, Security Council? Once again we have thrown the ball back into the court of the United Nations, the Security Council and the courts of friends and brothers. Our conscious decision represents our advanced capability for taking on huge responsibilities.

"This is what distinguishes a country that wants 'peace', respects international legitimacy and deals with a spirit of interaction with the resolutions of the Security Council, despite the fact that they represent a clear violation of all the principles and aims on which the United Nations was founded."

IRAN STOCKS REAP REFORM BENEFITS

After years of paying lip service to desperately needed economic reforms, Iran's government has started to deliver.

This year it has slashed taxes, updated its foreign investment law, and overhauled its currency laws, announcing a single exchange rate for the Iranian rial, to replace the present complex system.

It has also taken advantage of high oil prices to pay down its foreign debts.

The effect of these changes can be seen on the Tehran Stock Exchange (TSE), which has risen by about 30% so far this year.

That makes it one of the best performing markets in the world this year.

MOHAMMED MEETS JOURNALISTS

General Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Minister of Defence, has underlined the cultural role of the fourth estate in rectifying errors and supporting national efforts to build a modern state.

Speaking to local and foreign media representatives at a Suhoor party hosted by him, in the presence of Sheikh Abdullah bin Zayed Al Nahyan, Minister of Information and Culture, Sheikh Mohammed called on the mass media to make use of the prevalent freedom and democracy in the UAE and upgrade their performance.

UN INSPECTORS HAVE ROADMAP READY

With Iraq's announcement that it will accept tough new UN inspection terms, a team of disarmament experts will likely arrive in Baghdad to restart their surveillance cameras, install their communications equipment and begin the most intrusive weapons inspection operation in modern history.

Armed with tips and evidence amassed by Iraqi defectors, former UN arms experts and American and British intelligence agencies over the past decade, the UN inspection team has created a roadmap of more than 1,000 sites that inspectors will potentially visit in their search of Iraq's suspected chemical, biological and nuclear weapons arsenals.

UAE WELCOMES IRAQ ACCEPTANCE

The UAE welcomed the Iraqi government's unconditional acceptance of the Security Council resolution, urging Baghdad to cooperate with the UN inspection team to stave off woes of any new war in the region.

A spokesman for the UAE Foreign Ministry regarded Iraq's decision as a 'positive step', adding that he hoped UN inspectors would carry out their job with transparency, objectivity and neutrality. He also called on Baghdad to cooperate so as not to give an excuse for a recourse to force against it and prevent the horrors of war.

ARAFAT MEETS EGYPT'S INTELLIGENCE CHIEF

President of the Palestinian National Authority Yasser Arafat met Egypt's intelligence chief to assess results of talks between the president's Fatah faction and the Hamas group, aimed at ending suicide attacks in Israel.

The Egypt-mediated meetings in Cairo between Fatah and Hamas's exiled leaders ended without any announcement of an agreement to cease the bombings.

WAR TO IMPACT REGION'S ECONOMIES HEAVILY

The U.S. plan to strike Iraq cannot be viewed only as a political issue as the economic implications will be hard and far-reaching for the global economic fraternity.

According to Dr Ahmed Al Samerai, economic advisor for Shuaa Capital, a leading investment bank in the UAE, there is huge potential for economic transactions and exchanges between Iraq and the countries from the region as well as from outside.

Take for instance the case of Jordan. Iraq with the second biggest oil reserves in the world is considered to be the first commercial partner of Jordan. Jordanian exports to Iraq have been 19 per cent of total Jordanian exports during the first nine months of 2002.

PROPERTY DEVELOPMENTS

Tourism to Dubai is growing exponentially with the current 5 million visitors due to reach 10 million by 2007 and an incredible 40 million by 2015, according to new studies.

The new property developments in Dubai are luring more and more investors to build modern facilities which will cater to an increased number of guests.

TOP DSF TEAM LEAVES FOR INDIA

A high-level delegation from the Dubai Shopping Festival (DSF) has left for Mumbai to promote the events, activities and promotions of DSF 2003.

The India road show, organised by Emirates airline's India headquarters, is one of the many planned to create awareness among international audiences of the various elements that make up the festival.

ABU DHABI MOTORS GETS ROLLS-ROYCE

Al Habtoor Motors has transferred the rights of Rolls-Royce brand in the Capital to Abu Dhabi Motors under an agreement signed.

This follows the separation of Rolls-Royce and Bentley brands worldwide after Rolls-Royce became part of the BMW Group.

SAUDI BUSINESSMEN KEEN ON PRIVATISATION

Privatisation is inevitable if economic problems in the kingdom are to be solved and dramatic changes will be witnessed in the near future for the Saudi economy, said Saudi businessmen and economic experts.

Just a day after Saudi Arabia announced plans to privatise 20 vital economic sectors including telecommunications, civil aviation, desalination, highway management, railways, sports clubs, municipality services, health services and hotels, Saudi businessmen assured that the private sector is ready to take the responsibility and will speed up private participation.

The issue of privatisation is not new for the kingdom, stated Abdulrahman Al Turki, a businessman.

MASHREQBANK SABBATICAL FOR BORROWERS

In keeping with the spirit of Ramadan, Mashreqbank has announced that all its clients who have taken loans can enjoy a sabbatical during The Dubai The City That Cares 2002 by delaying their payment.

The move will also provide them with more spending power for Eid, a spokesman for the bank said.

In another gesture, Mashreqbank has come out with a new scheme in which 10 customers will be selected for free school fees.

IRAN'S PRESIDENT CRITICISES DEATH SENTENCE

Iran's reformist President, Mohammad Khatami, has spoken out against the death sentence given to a university lecturer for criticising the country's Islamic clergy.

Mr Khatami described the death sentence handed down to Hashem Aghajari, a prominent reformist and ally of the president, as "inappropriate".