GULF

 

Dec 02 - Dec 15 , 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

SAUDI BUDGET DEFICIT GROWS

The world's largest oil producer Saudi Arabia has announced a 209bn riyal (36bn; $55.7bn) budget for 2003 and forecast a deficit of 39bn riyals.The only time it has recorded a surplus in the last 20 years was in 2000.Analysts told BBC News Online they were surprised at the size of the budget and the deficit.

Revenues of 170bn riyals are expected, 75% of which analysts estimate comes from oil sales.

The secretive rulers do not reveal the oil price which was used to calculate the budget, but it is thought to have been between $16 to $17 per barrel for 2002.

Saudi oil production is about 7.6 million barrels per day and the average price for the kingdom's crude has been slightly above $23 dollars a barrel.

As is customary, the budget did not mention defence spending.

KING FAHD APPROVED THE BUDGET

A Finance Ministry statement said 2002's 225bn riyal budget had a smaller-than-expected deficit of 21bn riyals, which is thought to have been mainly due to higher oil prices.

The kingdom's domestic debt is about $170bn while foreign debt stands at around $20bn.

Finance and Economy Minister Ibrahim al-Assaf said earlier this month that Saudi Arabia planned to sell stakes in 20 big state-owned industries to reduce the debt burden.

Under a five-year plan announced in 2001, the government plans to employ over 800,000 unemployed Saudis, replacing 488,600 foreigner workers and creating 328,000 new jobs, mainly in the private sector.

ARMS INSPECTORS VISIT MORE IRAQI SITES

United Nations arms experts have visited a laboratory and a munitions factory near Baghdad, on the second day of their hunt for suspected Iraqi weapons of mass destruction.

Two teams set off from their Baghdad headquarters followed by dozens of journalists, but Iraqi guards prevented the reporters from entering the facilities.

After the inspections resumed, the experts said they had been given full co-operation by the Iraqis.

But US Deputy Defence Secretary Paul Wolfowitz said there had to be a genuine change of heart by the Iraqi leader for the programme to succeed.

One of the UN teams visited an animal vaccine production plant at al-Dora, south of the capital.

The BBC's Ben Brown in Baghdad says the plant has a documented history of biological weapons production, including anthrax.

When weapons inspectors were last in Iraq in the 1990s they visited and disabled part of the al-Dora plant. But, our correspondent adds, there is a lingering suspicion that biological weapons could still be manufactured there.

The weapons inspectors peered into storage tanks, and looked over pipes and other fixtures for signs of any military research.

Another team went to the al-Nasser factory, north of Baghdad, which produces both ammunition and civilian machinery.

The inspectors visited the al-Tahadi factory in the al-Rashad suburb, north-east of Baghdad, and a graphite plant at al-Amariyah, south-west of the capital.

ISLAMIC BANKS EDGE PAST CONVENTIONAL

The growth rate of Islamic banking services has outpaced that of 'conventional' banking during the past decade, making it one of the most dynamic areas in international finance.

This was part of the Standard & Poor's Ratings Services (S&P)'s comments on the approach taken in analysing the creditworthiness of Islamic financial institutions, made in a report Classic Ratings Approach Applied to Islamic Banks Despite Industry Specifics published.

The annual growth of Islamic financial institutions (IFIs) has been an estimated 15 per cent worldwide over the past 10 years, and is expected to accelerate in the foreseeable future.

DOUBTS ON LEBANON $4BN LOAN DEAL

A $4bn loan package from international donors to help Lebanon tackle its public debt and avert a financial crisis has received a mixed reaction.

Former Lebanese Finance Minister George Corm said the amount and conditions of the low-cost loans pledged at the Paris conference were unclear.

"The sums lack transparency, and neither the conditions, the period and the process of utilising credits is clear, neither in the final statement of Paris II or in the table distributed to journalists," he said in a television interview.

Lebanon did not receive the $5bn it was counting on, because it has avoided International Monetary Fund (IMF) policies on privatisations and market liberalisation.

UAE BANKS' OVERSEAS LENDING RISES

UAE banks have spread their wings abroad in a big way since the end of 2000 by increasing their lending outside the UAE by a substantial Dh5 billion.

The non-resident lending by UAE banks during this period rose by 27 per cent from Dh17 billion of 2000 to Dh22 billion as of this year's second quarter.

Speaking to Gulf News, Abdulaziz Al Ghurair, CEO of Mashreqbank, said UAE banks are becoming regional banks and it makes sense that more and more of them are looking beyond the UAE.

Emirates Bank International (EBI) recently acquired a licence to open a branch in Saudi Arabia.

The Mashreqbank chief said his bank was also toying with the idea of entering other GCC countries in the near future. He said that the international operations of Mashreqbank are being reviewed and in the exercise, GCC stands to gain more in terms of branch expansion potential.

SAUDIS DENY MONEY TRANSFER CHARGE

The Saudi authorities have denied recent allegations that the Saudi government had sent money to two of the hijackers involved in the Sept 11 attacks. The Saudis are also questioning the timing of the allegation.

According to Adel Al-Jubeir, foreign policy adviser to Crown Prince Abdullah, the Saudi officials had worked closely with the FBI in investigating the funding allegation when it first emerged some "seven or eight months ago".

Al-Jubeir said his country was pursuing Al Qaeda mercilessly, adding that investigations were continuing to determine whether Saudi money reached the hijackers, and if so how.

BELHOUL GROUP PLANS IPO

Belhoul Group plans to go the IPO (initial public offering) route to raise funds for its ambitious healthcare expansion projects.

The size of the IPO could be Dh500 million to Dh1 billion.

OCCUPIED ISLANDS 'WILL RETURN TO UAE'

Ras Al Khaimah will soon organise events to mark the occupation of Abu Mousa and Greater and Lesser Tunbs islands, said Sheikh Khalid bin Saqr Al Qasimi, Ras Al Khaimah Crown Prince and Deputy Ruler.

He said activities organised by the schools would highlight the Iranian occupation of the islands.

Sheikh Khaled was optimistic that the three islands will very soon return to the UAE, adding that this will come about because of the extensive efforts by the UAE officials and high-level contact between the Abu Dhabi and Tehran.

SAUDI ARABIA TO SLASH PHONE, INTERNET CHARGES

Major cuts in mobile, Internet phone charges, national and international phone call tariffs will be implemented in Saudi Arabia starting next April 1.

The announcement was made by Khalid Al Gosaibi, Acting Minister of Posts, Telegraph and Telephones, after the government decided to sell around 30 per cent of STC shares for public subscription.

The acting Minister disclosed that mobile phone connection charges will be slashed from 300 to 100 Saudi riyals.

PRIVATISATION IN KUWAIT IS PROGRESSING CAUTIOUSLY

The long-awaited privatisation law remains deadlocked at the National Assembly due to political wrangling between the appointed government and the elected parliament.

The proposed law will likely grant each ministry its own privatisation strategy, and this clause has been stirring much debate.

Some details of the privatisation programme have emerged.

Amongst others, the programme will be centred on selling shares in banks, insurance companies and light industries that the government had purchased through Kuwait Investment Authority (KIA) following the collapse of the unofficial stock market in 1982 and the Iraqi invasion in 1990.

MOROCCO FLOODS HIT OIL PLANT

Morocco's largest oil refinery has been closed down following flash floods which have killed at least 37 people.

The Samir plant in the town of Mohammedia which processes up to 90% of the country's crude oil exports was severely damaged after flash floods triggered a major blaze.

OMAN EDGES TOWARDS DEMOCRACY

The Sultan of Oman has extended voting rights to all citizens over the age of 21, in a move that is seen as a step towards political reform in the Gulf state.

Voters in the sultanate were previously chosen from among tribal leaders, intellectuals and prominent businessmen, with about a quarter of the state's 1.8 million people taking part in elections.

CHARITY TO EXPAND ACTIVITIES

Al Ihsan Charity Centre plans to open branches in Dubai and Sharjah in a bid to help more needy families throughout the country.

"While we already deliver aid to over 1,300 families in Dubai and the Northern Emirates, we are seeking to expand our scope of humanitarian activities to various parts of the country," Atallah Habib, Deputy Director, told Gulf News.

He said a Dubai branch would foster cooperation between the centre and a number of Dubai establishments, including the Economic Development Department and the municipality, which have been supporting its operations.

DUBAI AIRPORT TO BEEF UP SECURITY

Dubai International Airport will beef up security in the coming years, a senior police official said. According to Major General Ismail Al Gergawi, Director of the General Directorate of Ports and Airports, 625 police officers will be added to the force in the next few years.

Emirates airline is introducing 50 new planes to its fleet during the next few years this will bring an increase of passengers, he said. "Every year the number of passengers using the airport increase by 12 per cent", he added.

ARAB STATES 'COULD DO MORE TO AVERT WAR'

The former United Nations Humanitarian Aid Coordinator in Iraq has said that Arab states could do more to prevent a war against the country.

Hans von Sponeck, who headed the UN's Oil for Food programme before resigning in February, 2000, gave a lecture at Zayed Centre for Coordination and Follow-up on the impact of sanctions on the Iraqi people.

AVIATION SECTOR TO SPEND $10B ON IT

Middle East airports and airlines are expected to spend an estimated $10 billion over the next few years on their IT requirements, including moving many of their processes to the Web.

This year, carriers based in the Middle East and Africa have outpaced the rest of the world in their IT-related spending, according to a survey commissioned by Sita, a major vendor of technology solutions to the airline and airport markets.

These airlines, on an average, are spending 2.88 per cent of their revenues on IT, while it is 2.7 per cent in the case of North American carriers, and 1.9 per cent for European ones.

AD INDUSTRY EMERGES FROM SLUMP

The advertising industry has emerged a clear winner from the spate of promotions and activities that have been lined up during Ramadan.

The last week of Ramadan and the extended weekend during the Eid holidays will see a further surge in advertising spend, according to industry sources.

The upturn has come at a very welcome moment for the local advertising market, which had seen an extended lull during the second quarter and the summer of this year for a variety of reasons.

ARAMEX

Aramex International, the regional air express company, recorded a near 20 per cent increase in revenue to $34.8 million for the third quarter, against $29 million last year.

Net income increased by 50 per cent to $1.5 million for the three months ended September 30, compared with $1 million the corresponding period of 2001.

DIB GIVES DH1M TO SIX CHARITIES

Dubai Islamic Bank will donate Dh1 million to six key local charities in the UAE, as part of its sponsorship of Dubai The City That Cares 2002.

NEW PLAN TO RESTORE HISTORIC AL AIN SITES

The Department of Antiquities and Tourism (DAT) has formulated a new annual plan for archaeological excavations and restoration of historic sites and buildings in Al Ain.

The plan will come into effect from the excavation season of 2002-03, with special focus on the archaeological sites in north and west of Al Ain.

The department made new archaeological discoveries at these sites last season. Human settlements dating back to 5000 BC, to the Stone and Bronze Ages, were discovered there. The excavated objects include spearheads which provide clues on the age of the sites.