GULF

 

Dec 23 - 29 , 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

GOLD AND OIL SOAR ON GULF WAR FEARS

Growing worries about a war with Iraq have triggered big rises in the price of oil and gold.
The threat of military action, together with the continuing strike-driven shutdown of Venezuela's crude oil production, drove oil prices to a three-month high.

But oil prices fell back from their highs after Venezuela's Supreme Court ordered the restart of operations at the state oil firm PDVSA.

Gold, meanwhile, has assumed its traditional role as a safe haven in uncertain times, with its price hitting levels not seen in almost six years.

Oil prices strengthened on Thursday after the chief United Nations weapons inspector Hans Blix said there was "little new information" in Iraq's weapons declaration to the UN.

And US Secretary of State Colin Powell stepped up the pressure by saying Iraq had "totally failed" to meet the requirements of a UN Security Council resolution with its declaration.

Oil traders fear that any war in Iraq could disrupt oil supplies out of the Middle East.

But news of the Venezuela Supreme Court's ruling knocked prices back from their highs as hopes rose that oil supplies from the country might start again.

Oil output in Venezuela is now down to less than 300,000 barrels a day from 3.1m last month, following the 18-day-old industry shutdown.

On the New York Mercantile Exchange, US crude oil for January delivery was up 12 cents at $30.56 a barrel after hitting $31.10 at one point.

In London, February Brent crude prices fell back to $28.22 a barrel after earlier reaching $29.40.

PRIVATISATION IS ONE THING AND LIBERALISATION ANOTHER

Few days ago, the initial public offer (IPO) of Saudi Telecommunications Company (STC) made headlines. However, Saudi Arabia is not liberalising the telecom industry. To be sure, most GCC states have taken measures for privatising state telecom monopolies rather than liberalising the industry or deregulating the services.

This article offers a report card on progress towards opening the telecom market within the GCC. With respect to Saudi Arabia, the STC was corportarised in 1998 as 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. On December 17, 2002, the STC offered to sell 30 per cent of its shares, hoping to raise SR15.3 billion ($4 billion). But only Saudi nationals and government institutions were allowed to purchase the 90 million shares, sold at SR170 a piece.

Foreign investors are barred from investing in the telecommunications sector, as part of a negative list that prohibits foreign investments in some 20 activities. The IPO confirms STC's success in overcoming an earlier failure to win a strategic buyer - in 2000 SBC of the U.S. decided against joining the proposed partnership. The next plan calls for allowing entry of foreign operators in the mobile line by 2004.

Kuwait's telecommunications sector is the most liberal within the GCC economies - not a single monopoly firm controls the telecom services. Two firms, Mobile Telecommunications Company (MTC) and National Mobile Telecommunications Company (Wataniya) provide mobile services. The government has minority stakes in both firms and acts as a regulator of the industry.

BUSH TO SPEAK ON IRAQ 'VIOLATION'

The US is to provide intelligence to the arms inspectors US President George W. Bush is due to make his first public comments on Iraq's weapons declaration since America announced its view that Iraq is in material breach of UN resolutions.

Secretary of State Colin Powell said on Thursday that omissions in the document meant that Baghdad was "well on its way to losing this last chance" to avoid military action.

Mr Powell stressed that the US still accepted that weapons inspectors should continue their work in Iraq, but warned that the burden was on Baghdad to prove that it did not have weapons of mass destruction.

He was speaking soon after the chief weapons inspector, Hans Blix, told the UN Security Council that the declaration showed that Baghdad had missed an opportunity to fill in gaps in the evidence.

BBC Washington correspondent Justin Webb says there is a sense of satisfaction in the White House at the outcome of the Security Council meeting.

IRAN PARLIAMENT VOTES TO LIFT BAN ON SATELLITE TV

Iran's parliament voted Tuesday to end an openly-flouted national ban on satellite television, and instead place restrictions on what residents of the Islamic republic are allowed to watch.

Deputies in the Majlis approved a text that commissioned the telecommunications ministry to develop over the next six months "receivers that can receive a limited number of foreign channels" whose broadcasts do not contravene Iran's national and Islamic values.

The law also authorises state television to relay programming from some foreign media, and would give certain people such as academics and journalists unlimited satellite television access.

Reformist deputies argued that a total ban had proved impossible to enforce.

GCC URGED TO FORM ALLIANCE WITH INDIA AND PAKISTAN

Gulf Arab states should get closer to India and Pakistan and form an alliance with the two subcontinent giants to serve their interests and offset the growing military power of the neighbouring states Iran and Iraq, according to a UAE study.

But the six GCC countries should also try and use their strong links with Pakistan to persuade it to defuse tension with India to avert destruction on the grounds as New Delhi is militarily far superior, said the study, prepared by Abdullah Jumma Al Haj, Cultural Attache at the UAE Embassy in Washington.

UAE BANKS EXCEED GLOBAL ADEQUACY LAWS

Commercial banks in the UAE have heeded Central Bank inst-ructions and largely surpassed international standards on capital adequacy by strengthening their reserves and tightening credit rules, according to their balance sheets.

At the end of 2001, all national and foreign banks were far ahead of the 8 per cent floor set by the Bank for International Settlement for financial institutions worldwide to ensure they have sufficient funds to face a possible financial crisis.

MEDIATORS TO DISCUSS MID-EAST PLAN

Representatives from the quartet of mediators trying to create a blueprint for a peace deal between Israel and the Palestinians are due to meet in Washington on Friday.

The four - the United States, Russia, the United Nations and the European Union - will discuss a roadmap that proposes the creation of two states living side by side.

But hopes of anything substantial coming out of this meeting are not high.

MASS ARRESTS OF MUSLIMS IN LA

US immigration officials in Southern California have detained hundreds of Iranians and other Muslim men who turned up to register under residence laws brought in as part of the anti-terror drive.

Reports say between 500 and 700 men were arrested in and around Los Angeles after they complied with an order to register by 16 December.

The Immigration and Naturalization Service (INS) is refusing to say how many people were arrested but said detainees were being held for suspected visa violations and other offences.

IRAQ TO DISCUSS MISSING KUWAITIS

Iraq has agreed to hold talks with Kuwait and Saudi Arabia next month to discuss the fate of hundreds of people who disappeared during the Gulf War.

The meeting, in Jordan, will be the first time in four years that Iraq has discussed the issue.

Kuwait says more than 600 people, almost all of them Kuwaitis, are still unaccounted for since the Iraqi occupation in 1990-91.

NEW CASH FOR GULF AIR

Gulf Air, the Bahrain-based carrier, is to get another $240m (150m) in emergency funding from the Middle Eastern countries that own it.

Bahrain, Oman and Abu Dhabi have already injected $81.7m this year to try to stabilise Gulf Air after the state of Qatar abruptly decided to pull out of the company.

At the time, Qatar said it did not believe the company, battered by the sharp slowdown in the aviation business which was exacerbated after September 11, could survive.

The new money is intended to cover the company's deficit, while debt worth $146m will also be frozen till May next year, according to chairman Sheikh Hamdan bin Mubarak al-Nahayan.

SALMONELLA RISK CUT BY BETTER CHECKS

Poultry imported by the UAE from other countries has been found to be heavily contaminated with Salmonella bacteria which causes fever and can eventually lead to death, according to an official health study.

The level of contamination was very high in early 1990s but it has been reduced over the past few years due to better handling in the UAE and improvement of processing measures in key producing countries, said the study carried out by Dr Anwar Saad of the Abu Dhabi Municipality's Food and Environment Control Centre (FECC).

GOLF COURSE

Arabian Ranches, the multi-billion dirham residential community, which is being developed by Emaar Properties, will have one of the world's top-100 desert golf courses.

Experts predict that the 7,698-yard, par-72 course - designed by Australian Ian Baker-Finch in association with Niklaus Design - will rank among the top 100 courses of any kind anywhere in the world.

FACTORY PLANS EXPANSION

Al Ain Vegetable Processing and Canning Factory plans to expand the production capacity of all kinds of packed beans by May next year.

DAIRY INDUSTRY GROWTH STEADY

The dairy industry is growing steadily, although it is facing stiff external competition as well as protectionism and dumping policies, the participants of a symposium were told here.

The industry, which started with just 382 cows producing 97 tons of fresh milk in 1979, now fulfils 75 per cent of the UAE's dairy products requirements, said Prof Abdel Alim Metwally, dean of the College of Food Systems at UAE University. But by 1997, the production increased by 65 per cent with the growth of farms which reached 24.

FIRST ISLAMIC IN REAL ESTATE DEAL

Crescent Euro Industrial I - the newly formed joint venture vehicle between First Islamic Investment Bank (First Islamic) and Lend Lease Real Estate Investments GmbH (Lend Lease) - will acquire usufruct lease interests in a portfolio of industrial distribution facilities in Germany.

The portfolio is expected to consist of 5-8 stabilised industrial distribution facilities with a total value of between Euro 150-200 million. The properties will be spread across markets of strategic importance to German distribution, logistics, and industrial sectors, such as Hamburg, Dusseldorf, Cologne, Frankfurt and Berlin.

BLIX TO REPORT ON IRAQI DOSSIER

The United Nations chief weapons inspector, Hans Blix, is due to deliver his first assessment of Iraq's weapons declaration to the Security Council, amid growing signs of tension among council members.

Washington, which is threatening military action if the resolution is not enforced, is to issue its own formal response to the declaration after the report by Mr Blix.

AL FUTTAIM GROUP TO INVEST $2B

Dubai's Al Futtaim Group plans to invest Dh7.3 billion ($2 billion) in a mixed-use property development in Cairo, said a top company official.

Land has been acquired and development may begin in two years. The group aims to increase its international portfolio of properties as part of a larger plan involving other similar projects in the Middle East.

UAE'S PC MARKET

The UAE should cross the 200,000 PCs a year mark for the first time in 2003, according to early forecasts by International Data Corp (IDC). In value terms, this would be around $320 million, out of which the portable PCs would account for $130 million.

In 2002, the corresponding figures were $280 million and just over $100 million respectively. The growth predicted for 2003 belies the increasingly worst-case scenarios that have been painted in recent times for PC growth in the country.

BAHRAIN TO OPEN TELECOM SECTOR

Several foreign companies have expressed interest in investing in Bahrain's telecommunications sector which will be open to competition January, an economic official source told Gulf News.

BAHRAIN BIDS TO BOOST INSURANCE

A new, four-pronged strategy is being launched by the Bahrain Monetary Agency (BMA) to develop the domestic and offshore insurance sectors centre, an official said recently.

The major new drive follows the recent assumption, by the BMA, of the role of sole regulator for the financial sector, which includes insurance and the capital market.

CAIRO-AMMAN BANK TO E+

Moody's Investors Service has downgraded the financial strength rating of Cairo-Amman Bank to E+ from D. The outlook is stable.