GDP at current prices jumped from 321.75 billion
dirhams in 2003 to 378.76 billion dirhams in 2004. GDP at constant
prices provides a more accurate picture of the economy as it does not
take into account inflation.
The value of total exports and re-exports increased
by 23.3 percent in 2004 compared to 2003, reaching 303.9 billion
dirhams. This was mainly due to the increase in receipts of exports of
the hydrocarbon sectoring other exports and re-exports.
The UAE's balance of payment (BoP) surplus reached
12.8 billion dirhams in 2004 against 4.7 billion dirhams in 2003. Both
the trade balance and the current account reflected higher surpluses
compared to 2003, while the negative balance of the capital and
financial account increased by 8.3 percent.
The increase in value of exports of the hydrocarbon
sector was mainly due to increased production volumes resulting from
increase in the refining capacity gas production capacity and
expansion in production of condensates on the one hand, and to the
increase in oil prices, said the report. Weighted average price of oil
rose from $28.1 a barrel in 2003 to $36.1 a barrel in 2004. This led
to an increase in value of exports of oil (including condensates which
are not included in the country's production quota set by OPEC) from
81.2 billion dirhams in 2003 to 108.8 billion dirhams in 2004 and in
value of exports of gas by 19.9 percent compared with 2003 to 17.2
The value of exports of petroleum products also
increased to 15.2 billion dirhams in 2004 against 13 billion dirhams
in 2003. The value of commodity exports, including those from the free
zones, continued to rise over the past few years to reach 60.9 billion
dirhams in 2004 compared with 51.2 billion dirhams in 2003.
Exports from the free zones constitute 80 percent
of the country's commodity exports valued at 48 billion dirhams in
2004. The value of re-exports (including non-monetary gold) also rose
from 81.6 billion dirhams in 2003 to 101.8 billion dirhams in 2004.
A substantial portion of the increase reflected in
increased reliance by some GCC countries on the country's seaports for
imports, as a result of the GCC countries Customs Union. The value of
total imports FOB (including free zone imports) increased from 168.3
billion dirhams in 2003 to 199 billion dirhams in 2004. This was
attributed to rapid construction and building activity, rising
domestic and external demand resulting from population increase and
the need to meet the requirements of re-exports.
The report said that the geographical distribution
of the total value of imports shows that the share of European
countries dropped from 30.1 percent in 2003 to 29.8 percent in 2004.
Within this group, the share of Germany was the highest, increasing
from 7.1 percent to 7.5 percent. The share of Asian countries rose
slightly to 45 percent against 44.7 percent in 2003.
SAUDI ARABIA'S SURPLUS BUDGET
Saudi Arabia's budget surplus is expected to cross
SR110 billion ($29.33 billion) this year, banking on surging oil
prices, a report issued by Saudi British Bank (SABB) said. The report
said it expected the Kingdom's revenues from oil exports to reach
SR420 billion ($112 billion). "Our forecast is for Saudi
government revenues to reach SR420 billion, with a budget surplus of
approximately SR110 billion. In the IQ2005, our estimates put oil
exports revenue for Saudi Arabia at SR105 billion. If this continues
throughout 2005, oil export revenues alone will reach SR420
billion," the report said.
Last year, the Kingdom made a budget surplus of
SR98 billion ($26.1 billion) reaping a windfall from record prices for
its crude exports. The government then said part of the surplus would
be used for repaying public debts estimated at SR660 billion.
An official statement said that revenues in 2004
soared to SR393 billion, almost double the initial government
projections, while spending was SR295 billion. More than SR30 billion
of last year's surplus will go toward development projects. Another
SR11 billion will be used to raise the capital of the Saudi Credit
Bank and Saudi Real Estate Fund. "The remaining revenues will be
allocated to settle part of the public debt," the Finance
In its second quarter report, SABB based its oil
revenue forecast on the US Energy Information Administration, which
continues to predict WTI above $50 a barrel throughout 2005 and 2006,
taking Saudi government revenues well in excess of SR400 billion a
With Saudi oil production already averaging 9.5
million bpd in 2005, even a drop in output through the summer months
in the Northern Hemisphere, could still see overall Saudi production
in 2005 averaging well above 9 million bpd, the report pointed out.
The bank said rising oil revenues would have a
"knock-on" effect for the non-oil private sector, adding
that it would boost government spending and create a much higher
consumer and business confidence. "It will also have substantial
monetary effects assisting credit creation and greater
liquidity," it pointed out. The report also highlighted growing
foreign investment in the Kingdom.
FUEL OIL CONTRACTS
Dubai Gold and Commodities Exchange (DGCX) will
launch its energy portfolio with a fuel oil contract next year to help
position Dubai as the Gulf's energy trading hub, it is learnt.
DGCX, a joint venture between free zone authority
Dubai Metals and Commodities Center and Indian partners, expected to
be launched in November with a gold futures contract. Freight, energy
and more metals contracts will follow on the electronic derivatives
market in Dubai emirate, part of OPEC producer United Arab Emirates.
Tilak Doshi, executive director of the energy
division, said the focus would be on fuel oil at first and then
incorporate other refined products such as gasoline and gas oil.
"Now, we are in the process of industry consultations. We've held
a first round in Dubai as well as in Bahrain and Sharjah to talk to
producers, traders and storage companies," he said. "We are
looking at the first half of 2006 for the actual launch of the
contract," he told Reuters, adding that work on finalizing
contract structure and details would take place after industry
consultations. He said the fuel oil trade involves a range of
commodities with different specifications, including 180-centistoke
and 380 centi-stoke fuel oil as well as straight-run and cracked
Dubai government has also signed a deal with the
New York Mercantile Exchange to launch the Dubai Mercantile Exchange (DME)
by the middle of 2006. DME organizers have said they plan to launch by
the middle of 2006 with an initial offering of a crude futures
contract and that fuel oil futures will also be introduced early in
the exchange's operations.
Doshi said the DGCX exchange would create a
transparent pricing benchmark for Middle Eastern refined products.
"The Middle East is emerging as a price discoverer in its own
right. For instance, the UAE emirate Fujairah is already the second
largest bunkering center behind Singapore," he said.
The port of Fujairah had annual fuel oil sales of
12 million tons in 2004, netting $2.5 billion. Still stronger crude
oil prices are expected to ensure even higher sales of marine fuels
this year and further investment in the East Coast emirate's marine
fuels, or bunkering, industry is also anticipated. "The feedback
from the industry is that there is a requirement for price
discovery," Doshi said.
Doshi said both DGCX and DME would help boost
transparency. "They are focusing on sour crude and ours is on the
refined products side. If we feel there is space for us in other areas
including crude that will be for the industry to decide" he said.
"In Dubai, initiatives are undertaken by several groups and this
creates healthy internal competition."
The exchanges are part of Dubai's ambitious plans
to boost its position as the Middle East's prime trading center. It is
already the Gulf region's tourism hub and is working on establishing
itself as a financial district.
SAUDI WATER PROJECT
Kingdom of Saudi Arabia has signed an agreement
with a French water management company to evaluate a water
distribution project in Jeddah it is learnt
The project was signed by Abdullah ibn Abdul Rahman
Al-Hussayen, minister of water and electricity and Jacques Bertrand,
president of Safege Consulting Engineers, for the SR20 million
project, which will be completed in six months. "The effort is
part of the Kingdom's plan to privatize its water and electricity
He said that a similar agreement was signed in May
this year to evaluate the water project in Riyadh. According to the
agreement, the company is expected to submit a detailed report on the
production and distribution of drinking water, billing, and sewage and
identify other priorities in the water sector, the minister said.
A special committee headed by Loay Al-Mussallam,
deputy minister for planning and development, has been set up by Al-Hussayen
to supervise the evaluation of the projects in Riyadh and Jeddah and
to explore ways and means for the privatization of water projects. The
minister hopes to carry out a similar project in the Eastern Province.
Speaking to Arab News, Bertrand said his company
was not new in the Kingdom, "It was the first company which
detected ground water in the city of Riyadh in the early 60s," he
Two years ago, he said, the company undertook a
detailed study on institutions dealing with water in the Kingdom.
"It took nearly seven months to study the water distribution
system in Jeddah prior to the signing of the agreement."
He said his company is one of the two leading water
management companies in France, which serves more than 100 million
inhabitants throughout the globe. "We are happy to cooperate with
the Kingdom in its efforts to effect improvements in the Kingdom's
The company assists its global customers in the
water sector in diagnostics, audits, scheduling, feasibility and
impact studies and training.
"One of the top priorities of the Kingdom is
to give fresh potable water to its people. We are happy that we are
able to join the Kingdom in its efforts and also feel confident that
the French company will do a good job in this project," Christian
Bodin, economic and commercial counselor at the French Embassy said
HUMAN CHAIN AROUND ISFAHAN UCF
Over 1700 Iranian students joined hands to knit a
human chain around the Isfahan Uranium Conversion Facility (UCF) last
week, the Students' Justice-Seeking Movement issued a statement
reaffirming the Iranian nation's inalienable right to access nuclear
The statement said that guaranteeing the
independence and dignity of the Islamic Republic is among the great
causes of the Islamic Revolution, for which Iranians have paid a heavy
"The recent resolution of the International
Atomic Energy Agency Board of Governors indicates that authoritarian
countries intend to impose their demands on Iran and thus deny Iran's
inalienable right to access peaceful nuclear technology, but the
Iranian nation should now prove that it will never accept the West's
discriminatory behavior," the students declared in their
Following are the main positions of the Students'
Justice-Seeking Movement as elaborated in their statement:
1. While condemning the recent resolution of the
IAEA Board of Governors, we hereby announce that it seems that the
real mission of the IAEA is safeguarding the interests of
authoritarian powers, including the United States. Iran has never
sought to produce nuclear weapons and has proven this with efficient
objective guarantees. We believe that these authoritarian powers are
actually afraid that Iran will become a model for independent nations
seeking to oppose them. Fear that the ideology of the Islamic
revolution and religious democracy could spread throughout the world
is the main reason behind all these pretexts.
2. The recent resolution of the Board of Governors
once again proved that these authoritarian powers cannot be trusted,
and so the Iranian nation is now quite sure that it should expect no
cooperation whatsoever from them in safeguarding its independence and
national interests. Therefore, the future government should rely on
Almighty God as well as the support of its people. It should also
review its foreign policy and take measures to defend the national
dignity of Iranians.
3. It has been proven over the course of history
that the only way to oppose the extremist demands of authoritarian
powers is by insisting on maintaining revolutionary principles and
values. That is to say, this is the only way to force the enemies to
back down and to guarantee independence. The resumption of nuclear
activities at the Isfahan Uranium Conversion Facility is an
appropriate measure, which should be followed by the resumption of
nuclear activities at the Natanz complex as well.
4. It is quite clear that Iran's insistence on
using peaceful nuclear technology will impose some political and
economic costs on the country. However, the Iranian nation will
withstand all pressure but will not surrender its independence and
5. Over the past two years, Iranian students have
shown that, despite all their differences, they are quite united in
regard to Iran's nuclear dossier and will not allow the country's
officials to back down from their justified positions. So the
Students' Justice-Seeking Movement hereby underlines the necessity to
resume nuclear activities.
At this juncture, it is essential to maintain total
unity and awareness and to monitor the performance of governmental
organizations responsible for Iran's nuclear dossier.
Prior to the event on Tuesday, the director of the
Isfahan Nuclear Energy Research Center, Dr. Faqihiyan, said that Iran
does not seek confrontation with any nation but at the same time will
not forgo its inalienable right to access nuclear energy.
He told the students that the human chain they
formed around the Isfahan UCF could be regarded as a chain of dignity,
nobility, and resistance because making use of nuclear energy for
peaceful purposes is the inalienable right of every nation.
He went on to say that anti-Iranian propaganda is
being disseminated to make the world scared of the Islamic Republic,
although the United States was the first and only country which ever
dropped nuclear bombs on innocent people, thus betraying the human
IRAN CABINET NOMINEES RECEIVE MIXED RESPONSES
President Mahmud Ahmadinejad's proposed cabinet for
the new Iran government has received mixed responses from conservative
lawmakers who form the majority in the Majlis and from some political
activists. Some have praised the proposed cabinet nominees but others
have raised doubts about the qualifications and experiences of certain
President Ahamdinejad won a landslide victory on
promises of establishing justice, increasing the purchasing power of
the poorer classes, preventing the waste of state coffers, fighting
economic corruption, and cracking down on elements who amassed great
fortunes by abusing governmental privileges.
In order to implement these goals, the members of
his cabinet team must have two important qualifications: expertise and
honesty. Experience has shown that these two characteristics go hand
in hand. Of course, oversight bodies still must constantly monitor the
performance of officials and encourage them to consult experts in
Some proposed cabinet members are new faces but
that does not necessarily mean that they are unqualified. However, it
must not be forgotten that top posts are not a place for trial and
error. High-ranking officials have gained valuable experiences during
the years since the victory of the Islamic Revolution, and the
incoming government and even future governments should avail
themselves of these experiences.
The new government should acknowledge that since
the end of the 1980-1988 Iraqi imposed war against Iran, the
succeeding governments of Akbar Hashemi Rafsanjani and Mohammad
Khatami have taken painful but necessary steps for the purpose of
making the country more self-reliant and boosting the national
economy. Though there had been some deficiencies with the two previous
governments, as a whole, the economic, political, and cultural
approaches adopted should not be questioned.
So, in order to achieve the goals set in the
20-Year Outlook Plan, the government in general and ministers in
particular should be careful not to turn the clock back just because
of the existence of some tactical and managerial deficiencies.
Considering these facts, the ministers should be realistic, look to
the future, act transparently, and be held accountable for their
With some minor differences, all governments are
concerned about social justice, unemployment, corruption, social
disorder, and so on. Therefore, the Ahmadinejad administration should
take advantage of the experience of other governments in managing the
It has been proven in different administrations in
different countries that unscrupulous measures only rob a country of
material wealth and time and that it takes a long time to put the
things in order.
The goals and plans proposed by the government are
very promising, but the people want to see results in four years and
YEMEN POWER PLANT
A contract on construction of power transfer
substations for Marb power plant of Yemen was signed between the Power
Ministry of Yemen and the Iranian Parsian Company in Sana'a last week.
The total cost for implementing this project is
estimated at $45m, which will be provided by the government of Yemen
and Arab Fund for Economic and Social Development.
The project involves the construction of four
substations by the Parsian Company. Two of them, from Marb reroute to
Sana'a, will transfer 400 kV and 1,200 MVA of electricity and the
other two, located in Rahban and Haziz regions in the vicinity of the
capital Sana'a, will be constructed with the capacity of 33,132 kV and
248 MVA correspondingly.
TEA INDUSTRY DOWN
Some 80 percent of tea factories in the northern
parts of Iran have been shut down; a tea industry official said. Only
83,000 tons of tealeaves have been produced since March, stated Nemat
Yavarzadeh, executive manager of Shomal Tea Factories Syndicate.
He noted the figure for the corresponding period
last year was 200,000 tons, which means the tea industry is completely
down, adding the State Tea Organization was dissolved due to its
failure to protect national tea production. He further noted that only
20 percent of tea factories are operating.
Experts say tealeaves to be produced this year
would be of poor quality, stressing those smugglers and not farmers
meet some 80 percent of the country's demand for tea.
Production of tealeaves is expected to decline by
60,000 tons in the year to March 2006, while processed tea output that
will also drop by 30,000 tons.
Some 80 percent of last year's tea crop have
reportedly been stockpiled as a result of import and smuggling of the
Agriculture officials have been criticized for
their failure to remove the challenges facing the once lucrative
industry, which is now undergoing its worst period. Northern Province
of Gilan ranks first in tealeaves industry with 34,000 hectares of
land allocated to tealeaves plantation and an annual green tea
production of 50,000-60,000 tons.
(Inputs from PAGE sources and courtesy to Tehran