GULF VIEW

 

Sep 05 - 11, 2005

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36 YEARS OF GADDAFI RULE

One million Libyans from across the country converged on a banner-festooned Tripoli to participate in festivities marking the 36th anniversary of Colonel Muammar Gaddafi's rule over Libya.
Gaddafi, who aged just 27 toppled King Idris in a coup on September 1, 1969 with other military officers, addressed the throngs of supporters gathered at Libyan capital.
Thousands of tents have sprung up across Tripoli, mainly on its beaches, to receive the visitors while banners proclaiming "We live for you and we will die for you" have been hung up in the streets.

A festive atmosphere has also descended in the past days with even more cars than usual clogging the streets and the city pulsing with the sounds of traditional music and dancing from guest performers.

GULF STATES' ACTION

Arab states will put new checks in place next month to protect their financial systems from abuse in a region that has provided Al Qaeda with most of its funds, it is learnt.

Mohamed Baasiri, who heads the Middle East and North Africa Financial Action Task Force (MENA FATF), has reportedly said that the region had made significant strides over the past year in regulating charities and money transfers that could fund terrorism.

We still have a long way to go but if I compare the situation in the MENA countries now to a year ago, or even three or four years ago, we have done a lot, Baasiri said.

The important thing is the MENA countries are committed to the process because it is in their interests to join the global fight against terrorism financing and money laundering.

Fourteen Arab states founded MENA FATF in November, pledging to implement world standards to combat the use by Al Qaeda and other terrorist groups of the global financial system.

At the second plenary meeting in Beirut on September 26-27, the members will set up a crucial system for reviewing each other's measures to fight money laundering and terrorism financing. The session will also discuss models for controlling the informal 'hawala' system of cash transfer, charities and cash couriers, although Baasiri admitted the toughest challenge lay in enforcing new rules. Gulf States have already tightened control over donations. The Gulf countries have done impressive work controlling charities to make sure funds don't go to offenders ... they has done a good deal regulating this hawala system.

The hawala system can be supervised by the central bank. You can ask them to register, make it illegal for hawala not to register but like anything you can't guarantee it won't happen. Iraq and Mauritania should be admitted to the regional body at next month's session, Baasiri said. Libya, Sudan and other countries have also expressed interest in joining, while existing members are working to install or strengthen financial intelligence units to detect suspicious cash movements.

Few Middle Eastern countries have effective financial intelligence units, which US officials say are a must if they are to prove they are serious about combating terrorism financing. So far, only five of the 14 MENA FATF members have joined the Egmont Group of global financial intelligence units, which collect, analyze and exchange financial information to help fight money laundering and terrorism financing.

Qatar was the latest to come on board in June. Baasiri said Saudi Arabia would join soon.

I would expect most MENA FATF members to join Egmont starting next year. I would give it a time-frame of one to three years Baasiri said.

LOVE FUND

Iran is to create a $1.3billion 'love fund' to encourage poor young people to marry, the country's vice president said, it is reported.

Iranian youngsters often complain they cannot afford to get married and are living with their parents longer than ever before.

"The love fund is a realization of the new government's slogan — taking oil money to the tables of the people," state television quoted Vice President Farhad Rahbar as saying.

Populist conservative President Mahmoud Ahmadinejad swept to election victory in June on a pledge to distribute the oil earnings of the world's fourth biggest crude producer more fairly.

The government's share in the $1.3billion for the Reza Love Fund will be deducted from the oil income of the National Iranian Oil Company, Rahbar said, without elaborating on how the money would be used to help young couples.

Each province would have a board of trustees to determine how much money needy couples should get. Iran's oil earnings above a budgeted level go into the Oil Stabilization Fund, which is only meant to be used in emergencies, should oil prices slump.

Iran's Central Bank, the International Monetary Fund and rating agencies have all warned against raiding it for other schemes, arguing this could exacerbate inflation, already running around 15%.

The 'love fund' bill will be the first piece of legislation submitted to parliament by Ahmadinejad's government. Parliament is dominated by populist conservatives who have long advocated raiding the oil fund for social spending.

IRAN'S NUCLEAR SCENARIO

Iran's top nuclear negotiator is due to visit Pakistan soon as part of Tehran's effort to head off warnings over its nuclear program.

Pakistan's Foreign Ministry spokesman said Ali Larijani would arrive in Islamabad on Sunday evening or Monday morning.

"He is likely to tell us about Iran's discussions with the IAEA and the European Union on the nuclear issue," spokesman Muhammad Naeem Khan said.

Pakistan, Iran and India have been discussing the building of $7 billion pipeline that would carry Iranian gas to energy-hungry India via Pakistan, a project opposed by Washington.

Supreme National Security Council Secretary Ali Larijani called regional security a necessity for neighboring countries.

On his arrival from a three-day trip to India, Larijani said that Iran, India, Pakistan and China enjoy geo-strategic positions in the Middle East and are capable of leading the region. He called for efforts to establish strategic ties among these four great countries.

On his negotiations with Indian officials, Larijani said that talks were held on various issues including oil and gas, regional affairs and the expansion of diplomatic ties.

On the nuclear issue, he noted that Iran's new government holds a positive view toward its cooperation with the International Atomic Energy Agency and seeks to conduct nuclear activities within the framework of the IAEA charter.

Larijani expressed hope that the IAEA secretary general Mohammad El Baradei's report on Iran's nuclear activities, which is due to be released today, would pave the way for further cooperation between Iran and the agency.

He noted that nuclear negotiations with Europe can continue but talks are only meant to facilitate Iran's dealings with the IAEA. Iran's main partner in the nuclear issue is the IAEA, he stressed.

Larijani noted that Iran has observed the IAEA resolutions, the latest of which had mentioned the suspension of activities in the Isfahan Uranium Conversion Facility was voluntary and not legally-binding. He added that the UCF is not part of the nuclear fuel cycle process. Larijani stated that Iran is ready to hold talks with European or other countries but believes that negotiations should positively influence the nuclear issue rather than produce a new hindrance.

INDIA TO BUY 5 MILLION TONS OF LNG FROM IRAN EVERY YEAR TILL 2009

India's Foreign Minister Natwar Singh arrived in Tehran atop a high ranking political delegation. The high ranking Indian delegation was welcomed by Foreign Minister Manouchehr Mottaki at the airport. In welcoming ceremony, Mottaki evaluated mutual relations, as "old, friendly and expanding. Deepening and expansion of bilateral ties would be the topic of our negotiations.

India is to buy 5 million tons of Iran's Liquid Natural Gas (LNG) annually as of the year 2009.† Indian delegation is likely to have final dialogue over the deal during its stay in Iran. Energy experts were of the view that if the transaction for 5 million tons of LNG was transpired between the two countries, the much talked about cross border gas pipeline project from Tehran-Pakistan- India might get a severe dent. LNG transportation does not require a pipeline it could be transported in especially designed containers by air or sea transportation, the experts said.

However, the area of cooperation between Iran and India is wide and diversified, he noted, "and cooperation in the field of energy is among the issues which would be followed in Tehran this time." Mottaki also notified, "International and regional issues are also on the agenda of our talks with Indian high ranking officials." Expressing pleasure over traveling to Tehran, Premier Natwar Singh, too, said, "I am conveying Indian nation message to the Iranians for the success of Iran's new President Ahmadinejad in election."

India's foreign minister in his 3-day visit to Tehran will confer with President Ahmadinejad and some other Iranian senior officials. Currently, trade exchange values between Iran and India is more than 3 billion dollars annually, which is expected to rise drastically upon exploitation of the existing potentials, particularly in energy field.

FIRST WOMAN BROADCASTER

"The news is read to you by Najwa Moemena." That announcement broadcast last Monday by the Jeddah radio station marked the debut of a woman broadcaster served as a news anchor in Saudi Arabia.

Moemena has presented numerous radio programs discussing social and political issues.

She began her career at age 10 on radio children's programs. Although the presence of women on Saudi radio goes back to its beginnings, and women have been broadcasting news briefs for 15 years, never before last Monday had a woman served as news anchor.

"I felt a huge weight of responsibility on my shoulders as I started reading the news. "I felt in charge ... not merely for presenting the newscast, but for being a symbol of hope in the continuing march of change among Saudi broadcasters."

The decision to allow Saudi women to broadcast the news was made at the last meeting of the administration in Riyadh. Dr. Abdullah Al-Jaser, deputy minister of Media Affairs, gave the green light, as there is no rule prohibiting women from presenting the news.

The atmosphere in the newsroom where Moemena made the broadcast was one of excitement and anticipation. Moemena recalls that broadcast director Khaled Jad helped her every step of the way and did not leave her until she went to the newsroom.

All my coworkers at the radio station in Jeddah gathered with station manger Dr. Abdullah Al-Shayea to hear the One o'clock news I announced," she said. "I was so touched by their support."

Station plans are to continue to have Moemena anchor the 1 p.m. Saturday newscasts with Dalal Diyaía. Moemena said she is ready to play a wider role in presenting the news if the station proposes it. Veteran broadcaster Salwa Shaker, who presented the news briefs half an hour after Moemena, said she hopes progress continues to give women greater opportunities in the broadcasting field. Shaker broadcast news for the Saudi Channel television station in 1976 for three months before she traveled to the United States to continue her media studies.

That was the last instance of a Saudi woman taking such a broadcast leadership role. Although Saudi women do not present the news at Saudi Channel One, there are other outlets, such as Al-Arabiya News channel or Saudi Channel Two.

OIL WINDFALL

Revenues of Gulf producers have shot up as world oil prices soar, enabling them to launch expensive projects, but economists said yesterday they had failed to use the windfall to ensure continued economic growth.

GCC producers are set to reap revenues of around $265bn from oil this year, said Jassem al-Saadun, head of Kuwait's Al-Shall Economic Consultants.

The estimate is based on an average price of $50 a barrel and combined exports of 14.5mn barrels per day (bpd), Saadun said.

But with crude trading above $70 a barrel in New York, Saudi economist Ihsan Bu Hulaiga said the estimate was based on "conservative figures" and Gulf states' income from oil sales could be even higher.

Saadun said Gulf States would earmark part of the income on ìinfrastructure projects in the fields of health, education, electricity, water and oil, which have been blocked for some time.

Some, chiefly Saudi Arabia and Oman, would also use part of their revenues to service their public debt, he said.

Saudi Arabia, which pumps some 9.5mn bpd and is the world's biggest oil exporter, has a public debt of $176bn. It has announced that it will use part of last year's $26bn budget surplus to repay some of the debt.

Other Gulf producers, namely Kuwait and the UAE, are taking advantage of the surge in oil prices to beef up their currency reserves, Saadun said.

Petrodollars are also helping "buy political loyalty", said Saadun, citing salary increases for civil servants recently decreed in a number of countries, including Saudi Arabia, Kuwait and the UAE.

Most Gulf countries have announced multi-billion-dollar development projects in the past few months.

Earlier this month, new Saudi King Abdullah ordered a 15% hike in public sector salaries and the handing out of almost $22bn on housing, health and education projects as well as raising the capital of development funds.

But Saadun argued that Gulf producers were not doing enough to ensure long-term economic growth and promote non-oil sectors of the economy, saying they were instead building "bubble economies".

The Gulf States "are repeating their mistakes by entrusting the public sector with carrying out giant projects in a short time without such ventures having a long-term impact on economic growth," he said.

"This is liable to increase costs and hamper the growth of the private sector, rendering it unable to compete with the public sector," Saadun said.

"People may be happy with the extra wealth, but if the rise in oil prices does not last, the boom will end in five to 10 years" without leaving a lasting impact on the region's economies, Saadun added.

Bu Hulaiga was more hopeful about the Gulf States' ability to exploit the "golden opportunity" offered by the surge in oil prices, although he stressed they should do more to reduce their dependence on oil.

The GCC states should "collectively and individually launch specific plans with tight timetables to promote non-oil sectors which can sustain economic growth." He said this can only be done by "developing human resources, which never run out."

Economic policies should seek to "bridge the gap between the economies of (Gulf) producers and those of members of the Organization for Economic Co-operation and Development (OECD) within a decade, which is difficult but not impossible," Bu Hulaiga said.

High oil prices have not been a boon all the way, at least in some producing countries. The UAE has announced a 30% rise in the price of petrol and diesel at the pumps due to soaring costs.

"Oil production is one thing and distribution another," Abu Dhabi-based oil official Jamal Zareef said, adding that distribution companies could not continue to put up with losses resulting from high prices on world markets.

POWER BREAKS DOWNS IN JEDDAH

The power outage, which hit more than 10 neighborhoods in Jeddah, paralyzed many government departments and affected private citizens.

According to a report, hundreds of families left their overheating homes and drove to relatives' houses in areas unaffected by the power cuts.

Many people across the city found themselves trapped in elevators; the Fire Department responded to frantic calls to release them. Businesses that rely on continuity of electric supply reported considerable damage to their operations.

Abdul Aziz Al-Ghamdi, father of four, was outraged by the power failure. The power cut happened at a time when his young daughter was sick with fever. He had to rent a room at Jeddah hotel to keep his family cool.

"The electricity company should be punished for the continual power outages. I paid SR450 for the room for one day. I cannot pay that for another day. If I billed the electricity company for the amount I paid, would they pay it? Of course not, then they should either provide good services or pay damages next time."

The main thoroughfares of Jeddah were in chaos. More than 200 police units were deployed to many locations to organize traffic. Small businesses suffered the most damages according to many owners interviewed. Salem Ali Omar, owner of a grocery store in Al-Rawdah district, said, that the outage caused him huge damage. "I have suffered enough loses. I am used to power outage in Al-Rawdah for ten to fifteen minutes, but this time it lasted more than eight hours." Ice cream in the freezers had to be destroyed and he frantically searched for ice to keep the chicken and meat in deep freezer until the power was back on. A group of local Jeddah residents is planning to file a lawsuit against the electricity company for the repeated power outages. They complained that the company is making huge profits but not providing good service to customers.

They say that the telephone number the electricity company provides to public to call during an emergency is useless. The consumers demanded that the company be more considerate and at least have someone pick up the phone and talk to public instead of ignoring them. One angry Jeddah resident who is preparing to file a lawsuit against the electricity company in his severe remarks against the power company says "If I was late paying my bill by one day the electricity company would not hesitate to cut power off the second I pass the deadline," he said.

"I wish they were as good in providing a decent service. If we stated that the personal damage per hour is one thousand riyals, I swear we would not see power outages in Jeddah. In foreign countries, officials are held accountable if the power goes down once. Here it happens many times and yet they are in their positions."

The electricity company issued a statement saying that the power outage happened due to damage to one of the main power switchgear units that is connected to the desalination plant. It is generally believed that the power failure phenomenon exists only in Pakistan, but reports coming from the Gulf States dispel the impression which must be a source of strength at least for the KESC management.

(Inputs from Page sources and courtesy Tehran Times)