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CREDIT CRUNCH COSTS ARABS $2.5 TRILLION

Posted by Gilmour Poincaree on January 17, 2009

07:18:00 01/17/2009

Agence France-Presse

PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’ (Philippines)

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PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’ (Philippines)

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Posted in BANKING SYSTEMS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, INDUSTRIES, INTERNATIONAL, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, STOCK MARKETS, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS | Leave a Comment »

GULF MINISTERS AGREE ON MONETARY UNION (Lybia)

Posted by Gilmour Poincaree on January 1, 2009

01/01/2009 01:22:00

WAM/TF

PUBLISHED BY ‘THE TRIPOLI POST’

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PUBLISHED BY ‘THE TRIPOLI POST’

Posted in BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, ISLAMIC BANKS, LYBIA, MACROECONOMY, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS | Leave a Comment »

THE RETURN OF REALPOLITIK IN ARABIA – Bush’s ‘diplomacy of freedom’ gives way to Obama’s caution and reticence. The Middle East may test our fatigue

Posted by Gilmour Poincaree on December 16, 2008

DECEMBER 15, 2008, 11:42 P.M. ET

by Amy R. Remo

PUBLISHED BY ‘THE WALL STREET JOURNAL’ (USA)

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PUBLISHED BY ‘THE WALL STREET JOURNAL’ (USA)

Posted in AL QAEDA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), DEFENCE TREATIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES, FOREIGN POLICIES - USA, INTERNATIONAL RELATIONS, RECESSION, THE ARABIAN PENINSULA, THE ISRAELI-PALESTINIAN STRUGGLE, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, THE UNITED NATIONS, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

OIL PRICES STEADY AT $44 IN ASIA AS INVESTORS WAIT TO SEE SIZE OF OPEC OUTPUT CUT ON WEDNESDAY

Posted by Gilmour Poincaree on December 16, 2008

December 16, 2008 – 12:10 AM

by Alex Kennedy – Associated Press

PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

SINGAPORE – Oil prices were steady above $44 a barrel in Asia on Tuesday, a day before investors expect OPEC to announce a big production cut.

Light, sweet crude for January delivery was down 6 cents to $44.45 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract fell overnight $1.77 to settle at $44.51.

Investors are looking to the Organization of Petroleum Exporting Countries, which accounts for 40 percent of global supply, to announce a substantial reduction of output quotas at its meeting Wednesday in Algeria.

OPEC President Chakib Khelil suggested Monday the group may slash as much as 2 million barrels a day, equaling a cut at the cartel’s last Algeria meeting four years ago.

Khelil said that a fair price for oil would be around $70 to $80 per barrel — the benchmark for several OPEC members below which they lose money on production.

Mohammed Al-Aleem, Kuwait’s oil minister, said Monday that OPEC should cut supply to help balance a large market surplus.

“At the very least, a cut should help stabilize the market,” said Gerard Burg, minerals and energy economist with National Australia Bank in Melbourne. “The impact may be relatively muted, but it could add some upward pressure on prices.”

Investors will be watching for evidence OPEC members are adhering to any announced cuts, as exceeding quotas has dogged the organization throughout its history.

“That’s going to be the difficult thing,” Burg said. “OPEC’s cohesiveness has really deteriorated over the last few years because the world was consuming everything it could produce.”

Many OPEC members based their budgets assuming oil prices would be above where they are now. The group’s efforts to bolster prices — including output cuts totaling 2 million barrels a day in September and October — have been ignored by investors preoccupied with the worst economic slowdown to hit developed countries in decades.

Oil prices, which reached a four-year low at $40.50 earlier this month, have fallen about 70 percent since peaking at $147.27 in July.

“The market is still consumed with demand-side factors,” Burg said. “We don’t expect a recovery until the second half of next year, so there’s potential for further negative news to have a dampening affect on the crude market.”

In other Nymex trading, gasoline futures rose 0.16 cent to $1.04 a gallon. Heating oil gained 0.24 cent to $1.46 a gallon while natural gas for January delivery was steady to 5.64 per 1,000 cubic feet.

In London, January Brent crude was steady at $46.36 a barrel on the ICE Futures exchange.

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PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

Posted in COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, OPEC, PETROL, RECESSION, SINGAPORE, STOCK MARKETS, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

WEATHERING THE STORM – Syrians are quickly realising that the impact of the global financial crisis will be larger than first thought. In an age of globalisation, no country is an island

Posted by Gilmour Poincaree on December 13, 2008

Issue: December 2008

by Brooke Anderson

PUBLISHED BY ‘SYRIA TODAY’

Despite government assurances that their country will weather the storm engulfing markets around the world, Syrians are quickly realising that in the 21st century, no country is immune from a global economic meltdown.

“No country can say it’s unaffected,” Samira al-Masalmeh, managing editor of local affairs at the independent Syrian daily newspaper Al-Watan and the economic weekly Al-Iqtissadiya, said. “It’s true, we don’t have direct economic relations with the United States, but the crisis is affecting Europe. We work with Europe and Asia, so there is an indirect effect on Syria.”

Syria will, however, weather the storm better than most countries, Masalmeh said. “For the most part, 70 percent of investment in Syria is from inside the country,” she said. “Syria has a strong and diversified internal economy that doesn’t depend on oil. We don’t have a stock market.”

The global financial crisis, which originated in the US banking system, hits Syria at a time when the country is opening up its economy after more than 40 years of socialist rule. Many in Syria now believe the country needs to quickly learn the lessons emerging from more developed economies now battling recession. “I hope Syria will learn a lesson from America and it will put into place better laws protecting investment,” Masalmeh said.

Far from the epicentre

To date, the Syrian government has taken a cautious view of the crisis. “The Syrian economy is stable and solid and the Syrian pound is strong and protected,” Deputy Prime Minister for Economic Affairs Abdullah al-Dardari said in October. “Syria has an independent banking system. In addition, the Syrian pound has a higher interest rate than other currencies.”

Dardari also said deposits in Syrian banks have increased since the beginning of the crisis because of the stability of the local banking sector. “The government is working day and night for the stability of the economy and to serve the nation and the citizen,” he said, adding there is “no reason at all to be scared or worried”.

Likewise, Syrian Minister of Finance Muhammad al-Hussein has emphasised the limited impact the global financial crisis will have on Syria. “The worldwide financial crisis could have an effect on Syria, but the government- is working with President Bashar al-Assad to make sure the effect is limited,” Hussein told the state daily newspaper Al-Thawra. He said Syria was “far away from the epicentre of the earthquake”.

Indirect impact

One government official striking a different note is Duraid Dargham, head of the government-run Commercial Bank of Syria, the country’s largest bank. In a full-page article published in the Tishreen newspaper in early October, Dargham said the danger posed to Syria by the global financial crisis was real and significant. “The economic crisis will have a big effect on Syria,” he wrote.

Dargham said Syria’s economy would take two main hits. The first will come in a decline in both the price and global demand for oil. Since the crisis erupted, the price of oil has fallen from a record SYP 6,510 (USD 140) per barrel to around SYP 2,557 (USD 55) a barrel and the slide is expected to continue. It’s a drop which could now make growth estimates for 2009 optimistic and will further widen the country’s budget deficit, a fact Hussein pointed out at a recent banking conference.

The second blow will come from remittances from Syrians living abroad who now number a massive 18m; Syria’s internal population is little more than 19m. On average, Syrian expatriates, many of whom earn high wages in the Gulf, inject SYP 37.2bn (USD 800m) annually in remittances into the Syrian economy. With many parts of the world entering recession and unemployment rising, this stream of foreign funds is expected to slow.

Jihad Yazigi, editor of the English-language economic newsletter The Syria Report, said Syria’s links to the Gulf markets make it vulnerable to the ongoing global economic turmoil. “A lot of money comes [to Syria] from the Gulf,” he said. “Some Syrians could be made redundant in the Gulf so we could see a slower pace of remittances and that could lead to more unemployment here.”

Yazigi also points to the possibility of foreign direct investment flows slowing over the next year. Rather than the dramatic blows being landed on the world’s leading economies like the US and Japan, Yazigi said the impact on Syria would come incrementally. “We haven’t seen anything yet, because the impact is indirect,” he said. “It won’t be as dramatic as the price of stocks. It will be an interesting sign if we see the delay of one to two big Gulf investments in Syria. Investors have to prioritise when they want to invest and Syria is not a priority for them. We haven’t felt it yet, but we will. It won’t be a big impact, but there will be an impact.”

Masalmeh points to tourism, an increasingly important money spinner in Syria, as another area likely to be negatively impacted as people around the world tighten their spending habits and cancel overseas holiday plans. “The crisis will affect tourism because there’ll be less money to spend,” she said. “If there’s no money, there’s no tourism.”

Feeling the squeeze

One Syrian company is already seeing the impact of the global financial crisis firsthand. At Muhanna for Sweets, a Damascus-based family sweets business founded in 1935, chief executive officer Mahmoud Muhanna said the global financial crisis could not come at a worse time. The company is already battling the impact of a cut in fuel subsidies which has seen the price of raw materials rise. As a result, the company has had to increase the prices of its goods – 30 to 40 percent for some sweets and 100 percent for others – at a time when foreign buyers in America and Europe are looking to save money. “All of the prices of raw materials – sugar, fat, and pistachios – have increased,” Muhanna said.

Three years ago, exports made up 40 percent of all sales at Muhanna for Sweets. Now they account for just 25 percent of business. Twenty-five percent of total exports go to the US, 5 to 10 percent go to the Gulf, while the rest go to Europe.

Muhanna does not expect any growth in his exports to US and European markets in the short term. As such the Gulf and local market will become all the more important. He said his company has been helped by the steady flow of tourists in the past several years, business travellers from the Gulf and the opening of new hotels such as the Four Seasons. But it’s a customer base that might not be so reliable in the coming months, he admits.

To counter a decline in exports, Muhanna is already thinking of a plan B: creating a line of less expensive sweets. Still, he doesn’t appear to be too worried about the financial turmoil creating a crisis in sweets consumption. “No matter what happens, people always buy Arab sweets,” he said.

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PUBLISHED BY ‘SYRIA TODAY’

Posted in ASIA, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENERGY, ENERGY INDUSTRIES, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, FOREIGN POLICIES - USA, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, ISLAMIC BANKS, JAPAN, PETROL, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TOURISM INDUSTRIES, USA | Leave a Comment »

YEMEN COMES LAST IN GLOBAL GENDER GAP REPORT FOR THE THIRD YEAR IN A ROW

Posted by Gilmour Poincaree on December 12, 2008

December 11, 2008

by Ebrahim Al-Wadee and Yemen Times Staff

PUBLISHED BY ‘THE YEMEN TIMES’

SANA’A, Dec. 6 — For the third consecutive year, Yemen ranks last in the Global Gender Gap Report 2008 published by the World Economic Forum with a slight improvement in its score compared to last year.

The Global Gender Gap Index scores can be interpreted as the percentage of the gap between women and men that has been closed. This year Yemen scored 0.466 compared to 0.45 in 2007. Each country is judged based on four categories: Economic participation and opportunity – outcomes on salaries, participation levels and access to high-skilled employment; Educational attainment – outcomes on access to basic and higher-level education; Political empowerment – outcomes on representation in decision-making structures; and Health and survival – outcomes on life expectancy and sex ratio.

Yemen having a score less than 0.5 means that in these four categories together Yemeni women nearly have half the rights Yemeni men do.

However, the individual scores of each of the four categories vary. According to the report when it comes to health and survival, Yemeni women are almost as equal to men with a score of 0.98 while educational attainment comes second at 0.62, then comes economic participation at 0.25 and finally political empowerment which is 0.016.

Despite the slight progress from last year which was mainly in the health and survival category and education, the economic and political empowerment have dragged Yemen again to the bottom of the list of 130 countries world wide. The calculations include factors such as literacy rate, employment, healthy life expectancy, number of women in leading decision making positions.

Yemeni government’s report

The Yemeni government had preceded the WEF’s report by a local report which allegedly said that women participation has improved in the political, economic and social fields during the last few years.

Released by the Ministry of Planning and International Cooperation, the third local report, which included statistics of the year 2008, said that women achieved progress in terms of decision making inside four political parties, General people’s Congress, Islah, Socialist and Nasserite parties. It indicated that women assumed leading positions in these parties.

“Around 70 Yemeni women were able during 2006 to hold leading diplomatic positions in the Ministry of Foreign Affairs,” said the government’s report, adding, “The number of women who held leading positions in the unions of different professions mounted to 371 and those who are members of these unions committees are 2,453.

Women who held the judge degree mounted to 67 including three women holding management positions in the Ministry of Justice and another five were nominated in the High Judiciary Institute. The rest 59 women were appointed as judges in the public courts and prosecutions.

However, the local report maintained that women participation in decision making is still low as only 13 women work in the leading positions in the Republic Presidency representing only 14 percent compared with 191 men in the same institution. Women participation in the Cabinet represents only 7 percent as only 18 women work there, whereas the number of men mounted to 131, according to the government’s report.

Yet as co-author of the WEF report Ricardo Hausmann, Director of the Centre for International Development at Harvard University in USA explains that the index assesses countries on how well they are dividing their resources and opportunities among their male and female populations, regardless of the overall levels of these resources and opportunities. Thus, the Index does not penalize those countries that have low levels of education overall, for example, but rather those where the distribution of education is uneven between women and men.

A third report

A shadow report on women’s empowerment in light of the Convention on the Elimination of all Forms of Discrimination against Women prepared by civil society organizations in Yemen contradicts the government’s report, confirming that women participation is still low in the leading positions of the political parties.

Presented to the 41th session of CEDAW’s Committee last May, the report said that there are no signs that indicate the Yemeni government works toward enhancing women participation through adopting the quota system in elections and the system of closed constituencies.

It pointed out that women’s participation is only 0.33 percent in the parliament and 0.08 percent in the local councils.

While the report said that, in the field of health care, maternal mortality rate during delivery has decreased during 2008, it confirmed that the gap between men and women is still big in the different levels of education. It pointed out that curriculum, despite the recent change on it, still highlights the stereotyped roles of women.

Nabila Al-Mufti , a lawyer and women rights activist, maintains that improving women situation in Yemen is correlated with a solution to the problem of codification of laws and lack of awareness of women issues among members of the parliament in a fair way. She said that the situation is also related with the society adoption of such issues, noting that the society is still far from women issues.

Asked whether Islam is a barrier in front of women participation, Al-Mufti said that Islam doesn’t hinder women progress as it contains all principles of justice, pointing out that the problem consists in lack of awareness of the Islamic teachings.

Although recent political debates especially regarding the probable boycott of the opposition parties of the coming parliamentary elections in April 2009, the ruling party is strongly hinting at promoting women in the political sphere and recognizing a quota of at least ten percent of the party’s nominees in the parliament.

“The boycott of the opposition would be an excellent opportunity to for women’s political movement as they can transform the competition from political between different parties, to social by integrating minorities such as women in the political competition,” said Dr. Ahmed Al-Sofi Director of the Yemeni Institute for Developing Democracy and a prominent figure at the ruling party.

And although the Women’s National Committee which is the government machinery for empowering women praised the President’s pledge to allocate 15 percent of the parliamentary seats for women, Hooria Mashhour, deputy director of the committee admitted that the way is still too long in front of Yemeni women to reach their targets. She said that three issues imposed themselves on Yemeni women during 2008 on the national level. The first one was the amendment of laws related to women in the Yemeni legislation. She said that out of 20 articles that represent discrimination against women, only five were amended, the second issue is women political participation, and the third being safe motherhood.

The Global picture

Norway leads the world in closing the gender gap between men and women, according to the overall ranking in the World Economic Forum’s Global Gender Gap Report 2008. Three other Nordic countries – Finland (2), Sweden (3) and Iceland (4) – also top the Report’s Gender Gap Index. Previously higher ranking countries such as Germany (11), United Kingdom (13) and Spain (17) slipped down the Index but stayed in the top 20, while Netherlands (9), Latvia (10), Sri Lanka (12) and France (15) made significant gains.

The United States (27) made progress this year and closed gender gaps in estimated earned income and perceived income gaps for similar work. The United States also made strides in political empowerment, driven by increased participation of women in political decision-making positions. Switzerland’s (14) advancement up the rankings was based on large increases in the percentage of women in parliament and those in ministerial-level positions. France (15) improved significantly for the third consecutive year, thanks to gains in both economic participation and political empowerment. China (57) gains 17 places relative to last year driven by narrowing gender gaps in educational attainment, economic participation and political participation. Brazil (73) improves on education and economic participation but falls to 110th place in political empowerment. In the bottom half of the rankings, countries such as Tunisia (103), Jordan (104) and United Arab Emirates (105) made overall gains, driven by narrower gaps in literacy, and in the case of Jordan and the UAE, in the percentage of women in political decision-making positions. Syria (107), Ethiopia (122) and Saudi Arabia (128) not only fell farther in the relative ranking, but also showed a drop in scores relative to their own performance last year.

According to the report, the three highest ranking countries have closed a little over 80% of their gender gaps, while the lowest ranking country has closed only a little over 45% of its gender gap. Out of the 128 countries covered in both 2007 and 2008, more than two-thirds have posted gains in overall index scores, indicating that the world in general has made progress towards equality between men and women. Additionally, taking averages across the subindexes for these 128 countries reveals that, globally, progress has been made on narrowing the gaps in educational attainment, political empowerment and economic participation, while the gap in health has widened.

“Greater representation of women in senior leadership positions within governments and financial institutions is vital not only to find solutions to the current economic turmoil, but to stave off such crises in future. At the World Economic Forum, we put strong emphasis on addressing this challenge with a multi-stakeholder approach through our global and regional Gender Parity Groups,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. These communities of highly influential leaders from business, politics, academia, media and civil society – 50% women and 50% men – seek to share best practices and identify the most effective strategies to optimize the use of talent.

The Global Gender Gap Report 2008 is based on the innovative new methodology introduced in 2006 and includes detailed profiles that provide insight into the economic, legal and social aspects of the gender gap in each country. The Report measures the size of the gender gap in four critical areas of inequality between men and women.

The Report also provides some evidence on the link between the gender gap and the economic performance of countries. “Our work shows a strong correlation between competitiveness and the gender gap scores. While this does not imply causality, the possible theoretical underpinnings of this link are clear: countries that do not fully capitalize effectively on one-half of their human resources run the risk of undermining their competitive potential. We hope to highlight the economic incentive behind empowering women, in addition to promoting equality as a basic human right,” said Laura Tyson, co-author of the report and Professor of Business Administration and Economics at the University of California, Berkeley, USA.

“The Report reveals that progress is not only possible, but possible in a relatively short space of time: calculating the Index as far back as data would allow, we found that countries such as Chile, Spain, Turkey and Finland have closed between 5 and 10 percentage points of their respective gender gaps over just the past eight years. When we interpret these percentage changes at the societal level, we see that hundreds of thousands of lives are impacted, and at the economic level, we see enormous potential competitiveness gains,” said Saadia Zahidi, Head of Constituents at the World Economic Forum and co-author of the WEF Global Gender Gap report.

The World Economic Forum continues to expand geographic coverage in the Report. Featuring a total of 130 countries, this year’s Report provides an insight into the gaps between women and men in over 92% of the world’s population. Coverage has been expanded this year to include Barbados and Brunei Daressalam. The Report covers all current and candidate European Union countries, 23 from Latin America and the Caribbean, 23 from sub-Saharan Africa, over 20 from Asia and 15 from the Middle East and North Africa. Thirteen out of the 14 variables used to create the Index are from publicly available “hard data” indicators from international organizations, such as the International Labor Organization, the United Nations Development Program and the World Health Organization.

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PUBLISHED BY ‘THE YEMEN TIMES’

Posted in ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INTERNATIONAL, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE ARABIAN PENINSULA, THE WORK MARKET, THE WORKERS, YEMEN | Leave a Comment »

BEIRUT BOURSE TRACKS LOSSES ABROAD (Lebanon)

Posted by Gilmour Poincaree on December 8, 2008

Monday, December 08, 2008

BlomInvest, with The Daily Star

PUBLISHED BY ‘THE DAILY STAR’ (Lebanon)

BEIRUT: With the deepening world recession, the Beirut Stock Exchange (BSE) continued to mimic the performance regional Arab stock exchanges that on average have fallen around 43 percent from the start of the year.

On a weekly basis, total volume of trades increased 48 percent to 1.29 million shares as investors rushed to liquidate their portfolios. But the corresponding value decreased 33 percent to $10.29 million on declining share prices that sank the BLOM Stock Index to a 52-week low of 1,183 with a year-to-date drop of 21 percent.

Of the 26 listed stocks on the Beirut Stock Exchange, 11 stocks exchanged hands this past week, of which 2 went up and 9 decreased. Solidere stocks represented 64.9 percent of the total value traded.

The banking sector accounted for the remaining 35.1 percent. In the banking sector, BLOM GDR dropped this week by 2.08 percent to $68.4 after trading 7,830 shares at $533,187. Audi Bank’s GDR stock went down by 3.65 percent to close at $54.1 following trades of 9,460 shares with a value of $518,676. Byblos Bank’s common stock increased slightly this week by 0.61 percent to $1.65 recording a volume of 566,400 shares valued at $939,953. On the other hand, its preferred stock class 2008 dropped by 2 percent to $97.9. Solidere stocks remained vulnerable this week as its A shares dipped 4.58 percent to close at $16.66, Solidere B also dropped 2.65 percent to $16.87.

As described last week, the overall situation on the Beirut Stock Exchange remains volatile and vulnerable to the ongoing financial crisis.

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PUBLISHED BY ‘THE DAILY STAR’ (Lebanon)

Posted in ALGERIA, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, EGYPT, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, ISLAMIC BANKS, LEBANON, LYBIA, MIDDLE EAST, MOROCCO, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS | Leave a Comment »

QATAR LOOKS TO GROW FOOD IN KENYA -THE GULF STATE HAS JOINED A GROWING LIST OF RICH COUNTRIES THAT WANT TO GROW FOOD IN POOR COUNTRIES

Posted by Gilmour Poincaree on December 5, 2008

Tuesday December 2 2008 16.58 GMT

Xan Rice in Nairobi – guardian.co.uk

PUBLISHED BY ‘THE GUARDIAN’ (UK)

Qatar has asked Kenya to lease it 40,000 hectares of land to grow crops as part of a proposed package that would also see the Gulf state fund a new £2.4bn port on the popular tourist island of Lamu off the east African country.

The deal is the latest example of wealthy countries and companies trying to secure food supplies from the developing world.

Other Gulf states, including Saudi Arabia and the United Arab Emirates, have also been negotiating leases of large tracts of farmland in countries such as Sudan and Senegal since the global food shortages and price rises earlier this year.

The Kenyan president, Mwai Kibaki, returned from a visit to Qatar on Monday. His spokesman said the request for land in the Tana river delta, south of Lamu, in north-east Kenya was being seriously considered.

“Nothing comes for free,” said Isaiah Kabira. “If you want people to invest in your country then you have to make concessions.”

But the deal is likely to cause concern in Kenya where fertile land is unequally distributed. Several prominent political families own huge tracts of farmland, while millions of people live in densely packed slums.

The country is also experiencing a food crisis, with the government forced to introduce subsidies and price controls on maize this week after poor production and planning caused the price of the staple “ugali” flour to double in less than a year.

Kibaki said that Qatari Emir Sheikh Hamad bin Khalifa al-Thani was keen to invest in a second port to complement Mombasa, which serves as a gateway for goods bound for Uganda and Rwanda and is struggling to cope with the large volumes of cargo.

By building docks in Lamu, Kenya hopes to open a new trade corridor that will give landlocked Ethiopia and the autonomous region of Southern Sudan access to the Indian Ocean. Kabira said that if the financing was agreed, construction of the port would begin in 2010.

Qatar, which has large oil and gas revenues, imports most of its food, as most of its land is barren desert and just 1% is suitable for arable farming. It has already reportedly struck deals this year to grow rice in Cambodia, maize and wheat in Sudan and vegetables in Vietnam.

Much of the produce will be exported to the Gulf. Qatar’s foreign ministry in Doha did not return calls today, but Kabira said that its intention was to grow “vegetables and fruit” in Kenya.

The area proposed for the farming project is near the Tana river delta where the Kenyan government owns nearly 500,000 hectares (1.3m acres) of uncultivated land.

But a separate agreement to allow a local company to grow sugarcane and build a factory in the area has attracted fierce opposition from environmentalists who say a pristine ecosystem of mangrove swamps, savannah and forests will be destroyed.

Pastoralists, who regard the land as communal and rear up to 60,000 cattle to graze in the delta each dry season, are also opposed to the plan.

“We will have to ensure that this new project is properly explained to the people before it can go ahead,” said Kabira.

The sudden rush by foreign governments and companies to secure food supplies in Africa has some experts worried. Jacques Diouf, director general of the UN’s food and agricultural organisation (FAO), recently spoke of the risk of a “neo-colonial” agricultural system emerging.

The FAO said some of the first overseas projects by Gulf companies in Sudan, where more than 5 million people receive international food aid, showed limited local benefits, with much of the specialist labour and farming inputs imported.

A deal struck last month by Daewoo Logistics and Madagascar to grow crops on 1.3m hectares of land also attracted strong criticism. While the South Korean firm has promised to provide local jobs and will have to invest in building roads and farming infrastructure, it is paying no upfront fee and has a 99-year lease.

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PUBLISHED BY ‘THE GUARDIAN’ (UK)

Posted in 'DOHA TALKS', AGRICULTURE, BANKING SYSTEMS, COMMERCE, COMMODITIES MARKET, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ENVIRONMENT, FARMING SUBSIDIES, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOOD PRODUCTION (human), FOREIGN POLICIES, FRUITS AND FRESH VEGETABLES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, KENYA, MACROECONOMY, NATIONAL WORK FORCES, QATAR, REGULATIONS AND BUSINESS TRANSPARENCY, ROAD TRANSPORT, SOUTH KOREA, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS, THE UNITED NATIONS, THE WORK MARKET, THE WORKERS, TRANSPORT INDUSTRIES, WATER | Leave a Comment »

ARAB ECONOMIES TO GROW DESPITE SETBACKS

Posted by Gilmour Poincaree on December 2, 2008

December 1, 2008 at 9:10 AM EST

OXFORD ANALYTICA – Exclusive – PUBLISHED BY ‘THE GLOBE AND MAIL’ (Canada)

SUBJECT: The impact of the world economic downturn on Arab economies.

SIGNIFICANCE: In contrast to the severity of the downturn in other parts of the world, the Arab world appears likely to experience relatively moderate losses. However, certain countries may be particularly vulnerable.

ANALYSIS: The IMF’s latest downward revisions of growth rate projections for 2009 place Arab countries in third place at 5.3 per cent after China and India at 8.5 per cent and 6.5 per cent respectively, although World Bank figures are somewhat less optimistic. Positive growth prospects reflect two key factors:

Macroeconomic fundamentals are positive, in particular the prospects for sustained investment growth, which will be driven by accumulated oil revenues and continuing oil incomes.

Regional capital markets, which have been hit by the crisis, are among the smallest and least significant in emerging markets.

Investment. Buoyant investment activity is now and will continue to be supported by oil income and wealth: The current account surplus of oil economies is expected to double to some $132-billion (U.S.) in 2008 against $77-billion in 2007.

Arab sovereign wealth funds possess at least $1.53-trillion in assets, with considerably more in reserves and accumulated private wealth.

Despite the slashing of oil revenues due to the present fall in oil prices, accumulated assets are likely to make up the difference from a regional standpoint – although particular countries may suffer.

Intra-Arab foreign direct investment has been rising steadily, from $8.8-billion between 1985-1995, to nearly $17-billion between 1995-2002, to $77-billion between 2002-07, with $14-billion in 2007 alone: FDI accounts for 12 per cent of regional capital formation compared to 7.8 per cent in developing countries as a whole.

GCC investors are now investing around 25 per cent of their oil wealth in the region compared to 15 per cent in 2003.

In oil, gas and energy, $520-billion worth of projects are planned for 2009-2013, down from a projected $650-billion before the crisis; even if only $400-billion worth are financed, $8-billion to $10-billion a month of investment will take place.

The crisis in Europe and the United States will strengthen the need for geographic diversification, and will confirm intra-Arab investments as a key category in Arab portfolios.

Investors will likely diversify away from real estate and tourism into other sectors such as food, transport, and medical diagnostics.

There have been official promises to maintain intra-Arab capital and investment flows, although the use of resources in domestic bailouts may limit the fulfilment of such commitments.

Market losses. The four largest markets – Dubai, Egypt, Kuwait, and Saudi Arabia – have lost up to half of their value, mirroring heavy losses elsewhere. Another four markets – Abu Dhabi, Bahrain, Qatar, and Oman – registered relatively moderate losses of 20-40 per cent. All had fallen from historical highs in summer, 2008.

There are a number of channels of contagion from global financial markets:

Exits by non-Arab investors have most seriously affected the more open Arab stock markets, namely those of Egypt and the United Arab Emirates.

Exposure to the US prime and sub-prime markets has affected players in Kuwait, Qatar and the UAE.

A more significant channel is heightened fear and uncertainty about the unfolding global recession; the region’s markets, whose trends have been dominated by excitement and herd behaviour, joined the global panic.

Negative sentiment overwhelmed the effects of positive fundamentals, including the strong results of many listed corporations for the first half of 2008.

Mitigated impact. Yet there are good reasons to believe that the falls in Arab markets will be less enduring, and have less negative broader impact, than in markets elsewhere:

The fall in OECD financial markets is the most severe in decades; in contrast, wild swings in the region are common.

Arab stock markets are highly volatile, narrow and illiquid; only a small proportion of total capitalization is traded.

The dominance of financial institutions in market indices made their fall in the present crisis inevitable; financials constitute 56 per cent of the S&P’s Pan Arab index, compared to 16 per cent in the Latin America index and 36 per cent for Africa.

Remarkably, the four smallest markets – Beirut, Jordan, Morocco, and Tunis – retained gains, indicating that intra-Arab investments have constituted a successful portfolio diversification strategy.

Arab markets are still constructing operational and regulatory structures. Gaping holes remain in corporate governance rules and practices, and the culture of retail investors is still underdeveloped. In 2007-2008 a series of investigations targeted insider dealings and share manipulation. Fines were handed to listed firms, brokers, and investment companies in Jordan, Egypt, UAE, Saudi Arabia, and Oman. However, the relative unsophistication of markets and their lesser significance in the broader economies has shielded Arab countries from the worst effects of the financial crisis.

Slowdown. The downside risks are not to be underestimated in a deep and complex world crisis: Oil revenues will be dented by declining world demand, forcing oil-rich countries to engage in belt-tightening and possibly threatening FDI flows to other Arab countries.

The cost of finance, in terms of spreads, has already risen to all-time highs, and all types of capital raised are below 2007 levels.

Falls in exports will cause losses across the region; many once-booming industries such as petrochemicals and fertilizers are now faced with sliding markets.

Falls in tourism will hit players such as Morocco, Egypt, and Dubai; falls in remittances will hit North African countries.

Dubai’s fall is likely to be the sharpest, linked as it is to the bursting of an enormous real estate bubble; mortgage lending had quintupled in the last five years, and government debt is high at around $70-billion.

Egypt, which is poor and heavily indebted, is likely to be hit hard by declines in the stock market, oil and gas income, and Suez revenues; even a moderate downturn is likely to feed growing public discontent.

CONCLUSION: Losses on Arab stock markets have wiped out abnormally high returns, but not the prospects of solid positive returns. The region is finally drawing on what has long underpinned East Asian and European growth: domestic and intra-regional investment. Supported by ample reserves and SWF resources, this strength should help the region to weather a world recession. Growth prospects are therefore dented, but remain positive.

From the Oxford Analytica Daily Brief

Copyright 2008 – Oxford Analytica Ltd. All rights reserved.

Founded in 1975, Oxford Analytica’s 1,000+ analysts provide international organizations with monitoring, research and consultancy services that explore the strategic implications of policy, economic, financial, industry, trade and security developments around the world.

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ASSETS OF ARAB BANKS SET TO REACH $2 TRILLION

Posted by Gilmour Poincaree on December 1, 2008

Sunday 30 November 2008 (02 Dhul Hijjah 1429)

by Mahmood Rafique – PUBLISHED BY ‘ARAB NEWS'(Saudi Arabia)

MANAMA: The consolidated assets of the Arab banks are set to reach $2 trillion with a projected net profit of $40 Kuwaiti traders follow the dealings of Kuwait's Stock Exchange in Kuwait Citybillion by the year-end, a senior official at the Union of Arab Banks, announced.

Adnan Ahmad Yousef, chairman of Union of Arab Banks, who attended the 2nd Arab-Greek Economic Forum last week in Athens, said that despite the economic upheaval, Arab banks would witness 15 percent annual growth in 2009.

Adnan, who is also chairman and chief executive of the Manama-headquartered AlBaraka Banking Group (ABG), said that the rapid growth of Arab banks had made them one of the most rapidly growing segments within the global banking system. “The balance sheet of Arab banks increased significantly in 2007 rising to $1.69 trillion, an increase of 30 percent over 2006. Our banking sector is made up of 470 institutions forming 267 commercial banks, 45 Islamic banks, 52 investment and national banks, 49 specialized banks and 57 foreign banks,” he said.

This sector, he said, employed more than 370,000 employees scattered across some 15,000 branches around the world. The sector plays a great role in the Arab economy, where it finances production, trade and investment. “It is also considered an essential partner in enhancing economic and social development, and laying the solid grounds of our economy that is always aimed at constant growth and the availability of credit between different Arab economies,” he said.

“As for Islamic finance the number of Islamic banks and institutions operating today in more than 75 countries in five continents is almost 300. Over 120 Islamic banks or 40 percent based in the Arab world and mainly in the GCC and their total assets reached more than $520 billion,” he added.

The Arab banking industry, he said, has shown a sustained growth and development and more Arab banks are making it to the list of the top 1,000 banks. By the end of 2007, 80 Arab banks were on the list, when nine of them made it for the first time.

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WORLD ECONOMIES

Posted by Gilmour Poincaree on November 18, 2008

November 17, 2008 Monday Ziqa’ad 18, 1429

Gulf States

Oil-dependent Arab states will be hurt as the global economy slides into recession, but a huge windfall WORLD ECONOMIESaccumulated over the past few years from oil sales will help them minimise the impact. Undoubtedly, the Gulf economies will be affected, but the impact will be much less than in the industrial world. The main impact will be a drop in demand for oil, and consequently revenues.

The six-nation Gulf Cooperation Council (GCC), grouping Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE), is estimated to have sold oil worth around $3 trillion over the past six years.

The GCC governments had foreign assets of $1.8 trillion at the end of last year. This is expected to top $2 trillion by the end of 2008. Despite the sharp drop in oil prices, GCC states will end up this year with a good surplus. However, projects still in the pipeline are likely to be affected by delays.

The region’s stock markets have been severely affected by the global crisis, plunging 20 per cent, or close to $200 billion in value. The impact of the global financial meltdown on Gulf economies could spread much wider and deeper. Financing for Gulf mega-projects will become scarce and its cost higher. The region’s markets for large-scale project finance and real estate will be particularly affected by this credit crunch.

Some Gulf projects are already facing finance problems. The main impact will be on the real estate sector, mainly in the UAE and Qatar because they have been growing at a fast pace. Petrochemicals and other industries will remain safe, but petrochemicals and aluminum exports, the main Gulf products other than oil, will also be affected. The estimated $2.5 trillion value of foreign investments held by Gulf governments and the private sector is also expected to be reduced by a slump in asset prices worldwide. Some economists say Gulf investments may have already lost hundreds of billions of dollars of their book value.

Finance ministers and central bankers from Gulf on the other hand expect their economies to continue to grow despite the global financial crisis and a sharp drop in oil prices. The officials underscored the “strength and solvency” of the financial sector and stressed that the region can weather any impact from the global financial crisis. They have voiced satisfaction over measures taken to deal with any impact from the world economic crisis and expressed readiness to take any additional measures.

Although the region is not much dependent on the international economy, Middle Eastern agriculture and manufacturing, the main providers of job opportunities, have still become less competitive because of the increasing pressure to export goods to the global markets at lower prices. At the same time, inflation is running above 10 per cent in much of the region due to rising commodity prices. Inflation is also being driven upward because the currencies of many of the Gulf countries are pegged to the US dollar.

A prolonged slowdown in the international economy will also cause remittances, job creation, tourism and foreign aid to decline and unemployment to increase, particularly among the youth. The economic downturn will also slow the flow of educated Arab workers into jobs in the oil sector. Before the global financial crisis, the region benefited whether oil prices were high or low, since the region has both oil producers and consumers. But Middle East producers and consumers are now likely to suffer from either higher or lower oil prices as the financial crisis spreads because of the sustained drop in foreign investment coming into the region.

The 2009 GDP forecast for GCC as a region has been revised from 6.2 per cent to 4.5 per cent in 2009 due to the weakening global backdrop and lower oil prices. In Saudi Arabia, the world’s largest oil producer, oil output is likely to decrease in 2009, pulling down GDP growth to 4 per cent. Inflation will continue to rise in 2008 to 9.8 per cent and start coming down in 2009 to 9 per cent. In the UAE, the GCC’s most diversified and open economy, credit crunch and global downturn will hit open economy and growth will slow down in 2009 to 4.5 per cent. Inflation is likely to increase this year to 11.8 per cent before coming down next year to 10.5 per cent.

Qatar, with both its oil and non-oil sectors growing at double-digit speed, will remain one of the fastest-growing markets in 2008 with 14.5 per cent real GDP growth. However, supply bottlenecks and deeply negative policy rates will push inflation higher in 2008 to 15.6 per cent. Qatar’s investment driven, capital-intensive growth will face headwinds in 2009.

In Oman, with declining oil output, the economy is being propelled by services and gas-based industries in 2008 with expected GDP growth of 6.8 per cent. Despite a $15 billion investment plan for the oil and gas sectors, the outlook is less than rosy with high recovery costs and limited reserves. Inflation at 12 per cent is pushed up by food and rent prices, along with negative real interest rates that boost bank lending.

The Kuwaiti macro story continues to be driven by oil. The lack of political determination for diversification has caused Kuwait to lag most of its GCC neighbors so far with GDP growth forecast of 5.6 percent in 2008. Inflation as elsewhere continues to climb to 9.7 percent in 2008. In Bahrain, the non-oil sector remains the main driver of the resource-poor economy. With limited petrodollars, the budget surplus should stay modest at 7 percent of GDP by regional standards, while inflation should continue to rise in 2008 to 5.5 percent, the region’s lowest.

Asian economies

Most Asian economies are in a better position to weather the global financial storm due to significant foreign reserves, and painful lessons gleaned from the 1997 crisis. Growth in the Emerging Asia region is projected to moderate to 7.7 per cent in 2008 and 7 per cent in 2009, from 9.25 per cent last year, according to the World Economic Outlook report released by the International Monetary Fund.

Asia’s projected positive but slower growth will be propelled by the regional twin engines of China and India. Both countries are expected to experience lower demand on weaker exports but should continue to be supported by strong private consumption.

Growth in China eased to 10.5 per cent (year-on-year) in the first half of 2008, 2.5 per cent slower than the same period last year, partly due to slackening exports. However, activity continued to be supported by steady investment growth and accelerating consumption. India is not immune from the global liquidity crunch. India is likely to register GDP growth of 7.9 per cent in 2008, which may slip to 6.9 per cent in 2009, compared to 9.3 per cent last year. Indian growth in the second quarter slipped to 7.9 per cent, having risen by 8.8 per cent in the preceding quarter, on the back of weakening investment while private consumption and export growth have held up well.

IMF projects that the ongoing financial turmoil will have minimal impact on India, which is still largely a closed economy. The relatively high 7 per cent growth forecast reflects India’s strong internal growth dynamics from rapid productive growth and from its process of integration into the global economy that is still continuing. Emerging Asia can anticipate more weakness ahead in response to slowing demand from advanced economies and growing strains in regional financial markets.

The two biggest newly industrialised economies, South Korea and Taiwan, will see growth moderate, with South Korea’s economy expanding 4.1 per cent this year and 3.5 per cent in 2009. Taiwan will see 3.8 per cent growth in 2008 and 2.5 per cent next year. In the newly industrialized Asian economies (NIEs) and the Association of Southeast Asian Nations (ASEAN) economies, activity has also been decelerating. Domestic demand has softened, as rising food and fuel prices have started to weigh on consumption, while declining profit margins and weakening demand have prompted firms to scale back their investment plans.

Asia’s financial system is little affected by the US sub-prime mortgage problems that have triggered a global crisis. The impact on the financial sector in Asia is limited. Still, Asia’s economic growth will lose steam because of the slowdown in the US and Europe, which are main export markets for Asia.

The Asian Development Bank’s projection that overall growth rate in Asia would be 1.5-2.0 percentage points slower this year, but that is not necessarily a problem, as many Asian economies have “overheated.”

According to ADB’s latest outlook, Asia overall will continue to post robust growth, while slashing growth projections for the global economy and predicting that the United States would continue losing traction. But the growth among emerging Asian economies is forecast to moderate to 7.7 per cent in 2008 and 7.1 per cent in 2009, from 9.3 per cent in 2007. Weakening external demand is likely to weigh on exports, but, in some cases, the impact may be mitigated by still-loose macroeconomic policies and currency depreciation.

The Director General of the United Nation’s Conference on Trade and Development has warned the global downturn will continue into 2009. Economists at the UN’s Economic and Social Commission for Asia and the Pacific (UNESCAP) says Asia’s export sector, a key driver of most economies, will be hit by a downturn in the European and US economies. But a downturn will be eased somewhat by the strength in domestic consumption in Asia, with most governments holding substantial foreign exchange reserves.

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Posted in ASIA, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, IMF, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, PETROL, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS | Leave a Comment »

OPEC REDUX: RESPONDING TO THE RUSSIAN-IRANIAN GAS CARTEL

Posted by Gilmour Poincaree on November 15, 2008

Published: November 14, 2008

Ariel Cohen (Middle East Times) by Ariel Cohen (Middle East Times) (*)

MOSCOW – Steadily and stealthily, a natural gas cartel has emerged over the last seven years. On Ariel Cohen, the usually obnoxious 'scarecrow' with a PhD ...Oct. 21 in Tehran, the Gas Exporting Countries’ Forum (GECF) agreed to form a troika which will direct the future cartel. Russia, Iran, and Qatar announced they will form a yet-unnamed group “to coordinate gas policy.” The troika will meet to coordinate and control close to two-thirds of the world’s gas reserves and a quarter of its gas production.

Russia prefers to coordinate energy policies with Tehran, recognizing that together they control roughly 20 percent of the world’s oil reserves and about half of global gas reserves, offering tremendous geo-economic power.

The United States should create an international coalition of energy consumers to oppose energy cartels. The U.S. Congress should also allow energy exploration in the Arctic, the Rocky Mountains, and along the continental shelves and expand cooperative gas ties with Canada.

Russia’s Global Gas Strategy

In the tight global energy market, Russia clearly appreciates the bargaining power that its energy resources provide, as it attempts to control energy exports from the New Independent States, such as Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan. Russia also has strengthened its ties to Iran, Venezuela, Libya, and other energy exporters. Recently, Moscow also launched a “charm offensive” on OPEC.

Russia is playing a sophisticated game to maximize its advantage as the leading gas producer with the largest reserves on the planet as well as the second largest oil exporter.

Russia’s approach was gradualist. Moscow had never openly shown enthusiasm about a gas cartel but waited for an opportunity to launch one. Yet, the cartel reportedly was a brainchild of the Russian prime minister and former president, Vladimir Putin.

Russia’s approach was also stealthy. Instead of announcing the cartel prematurely and spooking consumer countries, it quietly put the component parts into place. Until the Tehran declaration, Russia was able to appear reasonable.

At the Doha meeting in April, members of the GECF agreed to discuss dividing the consumer markets between them, particularly in Europe. Russia and Algeria are already major players there, and Iran may join them in the next decade. This will clearly challenge the European Union’s energy liberalization and gas deregulation policy, which took effect on July 1.

Geopolitical Clout

The troika and GECF members are planning to “reach strategic understandings” on export volumes, schedules of deliveries, and the construction of new pipelines. They plan to explore and develop gas fields and coordinate startups and production schedules. Despite protestations to the contrary, the GECF has all the trappings of a nascent cartel, and the troika includes its founding members. These founders will expand cooperation beyond their relationship through the GECF and drag other gas producers with them.

The new group will provide its three leaders with greater geopolitical advantage. If this new cartel expands, Russia and Iran will gain clout over Eurasian gas suppliers, such as Azerbaijan, Turkmenistan, Kazakhstan, and Uzbekistan.

Major gas producers such as Iran, Russia, Qatar, Turkmenistan, Brunei, and Venezuela have one feature in common: a democracy deficit. All three members of the new cartel share this dubious quality. Just like OPEC, the gas cartel will be a force that can be used to challenge and possibly weaken market–based democracies through energy prices and wealth transfer. Such a cartel may cut deals with undemocratic large-scale consumers, such as China, while forcing the West to pay full price.

Coordinated Global Action Needed

The U.S. George W. Bush administration barely reacted to the Tehran and Doha meetings. Officials express concern, but only in private. The European Commission merely stated that it opposed price-fixing cartels in principle.

As the case of OPEC demonstrates, closing markets to competition, promoting national oil companies, and limiting production results in limited supply and higher oil prices. Gas will not be different.

What the U.S. Can Do

The United States should open its vast natural gas resources onshore and offshore to further exploration and production and encourage its neighbors in Canada, Mexico, and the Caribbean to do the same.

The next administration should work with the European Union, Japan, China, India, and other countries to prevent the cartelization of the gas sector. This can be accomplished through cooperation with the International Energy Agency, which China and India should be invited to join, and by applying anti-trust legislation worldwide against state-owned companies that are actively involved in cartel-like behavior in energy markets.

Finally, the United States should work closely with those within GECF who oppose Russian-Iranian domination, including Azerbaijan, Canada, the Netherlands, and Norway. The National Security Council and the National Economic Council should take the lead in developing this policy. Unless buyer solidarity is translated into action, energy consumers and economic growth will suffer worldwide.

(*) – Ariel Cohen, Ph.D., is senior research fellow in Russian and Eurasian Studies and International Energy Security in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation.

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Posted in COMMERCE, COMMODITIES MARKET, COMMONWEALTH OF INDEPENDENT STATES, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, FINANCIAL CRISIS 2008/2009, FUELS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, IRAN, LYBIA, NATURAL GAS, OPEC, PETROL, QATAR, RUSSIA, THE ARABIAN PENINSULA, THE EUROPEAN UNION, THE FLOW OF INVESTMENTS, VENEZUELA | Leave a Comment »

INVESTOR LAWSUIT CLOSES KUWAITI BOURSE, GULF MARKETS PUMMELED

Posted by Gilmour Poincaree on November 15, 2008

Published: November 14, 2008

by Sana Abdallah (Middle East Times, with agency dispatches)

AMMAN – The global financial crisis continued to pummel the oil-rich Arab Gulf markets this week, Panic-stricken Kuwaiti traders have been demanding a halt to trading for weeks, demonstrating outside the stock market (Kuwait's bourse shown here) and the Kuwaiti parliament, and seeking the emir's intervention - Sipa Press via Newscomprompting an unprecedented and controversial court order that closed down the Kuwaiti bourse after an investor sued government and finance officials for compensation for his heavy losses.

The seven markets of the Gulf states closed on Thursday, the last day of the trading week in most of these countries, with a total loss in excess of $100 billion in share values in just one week, to about $650 billion, or 42 percent down from $1.116 trillion last year.

The administrative court in Kuwait on Thursday morning ordered the Kuwait Stock Exchange (KSE) to shut down until Nov. 17 in an attempt to curb the hemorrhaging of the market, which has seen a $100 billion loss, or 44 percent, since June 24.

The court justified its ruling, the first of its kind in the Gulf, as an intervention on behalf of investors, it said, after the market’s management failed to take measures to boost the declining bourse.

The court said it would convene again on Nov. 17 to continue looking into the case, in reference to a lawsuit filed on behalf of an investor seeking compensation for his heavy losses incurred at the Kuwait market. He filed the lawsuit against the prime minister, the commerce minister, who heads the bourse committee, and the director general of the KSE.

The bourse abided by the verdict and stopped trading as soon as it received the order, drawing cheers from investors gathered on the trading floor, but warnings from the government and lawmakers that shutting down the market was more detrimental to investors.

The unusual verdict came as a relief to panic-stricken traders who have been in recent weeks demanding a halt to trading, demonstrating outside the market and the Kuwaiti parliament, and sought the emir’s intervention.

The government has tried, but failed, to deflect the domino effect of the international financial crunch and curb the meltdown at home.

The central bank injected billions of dollars into banks last month after the near-collapse of the Gulf Bank, Kuwait’s fourth-largest lender. Parliament passed a bill to guarantee deposits at national and foreign banks. The emirate’s Investment Authority, Kuwait’s sovereign wealth fund with foreign investments of $300 billion, pumped hundreds of millions of dollars into buying stocks.

The government is still working out a rescue plan, but Kuwait became the first Gulf state to announce it would set up a fund to buy assets from investment firms.

Some Kuwaiti financial analysts said while suspending trade in the KSE was unorthodox, there was no other choice at this point when there are desperate sellers and no one wants to buy shares until they drop far enough.

But some Kuwaiti politicians saw the court order as setting a bad precedent that further weakens confidence in the stock market.

All other Gulf bourses have also taken a strong beating from the international financial fallout, and this week was no exception, owing to panic over the proliferation of the global crisis and ensuing plunge in oil prices.

Although the governments of the world’s other oil-rich nations have announced measures to prop up their respective markets and financial systems, they have not yet found the need for a bailout or to resort to the drastic measure of suspending trade, as in Kuwait.

The Dubai Financial Market dropped to its lowest point in more than four years on Thursday, down 4.9 percent in the day’s trading, and 24.7 percent over the week in its worst losses ever. Its share values fell 56 percent in the past three months, and 64.5 percent on the year.

The Abu Dhabi Securities Exchange index slumped 16.8 percent over the week, and 45 percent since June.

The financial markets in Qatar, Oman and Bahrain also had their share of heavy losses during the week.

The largest Arab market, Tadawul in Saudi Arabia, closed its week on Wednesday with a 10 percent drop, with its index down 44 percent since June.

Analysts predicted the financial downward spiral in the region will continue as huge losses in the United States, Europe and Asia plunge the world’s economies into recession.

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Posted in CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, KUWAIT, QATAR, REGULATIONS AND BUSINESS TRANSPARENCY, SAUDI ARABIA, STOCK MARKETS, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS | Leave a Comment »

MANY AMERICAN MEAT EXPORTERS OBTAIN HALAL CERTIFICATE FRAUDULENTLY (Dubai)

Posted by Gilmour Poincaree on November 14, 2008

Published: November 13, 2008, 23:54

by Nadia Saleem, Staff Reporter

Dubai: Ninety-five per cent of American food items found in supermarket shelves in the UAE and some HALAL MEATother Gulf countries are not halal even though they may be certified as such, an industry specialist said at the Halal World Expo in Abu Dhabi.

Jalel Aossey, director of Midamar, a US-based international supplier of halal food and foodservice equipment, said that there is a significant flow of non-halal food items in the region from meat-supplying countries, and the Gulf countries need tougher regulations to stop that flow.

“On one side you have producers who genuinely don’t know what they have to comply with because of a lack of education from the industry. But you also have companies and exporters that are deliberately defrauding governments and consumers by not complying with regulations because they don’t want to pay the fees and the transition costs to make halal products,” Aossey said.

Corrupt certifiers

Nearly 1.8 billion Muslims around the world as well as some non-Muslims are fuelling the halal food industry, generating sales of $2.1 trillion annually, according to recent reports. The attractive halal food industry is drawing many dubious players.

“Corrupt certifiers get a taste for the money generated producing “paper halal certificates” for companies without actually performing any work,” Aossey said.

On regulatory measures, Aossey said, “People have to realise that it is not impossible, and that it’s not too costly to put the correct halal standards in place here. There’s a big misconception about how difficult this process is.”

Noor Al Deen Abdullah, executive director of Kasehdia, a communications and consultancy company in Malaysia, and publishers of The Halal Food Journal earlier told Gulf News, “The global halal industry is still in its infancy because huge awareness is required, especially in the Middle East.”

The major producing nations are Australia, New Zealand, Brazil and Canada, Abdullah said, from where halal and non-halal meat is supplied.

Aossey said that inspection teams can be sent to the various countries where food is being produced to allow it to be inspected, at that country’s cost. “This is nothing when you consider the huge dollar volume of food products exported to the UAE and other Gulf countries.”

In the UAE, 80 per cent of imported food is said to be halal, coming from countries such as Brazil and Australia.

Facts

What is halal meat?

Halal (or permissible) in Islam is the meat of animals that have been slaughtered reciting the name of Allah on them and all the blood has been drained from the carcass.

Additional criterion that make meat halal are that the animal should not be dead prior to slaughter, since carrion is forbidden and that the animal is from those that are allowed according to Islamic teachings.

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PUBLISHED BY ‘GULF NEWS’ (Dubai)

Posted in AUSTRALIA, BRASIL, CANADA, COMMERCE, COMMODITIES MARKET, CRIMINAL ACTIVITIES, FRAUD, INDUSTRIAL PRODUCTION - USA, INTERNATIONAL, MEAT, NEW ZEALAND, PECUÁRIA, REGULATIONS AND BUSINESS TRANSPARENCY, SETOR EXPORTADOR, THE ARABIAN PENINSULA, UNITED ARAB EMIRATES | Leave a Comment »

‘GAS TROIKA’ PLANS LNG JOINT VENTURE, PAPER SAYS

Posted by Gilmour Poincaree on November 14, 2008

November 13, 2008

by Eric Watkins – Oil Diplomacy Editor

LOS ANGELES, Nov. 13 – Russia’s state-owned OAO Gazprom, Qatar Liquefied Gas Co. Ltd., and PETRON - GASOLINE STATION - FUEL - PETROLEUM - OIL - KEROSENE - DIESELNational Iranian Oil Co. plan to establish a joint venture to produce gas from Iran’s South Pars field and liquefy it at Qatar’s Ras Laffan.

Each founder will get 30% in the project and the remaining 10% will go to the trader, probably to China’s CNPC or Korean Kogas, according to a report in Moscow’s Kommersant newspaper.

Participation by Qatar—a key US ally in the region — will level political risks triggered by the sales of Iranian gas, experts told the paper.

The plans are to set up the gas production infrastructure in South Pars, lay a pipeline across the Persian Gulf to Qatar, and construct an LNG facility at Ras Laffan.

The Kommersant report came as a Russian delegation led by Prime Minister Vladimir Putin arrived in Doha, Qatar, for talks with Qatari and Iranian officials on cooperation in natural gas exports.

Ahead of the meeting, Putin sought to allay the fears of gas consumers who viewed a meeting in Tehran last month as the start of a process that would eventually lead to the formation of an OPEC-like group of natural gas exporters.

At the time, Alexey Miller, chairman of OAO Gazprom’s management committee, said their discussions “may contribute greatly to developing the agenda for the Gas Exporting Countries Forum…,” which could be rapidly transformed “into a permanent organization promoting steady and reliable fuel supplies around the globe (OGJ Online, Oct. 24, 2008).”

Following the announcement, the European Union — Russia’s biggest gas customer — warned it could reconsider its energy policy if Russia, Iran, and Qatar formed a “gas OPEC.”

Putin said Nov. 11 that there were “absolutely no grounds for such fears,” adding, “We are not establishing a cartel; we are not striking any cartel deals.”

Putin said, “Energy producers, as well as consumers, have the right to— and in my view must —coordinate their decisions, exchange information, and do their best to ensure uninterrupted hydrocarbon supplies on global markets.”

Contact Eric Watkins at hippalus@yahoo.com.

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UAE AND INDONESIA AIM TO BOOST TRADE RELATIONS

Posted by Gilmour Poincaree on November 11, 2008

Published: November 11, 2008, 00:11

by Binsal Abdul Kader, Staff Reporter

Abu Dhabi: Indonesians in the UAE are thrilled with the increasing number of professionals among them.

“When I reached Abu Dhabi nine years ago, I didn’t find many Indonesian engineers. Now, our Indonesian artists perform Gamelan, a traditional instrumental music from Java and Bali islands.association of petroleum engineers has more than 250 members”, Irfan Hendrawan , a petroleum engineer told Gulf News.

“Even a construction company working on an Island in the capital alone recruited 600 Indonesian engineers recently”, said Mohammad Loekito Slamet, Vice-President of UAE chapter of Society of Indonesian Petroleum Engineers.

“Among the 75,000 strong community, majority of them are housemaids but I was surprised to find about 160 engineers and their families in Ruwais, a remote town, 250 kilometres away from the capital”, M.Wahid Supriyadi, Indonesian Ambassador to the UAE told Gulf News.

“I met them as part of my efforts to form Indonesian Business and Professional Organisation in the Abu DhabiUAE “, said Supriyadi who took charge as the ambassador six months ago. “We expect more than 2,000 professionals and business men to be the members of the organisation”.

The ambassador and community members spoke to Gulf News on the sidelines of a reception hosted by the embassy as part of Indonesian national day celebrations on Sunday evening.

“Although national day was on August 17, we set aside the celebrations to this month, for the convenience of the community”, said the ambassador.

Saqr Gobash Saeed Gobash, Minister of Labour, was the chief guest.

A group of Indonesian artist played Gamelan, traditional instrumental music from Java and Bali islands, which touched the hearts of guests and the community members. Traditional dance also added colour to the celebrations.

A special corner of Indonesian food gave a new experience to the guests.

The ambassador said that being moderate Muslim countries, both are enjoying a very strong political relation and are trying to expand trade and people to people contact.

“The UAE has committed to invest $6.2 billion in our country as part of growing trade relations. Both countries have found new areas of opportunities which were ignored in the past”, said Supriyadi.

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DUBAI MARKET DROPS OVER 7 PER CENT ON FEARS OF GLOBAL FINANCIAL CRISIS

Posted by Gilmour Poincaree on November 11, 2008

Last updated: November 11, 2008, 14:44

Gulf News Report

Photo – It’s the fourth straight session of declines for the Dubai Financial Market. Shares have lost more than 16 per cent since Sunday, when the trading week opened – Ahmed Ramzan – Gulf News.

Dubai: Markets in Dubai and Abu Dhabi fell sharply on Tuesday with the Dubai index dropping more than 7 per cent, led by banking and property stocks.

Incidentally, Dubai is bearing the brunt of the regional and global market weakness.

“Even in days when other regional markets recover, Dubai has consistently underperformed and is also much weaker than its Abu Dhabi peer,” says Khaled Masri, executive partner at Rasmala Investments. “The market perception is that Dubai is seen as the ‘weakest link’ within the GCC in this environment. This is due to the very high percentage of market capitalisation being represented by real estate related stocks and a perception within the market that Dubai and its companies have very high levels of leverage.”

Emaar Properties dropped 9.88 per cent and Deyaar tumbled 9.57 per cent.

Among banks, Emirates NBD and Dubai Islamic Bank fell 4.85 per cent and 9.77 per cent, respectively.

In Qatar, the index fell 6.25 per cent while Kuwait’s benchmark slipped 2.16 per cent.

The Muscat bourse retreated 1.99 per cent and Bahrain shed 2.74 per cent.

– With inputs from Gaurav Ghose, Financial Features Editor

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OIL UP OVER 4 PCT, TOPS $64 ON CHINA STIMULUS, G20

Posted by Gilmour Poincaree on November 10, 2008

by Fayen Wong – Reuters – (Editing by Clarence Fernandez)

Published: Sunday, November 09, 2008

PERTH (Reuters) – Oil leapt more than $3 to over $64 a barrel on Monday, fueled by top exporter Saudi An oil pump is seen on the shore near Santa Cruz del Norte, Cuba June 5, 2008. REUTERS - Claudia DautArabia’s plans to cut December supplies to Asia, a weaker dollar and hopes that global economies’ plans to lift growth could avert recession.

Saudi Arabia has told refiners in Asia it would cut December supplies by 5 percent, providing the most visible evidence yet that it is adhering to OPEC’s agreement last month to reduce output.

U.S. light crude for December delivery rose $2.96, or 4.55 percent, to $64.00 a barrel by 7:59 p.m. EST, after rising as much as $3.26. London Brent crude rose $1.85 to $59.20.

The proposals made at the G20 meeting and the relief package out of China really helped the markets this morning,” said Mark Pervan, a senior commodities analyst at the Australia & New Zealand Bank.

“The message over the weekend was supportive and it is clear that governments around the world will do all it takes to prevent a deep global recession.”

At the G20 group’s annual meet in Brazil, finance ministers and central bank governors representing 90 percent of the world’s economy vowed to take all necessary measures to get financial markets back on their feet and counter the credit crisis.

China went a step further and launched a huge stimulus plan on Sunday worth nearly $600 billion, kicking off what could be a round of big spending or interest rate cuts by leading economies to stave off a recession in many countries.

China’s solid government spending package to boost domestic demand is “good news” that will help the global economy ride out the financial crisis, the International Monetary Fund’s managing director said.

The U.S. currency weakened broadly after data on Friday showed the U.S. economy shed more jobs than expected in October. But the yen fell against the dollar and euro on Monday as Asian shares were lifted by strong Wall Street gains and by China’s launch of its huge stimulus plan.

Oil lost nearly 10 percent last week and dipped below $60 the previous week, its lowest since March 2007, after a string of dismal economic data from the United States sharpened fears of a protracted global recession and growing U.S. energy stockpiles underscored falling demand in the world’s top energy consumer.

Government data on Friday showed U.S. employers cut payrolls by 240,000 in October. In addition, the Labor Department said the U.S. unemployment rate shot up to 6.5 percent from 6.1 percent in September, the highest since March 1994.

Oil’s tumble from July highs has already spurred OPEC to rein in supply from November 1, and some members of the cartel are talking of reducing production further.

OPEC will cut oil output again if the trend toward lower prices and slowing demand growth are unchanged when the group meets in December, Iran’s OPEC Governor Mohammad Ali Khatibi told Reuters on Sunday, adding to comments by Venezuela’s oil minister Rafael Ramirez last week that OPEC should act again to reduce output by at least 1 million barrels per day (bpd).

Iran’s Khatibi added that the credit crisis and economic slowdown could shave as much as 3 million bpd from global crude demand.

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CRISE MANTERÁ PETRÓLEO EM BAIXA, DIZ PRESIDENTE DA OPEP – Previsão de Chakib Khelil leva em conta abalo nos mercados e baixa do dólar frente a outras moedas

Posted by Gilmour Poincaree on November 2, 2008

02/11/2008 | 16h41min

O ministro da Energia argelino e presidente em exercício da Organização dos Países Exportadores de Chakib Khelil - Algerian Energy and Mines Minister, gestures during a press conference at the governmental newspaper El-Moudjahid's press center in the center of Algiers 20/10/2007. Khelil, who is the vice president of the Organization of Petroleum Exporting Countries (OPEC), said, then, that petrol prices would stay high until the second trimester of 2008Petróleo (Opep), Chakib Khelil, disse neste domingo que os preços da commodity podem continuar sua tendência de baixa caso persista a crise financeira e o dólar não se recupere frente a outras divisas.

— Tudo depende da situação econômica mundial. Caso continue se deteriorando fica claro que a demanda de petróleo percebida pelo mercado diminuirá, o que manterá a tendência de baixa — disse Khelil a uma rádio argelina.

No entanto, o ministro não descartou que o preço do petróleo, estabelecido em dólares, possa voltar a subir “se a moeda americana se debilitar em relação a outras”.

— É o impacto de todos estes elementos o que vai decidir o preço do petróleo a curto prazo — assinalou.

Em todo caso, o presidente da Opep previu que os preços se recuperarão em dois ou três anos, “já que há um desinvestimento e muitos projetos (no setor petrolífero) foram suspensos”.

Segundo ele, a decisão da Opep adotada na última reunião de Viena de cortar a produção “vai precisar de muito tempo para ter seus efeitos” sobre o preço do petróleo, já que o mercado não integrou ainda a redução da oferta.

Khelil explicou que vários países, entre eles Argélia, Emirados Árabes, Irã e Nigéria, anunciaram já o corte de sua produção e que se espera que os demais membros da Opep informem a seus clientes “para avaliar o impacto no mercado da decisão adotada em Viena”.

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SAUDI MARKET JUMPS 6% AT WEEK’S START

Posted by Gilmour Poincaree on November 2, 2008

First Published 2008-11-01 – Updated 2008-11-01 13:38:31

Saudi stock market shows gains in all sectors, with 9.06 percent surge in petrochemicals.

RIYADH – The stock market in oil powerhouse Saudi Arabia, the largest in the Arab world, rose by six A crowd of mostly stock traders gathers at the Kuwait Stock Exchange on Monday, Aug. 21, 2000 in Kuwait City one day after the government announced the approval by Kuwait's cabinet of regulations necessary to implement a bill allowing foreigers to own stock and trade at the local stock market - AP Photos - Gustavo Ferraripercent on the first day of the trading week on Saturday, with all sectors, but chiefly the leading petrochemicals sector, showing gains.

The Tadawul All-Shares Index (TASI) closed on 5,871.24 points, up 6.02 percent on last week’s close on Wednesday.

All sectors were up, with petrochemicals surging 9.06 percent gain as petrochemicals giant SABIC finished the day 9.85 percent up.

The construction sector also climbed by more than nine percent while the banking sector registered a more modest gain of 3.72 percent.

The Saudi stock market trades from Saturday to Wednesday, while other bourses in oil-rich Arab countries in the Gulf operate from Sunday to Thursday.

The TASI finished last week down 10.1 percent and shed a massive 25.8 percent in October amid the global financial turmoil. The index is 46.81 percent lower than at the end of last year.

The Saudi bourse’s gains on Saturday came a day after US and European share markets ended their week with solid gains at the end of a month of wild volatility and losses amid fears that a deep recession lies ahead.

The total value of shares listed on stock markets in the Gulf region plummeted by 250 billion dollars in The Saudi stock market is the largest in the Arab worldOctober as indexes sank by an average 25 percent amid the global market meltdown.

A mild upturn at the end of the month did little to counteract the earlier rout and markets in the oil-rich states ended October worth 720 billion dollars, an enormous 400 billion less than at the start of the year.

Bourses in Gulf states other than Saudi Arabia closed slightly higher at best on Thursday, their final trading day of the month, as low investor confidence prevented them from responding to a huge rally by global stock markets in the previous few days.

Investors also failed to react to concerted support moves by Gulf state governments, such as injection of funds in the financial system and the guaranteeing of bank deposits.

Dubai topped the list of October losers, diving 28.7 percent, while Oman fell 26.9 percent. Doha plunged 25.6 percent, Kuwait shed 23.8 percent and Abu Dhabi was down 16 percent.

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JAPANESE GOV’T READIES MONEY FOR NEW IMF BAILOUT FACILITY

Posted by Gilmour Poincaree on November 2, 2008

Sunday, November 2, 2008

TOKYO (AP) – Japan is ready to provide some of its ample cash for any International Monetary Fund bailouts for struggling nations to help stabilize the growing global financial crisis, the finance minister said.

Japan will make that offer along with proposals about accounting standards and other regulatory adjustments needed to fix the growing economic woes at a world summit in Washington Nov. 15, Finance Minister Shoichi Nakagawa told reporters.

Nakagawa did not say the acceptance of its proposals would be needed to get any of the money but he said Japan expects to play a greater international leadership role on the international stage.

He said the IMF has about $ 210-billion funds but that may not be enough.

“Japan is ready if that prove insufficient,” he said, adding that Japan has $ 1 trillion in possible funding from its foreign currency reserves. “We see lending to the IMF basically as risk-free.”

He did not give specifics of what Japan’s proposals may be, stressing that Prime Minister Taro Aso was still hammering out details.

Britain and Germany support the creation of an International Monetary Fund facility to help smaller economies withstand the global financial crisis, Prime Minister Gordon Brown said on Thursday.

“We discussed how we must prevent contagion over the next few days to middle-income countries including in eastern Europe,” Brown told reporters after talks with German Chancellor Angela Merkel.

“It’s vital that the International Monetary Fund plays a central role in supporting these economies. We both agreed to support a new facility for the IMF which would draw on additional resources of countries with substantial reserves.”

IMF chief Dominique Strauss-Kahn told French daily Le Monde he would propose a new regulatory strategy at a meeting next month of the Group of 20 nations.

He said he would suggest a new type of loan to relieve short-term liquidity problems in some economies, and an increase in IMF resources which he said were insufficient to meet requirements over the medium

Nakagawa reiterated his earlier remarks and the views of other Japanese politicians that Japan wishes to exercise political leadership in offering its money and experience in wresting itself out of its bad debt woes of the 1990s.

He said Europe and the U.S. have historical experience with the Great Depression, but Japan has more recent experience and is in a better position to share its expertise.

“We were able to get ourselves out of our problems without help from any other nation,” he said at the Japan Press Center.

Earlier this week British Prime Minister Gordon Brown and German Chancellor Angela Merkel said the International Monetary Fund needs more money to bail out struggling countries.

Brown has called on countries such as China and the oil-rich Persian Gulf states to fund the bulk of an increase in the International Monetary Fund’s bailout pot. The IMF is giving Hungary, Iceland and Ukraine loans and is in discussions with Belarus.

The International Monetary Fund said Wednesday it is creating a new program to get money quickly to developing countries with strong economies that are facing cash crunches in the global financial crisis.

Nakagawa said countries need to respond quickly and work together to get out of the financial problems that started with the U.S. subprime mortgage crisis and is now spreading around the world.

“Japan is taking leadership,” he said.

He said Japan was also doing its part domestically with stimulus spending packages and regulatory changes to prevent a further plunge on the Tokyo stock market.

Merkel said joint action was needed to tackle the crisis.

“I believe the cooperation of the recent weeks has shown we are on the right path,” she said. “We must make risks (in financial markets) manageable.”

Brown said this week that the IMF needed more money to deal with the fallout from the global financial crisis and called on China and the Gulf states to play their part.

Asked about Brown’s call, China’s Foreign Ministry spokeswoman responded vaguely on Thursday but kept the door open to a bigger Chinese role in international rescue efforts.

Brown’s spokesman said he welcomed the positive responses from Germany and China to the proposal “and the indication that they (China) have given that they would be prepared to consider contributing to any such fund”.

Brown has said the issue of giving the IMF more resources will be on the agenda when he visits the Gulf this weekend.

Brown said he and Merkel were “in total agreement” about what needed to be done at a Nov. 15 global summit in Washington to discuss how to reform the global financial system.

“We need to have a transparency that has not existed in every area of the banking system,” he said.

Brown voiced confidence that the leaders would agree in Washington on the need for reforms to global supervision and cross-border cooperation as well as on the need to reopen talks on a new global trade agreement.

Merkel made no mention of a German economic stimulus programme widely trailed in national media, which a senior legislator in her ruling coalition said would be worth 20-25 billion euros ($ 26 billion-$ 32 billion).

Brown defended the decision he made back in 1997 to make the Bank of England independent.

“It’s absolutely the right idea. It’s stability and an anchor for our financial and economic system,” he said.

“The Bank of England has brought down interest rates twice recently. They continue to look at what they can do for the future, but I think we’ve got to understand that the way to deal with this global problem … is by a comprehensive set of measures,” he said, referring to interest rate cuts, tax cuts and British efforts to help homeowners and small businesses.

“I think you’ll see us, in the next few days, in a position to do more to help people face what is a global problem,” he said.

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ABU DHABI, QATAR BUY STAKE IN BARCLAYS BANK

Posted by Gilmour Poincaree on October 31, 2008

Friday, 31 October 2008

by Steve Slater

GULF INVESTORS - Barclays Bank to raise $12 billion from Abu Dhabi and Qatar - Getty Images - British British bank Barclays Plc is to raise 7.3 billion pounds ($12.1 billion) from investors from Qatar and Abu Dhabi and others to allow it to avoid taking government rescue cash, it said on Friday.

Britain’s second biggest bank said it is raising up to 3.5 billion pounds from Sheikh Mansour Bin Zayed Al Nahyan, a member of Abu Dhabi’s royal family. That could give him a 16.3 percent stake in the bank.

It is raising up to 2 billion pounds from Qatar Holding and 300 million from Challenger, an investment vehicle of a member of Qatar’s royal family.

That could leave Qatar Holding with a 12.7 percent stake and Challenger with 2.8 percent.

Barclays shares initially jumped after the news as investors welcomed the bank’s ability to raise cash in tough markets and an adequate trading update, but later eased back. At 1.30pm Dubai time they were unchanged at just over 205 pence after touching 228p.

The bank said group profit in the first nine months of this year was “slightly ahead” of the same level a year earlier.

It took a net writedown of 129 million pounds from credit market writedowns for the third quarter, but said 1 billion pounds of gains on debt it carries were reversed in October.

Barclays’ investor base has been transformed in the past two years, as it has raised funds from investors in China, Singapore and Japan as well as the Middle East and the bank expects to benefit commercially from the links as well as getting cash.

“There has been a significant shift in the availability of capital and economic power in the world over the last five years and we’re ensuring we’re aligned with those changes,” said John Varley, Barclays chief executive.

The bank is seeking to raise up to a further 1.5 billion pounds from the sale of MCNs (mandatorily convertible notes) with existing and other investors.

Asked on a conference call whether Barclays has enough capital to avoid more fundraising, Varley said: “Yes, we have what we need.”

Barclays earlier this month turned down an offer of government funds under Britain’s 400 billion bailout package and said it would raise capital privately.

Rivals Royal Bank of Scotland, Lloyds TSB and HBOS have agreed to take up to 37 billion pounds of taxpayers’ funds to help rebuild balance sheets hit by the credit crisis and prepare for possible recession.

Barclays said when the government’s recapitalisation plan was announced that it planned to raise about 6.5 billion pounds, with 3 billion from the sale of preference shares and the rest from selling ordinary shares. It had until the end of March to raise funds.

Those sales were expected to increase the bank’s core tier 1 capital ratio to about 8 percent, analysts estimated, up from 6.3 percent after a 4.5 billion pounds fundraising in July. It will lift its overall tier 1 ratio to above 11 percent from July’s 9.1 percent.

Barclays has lost billions of pounds from credit-related asset writedowns and is faced with a sharply slowing UK housing market and economy, but it has fared better than many rivals.

It has raised funds from investors in China, Singapore and Japan as well as Qatar.

The bank expects to gain a competitive advantage by raising capital privately, while RBS and others will have the government as a major shareholder. (Reuters)

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Posted in ABU DHABI, BANKING SYSTEMS, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, QATAR, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS | Leave a Comment »

LIMITLESS INVITES PHASE TWO BIDS (Dubai)

Posted by Gilmour Poincaree on October 29, 2008

Staff Report

Published: October 28, 2008, 23:32

Dubai: Limitless, Dubai-based master developer with Dh367 billion development portfolio, on Tuesday said it has invited construction firms to bid for the second phase of earthworks on Arabian Canal, its $11 billion (Dh41 billion) waterway that will reshape part of New Dubai and add a 75-kilometre long waterfront for real estate development.

The contract will involve the excavation of around 300 million cubic metres of earth along an 8.5 kilometre stretch of the canal’s route.

It follows the appointment last month of Abu Dhabi-based Tristar for phase one, where 100,000 cubic metres of earth is being moved each day and more than 200 million cubic metres will be excavated in total.

Ian Raine, who is the Project Director for Arabian Canal, said: “This is the second of around 10 packages that will be awarded for the excavation of our 75 kilometre waterway. Work is well underway on phase one.”

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SAUDI ARABIA, UAE POUR $10 BLN INTO BANKING SYSTEM

Posted by Gilmour Poincaree on October 22, 2008

Tuesday October 21 2008

Reuters

(Refiles with new headline)

by Souhail Karam and Daliah Merzaban

RIYADH/DUBAI, Oct 21 (Reuters) – Saudi Arabia and the United Arab Emirates poured up to $10 billion SAUDI OILinto their banking systems to boost liquidity as Gulf Arab policymakers prepared on Tuesday to discuss a joint response to the global crisis.

The Saudi central bank made deposits worth up to $3 billion with banks struggling to cope with the turmoil while the UAE Ministry of Finance funnelled 25 billion dirhams ($6.8 billion) into the system as part of a 70-billion-dirham rescue facility.

States across the world’s biggest oil-exporting region are trying to cope with the worst global financial crisis since the Great Depression, which threatens to put the brakes on a regional economic boom.

“The main challenge for Gulf states is to shore up confidence in the banking system and get the credit cycle going again,” said Mushtaq Khan, regional economist at Citigroup Global Markets.

“They can’t have diverging money-market conditions. Each country is most likely going to make decisions based on demands of their separate markets.”

In the past month, Gulf central banks and governments formulated separate responses to the crisis, including guaranteeing bank deposits, easing lending restrictions, setting up emergency funds and pouring money into ailing stock markets.

The Saudi Arabian Monetary Agency (SAMA) took the latest step to defrost interbank lending by pouring in between $2 billion and $3 billion in the form of riyal and dollar deposits with banks on Monday, bankers said on Tuesday.

The UAE finance ministry said it had transferred 25 billion dirhams into banks based on the size of their loan portfolios.

“The Ministry has placed the first portion of the payment to support liquidity at banks,” the ministry said. “This portion … is designed to support the capital of national banks.”

Interbank rates eased on Tuesday after the moves, with the three-month Saudi Interbank Offered Rate falling to 4.6375 percent from 4.65125 percent.

SHOCKWAVES

Saudi Arabia, the UAE and four other members of the Gulf Cooperation Council (GCC), which is preparing for monetary union, will meet on Oct. 25 to discuss how they can better coordinate policy responses, Gulf sources said on Tuesday.

The global turmoil has hit the Gulf region after six years of high oil prices allowed state and private investors to funnel billions of dollars into industry and infrastructure projects.

Banks are now struggling to finance these projects, leading economists and policymakers to expect project delays and cancellations.

“It is normal that we be affected by what is happening in global markets,” UAE Minister of Economy Sultan bin Saeed al-Mansouri said.

“But there are elements of confidence and protection that are relevant to the particulars of our economy and its diverse base of income,” he said in remarks reported by the daily Emarat al-Youm.

This week’s meeting of finance ministers and central bank governors in Riyadh follows a call from Saudi Arabia’s highest economic body for Gulf states to look at how they can coordinate their policies as Western economies head for a likely recession.

It will also happen the day after producer group OPEC holds its own emergency summit on oil prices, which have tumbled since hitting record highs above $147 a barrel.

“Most Gulf central banks have already started moving in some way or the other. If they sit and discuss it they can come out with formulated ideas,” said EFG-Hermes economist Monica Malik.

RELIANCE ON OIL

Despite lower oil prices, Gulf states are poised to continue boosting their budgets to keep their economic diversification plans on track, economists said. The UAE said on Tuesday it was raising state expenditure by 21 percent next year.

Kuwait’s leader, Sheikh Sabah al-Ahmad al-Sabah, also urged parliament and the government to push through reforms to help move the economy away from a reliance on oil exports.

Disputes between parliament and government have often paralysed legislative powers in Kuwait, the only Gulf oil producer that does not peg its currency to the dollar.

Kuwait’s central bank — which cut its benchmark interest rate this month — said last week it had shifted its priority away from fighting inflation to boosting confidence in its banking sector.

“The priority for all Gulf states is going to be to look out for their domestic economies,” Khan said.

(Writing by Daliah Merzaban; additional reporting by Inal Ersan in Dubai, Ulf Laessing in Kuwait and Saleh al-Shaibany in Muscat; editing by David Stamp)

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PUBLISHED BY ‘THE GUADIAN’ (UK)

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