GCC Summary # 103

SUMMARY

Gulf Economy
Qatar's index slumped to its biggest loss for seven weeks yesterday as investors sold off bank stocks after a muted response to bumper earnings from the country's largest listed lender. Dubai slunk to a new five-week low, dropping 2 percent, Abu Dhabi fell for a fifth session and Oman extended its losing streak to three, but Kuwait and Bahrain rose and Saudi Arabia hit a 12-week high on optimism its banks had turned the corner after a tough 2009. Qatar National Bank fell 2.3 percent as the feel-good factor from a 65 percent rise in quarterly profit proved fleeting. Doha's benchmark fell 2.4 percent. On the other side more than 300 officials and businessmen from Gulf oil producers and India will meet in Saudi Arabia in mid-2010 to discuss joint projects and opening up of their markets to each other's products. While Kuwaiti Finance Minister is still hopeful on UAE return to fiscal union. Meanwhile the Gulf Cooperation Council joint rapid deployment force could be set up this year. GCC states had agreed at their last summit in Kuwait in December to create a joint rapid deployment force that would address security threats in the world’s top oil-exporting region. Abdul Rahman Al Atiyyah, GCC secretary general, said that the force would be one of the pillars supporting stability and security in the region.
Saudi Arabia’s economic recovery this year will most likely follow a gradual, steady track. Economic growth should accelerate following a stagnant and difficult year, inflation will remain at manageable but historically high levels and expansion of the private sector is set to take a turn for the better along with credit expansion at Saudi banks. The government, through a stimulatory public spending program, will continue to lead the pick up in the economy as Saudi oil averages around $74 a barrel and low levels of government debt bolster the Kingdom’s fiscal position. A higher oil price environment will enable Saudi Arabia to experience comfortable budget and current account surpluses.
The property market in Qatar, that witnessed a downturn during 2009 on the back of the global financial crisis is expected to recover this year, with a great degree of stability in demand and prices. House rents fell by 25 to 30 percent over the past one year, while the prices of real state properties dipped by 30 to 40 percent. The market is currently witnessing a surge in supply of residential properties, resulting in lower prices.

Yemen Turmoil
Yemeni warplanes struck outside a desert village near the border with Saudi Arabia on Friday, killing six Al-Qaeda operatives, including the group's top military leader in the country, security officials said. The military chief, who escaped a government attack targeting him last month, was one of Yemen's most-wanted militants and had plotted to assassinate the US ambassador. Yemen, with the help of US counterterrorism aid and training, has intensified an offensive against an Al-Qaeda offshoot that has dug in to pockets of the mountainous, impoverished nation, sometimes under the protection of powerful local tribes that have their own grievances with the weak government. Meanwhile Yemen decided not to issue tourist visas on arrival to foreigners in an effort to prevent militants entering the country as it steps up its war on Al-Qaeda. On the other side the number of Saudi soldiers died fighting Yemeni infiltrators during the last three months has increased to 113.

International Front
Turkish Premier Recep Tayyip Erdogan visited the headquarters of the Organization of the Islamic Conference in Saudi Arabia and expressed his satisfaction over the 57-member group’s increasing role on the world stage. Addressing a press conference at the residence of OIC Secretary-General Ekmeleddin Ihsanoglu, Erdogan thanked the King Faisal Foundation for awarding him the prestigious King Faisal International Prize for Service to Islam.
The first 100-tonne aid plane of the UAE air bridge to relieve quake victims in Haiti left Abu Dhabi last week. Meanwhile Qatar Red Crescent has launched an emergency appeal to gather around 4 million Qatari Riyals of financial aid for those affected by the earthquake that hit Haiti last week. It was launched in a press conference held Monday in the presence of the Secretary General of the Qatar Red Crescent Society (QRCS) and its Board's Deputy Chairman, Dr Mohammad Bin Ghanem Al Ali al Mahdaadi and the Venezuelan Ambassador to Qatar, His Excellency Dr Juan Antonio Hernandez. "
"As part of a growing business interest in foreign countries, Kuwait has recently signed two investment projects with Kazakhstan," disclosed Abdulwahab Al-Wazzan, Honorary Deputy Treasurer Kuwait Chamber of Commerce and Industry (KCCI). He met with members of Kazakhstan economic delegation yesterday at its headquarters in Kuwait City. The two sides agreed to carry out projects in Astana-the capital city of Kazakhstan. Meanwhile, Kuwait has denied allegations made by Iraqi MPs that it is holding Iraqi land, either offered by the former Iraqi regime or annexed by its citizens. "Kuwait has never sought to expropriate land of other countries and has repeatedly called for the full respect of international borders," the An Nahar daily reported Kuwaiti diplomats as saying on Sunday. "What the Iraqi officials are referring to is in fact Kuwait land owned by Kuwaiti citizens, and this is clearly indicated in the internationally recognised maps. On the other side Kuwaiti lawmakers have often criticised the government for providing assistance to Iraq, which invaded their country in 1990. A Kuwaiti MP has lashed out at his government after it announced plans to fund the building of a hospital in Basra and homes for Iraqi farmers, charging that it was making "unjustified concessions" to Iraq. While Tehran said that it was ready to talk with the Kuwaitis on the "thorny" maritime border issue as Iran's parliament speaker Ali Larijani is making a visit to Kuwait on Saturday, Kuwaiti and Iranian sources have said. During the two-day visit, part of a tour that will also take him to Uganda and Kenya, Larijani, who will be accompanied by several members of the parliament and foreign ministry officials, will discuss with Kuwaiti officials bilateral relations and cooperation, the sources said without elaborating.

Social Front
Scientists on board the Tara, a sailboat that has set out on a three-year scientific expedition across the oceans to study the secrets of the earth’s climate and marine environment, have said they are keen on establishing links with King Abdullah University for Science and Technology (KAUST). Two of the research scientists of Tara Oceans told reporters at the French Consulate General on Saturday they would visit the KAUST to meet with officials of the university before sailing out of the Jeddah Islamic Port. Meanwhile Egypt, Russia, Saudi Arabia and the United Arab Emirates are the first countries to win preliminary approval for Internet addresses written entirely in their native scripts. Since their creation in the 1980s, Internet domain names have been limited to the 26 characters in the Latin alphabet used in English, as well as 10 numerals and the hyphen. Technical tricks have been used to allow portions of the Internet address to use other scripts, but until now, the suffix had to use those 37 characters.
In a few years time, Dubai will see more than 60 per cent of UAE nationals in private schools as an even greater number is currently enrolled in primary grades in these schools, according to the emirates education authority. In a trend where UAE nationals in private schools have increased in the last five years from 37.8 per cent to 52.3 per cent in 2008-2009, the head of education authority in the emirate said that the figures need to be watched and studied for future policies. This is the first time Dubai has reached this threshold of more nationals attending private rather than public schools. It is also the first time for any emirate in the UAE.
Bahrain’s labour minister has joked that he should be made member of the all-females Supreme Council for Women (SCW) for his persistent championing of women’s rights. Majeed Al Allawi made the light claim at the end of a week during which he had to face a barrage of criticism, mainly from women MPs for supporting calls to amend the private sector labour law in order to give women more rights, including more time to look after their children.

Labor Front
The UAE remains a popular destination among expatriate workers from all over the world as employment prospects in the country have increased by up to 8.3 per cent annually. It is also expected to maintain its upbeat growth in 2010, according to Careertunity.com, a private online recruitment portal in the Middle East. The trend is reflected in the surge in the number of job applications from expatriates at the web portal which maintains a huge database of various job candidates that is increasing every day. It further revealed that the unique situation of the UAE job market, which has been dominated by expatriate workers, has prevented it from being adversely affected by the global economic downturn, ensuring a steady supply of experienced professionals and international executives from the US, Europe, South Africa, Africa, Asia and the rest of the Middle East.

Environment
Special prayers to mark an annular eclipse in Saudi Arabia were held in mosques throughout the Kingdom on Friday morning. Yet turnout for the special salatul kusuf was very low since it was a weekend. The annular eclipse exceeded 11 minutes when viewed from the countries near the Indian Ocean – a record for the millennium. Such a long eclipse will not be seen until 3043. The annular eclipse, where the entire sun is obscured by the moon except for a blazing ring of light around the perimeter, was visible over a 300km wide track that encompassed half the earth. Meanwhile Civil Defense teams in Tabuk rescued over 75 people stranded in a number of valleys across the region following heavy rains and floods on Monday. Around 27 people were injured as a result of the rains, which caused schools to close and delayed commuters from reaching work. There were also power outages in several areas across the province. Gen. Suleiman Al-Huwaiti, head of the Civil Defense in Tabuk, said heavy rains flooded all of the province’s valleys. On the other side aid to most of the people displaced by the Nov. 25 flash flooding will come to an end on Thursday with Civil Defense officials asking people to return to their homes.
Now in Saudi Arabia the Passport Department has launched a service to enable exit and re-entry visas to be issued online. On another side, in an effort to curb dengue fever from spreading in Jeddah, the local Department of Health Affairs has added pharmacists to its war on dengue. A large pharmaceutical chain has agreed to distribute dengue awareness information in its stores and billboards. In addition to this effort, local health officials continue to push for awareness on how to reduce the risk of contracting the mosquito-borne disease. In the Same week, Shoura Council approved on Sunday a 5 percent increase in pensions paid to retired public servants. The house unanimously approved of the decision with an unprecedented ovation among its members. It was also decided to appoint a special committee to work out the modalities of making the payments to the pensioners. The move to increase pensions from the General Organization for Social Insurance (GOSI) follows a recent announcement to increase government retirement funds by 15 percent. Meantime a Riyadh court is considering a lawsuit against the Ministry of Social Affairs, which is accused of unreasonably delaying the provision of legal support for people who have problems with the ministry. The legal action comes from a group of 25 lawyers, who claim they were subject to a five-year delay in receiving their license to start practicing, even though they had already set up a charity for the purpose. The Administration Court is considering their case.
Saudi government is set to relax regulations governing the marriages between Saudis and non-Saudis. A revised draft law prepared by the Interior Ministry and the Cabinet’s Committee of Experts allows government ministers, judges, Shoura members and students on foreign scholarships to marry non-Saudi women. The new law, which replaces the old one issued 38 years ago, should be passed by the Council of Ministers. According to Article One, Saudis who are allowed to marry non-Saudis include ministers, members of the judiciary and diplomats at the Foreign Ministry. Other beneficiaries of the law are: Employees of the Royal Court, the crown prince’s court, the Council of Ministers, the National Security Council, and members of the councils and organizations chaired by the king and the crown prince, Al-Riyadh Arabic daily said. Staff at the Ministry of Defense and Aviation, the Interior Ministry, the National Guard, the Royal Guard and the General Organization for Military Industries including military and civilian officers as well as members of the Commission for Investigation and Public Prosecution, Customs staff and all students studying abroad under the government’s scholarship program are also allowed to marry non-Saudi women. “The above-mentioned Saudis are allowed to marry non-Saudis including GCC women after receiving permission from higher authorities,” says Article One of the revised draft law. Article Two allows Saudi men and women to marry GCC citizens. Saudi men can marry the daughters of Saudi women and non-Saudi men. But those who propose marriage should not be from categories mentioned in Article One. Paragraph Two of Article Three says a Saudi can marry a non-Saudi woman born in the Kingdom to non-Saudi parents. However, the law insists that the woman should have a valid resident permit and birth certificate issued by Saudi authorities. Here also the man proposing should not be from the categories mentioned in Article One.

Oil and Gas
Saudi Aramco has been entrusted with the task of building and financing the $10 billion Jazan refinery, which will have a capacity of 250,000 to 400,000 barrels per day.
In Bahrain, His Royal Highness Prince Salman bin Hamad Al Khalifa will inaugurate the firm at the site of Bahrain's historic first oil well at Jebel Dukhan. The new firm, Tatweer Development Company (Tatweer Petroleum), is a joint venture between Bahrain, UAE and US firms.