Middle East Business News Review – 15 July
The United Arab Emirates loaded its first cargo on Sunday from its multi-million dollar new oil export terminal on the Gulf of Oman, amid threats made by some Iranian MPs to close down the Strait of Hormuz.
Top UAE officials and executives from oil majors such as ExxonMobil, Shell and Total were present at the opening ceremony on the eastern coast of the country. The alternative route will make up to 75% of UAE’s exports.
A European Union ban on Iranian crude imports came into effect on 1 July and Iranian lawmakers have promised retaliation. Reuters said two Iranian military officials warned over the weekend that Iran could stop oil from sailing through the vital shipping lane.
Coffee and tea consumption in the Arab world more than tripled over the last decade with a whopping 85% increase in the UAE during the last three years alone, a report revealed on Sunday.
According to the latest coffee statistics released by the International Coffee Organisation (ICO), about 1.4 billion cups of coffee are poured a day, with the UAE emerging as the fastest growing market by volume for coffee in the world.
The world body added coffee volume sales are expected to register an 80% growth from 2009-2014, or a compound annual growth rate (CAGR) of more than 12% year on year over the same period. People in the UAE already drink nearly twice as much coffee as anywhere else in the GCC with consumption levels set to continue to grow at around 12% per annum until 2014.
Palestinian prime minister’s office announced on Sunday his government will receive $100 million from Saudi Arabia to help alleviate Ramallah’s stinging budget crunch.
Palestinian officials in Occupied West Bank welcomed the news as salaries for public sector employees have yet to be paid in full this month with festive month of Ramadan less than a week away.
The Saudi transfer, described by Palestinian officials as imminent, will partially help the Authority’s (PA) to meet some $300 million in expenditures this month. Officials in Ramallah are seeking the support of other countries as well to bridge the budget deficit estimated at over $1 billion for 2012.
An Iraqi government spokesman on Sunday demanded Turkey to stop ‘illegal’ transfers of crude oil from the autonomous Kurdistan region of northern Iraq or risk damaging bilateral ties.
His remarks come amid an Iraqi Kurdistan official’s statement in which he admitted that the Kurdistan Regional Government (KRG) has started pumping oil to Turkey without an explicit permission from Baghdad.
He also alleged that Ankara was contributing to the “smuggling of Iraqi oil” and warned that the matter will affect economic relations between the two countries.
Air Arabia, Middle East’s top budget carrier is the only airline from the Middle East that made it to the Top 10 in the ‘The Top-Performing Airlines (TPA) Study‘ in this year’s ranking conducted by Aviation Week, the leading global aviation magazine.
AirAsia topped the list with highest score of 81 and Air Arabia came close at 78. The study demonstrated the dominance of smaller and niche carriers in this year’s rankings.
The Aviation Week TPA Study is a leading annual ranking and competitive analysis for the global airline industry.
The TPA Study ranks the top 10 performing airlines worldwide, based on five different performance categories, including financial and operational performance.
Saudi Arabia is studying new regulations to criminalise insulting Islam, including in social media, and the law could carry heavy penalties, a Saudi paper said on Sunday.
“Within the next two months the Shura Council will reveal the outcome of study on the regulations to combat the criticism of the basic tenets of Islamic sharia,” unnamed sources with knowledge of the matter told al-Watan, adding that there could be “severe punishments” for violators.
Criticism penalised under the law would include that of the Prophet, early Muslim figures and clerics, it said.
The Middle East saw a one percent increase in international tourist arrivals in the first four months of 2012 compared to the same period last year.
According to new figures released by United Nations World Tourism Organisation, the region lagged global growth of five percent.
The increase in tourism came despite continuing economic uncertainties in some of the major outbound markets, the UNWTO said in a statement. The Middle East lost five million tourists last year due to the impact of the Arab Spring.
Saudi Aramco is once again set to showcase its commitment to environmental protection by constructing the Kingdom’s first mangrove eco-park in Ras Tanura.
The project will also be the first of its kind in the region and is set to breathe fresh life into an essential component of the Kingdom’s ecosystem.
Mangroves are a natural habitat for marine organisms and serve as a breeding ground for shrimp, crab and fish species — the lifeblood of the Kingdom’s fishing industry. The eco-park is part of the company’s effort to plant 1 million mangroves over the next five years — an unprecedented number in the Kingdom’s history.
After much deliberation, the Iraqi government announced that, beginning in 2013, they will begin removing three zeros from Iraqi banknotes. The change will take three years to complete. Despite economic experts staying Iraq is not ready to change its banknotes, the Iraqi Parliament and the Finance Committee both support the decision to redenominate the currency.
Iraq’s currency, the Iraqi dinar, currently has its smallest unit set at 250 dinars, the equivalent of only $0.20. The Central Bank of Iraq is going through the efforts to remove the zeros in order to redenominate the Iraqi dinar. MP Hassan Ozman of the Iraqiya List believes that this will work for Iraq and benefit the economy due to the measures’ success in other countries. Ozman also said that security measures would be taken to distinguish genuine notes from fake ones.