Middle East Business News Review – 26 July
Middle East Business News Review – A look at today’s important financial news and business updates from the Middle East and North Africa
Australian flag carrier Qantas said on Thursday it is holding talks with carriers including Emirates to give a shot in the arm to its struggling international arm.
Qantas saw its share price soar almost 10% after the revelation. The Australian airline has seen its fortunes slumping 83% during the first-half of this year.
Kuwait National Petroleum Company (KNPC) announced on Thursday it is going to build the Al Zour oil refinery despite political tensions that continue to put many economic development plans on hold.
A senior executive at KNPC said the government expects to announce next month the winner of the Middle East’s largest oil refinery project management and consultancy (PMC) contract, a Reuters report said.
Oman announced on Wednesday its Ministry of Transport and Communications (MoTC) has initiated work on the feasibility study of the ambitious GCC railway project to boost transport services across the region.
The first stage of the railway project will start at the Oman-UAE border comprising of the 136km Al Ain-Buraimi-Sohar stretch, Sohar to the Oman-UAE border (58km Khatmat Malaha-Fujairah stretch), Sohar to Muscat (242km) and from Muscat to Duqm (486km), Muscat Daily quoted the ministry as saying.
A senior Qatar central bank official on Thursday urged Gulf Arab states to press on with their own monetary union project, while learning lessons from the eurozone.
“I think that the GCC (Gulf Cooperation Council) countries should benefit from the euro experience and continue with the GCC monetary union project without a delay,” Khalid Alkhater, director of Research and Monetary Policy at the bank, said.
He emphasised that the monetary union is a strategic long-term project for these countries on both economic and political scale.
“The costs of not establishing it could be very high for the GCC countries…in the future,” he said in an interview with Reuters.
Iraq’s Cabinet has agreed to allocate US$500m to resolve a long-running dispute with Kuwait over the debts of Iraqi Airways.
The Cabinet asked parliament to approve the allocation of US$300m from next year’s budget and another US$200m the following year, State Minister Ali Al Dabbagh told Bloomberg.
Kuwait Airways has been seeking US$1.2bn in compensation for ten aircraft taken during Saddam Hussein’s invasion of Kuwait in 1990. Iraq in March said it had agreed to pay Kuwait US$300m in cash and invest US$200m in a joint Iraqi-Kuwaiti airline venture.
In return, Kuwait agreed to suspend legal actions against Iraqi Airways.
The Pentagon has announced that it will be selling 60 Patriot missiles to Kuwait as a part of Kuwait’s mission to reinforce its defense system amidst increasing Iran tensions.
The deal, which is estimated to be worth about $4.2 billion, was announced by the Defense Security Cooperation Agency (DSCA), which manages all US weapons sales to foreign countries. It notified Congress of the proposed sale, and Congress now has 30 days to raise objections should there be any.
Gulf oil producers have one of the lowest joblessness rates in the world but unemployment among nationals, mainly the youth, remain a problem because of their heavy reliance on expatriates, according to Saudi bank study.
Unemployment among native citizens in the six-nation Gulf Cooperation Council (GCC), the richest in the Arab world, has remained far higher than the rate among the expatriates, who come to the region for work and leave once they lose their job, Saudi Arabia’s largest bank, National Commercial Bank ( NCB ) said in the study.
For decades, free education was the flagship of Morocco. However, due to the current world economic crisis, this period is coming to an end. The Moroccan government has decided to end free higher education in the context of reforming the university system. The change will be presented in the next finance bill to the parliament, according to Moroccan Minister of Higher Education, Scientific Research and Staff Training Lahcen Daoudi.
Boeing’s most recent Long-Term Market Outlook brings good news of the growth potential for Middle Eastern airlines over the next 20 years. Currently, the main factor holding them back is the high proportion of airspace in the area that is under military control.
According to the report, “Middle East airline traffic is projected to grow 6.4 percent, compounded annually, during the next 20 years. Revenue passenger-kilometers will more than triple by 2031, supported by healthy development of long-haul, short-haul, and domestic travel.”