Economic Outlook
Proposed law puts 20 year limit on expat residency in Kuwait as the residency
should have a maximum of ten years that can be
renewed only once, according to the strict
conditions. The law also stated that no foreigner
in unskilled and semi-skilled occupations should
be allowed to stay in Kuwait when he reaches
the age of 50 while those who have skilled jobs,
such as doctors, advisers and university
professors, should be able to stay until they are 70. The suggestions are part of a
draft law the lawmaker is presenting to parliament to address what he called
demographic imbalances and the presence of a massive marginalized labor force
in the country. It’s worth mentioning that Kuwait is home to around 2.8 MM
foreigners, mainly unskilled Asian laborers in the construction sector and
domestic helpers, who make up more than two-thirds of the total population.
Egypt's central bank kept its main interest rates unchanged but said it was keeping
an eye on the risks to recovery posed by increasing concerns about the global
economy. The central bank raised benchmark interest rates at its meeting in midJuly to keep inflation in check after the cuts to electricity and fuel subsidies, while
it kept rates on hold as well as overnight deposit and lending rates unchanged at
9.25% and 10.25% respectively at its last meeting in September. On the other
hand, inflationary pressure has begun to ease after a spike following cuts to energy
subsidies in July while the economy is showing signs of strengthening recovery as
urban consumer inflation eased to 11.1% in September after surging to 11.5% in
August in the wake of cuts to fuel and electricity subsidies. Core inflation eased to
9.15% in September from 10.07% the previous month.
Experts in energy and environment sectors have called for removing government
subsidies for water and energy for environmental and financial reasons which may
pave the way for higher utility prices in the UAE. It’s known that the cost of fossil
fuels is much lower than its real cost and the external costs of fossil fuels such as
carbon costs, health and environmental costs (for example seven million global
deaths annually due to air pollution) are not included in its price. Sooner or later,
Abu Dhabi has to move away from the subsidized regime, because residents do
not consume water and electricity wisely with low-tariffs. As Abu Dhabi has the
highest per capita consumption in the world (around 550 liters) whereas in Dubai,
the consumption was reduced when subsidies were reduced.
The partners in Israel's offshore Tamar gas field said that they are negotiating the
sale of at least 5 BN cubic meters (bcm) of gas over three years to private
customers in Egypt via an old pipeline built to send gas in the other direction. The
supplies would pass through an underwater pipeline constructed nearly a decade
ago by East Mediterranean Gas (EMG). Egypt had been selling gas to Israel in a
20-year agreement, but the deal collapsed in 2012 after months of attacks on the
pipeline by radicals in Egypt's Sinai Peninsula. It has since been out of
commission and EMG is suing the government of Egypt for damages. Recent
offshore discoveries such as Tamar, with an estimated 280 bcm of gas, and
Leviathan, which is more than twice as big, have turned previously importdependent Israel into a potential energy exporter.
GCC countries plan to start their peddled joint tourist visa system by first
targeting expatriates as beneficiaries. This will be done on an experimental basis
for security reasons and later, nationals of some 35 countries, many from the Arab
bloc, will be able to enjoy the privilege. The idea behind a joint entry visa scheme
for the six member states is to boost tourism in a big way. However, the interior
ministries will look into security issues and see how they could possibly allow the
issuance of such visas. Rules for issuing joint visa would likely be framed by the
GCC tourism committee and all recommendations are being forwarded to the
GCC Secretariat-General for approval. It is likely the secretariat would make
slight amendments before ratifying them, which is expected by October 22.
Investments in Saudi travel and tourism will reach 150 BN SR in 2014. In KSA,
the inbound tourism is a major contributor to commercial and economic
dynamism. Industry observers project investments in Saudi travel and tourism to
stand at 150 BN SR in 2014 wherein 50 BN SR would come from domestic
tourism and 100 BN SR from inbound tourism. Saudi domestic tourism has grown
significantly lately, whereby spending soared from 59 BN SR in 2010 to 103 BN
SR in 2014 thereby becoming an economic generator that can be included in the
list of sustainable investment opportunities. Investments in the hotel and hotel
apartment sectors are also projected to reach more than 95 BN SR over the next
ten years.
In a milestone development for Sultanate Oman pivotal hydrocarbon sector, Oman
Oil Company Exploration and Production LLC (OOCEP), the upstream subsidiary
of the Sultanate's energy investment arm, Oman Oil Company, is preparing to
bring its Abu Butabul tight gas field in Block 60 into commercial production,
thereby becoming the first Omani operator to add unconventional tight gas to the
nation's expanding gas base. The company began commissioning its newly built
Gas Processing Plant at the start of a long exercise that will culminate in the
production, processing and export of unconventional tight gas into the
Government Gas System for the first time in the country's modern history.
A Saudi court sentenced one person to death and 21 others to various jail
sentences between five and 28 years after they
were convicted of a range of militant crimes,
including embracing militant ideology, the
possession of missiles in their apartment and firing
on security services during a raid on their
apartment in Mecca, killing one security officer
beside setting up training camps and identifying
oil locations to hit. It’s worth mentioning that Riyadh's concern about Islamist
militants has increased over the past two years as conflicts in Syria and Iraq have
attracted more of its own citizens to travel there to join groups fighting in the
name of jihad.
Egypt, Ethiopia and Sudan, the three main countries that share the Nile River's
waters, have moved towards an agreement to study whether the Renaissance
Ethiopian Dam would disturb the flow of water to downstream countries. But
while the countries continue talks, construction will proceed on the Renaissance
Dam, which will be Africa's biggest dam and aims to provide cheap power for
countries as far away as South Africa and Morocco. However, Cairo is concerned
that filling the new dam's 74 BN cubic meter lake will temporarily cut the river's
flow, and that surface water evaporation from the huge new lake will then reduce
it permanently in the time that the Ethiopian water minister refused to offer any
hard guarantees that the dam would not adversely affect Egypt.
Egyptian government wants Etisalat to
list
The Egyptian government wants Etisalat
Misr, the Egyptian unit of Abu Dhabi stateowned Etisalat, to be listed on the national
exchange. Etisalat is currently considering
listing the Egyptian unit in a reported planned 500 MM USD (1.8 BN Dh) sale
that would revive the country’s initial public offerings. A successful listing would
make Etisalat Misr the only mobile operator listed on the Egyptian Exchange
(EGX), which is up by almost 35% this year.
ROTANA announced its expansion plans in Riyadh, Jeddah, Al-Khobar, and
Dammam.
Rotana is preparing to open six new hotels as a key part of its expansion and
development plans for the Saudi market and other the markets in the region. It will
work to promote the concept of economy hotels, a relatively new concept in the
kingdom and which will offer guests a wonderful stay experience at convenient
prices while still providing them with the highest standards of hospitality. The
announcement of Rotana's expansion plans comes as they approach the opening of
the "Rosh Rayhann Hotel " in Riyadh during the first quarter of 2015.
Huawei Powers Up Operations with IT Upgrade for Oman Electricity
Transmission Company
In its efforts to power the future growth of the Omani economy, the Oman
Electricity Transmission Company (OETC) has announced the completion of an
advanced IT project done in partnership with Huawei -- a leading global ICT
solutions provider -- to enhance collaboration between its offices and provide a
foundation for a more reliable and secure communications network. Since the
privatization of the electricity sector in Oman, OETC has been one of the largest
electricity companies in the Sultanate with its transmission processes organized
through various branches and plants across the country. In particular, OETC has
recently expanded operations in both the far north and far south of the Sultanate.
Qatar Airways signs MOU for 20 private jets
The MoU “establishes the initial agreement” to order up to 20 Gulfstream aircraft,
including firm orders and options. The aircraft will be used for Qatar Airways’
private jet subsidiary Qatar Executive. The announcement was made in
conjunction of Gulf streams G500 and G600 private jets. Qatar Executive’s
current fleet consists of Bombardier Global Express, Global 5000 and Challenger
605 aircraft.
Damac widens scope for Paramount alliance
Damac Properties has expanded the terms of its agreement with Paramount Hotels
& Resorts to additional cities in the region. This paves the way for the brand to
prepare for its first appearance in Abu Dhabi, Jeddah and Istanbul in the next five
years, apart from the four projects announced earlier for Dubai and Riyadh