Afghans still rely on imported goods [GALLO/GETTY]
A dormant industrial park cordoned off by a wall stands on the main highway outside the northern Afghan city of Mazar e Sharif.
Funded by USAID, the US government's development aid arm, the park was the representation of hopes for a flourishing market-led economy in Afghanistan, an economic policy that was supposed to put the war-torn country back on its feet. But it lies strangely silent, lacking the hum of machinery and noise of human activity. A non-starter in the absence of basic requirements such as power and water.
In a reconstruction effort led by Western countries and dominated by the US through its sheer political clout and large financial contribution, Afghanistan adopted the free-market approach with little debate, less research and none of the existing conditions that have presaged a shift to such an economy in western countries.
The ideology was enshrined within the 2002 National Development Framework, but there were "no discussions with civil society or political parties" says Mudasser Hussain Siddiqui, a policy research manager with Action Aid in Afghanistan. "It was formulated by citizens or Afghans residing in the US and led by the World Bank," he says.
More recently, the approach was enshrined as one of the defining tenets of the vision for Afghanistan as "a society of hope and prosperity based on a strong private sector-led market economy" in what is known as Afghanistan's National Development Strategy (ANDS), finalised and adopted at the Paris Conference in June 2008.
Four months later, despite the spectacular collapse of the market in Western countries and an ongoing debate over the pros and cons of the value of the market-led economy in those nations, there is little discussion here in Afghanistan about the approach and what it has delivered.
Endorsing ANDS, Michael Yates, the Afghanistan mission director of USAID, said: "The US government and the broader donor community are committed to helping Afghanistan achieve this important vision."
Reform 'laboratory'
But Bahman Hares, an Afghan working with Action Aid, laments the fact his country has become "a laboratory" for different policies from other countries.
And Haroun Mir and Idrees Rahmani, researchers for the Afghanistan Centre for Research and Policy Studies, argue that ambitious economic reforms were launched without adequate thought and planning.
"International institutions have brought policies studied by foreign experts and imposed them on the government for implementation," they say.
Afghanistan has had to follow these policies in order to get debt relief and access to financial and technical assistance from these institutions.
Yates argues that the telecom sector is a good example of the private-sector model.Afghanistan's four mobile companies recently surpassed $100 million in combined quarterly revenue and have invested more than $1.3 billion in the economy. The beneficiaries of this 100 per cent, private-sector led, market-oriented achievement are Afghans, he says. The investments stay in Afghanistan, the jobs go to Afghans, the taxes paid by the telecoms companies go to the Afghan government – allowing the government to offer greater public services to its people. The success of Afghanistan's telecoms sector serves as a model to the rest of the economy, and to the world, of what can be achieved with the right policies, he says.
But is the telecom sector a model or an exception?
Deregulation has not automatically translated into growth and the industries to supply even basic goods is almost non-existent.
Lack of competition
Afghan reconstruction has been at a
slow pace.A walk around Kabul, one of the most economically active areas of the country, tells its own tale.Mushrooming houses, shops stocked with goods, the chaos of traffic and throngs of people suggest the hustle and bustle of economic activity.A second look however reveals a different story.Walk into the shops stocked with goods and a look at the manufacturer's origin will reveal that the goods are imported.Food items are largely sourced from Pakistan and Iran while household goods are largely Chinese.While few countries in the world are exempt from the threat of cheap imports, Afghanistan's tragedy is that here there are no indigenous competitors, no local industry that can even provide an alternate source of goods and services beyond the subsistence agricultural economy that has always existed.
Despite this, the Afghan government and its international backers follow a low-tariff regime in the name of a free-market economy, even while countries exporting a massive amount of goods into Afghanistan continue to follow protectionist policies and impose tariffs on Afghan carpets, raw hides and plants.
Six years into reconstruction, the promise of a better economic future, stable environment and improved security still remain elusive.Despite growth figures that are quoted frequently in a bid to prove signs of economic recovery, the benefits of economic growth remain skewed and despite a high rate of growth (13.5 per cent in 2007), food insecurity has increased with 4.5 million people facing severe food shortages, according to the World Food Programme.
According to the WFP, more than half the population, estimated at 24.9 million, live below the poverty line and the 2005 National Risk and Vulnerability Assessment found that around 6.6 million Afghans do not meet their minimum food requirements.
Targeting the poor
Are free-market policies benefitting
Afghanistan's poor?
Opinion is divided on the reasons for the lack of economic development.In a recent paper, ACBAR, the umbrella organisation for more than 10 non-governmental organisations, argued that a pilot participatory survey had revealed an urgent need for pro-poor targeted schemes rather than the "trickle down" theory of the market place.The government, it said, must develop policies and programming that "explicitly contain components and programmes that directly included the poor in targeted initiatives".For an effective trajectory of poverty reduction, the poor cannot be an add-on category, it said.Yates, however, argues a strong free-market economy "attracts new businesses, creates jobs and ensures higher demand is met by higher productivity, not higher prices".
Freddy Bob-Jones from the British government's aid arm, DFID, in Afghanistan, also argues in favour of the free-market approach, saying "recent evidence shows the failure of the market economy has been caused primarily by state failure through corruption, lack of policy clarity and good infrastructure".
"The state is standing in the way of the growth of the private sector. Growth in the telecom sector shows the potential for commercial success - the government has deregulated in that area and the sector has grown massively."
But some economic analysts feel that the free-market policy does not take into account the very real absence of power, water and roads, which continue to present the biggest stumbling blocks to the growth of indigenous industry, along with the prevailing insecurity.
Power failures
"Unfortunately the debate is among experts from donor countries and international multilateral organisations and does not include Afghan voices." Haroun Mir and Idrees Rahmani, researchers for Afghanistan Centre for Research and Policy Studies
According to current government statistics, only 20 per cent of the population have access to public power (grid-supplied) "on certain days for a limited number of hours".On a per capita basis, the electricity generating capacity is "well below what it was in 1978", while on water resources the national development strategy refers to the current "unclear delineation of responsibilities between ministries with regards to the water strategy" adding "co-ordination between water-related institutions remains weak".While a considerable amount of roads have been built or repaired, they are highly unstable due to the increasing insecurity.Rahmani and Mir say Afghanistan is far away from meeting other basic free-market prerequisite conditions as well."A market-led economy without basic requirements like power, water and roads leaves investors with no incentive to invest," says Action Aid's Siddiqui.
Siddiqui feels some form of protectionism is required to allow the domestic industry to grow as, without that, it is more cost-effective for businessmen to import cheap goods than produce them in Afghanistan.Jones agrees that "there could be some protection in a neutral way, by creating infrastructure, some limited protection in areas like value-added agriculture" but insists that this has to be limited.An earlier assessment of the free-market policy by the Afghanistan Research and Evaluation Unit had, however, argued for more, rather than less, state intervention, saying the market on its own would not deliver the wider benefits expected of it.Asked whether the market-led approach could work in Afghanistan if privatisation was on track and in the absence of corruption, Jones states: "I cannot give a definite answer to this. It needs more analysis." Both Mir and Rahmani, however, feel the debate has never included Afghans.
"Unfortunately the debate is among experts from donor countries and international multilateral organisations and it does not include Afghan voices from civil society and the business community," they say.
Both, it seems, would seem to have some grounds for their critique.
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
Saturday, 25 October 2008
Friday, 17 October 2008
Claiming Jewish Communal Property in Iraq Michael R. Fischbach
On June 23, 2008, representatives of Iraqi Jewish communities in several countries met in London to form a new group, the World Organization of Jews from Iraq (WOJI). According to a press release issued shortly after the meeting, the purpose of WOJI was to “protect, preserve and promote Jewish communal assets remaining in Iraq and to protect, preserve and promote Iraqi Jewish heritage, including holy sites and shrines remaining in Iraq.” Iraq is home to the oldest continuously present Jewish community in the world. After the June 1941 farhud (attacks on Jews in the wake of the British invasion of Iraq) and the harsh measures directed against certain Jews during the first Arab-Israeli war of 1948, Jews began to emigrate from Iraq, and from 1950 to 1951 alone, nearly 120,000 of Iraq’s remaining 135,000 Jews left the country, mainly for Israel. The law required those leaving to relinquish their citizenship, and the Iraqi government later sequestered the property left behind. Jews continued to emigrate in the years that followed, to the point where it is estimated that only about ten Jews live in Iraq today. Only one synagogue, the Me’ir Avraham Taweq Synagogue in Baghdad, was still open at the time of the US invasion in March 2003. Many other closed synagogues, along with Jewish shrines and other communal property, still remain in the country, however. What is the fate of this property as a Jewish endowment? Enter WOJI.
WOJI was the brainchild of Mordechai Ben Porat, founder and chair of the Babylonian Jewry Heritage Center (BJHC) in Or Yehuda, Israel. Born in Baghdad in 1923, Ben Porat immigrated to Palestine in 1945, but returned to Iraq to work with the Israeli foreign intelligence service Mossad in Baghdad during the period of mass Iraqi Jewish emigration to Israel in 1950–1951. Ben Porat and his accomplices were active in coordinating Jewish emigration, and even were accused of orchestrating a series of bombings of Jewish buildings from 1950 to 1951 in the hopes of sparking a larger and speedier Jewish exodus.[1] After his return to Israel, Ben Porat entered Israeli politics and was elected to the Knesset as part of the Labor Alignment. By 1975 he had risen to the post of vice chair of the Knesset. That same year, he formed the World Organization of Jews from Arab Countries (WOJAC). Ben Porat left the Labor Alignment in 1977, served as a minister without portfolio in the government of Menachem Begin and joined the Likud Party. For decades, he has remained one of the highest-profile Iraqi Jewish activists in the world.
Ben Porat took the first steps toward the formation of WOJI, and raised the issue of the fate of Jewish communal property in Iraq, in 2005. He and BJHC officials were likely influenced by the fierce intra-Jewish dispute over who should control the communal assets of the dwindling Jewish community in Egypt. In contention today are the hundred or so Jews still in Egypt and the various Egyptian Jewish heritage groups abroad, including the Historical Society of Jews from Egypt in New York, the World Congress of the Jews of Egypt in Israel and the Association Internationale Nebi Daniel in France.[2] No comparable group existed for Iraqi Jews, so Ben Porat and two other Iraqi Jews—former WOJAC Chairman Moshe Shahal and BJHC Deputy Chairman Aryeh Shemesh—arranged for meetings among Iraqi Jewish expatriates in Israel, New York and London to discuss the matter.[3]
More controversial, however, is what another BJHC official, Zvi Gabay, claimed publicly: that WOJI intends to become “the official representative of Jews of Iraqi origin in matters concerning the community as a whole” now that Jewish life in Iraq is virtually extinct.[4] Gabay stated that this will include submitting “an official claim to community property in Iraq,” a claim presumably to be made to the new Iraqi government.[5] According to Heskel Haddad, the Iraqi Jewish head of WOJAC’s office in New York, the plan is to sue the Iraqi government.[6] This could pit WOJI against a number of parties, not the least of which are the governments of Iraq and the United States, as well as other Jewish groups.
One of WOJI’s primary interests is control over and renovation of Iraqi Jewish communal properties, shrines and artifacts, both inside and outside Iraq. Ben Porat maintains that he and BJHC possess lists of Jewish communal real estate in Iraq, probably a reference to a report that he himself commissioned five decades ago while still operating as an underground Mossad agent in Iraq. In 1951, he arranged for three Iraqi Jews to conduct a survey of Jewish communal assets. Their March 1951 report detailed Jewish communal endowments (waqf) in Baghdad, and family endowments in al-Kifl, al-Hilla and al-Hindiyya. Among these properties were hospitals, cemeteries and synagogues. The report determined that the total value of these waqf holdings was 2,567,620 dinars or $10,347,508 (1 dinar was equal to $4.03 in 1951).[7]
Moreover, WOJI aims to “preserve” several important Iraqi Jewish holy sites, many of which have been maintained and venerated by other religious communities. These include the shrine of the prophet Ezekiel in the village of al-Kifl near al-Najaf, at which both Jews and Shi‘a worship. The tomb of the prophet Nahum lies in a village near the northern Iraqi town of al-Qush, which is inhabited today primarily by Chaldean Christians. The reputed tomb of the prophet Jonah is contained within a mosque in Mosul. Kirkuk is home to the tomb of the prophet Daniel, and that of Joshua the high priest is in Baghdad. Finally, the tomb of Ezra, the priest-scribe, lies in the southern town of al-‘Uzayr, near Basra. The town is inhabited by Shi‘a, who also venerate the shrine.
WOJI also intends to “salvage” and “repossess” moveable Jewish assets such as Torah scrolls and marriage registers.[8] Many Jewish religious artifacts remained in Iraq after the mass exodus of Jews in the early 1950s. Some were placed in museums; others were confiscated and warehoused by Iraqi security officials. After the fall of Baghdad in April 2003, a number of them disappeared. A number of Torah scrolls were stolen from the Iraq Museum in Baghdad in the looting after the US invasion. Some were later returned; others resurfaced in New York. The Shi‘i cleric Sa‘id Kamal al-Din al-Muqaddis al-Ruwayfi issued a call to Shi‘a to relinquish stolen museum goods; twenty-two scrolls and other manuscripts, plus dozens of other items, were subsequently returned to museum officials.[9] Saad Eskander, a Kurdish exile who returned to become director of the Iraq National Library and Archive, further managed to locate and collect a large number of Jewish books that Saddam’s regime had removed from synagogues.[10]
WOJI also seeks to gain control of the Jewish community’s marriage and death registers, as well as property lists maintained by the community’s office in Baghdad that continues to oversee the assets of the tiny Jewish community still living there. At the time of the US invasion, the office was staffed by Naji Diwaniyya, the acting rabbi of the Jewish community in Baghdad, along with representatives of Iraqi intelligence and the Ministry of Awqaf (the Arabic plural of waqf). Persons residing in properties still registered in the names of the original Jewish owners paid rent to the office.[11] By 2005, they were paying the rent to an elderly Jewish woman.[12]
WOJI’s efforts to lay claim to Iraqi Jewish artifacts could spread beyond Iraq, insofar as many such items are now located outside the country. According to media reports in July 2000, the Mossad, through intermediary Jordanian merchants, spirited some Torah scrolls and other religious artifacts out of Iraq in the 1990s after bribing Iraqi military officers who had found them hidden in a Baghdad warehouse.[13] Ben Porat and the BJHC themselves possess other Jewish artifacts that they arranged to be smuggled out of Iraq in recent years. Ben Porat admitted in June 2008 that the BJHC paid approximately $25,000 for some 300 old Jewish books in Iraq, having dispatched an agent to purchase them from what he called “thieves.” After American occupation authorities, anxious to stem further smuggling of Iraqi cultural items, put a stop to the agent’s direct shipments to Israel, Ben Porat’s operative resorted to more shadowy methods to send the items to Israel.[14]
Potentially even more controversially, WOJI has sought to claim a cache of Jewish books and documents that American occupation officials shipped out of Iraq to the United States. On May 6, 2003, US soldiers from the Army’s Mobile Exploration Team Alpha, along with members of the Iraqi National Congress (INC), descended into the flooded basement of the bombed-out Department of General Intelligence in Baghdad. Although the team’s job was to search for Iraqi weapons of mass destruction, that day the soldiers were acting on a tip provided to the INC by a former Iraqi intelligence official that an old Jewish Talmud lay deep within the building. The Americans decided that finding such a valuable cultural artifact merited diverting the army team from its normal task. Although they did not find the Talmud, they did discover something else: a Torah scroll along with thousands of manuscripts, documents and books dealing with Iraq’s Jewish community. What they had found were the archives of two offices within the General Intelligence Department: the Israel-Palestine and Jewish Sections.[15]
The waterlogged documents consisted largely of items that were confiscated from synagogues and libraries after the mass exodus of the Iraqi Jewish community in the 1950s. With the permission of the interim Iraqi Ministry of Culture, the Coalition Provisional Authority (CPA) had the damaged documents frozen and shipped to Texas, whereupon they were freeze-dried and sent to the National Archives in College Park, Maryland for restoration and preservation. Archivists originally estimated that it would cost between $1,525,000 and $3,000,000 to restore the materials.[16] As they were not official government documents, the National Archives solicited private funds to aid in the process. Donors were hesitant to commit, however, because of the uncertain future of the manuscripts. The future of these religious artifacts thus remains in limbo. Doris Hamburg, the National Archives official who was overseeing their restoration, stated in late 2007 that the American government had taken the documents with “the expectation of the return of the materials to Iraq,”[17] but final arrangements for their repatriation have yet to be made.
However legitimate WOJI’s campaign may be, making a public claim to Jewish communal assets is certain to stir up considerable opposition in Iraq. The fact that Israelis play a major role in WOJI will only add fuel to that fire. In fact, the prospect of Jewish property compensation and Jews buying up land in Iraq already has engendered a hostile reaction. Rumors of “foreign Jews” (presumably former Iraqi citizens) seeking to buy land were rife in Iraq in mid-2003. Sunni Muslim clerics in Mosul issued a fatwa in July 2003 forbidding the sale of real estate to non-Iraqis for fear it might end up in Jewish hands.[18] Exiled Shi‘i cleric Ayatollah Kazim al-Husayni al-Ha’iri issued a fatwa in June 2003 from Qom, Iran demanding death for any Jew seeking to buy land in Iraq.[19] And in late 2003 and early 2004, the Iraqi Turkmen Front claimed that Kurdish Jews in Israel were repurchasing their former properties with the help of the Kurdish Credit Bank.[20] The veracity of these reports aside, they indicate the depth of hostility to Jews seeking the restitution of properties abandoned long ago.
WOJI claiming communal property on behalf of the worldwide Iraqi Jewish community could also complicate Washington’s relationship with the Iraqi government, and indeed American authorities have already instructed other Iraqi Jews to stop pressing for property compensation.[21] The WOJI claim to the Jewish documents at the National Archives further puts the Americans in a quandary. Claimants to the artifacts could include WOJI, the few remaining Jews in Baghdad and the Iraqi government. Given high-profile international efforts to return Iraqi cultural heritage items plundered after the invasion, the US cannot avoid this quandary by maintaining possession of the items.
Finally, WOJI’s efforts are controversial within Jewish circles as well, particularly as many Jews (Iraqi or otherwise) might not recognize WOJI as their representative. Moreover, WOJI’s claims collide with parallel property compensation and restitution efforts by other Iraqi Jewish groups. In September 2005, the Iraqi-Israeli lawyer David Nawi filed a suit with the Israeli High Court of Justice on behalf of the group Shemesh-Shalom ve Shilumin. The suit seeks to force the Israeli government to enter into compensation negotiations with the new Iraqi government.[22] Other Iraqi Jews, like WOJAC officials ‘Oved Ben ‘Ozer in Israel and Heskel Haddad in the United States, are similarly against WOJI’s efforts, believing that suing Iraq would only stir up anti-Semitic feeling.[23]
WOJI’s efforts also might run afoul of the coalition Justice for Jews from Arab Countries (JJAC). Since its inception in New York in 2002, it has mounted a vigorous campaign to categorize all Jewish emigrants from the Arab world after 1948 as “refugees” whose fate, and property losses, should be linked to any diplomatic discussion about the 1948 Palestinian refugees. JJAC is supportive of Israel’s long-standing assertion that any Israeli obligation to the Palestinians should be connected to property losses sustained by Jewish emigrants from Arab countries. JJAC has argued that there was an irreversible Jewish-Arab population and property exchange during and after 1948. Insofar as former Jewish citizens of Arab states are not seeking a “right of return,” JJAC asserts, neither should the Palestinians demand a right of return to Israel.[24] The efforts of WOJI and other Arab Jewish groups seeking property compensation and restitution thus threaten Israel’s justification for not compensating Palestinians for their losses. On the other hand, WOJI’s efforts might strengthen JJAC’s claim of a population and property exchange by offering an example of Jews demanding property restitution from Arabs.
No matter what transpires, WOJI’s intention to pursue claims for Jewish communal property in Iraq raises a number of questions concerning Iraqi reconstruction, the Palestinian struggle and intra-Jewish political divides. Along with the unresolved Palestinian refugee problem, the exodus of the vast majority of the Arab world’s Jews evinces the ongoing, disruptive legacy of the large-scale demographic shifts witnessed by the region over the past 60 years.
Endnotes
[1] Even some Iraqi Jews believed the rumors that fellow Jews had planted the bombs. Over the decades, this accusation has been debated heatedly in Israel, resulting in official Israeli inquiries and lawsuits. For views dismissive of the accusation, see Moshe Gat, The Jewish Exodus from Iraq, 1948–1951 (London: Frank Cass, 1997); Shlomo Hillel, Operation Babylon: Jewish Clandestine Activity in the Middle East, 1946–1951 (translated by Ida Friedman) (London: Collins, 1998); and Mordechai Ben Porat, To Baghdad and Back: The Miraculous 2,000 Year Homecoming of the Iraqi Jews (translated by Marcia Grant and Kathy Akeriv) (Jerusalem and New York: Gefen, 1998). For a view supportive of the accusation, see Abbas Shiblak, Iraqi Jews: A History of Mass Exodus (London: Saqi Books, 2005). For a view that states that there is no solid evidence implicating any particular party in the bombings, see Yehouda Shenhav, The Arab Jews: A Postcolonial Reading of Nationalism, Religion and Ethnicity (Stanford, CA: Stanford University Press, 2006).
[2] For more information on this dispute, see Michael R. Fischbach, Jewish Property Claims Against Arab Countries (Columbia University Press, 2008), p. 198 and passim.
[3] Zvi Gabay, “Maintaining the Link: World Organization of Iraqi Jewry,” Nehardea (Spring 2008), online document available at www.bjcny.org/art-ZviGabay-WorldOrg.htm.
[4] Ibid.
[5] Ibid.
[6] Telephone interview with Heskel Haddad, August 7, 2008.
[7] Israel, Prime Ministry, Israel State Archives. (130) 2563/6, “Jewish Inalienable Properties in Baghdad” (March 7, 1951).
[8] Gabay, “Maintaining the Link: World Organization of Iraqi Jewry.”
[9] Jewish Telegraphic Agency, May 5, 2003.
[10] BBC News, January 8, 2008.
[11] Al-Hayat, May 31, 2003 and al-Sharq al-Awsat, May 8, 2003, cited in Nimrod Raphaeli, “The New Iraqi Press and the Jews,” Middle East Media Research Institute Inquiry and Analysis 146, August 26, 2003.
[12] Jerusalem Post, August 31, 2005.
[13] Sunday Times (London), July 5, 2000, cited in “Mossad Snatches Sacred Jewish Texts from Saddam,” The Scribe: Journal of Babylonian Jewry 73 (July 2000); Jewish Telegraphic Agency, December 3, 1999.
[14] Agence France Presse, June 27, 2008.
[15] New York Times, May 5, 2003; Michael R. Fischbach, “Israel Tallies Up Compensation Claims by Iraq’s Jews,” Daily Star, September 4, 2004.
[16] “The Iraqi Jewish Archive Preservation Report” (October 2, 2003), online document available at http://oi.uchicago.edu/OI/IRAQ/mela/IraqiJewishArchiveReport.htm.
[17] Personal communication with the author, November 7, 2007. For more on these documents, see Fischbach, Jewish Property Claims Against Arab Countries, p. 216 and passim.
[18] Dar al-Salam, July 10, 2003, cited in Raphaeli.
[19] Reuters, June 28, 2003.
[20] Cihan News Agency, November 13, 2003.
[21] Interviews with ‘Oved Ben ‘Ozer, Tel Aviv, August 30, 2006 and Heskel Haddad, New York, October 22, 2007.
[22] Ynet, May 29, 2006.
[23] Telephone interview with Heskel Haddad, August 7, 2008.
[24] For details on JJAC, see Fischbach, Jewish Property Claims Against Arab Countries, p. 235 and passim.
WOJI was the brainchild of Mordechai Ben Porat, founder and chair of the Babylonian Jewry Heritage Center (BJHC) in Or Yehuda, Israel. Born in Baghdad in 1923, Ben Porat immigrated to Palestine in 1945, but returned to Iraq to work with the Israeli foreign intelligence service Mossad in Baghdad during the period of mass Iraqi Jewish emigration to Israel in 1950–1951. Ben Porat and his accomplices were active in coordinating Jewish emigration, and even were accused of orchestrating a series of bombings of Jewish buildings from 1950 to 1951 in the hopes of sparking a larger and speedier Jewish exodus.[1] After his return to Israel, Ben Porat entered Israeli politics and was elected to the Knesset as part of the Labor Alignment. By 1975 he had risen to the post of vice chair of the Knesset. That same year, he formed the World Organization of Jews from Arab Countries (WOJAC). Ben Porat left the Labor Alignment in 1977, served as a minister without portfolio in the government of Menachem Begin and joined the Likud Party. For decades, he has remained one of the highest-profile Iraqi Jewish activists in the world.
Ben Porat took the first steps toward the formation of WOJI, and raised the issue of the fate of Jewish communal property in Iraq, in 2005. He and BJHC officials were likely influenced by the fierce intra-Jewish dispute over who should control the communal assets of the dwindling Jewish community in Egypt. In contention today are the hundred or so Jews still in Egypt and the various Egyptian Jewish heritage groups abroad, including the Historical Society of Jews from Egypt in New York, the World Congress of the Jews of Egypt in Israel and the Association Internationale Nebi Daniel in France.[2] No comparable group existed for Iraqi Jews, so Ben Porat and two other Iraqi Jews—former WOJAC Chairman Moshe Shahal and BJHC Deputy Chairman Aryeh Shemesh—arranged for meetings among Iraqi Jewish expatriates in Israel, New York and London to discuss the matter.[3]
More controversial, however, is what another BJHC official, Zvi Gabay, claimed publicly: that WOJI intends to become “the official representative of Jews of Iraqi origin in matters concerning the community as a whole” now that Jewish life in Iraq is virtually extinct.[4] Gabay stated that this will include submitting “an official claim to community property in Iraq,” a claim presumably to be made to the new Iraqi government.[5] According to Heskel Haddad, the Iraqi Jewish head of WOJAC’s office in New York, the plan is to sue the Iraqi government.[6] This could pit WOJI against a number of parties, not the least of which are the governments of Iraq and the United States, as well as other Jewish groups.
One of WOJI’s primary interests is control over and renovation of Iraqi Jewish communal properties, shrines and artifacts, both inside and outside Iraq. Ben Porat maintains that he and BJHC possess lists of Jewish communal real estate in Iraq, probably a reference to a report that he himself commissioned five decades ago while still operating as an underground Mossad agent in Iraq. In 1951, he arranged for three Iraqi Jews to conduct a survey of Jewish communal assets. Their March 1951 report detailed Jewish communal endowments (waqf) in Baghdad, and family endowments in al-Kifl, al-Hilla and al-Hindiyya. Among these properties were hospitals, cemeteries and synagogues. The report determined that the total value of these waqf holdings was 2,567,620 dinars or $10,347,508 (1 dinar was equal to $4.03 in 1951).[7]
Moreover, WOJI aims to “preserve” several important Iraqi Jewish holy sites, many of which have been maintained and venerated by other religious communities. These include the shrine of the prophet Ezekiel in the village of al-Kifl near al-Najaf, at which both Jews and Shi‘a worship. The tomb of the prophet Nahum lies in a village near the northern Iraqi town of al-Qush, which is inhabited today primarily by Chaldean Christians. The reputed tomb of the prophet Jonah is contained within a mosque in Mosul. Kirkuk is home to the tomb of the prophet Daniel, and that of Joshua the high priest is in Baghdad. Finally, the tomb of Ezra, the priest-scribe, lies in the southern town of al-‘Uzayr, near Basra. The town is inhabited by Shi‘a, who also venerate the shrine.
WOJI also intends to “salvage” and “repossess” moveable Jewish assets such as Torah scrolls and marriage registers.[8] Many Jewish religious artifacts remained in Iraq after the mass exodus of Jews in the early 1950s. Some were placed in museums; others were confiscated and warehoused by Iraqi security officials. After the fall of Baghdad in April 2003, a number of them disappeared. A number of Torah scrolls were stolen from the Iraq Museum in Baghdad in the looting after the US invasion. Some were later returned; others resurfaced in New York. The Shi‘i cleric Sa‘id Kamal al-Din al-Muqaddis al-Ruwayfi issued a call to Shi‘a to relinquish stolen museum goods; twenty-two scrolls and other manuscripts, plus dozens of other items, were subsequently returned to museum officials.[9] Saad Eskander, a Kurdish exile who returned to become director of the Iraq National Library and Archive, further managed to locate and collect a large number of Jewish books that Saddam’s regime had removed from synagogues.[10]
WOJI also seeks to gain control of the Jewish community’s marriage and death registers, as well as property lists maintained by the community’s office in Baghdad that continues to oversee the assets of the tiny Jewish community still living there. At the time of the US invasion, the office was staffed by Naji Diwaniyya, the acting rabbi of the Jewish community in Baghdad, along with representatives of Iraqi intelligence and the Ministry of Awqaf (the Arabic plural of waqf). Persons residing in properties still registered in the names of the original Jewish owners paid rent to the office.[11] By 2005, they were paying the rent to an elderly Jewish woman.[12]
WOJI’s efforts to lay claim to Iraqi Jewish artifacts could spread beyond Iraq, insofar as many such items are now located outside the country. According to media reports in July 2000, the Mossad, through intermediary Jordanian merchants, spirited some Torah scrolls and other religious artifacts out of Iraq in the 1990s after bribing Iraqi military officers who had found them hidden in a Baghdad warehouse.[13] Ben Porat and the BJHC themselves possess other Jewish artifacts that they arranged to be smuggled out of Iraq in recent years. Ben Porat admitted in June 2008 that the BJHC paid approximately $25,000 for some 300 old Jewish books in Iraq, having dispatched an agent to purchase them from what he called “thieves.” After American occupation authorities, anxious to stem further smuggling of Iraqi cultural items, put a stop to the agent’s direct shipments to Israel, Ben Porat’s operative resorted to more shadowy methods to send the items to Israel.[14]
Potentially even more controversially, WOJI has sought to claim a cache of Jewish books and documents that American occupation officials shipped out of Iraq to the United States. On May 6, 2003, US soldiers from the Army’s Mobile Exploration Team Alpha, along with members of the Iraqi National Congress (INC), descended into the flooded basement of the bombed-out Department of General Intelligence in Baghdad. Although the team’s job was to search for Iraqi weapons of mass destruction, that day the soldiers were acting on a tip provided to the INC by a former Iraqi intelligence official that an old Jewish Talmud lay deep within the building. The Americans decided that finding such a valuable cultural artifact merited diverting the army team from its normal task. Although they did not find the Talmud, they did discover something else: a Torah scroll along with thousands of manuscripts, documents and books dealing with Iraq’s Jewish community. What they had found were the archives of two offices within the General Intelligence Department: the Israel-Palestine and Jewish Sections.[15]
The waterlogged documents consisted largely of items that were confiscated from synagogues and libraries after the mass exodus of the Iraqi Jewish community in the 1950s. With the permission of the interim Iraqi Ministry of Culture, the Coalition Provisional Authority (CPA) had the damaged documents frozen and shipped to Texas, whereupon they were freeze-dried and sent to the National Archives in College Park, Maryland for restoration and preservation. Archivists originally estimated that it would cost between $1,525,000 and $3,000,000 to restore the materials.[16] As they were not official government documents, the National Archives solicited private funds to aid in the process. Donors were hesitant to commit, however, because of the uncertain future of the manuscripts. The future of these religious artifacts thus remains in limbo. Doris Hamburg, the National Archives official who was overseeing their restoration, stated in late 2007 that the American government had taken the documents with “the expectation of the return of the materials to Iraq,”[17] but final arrangements for their repatriation have yet to be made.
However legitimate WOJI’s campaign may be, making a public claim to Jewish communal assets is certain to stir up considerable opposition in Iraq. The fact that Israelis play a major role in WOJI will only add fuel to that fire. In fact, the prospect of Jewish property compensation and Jews buying up land in Iraq already has engendered a hostile reaction. Rumors of “foreign Jews” (presumably former Iraqi citizens) seeking to buy land were rife in Iraq in mid-2003. Sunni Muslim clerics in Mosul issued a fatwa in July 2003 forbidding the sale of real estate to non-Iraqis for fear it might end up in Jewish hands.[18] Exiled Shi‘i cleric Ayatollah Kazim al-Husayni al-Ha’iri issued a fatwa in June 2003 from Qom, Iran demanding death for any Jew seeking to buy land in Iraq.[19] And in late 2003 and early 2004, the Iraqi Turkmen Front claimed that Kurdish Jews in Israel were repurchasing their former properties with the help of the Kurdish Credit Bank.[20] The veracity of these reports aside, they indicate the depth of hostility to Jews seeking the restitution of properties abandoned long ago.
WOJI claiming communal property on behalf of the worldwide Iraqi Jewish community could also complicate Washington’s relationship with the Iraqi government, and indeed American authorities have already instructed other Iraqi Jews to stop pressing for property compensation.[21] The WOJI claim to the Jewish documents at the National Archives further puts the Americans in a quandary. Claimants to the artifacts could include WOJI, the few remaining Jews in Baghdad and the Iraqi government. Given high-profile international efforts to return Iraqi cultural heritage items plundered after the invasion, the US cannot avoid this quandary by maintaining possession of the items.
Finally, WOJI’s efforts are controversial within Jewish circles as well, particularly as many Jews (Iraqi or otherwise) might not recognize WOJI as their representative. Moreover, WOJI’s claims collide with parallel property compensation and restitution efforts by other Iraqi Jewish groups. In September 2005, the Iraqi-Israeli lawyer David Nawi filed a suit with the Israeli High Court of Justice on behalf of the group Shemesh-Shalom ve Shilumin. The suit seeks to force the Israeli government to enter into compensation negotiations with the new Iraqi government.[22] Other Iraqi Jews, like WOJAC officials ‘Oved Ben ‘Ozer in Israel and Heskel Haddad in the United States, are similarly against WOJI’s efforts, believing that suing Iraq would only stir up anti-Semitic feeling.[23]
WOJI’s efforts also might run afoul of the coalition Justice for Jews from Arab Countries (JJAC). Since its inception in New York in 2002, it has mounted a vigorous campaign to categorize all Jewish emigrants from the Arab world after 1948 as “refugees” whose fate, and property losses, should be linked to any diplomatic discussion about the 1948 Palestinian refugees. JJAC is supportive of Israel’s long-standing assertion that any Israeli obligation to the Palestinians should be connected to property losses sustained by Jewish emigrants from Arab countries. JJAC has argued that there was an irreversible Jewish-Arab population and property exchange during and after 1948. Insofar as former Jewish citizens of Arab states are not seeking a “right of return,” JJAC asserts, neither should the Palestinians demand a right of return to Israel.[24] The efforts of WOJI and other Arab Jewish groups seeking property compensation and restitution thus threaten Israel’s justification for not compensating Palestinians for their losses. On the other hand, WOJI’s efforts might strengthen JJAC’s claim of a population and property exchange by offering an example of Jews demanding property restitution from Arabs.
No matter what transpires, WOJI’s intention to pursue claims for Jewish communal property in Iraq raises a number of questions concerning Iraqi reconstruction, the Palestinian struggle and intra-Jewish political divides. Along with the unresolved Palestinian refugee problem, the exodus of the vast majority of the Arab world’s Jews evinces the ongoing, disruptive legacy of the large-scale demographic shifts witnessed by the region over the past 60 years.
Endnotes
[1] Even some Iraqi Jews believed the rumors that fellow Jews had planted the bombs. Over the decades, this accusation has been debated heatedly in Israel, resulting in official Israeli inquiries and lawsuits. For views dismissive of the accusation, see Moshe Gat, The Jewish Exodus from Iraq, 1948–1951 (London: Frank Cass, 1997); Shlomo Hillel, Operation Babylon: Jewish Clandestine Activity in the Middle East, 1946–1951 (translated by Ida Friedman) (London: Collins, 1998); and Mordechai Ben Porat, To Baghdad and Back: The Miraculous 2,000 Year Homecoming of the Iraqi Jews (translated by Marcia Grant and Kathy Akeriv) (Jerusalem and New York: Gefen, 1998). For a view supportive of the accusation, see Abbas Shiblak, Iraqi Jews: A History of Mass Exodus (London: Saqi Books, 2005). For a view that states that there is no solid evidence implicating any particular party in the bombings, see Yehouda Shenhav, The Arab Jews: A Postcolonial Reading of Nationalism, Religion and Ethnicity (Stanford, CA: Stanford University Press, 2006).
[2] For more information on this dispute, see Michael R. Fischbach, Jewish Property Claims Against Arab Countries (Columbia University Press, 2008), p. 198 and passim.
[3] Zvi Gabay, “Maintaining the Link: World Organization of Iraqi Jewry,” Nehardea (Spring 2008), online document available at www.bjcny.org/art-ZviGabay-WorldOrg.htm.
[4] Ibid.
[5] Ibid.
[6] Telephone interview with Heskel Haddad, August 7, 2008.
[7] Israel, Prime Ministry, Israel State Archives. (130) 2563/6, “Jewish Inalienable Properties in Baghdad” (March 7, 1951).
[8] Gabay, “Maintaining the Link: World Organization of Iraqi Jewry.”
[9] Jewish Telegraphic Agency, May 5, 2003.
[10] BBC News, January 8, 2008.
[11] Al-Hayat, May 31, 2003 and al-Sharq al-Awsat, May 8, 2003, cited in Nimrod Raphaeli, “The New Iraqi Press and the Jews,” Middle East Media Research Institute Inquiry and Analysis 146, August 26, 2003.
[12] Jerusalem Post, August 31, 2005.
[13] Sunday Times (London), July 5, 2000, cited in “Mossad Snatches Sacred Jewish Texts from Saddam,” The Scribe: Journal of Babylonian Jewry 73 (July 2000); Jewish Telegraphic Agency, December 3, 1999.
[14] Agence France Presse, June 27, 2008.
[15] New York Times, May 5, 2003; Michael R. Fischbach, “Israel Tallies Up Compensation Claims by Iraq’s Jews,” Daily Star, September 4, 2004.
[16] “The Iraqi Jewish Archive Preservation Report” (October 2, 2003), online document available at http://oi.uchicago.edu/OI/IRAQ/mela/IraqiJewishArchiveReport.htm.
[17] Personal communication with the author, November 7, 2007. For more on these documents, see Fischbach, Jewish Property Claims Against Arab Countries, p. 216 and passim.
[18] Dar al-Salam, July 10, 2003, cited in Raphaeli.
[19] Reuters, June 28, 2003.
[20] Cihan News Agency, November 13, 2003.
[21] Interviews with ‘Oved Ben ‘Ozer, Tel Aviv, August 30, 2006 and Heskel Haddad, New York, October 22, 2007.
[22] Ynet, May 29, 2006.
[23] Telephone interview with Heskel Haddad, August 7, 2008.
[24] For details on JJAC, see Fischbach, Jewish Property Claims Against Arab Countries, p. 235 and passim.
Tuesday, 14 October 2008
Saudi tower symbolises GCC’s stout economies
RIYADH // One of the globe’s richest men recently disclosed details about his newest real estate development, unveiling plans for constructing the world’s tallest building just outside Jeddah.
In a ceremony on Saturday attended by Saudi Arabia’s King Abdullah bin Abdul Aziz, Prince Alwaleed bin Talal bin Abdul Aziz, the chairman of Kingdom Holding Company, displayed a model of Kingdom City, a SR100 billion (Dh98bn) project of more than seven sq km to be constructed near Jeddah’s international airport.
Its most prominent feature will be a tower of more than 1,000m (the exact height is a secret) for offices, luxury residences and a five-star hotel.
The new community, expected to attract up to 80,000 residents, “will signify Kingdom Holding Company’s contribution in placing Saudi Arabia at the forefront of the first world,” Prince Alwaleed said in a press release.
Officials at his company declined to answer questions about how the project will be financed. But with a fortune estimated by Forbes of US$21 billion (Dh77bn), the prince is not just the world’s 19th richest man. He also is someone with no problem getting loans or credit.
The long-expected, formal unveiling of his latest development, and his apparent confidence in the future, is symbolic of the general sentiment in Saudi Arabia and, to a lesser extent, in other Gulf countries, about how they may fare in the current global financial crisis.
Despite the ill effects so far, which include a slide in oil prices and a disastrous two weeks in stock markets, government officials and outside experts are predicting that, barring an unexpectedly severe global depression, their oil-rich region will not suffer as much as the rest of the world.
“Gulf countries are going to feel the pinch,” said Howard Handy, the chief economist at Samba Financial Group. “But I think from everything I’ve seen so far, it is not going to be fatal.”
The Gulf nations, Mr Handy said, are facing the financial crisis “from a position of great strength” stemming from their huge budget surpluses and reserves garnered from high oil prices in recent years.
“This, by all means, is a very serious crisis,”the Saudi economist Ihsan Buhulaiga said of the events emanating from Wall Street in recent weeks. And Saudi Arabia has seen some trauma: in the first four days of opening after the Eid holiday, its stock market lost about 22 per cent of its value, Mr Buhulaiga said.
“And over the whole year, it has lost 46 per cent,” he said.
Still, the economist predicted that the impact on GCC countries will be far less than on the G7 industrial nations.
With the G7, “we’re talking about zero growth or contraction”, he said. In the GCC, economic growth will slow down but still be positive, he said.
Similar to Mr Handy, Mr Buhulaiga predicted that even with less revenue from oil sales, Saudi Arabia and other states will be able to pay their regular bills and finance many of their large development projects out of their current reserves.
Ibrahim Al Assaf, the Saudi finance minister, said much the same thing.
“Oil revenues will definitely cover these projects in addition to what we have in reserve,” he told Saudi television.
Mr Assaf said Saudi banks had shown “excellent third-quarter results”, proving “that they were not affected by the subprime mortgage crisis in the US”.
The minister called the sell-offs in the Saudi stock market “unjustifiable” and predicted the market would regain stability – which it did. The Tadawul, taking its cue from Asia and Europe, bounced back early this week.
But whether that bounce will be permanent is an open question. Brad Bourland, the chief economist at Jadwa Investment in Riyadh, wrote last week that “regional stock markets are overwhelmed by panic” and “investor confidence is exceptionally fragile”. He predicted that “a sustainable recovery is not likely in the near term”.
Mr Bourland said the drying up of credit internationally “is hampering implementation of the project boom in the region”.
And there are other concerns. Many Saudi banks and the government – which owns huge foreign assets managed by the Saudi Arabian Monetary Authority (Sama), the country’s central bank – have not yet disclosed how much those foreign investments have suffered.
According to Reuters, Sama reported in August that it had $285bn invested in foreign securities and $79bn in foreign bank deposits. Other government bodies, the news wire said, had $63bn in foreign securities and $5bn deposits with foreign banks.
Another concern is whether the depression that most economists see coming will be worse than anticipated, with demand for oil dropping beyond expectations.
After its record price zenith of $147 a barrel in July, oil has fallen steadily, closing last week below $80 a barrel.
That still leaves a huge cushion for Saudi Arabia, whose current budget is based on a conservative price prediction of $50 a barrel.
But drops below that would mean a whole new ball game for the kingdom and its Gulf neighbours.
Monday, 13 October 2008
The kids are all right: a testament to the optimism of youth
What young Arabs, or young Muslims in general, are thinking and doing is a subject of great interest to governments both in this region and in the West, which is why The National has launched a series that looks at the issues affecting them.
For the West in particular a large and restless youth cohort is often viewed as a potential terrorism threat, but it is unfair to young people that their complicated problems – which they have little or no power to address – should be viewed only through the prism of security. Many of them feel that they fall into two categories: those who may turn to religious extremism and have to be contained, and those who do not so can safely be ignored.
One expert I spoke to summed it up nicely when he said that, although Islamic radicalism is a problem, the real war is a “war for aspiration”: he meant that finding a good job is difficult unless you have family connections, and even if they do have jobs, most young people do not earn enough to save for a wedding and begin their lives as adults.
Addressing the underlying causes of these problems is impossible because political participation under authoritarian regimes can land you in jail, or worse. It is a grim picture.
Many times I heard from young people that they felt a sense of betrayal from older generations. Their parents benefited from the great investments in education in the 1960s and 1970s, but today a university education is pretty much useless because it does not prepare graduates for the global job market.
So it was surprising how many still seemed eager to change the world for the better in whatever way they can. In Egypt, I spent time with young people who had signed up to volunteer, helping the poor. The biggest volunteer organisation is Resala, with 65,000 members, nearly all in their early 20s: they distribute food to the needy, teach blind children how to read, and clear rubbish from the streets. Remember, this is Egypt, better known for its virulent strain of Islamism.
The volunteers, all nice middle-class kids, were surprised that I had bothered to speak to them: most outsiders, they said, were interested only in meeting members of the Muslim Brotherhood or Islamic Jihad.
One of the most compelling statistics I came across is that university-educated young people are much more likely to be unemployed than those with only an elementary education. The popular assumption is that semi-literate, rural young people or the working class find it tough to find work, but that is not true.
@body arnhem:In Egypt, for example, young people with secondary education or better comprised 95 per cent of unemployed young people in 2006, up from 87 per cent in 1998. This is partly because of high expectations. If you hold a university degree in engineering you do not want to take a job in a factory. Unfortunately the region’s economies are not creating enough jobs to absorb this educated cohort, and many will have to take what they consider undesirable jobs if they want to earn a living.
I grew up in Toronto as a first-generation Afghan immigrant, and the traditions of my culture played a strong role in how my parents raised me. Part of that tradition was that Afghan girls do not leave home until after they are married. Ever.
I was one of the first to break this taboo when I moved to London in my mid 20s, and later to Afghanistan, to work as a journalist. It caused my parents a great deal of stress.
I am sure Arab readers will be familiar with some of the anxieties: What will people think of us? What if no one marries you because they suspect your morals? In the end, they decided that life in the West was different from what they had known back home, and in their new homeland they would have to adapt, as so many immigrants do.
I had this in mind when I met the young and single Arab girls who are living on their own in Abu Dhabi and Dubai to pursue interesting careers in property development, the media, the arts and marketing.
To do this in the West, where nearly everyone moves away from home as a singleton, is one thing: to live away from your parents in the Arab world, with all its baggage of gossipy neighbours and the chauvinist attitudes of men, is quite another.
It is also difficult considering the bad press that Western expatriates get for decadence. At the risk of social death, no Arab woman who eventually wants to get married would want to be identified with a lifestyle associated with loose morals. One of the girls did admit that she felt like “an outcast”, but obviously not enough to convince her to move back home.
These girls – clever, ambitious and well educated – are the real trailblazers of the region.
For the West in particular a large and restless youth cohort is often viewed as a potential terrorism threat, but it is unfair to young people that their complicated problems – which they have little or no power to address – should be viewed only through the prism of security. Many of them feel that they fall into two categories: those who may turn to religious extremism and have to be contained, and those who do not so can safely be ignored.
One expert I spoke to summed it up nicely when he said that, although Islamic radicalism is a problem, the real war is a “war for aspiration”: he meant that finding a good job is difficult unless you have family connections, and even if they do have jobs, most young people do not earn enough to save for a wedding and begin their lives as adults.
Addressing the underlying causes of these problems is impossible because political participation under authoritarian regimes can land you in jail, or worse. It is a grim picture.
Many times I heard from young people that they felt a sense of betrayal from older generations. Their parents benefited from the great investments in education in the 1960s and 1970s, but today a university education is pretty much useless because it does not prepare graduates for the global job market.
So it was surprising how many still seemed eager to change the world for the better in whatever way they can. In Egypt, I spent time with young people who had signed up to volunteer, helping the poor. The biggest volunteer organisation is Resala, with 65,000 members, nearly all in their early 20s: they distribute food to the needy, teach blind children how to read, and clear rubbish from the streets. Remember, this is Egypt, better known for its virulent strain of Islamism.
The volunteers, all nice middle-class kids, were surprised that I had bothered to speak to them: most outsiders, they said, were interested only in meeting members of the Muslim Brotherhood or Islamic Jihad.
One of the most compelling statistics I came across is that university-educated young people are much more likely to be unemployed than those with only an elementary education. The popular assumption is that semi-literate, rural young people or the working class find it tough to find work, but that is not true.
@body arnhem:In Egypt, for example, young people with secondary education or better comprised 95 per cent of unemployed young people in 2006, up from 87 per cent in 1998. This is partly because of high expectations. If you hold a university degree in engineering you do not want to take a job in a factory. Unfortunately the region’s economies are not creating enough jobs to absorb this educated cohort, and many will have to take what they consider undesirable jobs if they want to earn a living.
I grew up in Toronto as a first-generation Afghan immigrant, and the traditions of my culture played a strong role in how my parents raised me. Part of that tradition was that Afghan girls do not leave home until after they are married. Ever.
I was one of the first to break this taboo when I moved to London in my mid 20s, and later to Afghanistan, to work as a journalist. It caused my parents a great deal of stress.
I am sure Arab readers will be familiar with some of the anxieties: What will people think of us? What if no one marries you because they suspect your morals? In the end, they decided that life in the West was different from what they had known back home, and in their new homeland they would have to adapt, as so many immigrants do.
I had this in mind when I met the young and single Arab girls who are living on their own in Abu Dhabi and Dubai to pursue interesting careers in property development, the media, the arts and marketing.
To do this in the West, where nearly everyone moves away from home as a singleton, is one thing: to live away from your parents in the Arab world, with all its baggage of gossipy neighbours and the chauvinist attitudes of men, is quite another.
It is also difficult considering the bad press that Western expatriates get for decadence. At the risk of social death, no Arab woman who eventually wants to get married would want to be identified with a lifestyle associated with loose morals. One of the girls did admit that she felt like “an outcast”, but obviously not enough to convince her to move back home.
These girls – clever, ambitious and well educated – are the real trailblazers of the region.
Thursday, 2 October 2008
Egypt burns, and even the Nile can’t put out the fire
I wrote the following few paragraphs in 2005, not thinking they could be relevant for this column. But the recent – partial – burning of the Egyptian National Theatre in Cairo as a metaphor for the state and fate of the great empire and nation was too powerful to ignore. These were my thoughts then…
“I was recently in Egypt. It was an extraordinary experience, though it was both solemn and sad. Cairo was a city in deep schizophrenia. It was beautiful and ugly, authentic and fake, rich and poor. I had hoped to see its beauty and I have, but I dare not speak of all that is ugly for no picture can justly convey what I saw. What I saw was sad… so sad. It was a moment where one thinks, this is beyond reform; this requires a complete demolition and rebuilding. Where have the great Egyptians gone astray?
“I demanded an answer in all the eyes and all the streets. I wondered why there were traffic officers, yet traffic could not be any more congested? I was struck at how mean my local hosts were to the poor and the beggars. It was so sad. And I ask you great scientists and explorers, I ask you, the sons of Cleopatra and the pharaohs and Isis and Amon… I ask you this, great Egyptians: how could you allow for such pollution to circle the once great beacon of wisdom and knowledge that was Cairo?
“How could you disappoint Ibn Battuta and the Fatimids? How could you let socialism and capitalism under the guise of fake national militarism steal your glory, diminish your history and set the sun on your story? I was saddened by all that.
“In the rubble I found many who could experience the authentic scent of the Nile, or at least liked to think they still did. I tried to remain hopeful. For instance, there was the dentist who lived in Libya for 30 years but opted to return after burying his father; the Syrian Arabic Literature PhD student in Cairo University; our host’s driver Hosni, from Alexandria, who would visit his wife and daughter once every two months; 15-year-old Sabah, who sold me a rose at 4am outside my hotel and made us all laugh from the bottom of our hearts; Ala’a the jeweller who left Italy after many years to come back home, and a lot of other people who refused to leave like their cousins and friends for Europe, the Gulf or anywhere for more money because they all had roots that were nourished in the Delta somewhere.
“Like France, Egypt is unique and very proud of its past and present alike, of its conquest and squander.”
That was three years ago. In its Annual Human Development Report 2008, the United Nation’s said that at least 19.6 per cent of Egypt’s 75 million citizens live below the poverty line, while 14.7 per cent of children do not go to school.
According to the United Nations 2006 World Population Growth Prospectus, Egypt’s population is expected to grow by 1.76 per cent annually. Now when I first saw that number and saw that it put Egypt only at number 71 in terms of population growth, I was momentarily relieved; but 1.76 per cent of 75 million is still a large figure, so I did a quick calculation and worked out that the population is likely to reach 101 million by 2025.
My first thought was: “Does anyone have any idea how to feed all those people? And if they don’t, do they realise what an incredible time bomb this is?”
How do you speak to 100 million hungry citizens living in one of the most fertile parts of the world? How do you appease their anger? What do you promise them then? What do you promise their parents now? Can you promise them anything?
Politicians around the world are unable to understand these problems let alone propose executable solutions; they compartmentalise issues. An orthodox approach to Egypt will fail. A misunderstanding of how population growth, poverty, pollution, corruption and extremism all tie in so that together they create an inevitable Armageddon is what’s missing in today’s politicians.
They may campaign on any one of these issues but without understanding that if you’re a Green candidate you should be an anti-corruption candidate, too; that if you’re a moderate, you should be an anti-corruption candidate, too. The world is interconnected and the issues are even more interconnected. Does anyone still think that people blow themselves up because they want to meet their 72 virgins in heaven? Here is a quick illustration of how one makes that decision:
You live in Shobra Al Khaema in Cairo – which makes the South Bronx in New York look like where the Teletubbies live – and you come home to a family of 10. Your father has passed away, your elder brother is in jail and you have six sisters whom you are sure will become wedding dancers unless they can be found jobs and/or husbands.
You tried to go to college but you couldn’t because you had to work as a carpenter to provide, and no matter how hard you work you can’t make ends meet. You had a girlfriend once but couldn’t marry her and she’s married to your boss now. One day someone makes you an offer that you can’t refuse: take revenge against the system that has killed your father, imprisoned your brother and stolen your girlfriend, he says to you. In return we will feed and educate your family. Many young men answer: Yes.
Mishaal al Gergawi is a graduate of the American University in Dubai and the CERAM European School of Business
“I was recently in Egypt. It was an extraordinary experience, though it was both solemn and sad. Cairo was a city in deep schizophrenia. It was beautiful and ugly, authentic and fake, rich and poor. I had hoped to see its beauty and I have, but I dare not speak of all that is ugly for no picture can justly convey what I saw. What I saw was sad… so sad. It was a moment where one thinks, this is beyond reform; this requires a complete demolition and rebuilding. Where have the great Egyptians gone astray?
“I demanded an answer in all the eyes and all the streets. I wondered why there were traffic officers, yet traffic could not be any more congested? I was struck at how mean my local hosts were to the poor and the beggars. It was so sad. And I ask you great scientists and explorers, I ask you, the sons of Cleopatra and the pharaohs and Isis and Amon… I ask you this, great Egyptians: how could you allow for such pollution to circle the once great beacon of wisdom and knowledge that was Cairo?
“How could you disappoint Ibn Battuta and the Fatimids? How could you let socialism and capitalism under the guise of fake national militarism steal your glory, diminish your history and set the sun on your story? I was saddened by all that.
“In the rubble I found many who could experience the authentic scent of the Nile, or at least liked to think they still did. I tried to remain hopeful. For instance, there was the dentist who lived in Libya for 30 years but opted to return after burying his father; the Syrian Arabic Literature PhD student in Cairo University; our host’s driver Hosni, from Alexandria, who would visit his wife and daughter once every two months; 15-year-old Sabah, who sold me a rose at 4am outside my hotel and made us all laugh from the bottom of our hearts; Ala’a the jeweller who left Italy after many years to come back home, and a lot of other people who refused to leave like their cousins and friends for Europe, the Gulf or anywhere for more money because they all had roots that were nourished in the Delta somewhere.
“Like France, Egypt is unique and very proud of its past and present alike, of its conquest and squander.”
That was three years ago. In its Annual Human Development Report 2008, the United Nation’s said that at least 19.6 per cent of Egypt’s 75 million citizens live below the poverty line, while 14.7 per cent of children do not go to school.
According to the United Nations 2006 World Population Growth Prospectus, Egypt’s population is expected to grow by 1.76 per cent annually. Now when I first saw that number and saw that it put Egypt only at number 71 in terms of population growth, I was momentarily relieved; but 1.76 per cent of 75 million is still a large figure, so I did a quick calculation and worked out that the population is likely to reach 101 million by 2025.
My first thought was: “Does anyone have any idea how to feed all those people? And if they don’t, do they realise what an incredible time bomb this is?”
How do you speak to 100 million hungry citizens living in one of the most fertile parts of the world? How do you appease their anger? What do you promise them then? What do you promise their parents now? Can you promise them anything?
Politicians around the world are unable to understand these problems let alone propose executable solutions; they compartmentalise issues. An orthodox approach to Egypt will fail. A misunderstanding of how population growth, poverty, pollution, corruption and extremism all tie in so that together they create an inevitable Armageddon is what’s missing in today’s politicians.
They may campaign on any one of these issues but without understanding that if you’re a Green candidate you should be an anti-corruption candidate, too; that if you’re a moderate, you should be an anti-corruption candidate, too. The world is interconnected and the issues are even more interconnected. Does anyone still think that people blow themselves up because they want to meet their 72 virgins in heaven? Here is a quick illustration of how one makes that decision:
You live in Shobra Al Khaema in Cairo – which makes the South Bronx in New York look like where the Teletubbies live – and you come home to a family of 10. Your father has passed away, your elder brother is in jail and you have six sisters whom you are sure will become wedding dancers unless they can be found jobs and/or husbands.
You tried to go to college but you couldn’t because you had to work as a carpenter to provide, and no matter how hard you work you can’t make ends meet. You had a girlfriend once but couldn’t marry her and she’s married to your boss now. One day someone makes you an offer that you can’t refuse: take revenge against the system that has killed your father, imprisoned your brother and stolen your girlfriend, he says to you. In return we will feed and educate your family. Many young men answer: Yes.
Mishaal al Gergawi is a graduate of the American University in Dubai and the CERAM European School of Business
Saturday, 6 September 2008
Inflation makes life ‘unbearable’
DAMASCUS // For years Abu Mohammed struggled to make ends meet, working as a painter, fruit seller or water carrier to put food on the family table. But soaring prices have made his daily battle for survival ever harder.
“A year ago I could pay for all the basics with 7,000 Syrian pounds [Dh440] a month,” he said. “Today I need double that. Today I need 14,000 pounds just to get by.”
Although the cost of food, fuel and housing has risen dramatically in Damascus, household incomes for the majority of Syrians has not. Official government figures for 2007 recorded an inflation rate of less than six per cent, a number rejected by independent economists here who estimate that real living costs rose by up to 30 per cent.
Whatever the actual numbers, inflation is beginning to bite hard and the poorest members of society, such as Mr Mohammed, 47, are bearing the brunt.
He said that in 2006 he could feed, house and clothe his wife and seven children without outside help. Now he relies on handouts from a community mosque in Blackstone, where he lives, 8km south of Damascus.
“Life is getting unbearable,” he said. “The cost of living is all I talk about with my neighbours; it’s a constant worry, it’s the only thing on my mind. It’s the only thing Syrians think about.”
A poor harvest has pushed down supplies of food, while an influx of Iraqi refugees has added to demand.
The resulting rise in prices has forced Mr Mohammed into an increasingly desperate position. Each afternoon he goes to the local market to buy damaged fruit and vegetables that are sold cheaply.
Sometimes, he said, he sifts though rubbish dumps for pieces of scrap metal that can be sold to salvage yards.
“We have one meal a day because that’s all I can afford at the moment,” he said. “We eat meat perhaps twice a month. I’m ashamed to tell you my daughter fainted in school, because I hadn’t fed her properly. She was too embarrassed to tell her teachers it was because she was hungry.
“I’m not talking about missing out on luxuries like roast chicken or kebabs; the basics are getting too expensive. Life is getting harder and harder.”
In a recent survey of 1,000 Damascus residents by the Syrian Economic Centre, 70 per cent said their financial situation had “deteriorated seriously” during the past two years.
Syria’s economy is in transition, shifting from a Soviet-style socialist system to a more open, free-market model. The move has ended decades of stagnation and brought about an economic recovery, with Syria now showing sustained growth in national output.
But is has also led to an upsurge in inflation, and in Syria pressures have been exacerbated by the movement of hundreds of thousands of Iraqis fleeing the violence of their country. The International Monetary Fund has praised the Syrian authorities for their handling of the situation and for resisting the temptation to simply print more money. A 2007 International Monetary Foundation report said that “barring policy missteps or a deterioration in the regional environment, the near-term outlook for growth and inflation looks favourable”.
But with oil reserves running dry, the government can no longer afford to bankroll huge national subsidies, something economists warn is a potential time bomb for the Syrian economy.
“There is no easy way to deal with this problem; it’s going to be painful,” said Nabil Sukkar, managing director of the Syrian Consulting Bureau for Development and Investment. “If we don’t remove subsidies, there will be a growing deficit, and that will cause inflation. If we remove subsidies, salaries will have to be raised and there will be inflation.”
Syria imports diesel for Dh1.8 per litre and sells it under government subsidy for Dh6 per litre – far cheaper than the true market cost. Supply shortages mean some fuel sellers already charge more than the government-approved price, adding Dh3.6 to Dh7.2 to the cost of 20 litres – a 30-per-cent rise.
The extra cost is easily met by the minority of wealthy Syrians, but is a burden the working-class majority can ill afford.
“These subsidies and the need to remove them mean there is a build-up of inflationary pressure,” Mr Sukkar said.
“Inflation is dangerous for the Syrian economy, as it’s dangerous for all economies; the problem is we are heading towards a threatening level. We should take steps to cope with it before it gets out of control. Difficult decisions are going to have to be made.” Housing costs in Syria’s urban centres have also soared dramatically during the past two years, pushed up by rising costs of imported construction materials, such as steel and cement.
Last year Mohammed Mamard, a real estate company owner and builder in Damascus, said he paid Dh180 per tonne of cement. This year the price has risen to Dh550 per tonne.
“Costs went up, and there were lots of Iraqis looking to rent property so the market just exploded,” he said.
“We were selling houses before we’d built them. I used to make maybe 15 per cent profit, but in 2006 and 2007 I would put in perhaps a 40 per cent profit margin and the houses would still sell.”
The fevered state of the property market was heightened by speculative investments, with Syrians rushing to buy land after the announcement of a series of multimillion-dollar real estate ventures, including by Emaar Properties of Dubai.
“Prices of homes have effectively doubled,” Mr Mamard said. “What used to sell for a million pounds [Dh71,850] now sells for 1.5 or two million. I think that has peaked now, it seems to have stabilised.”
In his illegally built house in Blackstone, just south of Damascus, Mr Mamard said he feared his situation was only going to get worse. “I walk out of a shop, and the next time I go in the prices have gone up.
“If they remove the subsidies I don’t know how I will pay for things. My wife has diabetes, and I can’t really afford the medicine as it is. I don’t know how we will get by.”
“A year ago I could pay for all the basics with 7,000 Syrian pounds [Dh440] a month,” he said. “Today I need double that. Today I need 14,000 pounds just to get by.”
Although the cost of food, fuel and housing has risen dramatically in Damascus, household incomes for the majority of Syrians has not. Official government figures for 2007 recorded an inflation rate of less than six per cent, a number rejected by independent economists here who estimate that real living costs rose by up to 30 per cent.
Whatever the actual numbers, inflation is beginning to bite hard and the poorest members of society, such as Mr Mohammed, 47, are bearing the brunt.
He said that in 2006 he could feed, house and clothe his wife and seven children without outside help. Now he relies on handouts from a community mosque in Blackstone, where he lives, 8km south of Damascus.
“Life is getting unbearable,” he said. “The cost of living is all I talk about with my neighbours; it’s a constant worry, it’s the only thing on my mind. It’s the only thing Syrians think about.”
A poor harvest has pushed down supplies of food, while an influx of Iraqi refugees has added to demand.
The resulting rise in prices has forced Mr Mohammed into an increasingly desperate position. Each afternoon he goes to the local market to buy damaged fruit and vegetables that are sold cheaply.
Sometimes, he said, he sifts though rubbish dumps for pieces of scrap metal that can be sold to salvage yards.
“We have one meal a day because that’s all I can afford at the moment,” he said. “We eat meat perhaps twice a month. I’m ashamed to tell you my daughter fainted in school, because I hadn’t fed her properly. She was too embarrassed to tell her teachers it was because she was hungry.
“I’m not talking about missing out on luxuries like roast chicken or kebabs; the basics are getting too expensive. Life is getting harder and harder.”
In a recent survey of 1,000 Damascus residents by the Syrian Economic Centre, 70 per cent said their financial situation had “deteriorated seriously” during the past two years.
Syria’s economy is in transition, shifting from a Soviet-style socialist system to a more open, free-market model. The move has ended decades of stagnation and brought about an economic recovery, with Syria now showing sustained growth in national output.
But is has also led to an upsurge in inflation, and in Syria pressures have been exacerbated by the movement of hundreds of thousands of Iraqis fleeing the violence of their country. The International Monetary Fund has praised the Syrian authorities for their handling of the situation and for resisting the temptation to simply print more money. A 2007 International Monetary Foundation report said that “barring policy missteps or a deterioration in the regional environment, the near-term outlook for growth and inflation looks favourable”.
But with oil reserves running dry, the government can no longer afford to bankroll huge national subsidies, something economists warn is a potential time bomb for the Syrian economy.
“There is no easy way to deal with this problem; it’s going to be painful,” said Nabil Sukkar, managing director of the Syrian Consulting Bureau for Development and Investment. “If we don’t remove subsidies, there will be a growing deficit, and that will cause inflation. If we remove subsidies, salaries will have to be raised and there will be inflation.”
Syria imports diesel for Dh1.8 per litre and sells it under government subsidy for Dh6 per litre – far cheaper than the true market cost. Supply shortages mean some fuel sellers already charge more than the government-approved price, adding Dh3.6 to Dh7.2 to the cost of 20 litres – a 30-per-cent rise.
The extra cost is easily met by the minority of wealthy Syrians, but is a burden the working-class majority can ill afford.
“These subsidies and the need to remove them mean there is a build-up of inflationary pressure,” Mr Sukkar said.
“Inflation is dangerous for the Syrian economy, as it’s dangerous for all economies; the problem is we are heading towards a threatening level. We should take steps to cope with it before it gets out of control. Difficult decisions are going to have to be made.” Housing costs in Syria’s urban centres have also soared dramatically during the past two years, pushed up by rising costs of imported construction materials, such as steel and cement.
Last year Mohammed Mamard, a real estate company owner and builder in Damascus, said he paid Dh180 per tonne of cement. This year the price has risen to Dh550 per tonne.
“Costs went up, and there were lots of Iraqis looking to rent property so the market just exploded,” he said.
“We were selling houses before we’d built them. I used to make maybe 15 per cent profit, but in 2006 and 2007 I would put in perhaps a 40 per cent profit margin and the houses would still sell.”
The fevered state of the property market was heightened by speculative investments, with Syrians rushing to buy land after the announcement of a series of multimillion-dollar real estate ventures, including by Emaar Properties of Dubai.
“Prices of homes have effectively doubled,” Mr Mamard said. “What used to sell for a million pounds [Dh71,850] now sells for 1.5 or two million. I think that has peaked now, it seems to have stabilised.”
In his illegally built house in Blackstone, just south of Damascus, Mr Mamard said he feared his situation was only going to get worse. “I walk out of a shop, and the next time I go in the prices have gone up.
“If they remove the subsidies I don’t know how I will pay for things. My wife has diabetes, and I can’t really afford the medicine as it is. I don’t know how we will get by.”
Friday, 22 August 2008
Iran: Iran buys wheat from U.S. first time in 27 years
Section: Business News - Iran this summer resumed buying U.S. wheat after a 27-year hiatus, a sign of the limited options for importers seeking large quantities of high-quality grain, The Wall Street Journal reported on Thursday.
Since the 2008-09 marketing year began on June 1, Iran has bought more than 1 million tons of hard red winter wheat directly from the U.S., which is "a very large amount," the report quoted Bill Nelson, analyst for Wachovia Securities as saying.
The purchases mean at least 3 percent to 4 percent of domestic wheat exports for the marketing year will go to a country the U.S. hasn't done business with for more than a generation, said the report.
Government sanctions don't prohibit U.S. agricultural exporters from doing business with Iran.
Drought is expected to slash Iran's domestic production by one- third this year.
Iran is forecast to produce 10 million tons of wheat this year, down from 15 million tons in 2007-08, and to import 4.5 million tons, up from 200,000 tons last year, according to the U.S. Department of Agriculture. - PNA
Since the 2008-09 marketing year began on June 1, Iran has bought more than 1 million tons of hard red winter wheat directly from the U.S., which is "a very large amount," the report quoted Bill Nelson, analyst for Wachovia Securities as saying.
The purchases mean at least 3 percent to 4 percent of domestic wheat exports for the marketing year will go to a country the U.S. hasn't done business with for more than a generation, said the report.
Government sanctions don't prohibit U.S. agricultural exporters from doing business with Iran.
Drought is expected to slash Iran's domestic production by one- third this year.
Iran is forecast to produce 10 million tons of wheat this year, down from 15 million tons in 2007-08, and to import 4.5 million tons, up from 200,000 tons last year, according to the U.S. Department of Agriculture. - PNA
Thursday, 21 August 2008
Key developments: Egypt
Latest figures. The urban inflation rate rose to 22.2% year on year in July as the cost of food and beverages soared by 29.9%. Month-on-month inflation also increased, by 2.4%, compared with a 0.6% gain in June. The cost of food and non-alcoholic beverages rose by 3.1% month on month, after gaining 0.8% in June. The cost of transportation gained 1.7% after stagnating in June, although this was still significantly slower than the 13.5% surge in May, when the government imposed a series of fuel price increases.
Wednesday, 20 August 2008
Cairo tries to get its oldest cabs out of traffic Discontinued car models being used as taxis, if they aren't breaking down
CAIRO -- The Egyptian government wants Fawzi Zawar, 49, to give up his taxi.
But Zawar, with a white moustache and white hair, is not about to let go of his 27-year-old Hyundai Pony.
Zawar earns 600 Egyptian pounds, or $112, a month rattling through Cairo's streets in his vinyl-seat Pony, with its peeling white and black paint and no door handles, window knobs or sun visors. That is more than he makes in his civil service day job.
Hyundai stopped producing the Pony about 20 years ago and now keeps one in a museum in Seoul. But Zawar's Pony is still running strong, battling the chaos on Cairo's roads and hauling tourists to the Pyramids on a good day.
''It only breaks down twice a week,'' Zawar said proudly. ''I won't change it unless they force me.''
Under a law passed earlier this year, the authorities will not renew the licenses of any taxis older than 20 years, which may be the majority on the clogged, polluted streets of Cairo.
The fleet of Russian-made Lada 1300s, Cold War-era Dacia 1300s from Romania and Sahins from Turkey may not rule the streets much longer in Cairo, where passengers pay what they wish for a ride in the meter-less contraptions.
''Taxis on the road have been operating 24 hours a day for 23 years,'' said Major General Sherif Gomaa, a deputy interior minister who oversees traffic. ''Their suspension systems are destroyed, the steering wheels can separate from the steering shaft and accidents happen, like falling into canals.''
The drive to get rid of old taxis reflects a broader trend toward modernizing consumer products in the most populous Arab country, where megamalls financed by petrodollars are opening for the first time.
Egypt's economy is growing 7 percent a year, and retailers, real estate developers, carmakers and banks are posting record profits as Egyptians spend more, buying new products they once could not afford.
''You will see many of the older generation keeping their 20-year old stoves and refrigerators they bought when they got married,'' said Mena Sadek, analyst at Beltone Financial, an Egyptian investment bank. ''But this is changing now.''
The Egyptian government, which has overhauled its economy along free-market principles since 2004, says that the taxis, besides causing crashes, break down so often that they clog up roads.
They also emit black clouds of smoke, contributing to a layer of summer smog that settles over Cairo's skyline of minarets and apartment towers topped with satellite dishes.
''The traffic law has been overdue for a long time,'' said Simon Kitchen, an economist at the Egyptian investment bank EFG-Hermes. ''There are a lot of very old vehicles on the road and that is a drag on economic performance.''
But persuading the owners of Cairo's antiquities on wheels to turn over the keys may be a tricky matter in Egypt, where discontent is rising because of soaring food costs.
Thousands of government workers hit the streets at night to supplement meager salaries by driving a cab in a country where about a fifth of the population lives on less than $1 a day.
''This is oppression,'' said Ahmed Saeed, 41, pounding the wheel of his 1972 Fiat 124. ''They will slaughter us! How will I feed my kids?''
Saeed, a father of five, said he would not be able to afford the 70,000 pounds he estimates he would need to buy a more modern car, even with a loan the government says it will give drivers to buy new cars.
The number of taxi drivers ballooned in the 1990s, when government decrees allowed any car to be converted into a taxi and banks were given permission to give car loans, according to Khaled el-Khamissi, author of ''Taxi,'' a 2006 book about Cairo cabbies.
Many of Egypt's unemployed took loans to buy cabs, swelling the number of taxis to about 80,000, Khamissi wrote.
Zawar bought his Pony in 1995 for 12,000 pounds, figuring that his salary of 500 pounds a month from the Ministry of Social Solidarity would not be enough to support his five children.
Buying a new car, he says, would not be a good idea because passengers would refuse to pay him any more money to ride it.
The new traffic law includes other measures, like increasing fines for violating traffic rules and allowing the licensing of three-wheeled rickshaw taxis, known as tuk-tuks, used commonly in Asia.
It may take more than higher fines to change the behavior of Cairo drivers, who obey traffic lights only when a police officer is present and wander from lane to lane without warning.
The penalties include possible jailing for offenses like speeding, eating and drinking while driving, or having a baby in the front seat, a common practice.
''It won't work for sure,'' said Adil Abdel Rahman, 48, a driver of a Soviet-era Lada. The police, he said, would probably target only the poor for fines, allowing the rich to dodge responsibility.
''Everyone plays with the law here,'' he said.
But Zawar, with a white moustache and white hair, is not about to let go of his 27-year-old Hyundai Pony.
Zawar earns 600 Egyptian pounds, or $112, a month rattling through Cairo's streets in his vinyl-seat Pony, with its peeling white and black paint and no door handles, window knobs or sun visors. That is more than he makes in his civil service day job.
Hyundai stopped producing the Pony about 20 years ago and now keeps one in a museum in Seoul. But Zawar's Pony is still running strong, battling the chaos on Cairo's roads and hauling tourists to the Pyramids on a good day.
''It only breaks down twice a week,'' Zawar said proudly. ''I won't change it unless they force me.''
Under a law passed earlier this year, the authorities will not renew the licenses of any taxis older than 20 years, which may be the majority on the clogged, polluted streets of Cairo.
The fleet of Russian-made Lada 1300s, Cold War-era Dacia 1300s from Romania and Sahins from Turkey may not rule the streets much longer in Cairo, where passengers pay what they wish for a ride in the meter-less contraptions.
''Taxis on the road have been operating 24 hours a day for 23 years,'' said Major General Sherif Gomaa, a deputy interior minister who oversees traffic. ''Their suspension systems are destroyed, the steering wheels can separate from the steering shaft and accidents happen, like falling into canals.''
The drive to get rid of old taxis reflects a broader trend toward modernizing consumer products in the most populous Arab country, where megamalls financed by petrodollars are opening for the first time.
Egypt's economy is growing 7 percent a year, and retailers, real estate developers, carmakers and banks are posting record profits as Egyptians spend more, buying new products they once could not afford.
''You will see many of the older generation keeping their 20-year old stoves and refrigerators they bought when they got married,'' said Mena Sadek, analyst at Beltone Financial, an Egyptian investment bank. ''But this is changing now.''
The Egyptian government, which has overhauled its economy along free-market principles since 2004, says that the taxis, besides causing crashes, break down so often that they clog up roads.
They also emit black clouds of smoke, contributing to a layer of summer smog that settles over Cairo's skyline of minarets and apartment towers topped with satellite dishes.
''The traffic law has been overdue for a long time,'' said Simon Kitchen, an economist at the Egyptian investment bank EFG-Hermes. ''There are a lot of very old vehicles on the road and that is a drag on economic performance.''
But persuading the owners of Cairo's antiquities on wheels to turn over the keys may be a tricky matter in Egypt, where discontent is rising because of soaring food costs.
Thousands of government workers hit the streets at night to supplement meager salaries by driving a cab in a country where about a fifth of the population lives on less than $1 a day.
''This is oppression,'' said Ahmed Saeed, 41, pounding the wheel of his 1972 Fiat 124. ''They will slaughter us! How will I feed my kids?''
Saeed, a father of five, said he would not be able to afford the 70,000 pounds he estimates he would need to buy a more modern car, even with a loan the government says it will give drivers to buy new cars.
The number of taxi drivers ballooned in the 1990s, when government decrees allowed any car to be converted into a taxi and banks were given permission to give car loans, according to Khaled el-Khamissi, author of ''Taxi,'' a 2006 book about Cairo cabbies.
Many of Egypt's unemployed took loans to buy cabs, swelling the number of taxis to about 80,000, Khamissi wrote.
Zawar bought his Pony in 1995 for 12,000 pounds, figuring that his salary of 500 pounds a month from the Ministry of Social Solidarity would not be enough to support his five children.
Buying a new car, he says, would not be a good idea because passengers would refuse to pay him any more money to ride it.
The new traffic law includes other measures, like increasing fines for violating traffic rules and allowing the licensing of three-wheeled rickshaw taxis, known as tuk-tuks, used commonly in Asia.
It may take more than higher fines to change the behavior of Cairo drivers, who obey traffic lights only when a police officer is present and wander from lane to lane without warning.
The penalties include possible jailing for offenses like speeding, eating and drinking while driving, or having a baby in the front seat, a common practice.
''It won't work for sure,'' said Adil Abdel Rahman, 48, a driver of a Soviet-era Lada. The police, he said, would probably target only the poor for fines, allowing the rich to dodge responsibility.
''Everyone plays with the law here,'' he said.
Friday, 8 August 2008
Russian website looks at food security measures in Central Asia
The following is Sergey Arbenin's article "Threat of food crisis has no boundaries", published by the Russian news agency website Fergana.ru on 6 July: subheadings as published:
Crop rotation is a period in the agricultural practice during which cultivation and evaporation affect each field in sequence.
[Passage omitted: food crisis in the world]
A growth in prices for foodstuffs, above all, for bread in Kazakhstan in September-October last year came as a real shock not just for ordinary consumers. Nobody had foreseen this! Especially at a time when the most economically developed country in Central Asia [i.e. Kazakhstan] harvested a bumper crop of cereals amounting to 20.1m tonnes. The hike in prices which was followed by inflation (18.8 per cent a year) was caused by pressure on the domestic market by the consumer situation in CIS countries, which are the closest economic partners of Kazakhstan.
"It is necessary to work out specific measures and carry out specific actions to remove administrative and other non-tariff barriers to ensure the delivery of foodstuffs to our country. These measures should lead to a reduction in inflation and protect, above all, the interests of socially vulnerable segments of the population in the CIS," Kazakh Prime Minister Karim Masimov said then, commenting on the situation.
The country's agricultural potential did not allow it to meet the population's demand for essential foodstuffs on its own. This is why, to protect the domestic food market, the Ministry of Industry and Trade and the Agriculture Ministry suggested above all imposing restrictions on exports of certain groups of foodstuffs and reducing customs duties for the import of others. They also suggested the introduction of a system of subsidies and tax preferences, as well as extending tax exemptions regarding VAT to a number of sectors engaged in processing agricultural products. The fact that the state demonstrated its readiness to provide financial support to the development of the agricultural sector became the main factor in strengthening Kazakhstan's national food security system.
Ahead of the new harvest campaign in the country, it was announced that cultivated areas were considerably increased - by 700,000 hectares, including 600,000 hectares for sowing wheat. "If we used to have 18.9m hectares of the cultivated areas in the past, then in 2008, in accordance with the plans and forecasts of the regions, this figure will reach 19.6m hectares. Accordingly, areas sown with grain will be increased to 17m ha, including 13.5m ha that will be sown with wheat," Deputy Agriculture Minister Akylbek Kurishbayev told the public ahead of the spring field work. "This is the highest figure in the past 10 years, starting from 1998," he said.
[Passage omitted: Kazakhstan plans to harvest 17m tones of grain this year; agriculture is under strict state control in Uzbekistan and Turkmenistan]
To secure the introduction of modern technologies and equipment to agriculture and increase the country's potential to store and process cereals, it is necessary to pursue a "flexible agricultural policy", Turkmen President Gurbanguly Berdimuhamedow told a government meeting in July. It is expected that a programme for providing the population with food for 2008-2012 will be a response to threats to the [food] security. Speaking at the government meeting at the end of July, the minister of economics and development, Gurbanmyrat Gurbanmyratow, said that the programme was being prepared. Possibly, the programme will soften the current system of state orders for cereals and cotton in the country. This will enable agricultural producers to cultivate crops in a way they like, in accordance, above all, with demands on the market.
Uzbekistan spends great funds to ensure food security in the country. For example, this country was found to be the largest importer of flour in the world in the last season [as published]. In accordance with forecasts of the International Grain Council (IGC), the country may retain this position this year as well.
Mass exports of seasonal fruit and vegetables in Uzbekistan partially compensate imports of cereals, flour and other essential food products. Uzbek agricultural producers have already sent products worth 11.5m dollars to Russia and Kazakhstan since the beginning of this year. At the same time, Uzbekistan has imported foodstuffs worth 12.6m dollars to stabilize prices on the domestic market.
The association of companies engaged in wholesale trade, Uzulgurjisavdoinvest, which is the largest operator for procurement and export of fruit and vegetables [in Uzbekistan], has reported that it is going to sell 200,000 tonnes of imported flour, 35,000 tonnes of vegetable oil, 11,000 tonnes of sugar, over 10,000 tonnes of rice and other foodstuffs worth 160bn soms [about 120m dollars] altogether by the end of this year. The association's wholesale companies have concluded futures contracts worth 20bn soms [about 15m dollars] with farms. It is planned to procure 20,000 tonnes of agricultural products for the needs of the domestic market. Products worth 25m dollars will be exported [by the association]. So, external threats to the country's consumer market have been weakened to some extent.
Significant damage was inflicted on Tajikistan's food security last winter. The energy crisis in the country led to a production collapse at enterprises of small and medium-sized businesses and to a hike in prices for fuel, food and industrial products. Because the early harvest of fruit and vegetables and potatoes was destroyed due to various climatic cataclysms, many [Tajik] regions were in need of humanitarian aid. At the same time, even at best times the country imported more than 60 per cent of the goods consumed in the country from Iran, Russia, Kazakhstan and Uzbekistan.
[Passage omitted: Kazakhstan sent humanitarian aid to Tajikistan during the energy crisis]
Last spring, the sowing season was carried out in a rush in Kyrgyzstan. The state failed to fully supply farmers with fuel and lubricant materials at reduced prices, and credit institutions opted not to notice the needs of farmers. According to statistics, only 3 per cent of all credits goes to the countryside. Considering the country's interests of ensuring food security, Kyrgyzstan increased areas sown with cereals by 40,000 hectares to 400,000 ha on the whole. During the spring sowing work, the Ministry of Agriculture, Water Management and Processing Industry announced that the government would buy deficient amounts of grain from Kazakhstan.
[Passage omitted: the author quotes a Kyrgyz official as saying that Kyrgyzstan needs 1.1m tones of grain]
The government is trying to improve the situation. In recent months it announced the establishment of the Food Security Council and the Kyrgyz Agro-industrial corporation with its authorized fund of 1bn soms (30m dollars). It is said that the corporation will be engaged in importing grain and flour, production of flour and producing bread in large amounts. It will also intervene to improve the situation regarding supplies of grain and pasta products. The government has also given a loan of 100m soms (almost 300,000 dollars) to Ayylbank to grant easy payment credits to solvent farmers.
Apart from this, the president has signed [the decree] "On food security", which is aimed at dotting all the i's. It has been decided that Gosmatreserve [state reserves] will buy grain of the new harvest from farmers at the guaranteed prices of 0.48 dollars per 1 kg. This should promote growth in the production of cereals in the country, the Cabinet of Ministers thinks.
[Passage omitted: the author notes the need for CIS countries to unite efforts to ensure food security in their countries; world grain figures and forecasts]
Source: Ferghana.ru news agency website in Russian 0001 gmt 6 Aug 08
Crop rotation is a period in the agricultural practice during which cultivation and evaporation affect each field in sequence.
[Passage omitted: food crisis in the world]
A growth in prices for foodstuffs, above all, for bread in Kazakhstan in September-October last year came as a real shock not just for ordinary consumers. Nobody had foreseen this! Especially at a time when the most economically developed country in Central Asia [i.e. Kazakhstan] harvested a bumper crop of cereals amounting to 20.1m tonnes. The hike in prices which was followed by inflation (18.8 per cent a year) was caused by pressure on the domestic market by the consumer situation in CIS countries, which are the closest economic partners of Kazakhstan.
"It is necessary to work out specific measures and carry out specific actions to remove administrative and other non-tariff barriers to ensure the delivery of foodstuffs to our country. These measures should lead to a reduction in inflation and protect, above all, the interests of socially vulnerable segments of the population in the CIS," Kazakh Prime Minister Karim Masimov said then, commenting on the situation.
The country's agricultural potential did not allow it to meet the population's demand for essential foodstuffs on its own. This is why, to protect the domestic food market, the Ministry of Industry and Trade and the Agriculture Ministry suggested above all imposing restrictions on exports of certain groups of foodstuffs and reducing customs duties for the import of others. They also suggested the introduction of a system of subsidies and tax preferences, as well as extending tax exemptions regarding VAT to a number of sectors engaged in processing agricultural products. The fact that the state demonstrated its readiness to provide financial support to the development of the agricultural sector became the main factor in strengthening Kazakhstan's national food security system.
Ahead of the new harvest campaign in the country, it was announced that cultivated areas were considerably increased - by 700,000 hectares, including 600,000 hectares for sowing wheat. "If we used to have 18.9m hectares of the cultivated areas in the past, then in 2008, in accordance with the plans and forecasts of the regions, this figure will reach 19.6m hectares. Accordingly, areas sown with grain will be increased to 17m ha, including 13.5m ha that will be sown with wheat," Deputy Agriculture Minister Akylbek Kurishbayev told the public ahead of the spring field work. "This is the highest figure in the past 10 years, starting from 1998," he said.
[Passage omitted: Kazakhstan plans to harvest 17m tones of grain this year; agriculture is under strict state control in Uzbekistan and Turkmenistan]
To secure the introduction of modern technologies and equipment to agriculture and increase the country's potential to store and process cereals, it is necessary to pursue a "flexible agricultural policy", Turkmen President Gurbanguly Berdimuhamedow told a government meeting in July. It is expected that a programme for providing the population with food for 2008-2012 will be a response to threats to the [food] security. Speaking at the government meeting at the end of July, the minister of economics and development, Gurbanmyrat Gurbanmyratow, said that the programme was being prepared. Possibly, the programme will soften the current system of state orders for cereals and cotton in the country. This will enable agricultural producers to cultivate crops in a way they like, in accordance, above all, with demands on the market.
Uzbekistan spends great funds to ensure food security in the country. For example, this country was found to be the largest importer of flour in the world in the last season [as published]. In accordance with forecasts of the International Grain Council (IGC), the country may retain this position this year as well.
Mass exports of seasonal fruit and vegetables in Uzbekistan partially compensate imports of cereals, flour and other essential food products. Uzbek agricultural producers have already sent products worth 11.5m dollars to Russia and Kazakhstan since the beginning of this year. At the same time, Uzbekistan has imported foodstuffs worth 12.6m dollars to stabilize prices on the domestic market.
The association of companies engaged in wholesale trade, Uzulgurjisavdoinvest, which is the largest operator for procurement and export of fruit and vegetables [in Uzbekistan], has reported that it is going to sell 200,000 tonnes of imported flour, 35,000 tonnes of vegetable oil, 11,000 tonnes of sugar, over 10,000 tonnes of rice and other foodstuffs worth 160bn soms [about 120m dollars] altogether by the end of this year. The association's wholesale companies have concluded futures contracts worth 20bn soms [about 15m dollars] with farms. It is planned to procure 20,000 tonnes of agricultural products for the needs of the domestic market. Products worth 25m dollars will be exported [by the association]. So, external threats to the country's consumer market have been weakened to some extent.
Significant damage was inflicted on Tajikistan's food security last winter. The energy crisis in the country led to a production collapse at enterprises of small and medium-sized businesses and to a hike in prices for fuel, food and industrial products. Because the early harvest of fruit and vegetables and potatoes was destroyed due to various climatic cataclysms, many [Tajik] regions were in need of humanitarian aid. At the same time, even at best times the country imported more than 60 per cent of the goods consumed in the country from Iran, Russia, Kazakhstan and Uzbekistan.
[Passage omitted: Kazakhstan sent humanitarian aid to Tajikistan during the energy crisis]
Last spring, the sowing season was carried out in a rush in Kyrgyzstan. The state failed to fully supply farmers with fuel and lubricant materials at reduced prices, and credit institutions opted not to notice the needs of farmers. According to statistics, only 3 per cent of all credits goes to the countryside. Considering the country's interests of ensuring food security, Kyrgyzstan increased areas sown with cereals by 40,000 hectares to 400,000 ha on the whole. During the spring sowing work, the Ministry of Agriculture, Water Management and Processing Industry announced that the government would buy deficient amounts of grain from Kazakhstan.
[Passage omitted: the author quotes a Kyrgyz official as saying that Kyrgyzstan needs 1.1m tones of grain]
The government is trying to improve the situation. In recent months it announced the establishment of the Food Security Council and the Kyrgyz Agro-industrial corporation with its authorized fund of 1bn soms (30m dollars). It is said that the corporation will be engaged in importing grain and flour, production of flour and producing bread in large amounts. It will also intervene to improve the situation regarding supplies of grain and pasta products. The government has also given a loan of 100m soms (almost 300,000 dollars) to Ayylbank to grant easy payment credits to solvent farmers.
Apart from this, the president has signed [the decree] "On food security", which is aimed at dotting all the i's. It has been decided that Gosmatreserve [state reserves] will buy grain of the new harvest from farmers at the guaranteed prices of 0.48 dollars per 1 kg. This should promote growth in the production of cereals in the country, the Cabinet of Ministers thinks.
[Passage omitted: the author notes the need for CIS countries to unite efforts to ensure food security in their countries; world grain figures and forecasts]
Source: Ferghana.ru news agency website in Russian 0001 gmt 6 Aug 08
Thursday, 7 August 2008
An Autobiographical Account of Exploring Business Opportunities in Dubai: Making a fortune in the Middle East
Dublin - Research and Markets (http://www.researchandmarkets.com/research/5d1b07/opportunity_dubai) has announced the addition of the "Opportunity Dubai: Making a fortune in the Middle East" report to their offering.
Opportunity Dubai is the autobiographical account of a real-life business adventure in the modern city of Dubai. The author was a financial journalist in the city before deciding in the year 2000 to join the internet revolution, believing that if a business idea would work during the dot-com crash then it would later turn into a big success.
However, this book is far more than the story of a relatively small business and its success (albeit a business that became a resource now used by millions of readers and sold for a multi-million dollar fortune in 2006). It is also an inside track on what is happening in modern Dubai, the focal point of hundreds of billions of dollars of investment, and a city whose GDP has quadrupled in a decade, outperforming any other in the world, including China.
The author charts the progress of Dubai in the 2000s and setbacks such as the Second Gulf War and 9/11 which actually proved the source of a remarkable injection of repatriated capital into the increasingly ambitious projects of the Maktoum family under the leadership of His Highness Sheikh Mohammed bin Rashid Al Maktoum.
Many commentators have pointed to the similarities between Dubai Inc. and the development of Singapore where the government has also played a highly proactive role. But the major strength of Dubai remains its long traditional as a free port and trading centre for the lower Gulf States of the Middle East.
Yet it is true that investment in this infrastructure has been government led for decades and this continues today with the ordering of 58 giant A380 Airbus aircraft by government owned Emirates Airline, the new Terminal Three for Dubai International Airport and the completely new airport at Jebel Ali, Maktoum International Airport. And the original Jebel Ali Free Zone is now managing ports around the globe as a part of the Dubai World business empire.
Perhaps then it should be no surprise that Dubai has been able to capitalise greatly on the Third Oil Boom as the trading hub of the Middle East. But Sheikh Mohammed's restless business vision never stands still. He created the Dubai Internet City in late 1999, just in time to give the author of this book a dedicated free zone with 100 per cent foreign ownership for his small business venture.
More significant still is the Dubai International Financial Centre inaugurated in 2003 which has taken the role of regional financial centre away from former incumbents Beirut and Bahrain. A year earlier Sheikh Mohammed introduced real estate ownership rights for foreigners, sparking a property boom that has created further wealth and opportunities for all residents who chose to share his vision. Early participants have enjoyed a five-fold increase in property values.
In September 2009 the tallest building in the world, the Burj Dubai will be completed, standing three times higher than London's One Canada Square at Canary Wharf. Indeed, Dubai has become the city of the mega project with the Dubailand theme park set to almost equal the existing metropolis in size, and office space about to triple in just over two years. Dubai is also the hotel construction capital of the world and its three Palm islands have become global icons.
Opportunity Dubai asks where this is all leading to and whether it can be sustained. However, the author's own experience of prospering from the opportunities presented by this incredible city point in a positive direction; although many of his insights will benefit anybody thinking of joining in this adventure, whether doing business in Dubai, buying a home there, or just taking up a job as an expatriate.
Key Topics Covered:
- The Eureka moment
- Meeting Klaus and Lars
- Darkest days for Dubai and AME Info
- The largest English language media in the Middle East
- Dubai steals the limelight for regional news
- The Dubai Real Estate Boom
- The Dubai real estate boom matures
- An apology to Dr. Marc Faber
- Good and bad investment calls
- Business trips and holidays
- Lunch again with David Price
- Epilogue: The Future of Dubai
For more information visit http://www.researchandmarkets.com/research/5d1b07/opportunity_dubai
M2 Communications Ltd disclaims all liability for information provided within M2 PressWIRE. Data prepared by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wide web. Inquiries to info@m2.com.
Laura Wood, Senior Manager, Research and Markets | Fax: +1 646 607 1907 (USA) | Fax: +353 1 481 1716 (International) | e-mail: press@researchandmarkets.com
Opportunity Dubai is the autobiographical account of a real-life business adventure in the modern city of Dubai. The author was a financial journalist in the city before deciding in the year 2000 to join the internet revolution, believing that if a business idea would work during the dot-com crash then it would later turn into a big success.
However, this book is far more than the story of a relatively small business and its success (albeit a business that became a resource now used by millions of readers and sold for a multi-million dollar fortune in 2006). It is also an inside track on what is happening in modern Dubai, the focal point of hundreds of billions of dollars of investment, and a city whose GDP has quadrupled in a decade, outperforming any other in the world, including China.
The author charts the progress of Dubai in the 2000s and setbacks such as the Second Gulf War and 9/11 which actually proved the source of a remarkable injection of repatriated capital into the increasingly ambitious projects of the Maktoum family under the leadership of His Highness Sheikh Mohammed bin Rashid Al Maktoum.
Many commentators have pointed to the similarities between Dubai Inc. and the development of Singapore where the government has also played a highly proactive role. But the major strength of Dubai remains its long traditional as a free port and trading centre for the lower Gulf States of the Middle East.
Yet it is true that investment in this infrastructure has been government led for decades and this continues today with the ordering of 58 giant A380 Airbus aircraft by government owned Emirates Airline, the new Terminal Three for Dubai International Airport and the completely new airport at Jebel Ali, Maktoum International Airport. And the original Jebel Ali Free Zone is now managing ports around the globe as a part of the Dubai World business empire.
Perhaps then it should be no surprise that Dubai has been able to capitalise greatly on the Third Oil Boom as the trading hub of the Middle East. But Sheikh Mohammed's restless business vision never stands still. He created the Dubai Internet City in late 1999, just in time to give the author of this book a dedicated free zone with 100 per cent foreign ownership for his small business venture.
More significant still is the Dubai International Financial Centre inaugurated in 2003 which has taken the role of regional financial centre away from former incumbents Beirut and Bahrain. A year earlier Sheikh Mohammed introduced real estate ownership rights for foreigners, sparking a property boom that has created further wealth and opportunities for all residents who chose to share his vision. Early participants have enjoyed a five-fold increase in property values.
In September 2009 the tallest building in the world, the Burj Dubai will be completed, standing three times higher than London's One Canada Square at Canary Wharf. Indeed, Dubai has become the city of the mega project with the Dubailand theme park set to almost equal the existing metropolis in size, and office space about to triple in just over two years. Dubai is also the hotel construction capital of the world and its three Palm islands have become global icons.
Opportunity Dubai asks where this is all leading to and whether it can be sustained. However, the author's own experience of prospering from the opportunities presented by this incredible city point in a positive direction; although many of his insights will benefit anybody thinking of joining in this adventure, whether doing business in Dubai, buying a home there, or just taking up a job as an expatriate.
Key Topics Covered:
- The Eureka moment
- Meeting Klaus and Lars
- Darkest days for Dubai and AME Info
- The largest English language media in the Middle East
- Dubai steals the limelight for regional news
- The Dubai Real Estate Boom
- The Dubai real estate boom matures
- An apology to Dr. Marc Faber
- Good and bad investment calls
- Business trips and holidays
- Lunch again with David Price
- Epilogue: The Future of Dubai
For more information visit http://www.researchandmarkets.com/research/5d1b07/opportunity_dubai
M2 Communications Ltd disclaims all liability for information provided within M2 PressWIRE. Data prepared by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wide web. Inquiries to info@m2.com.
Laura Wood, Senior Manager, Research and Markets | Fax: +1 646 607 1907 (USA) | Fax: +353 1 481 1716 (International) | e-mail: press@researchandmarkets.com
Tuesday, 5 August 2008
Thailand: Islamic Bank of Thailand expands customer base to include non-Muslims
Section: Business News - The Islamic Bank of Thailand (IBT), set up in 2003 to offer financial services in compliance with Islamic law, isn't only for Muslims, believes new chairman Somchai Virunhaphol, the Bangkok Post reports.
Instead, it needs to rebrand into an "I-bank", ready to offer services to all.
"The IBT isn't only a bank for the country's six million Muslims. It must be a bank for all people, with faster, more efficient services," he said.
The improvement campaign includes a 100-million-baht investment in new computer systems to assist in processing and data management. Staff uniforms will be redesigned to focus on modernised Muslim style.
Dr Somchai, who holds an economics doctorate from the State University of New York, said the bank would also change its expansion policies.
Instead of buying commercial buildings for development into branches, the bank would now lease space in shopping complexes for use as mini-branches to better reach out to customers.
The change will also help cut investment costs sharply, from five to 10 million baht for a full-size branch to just one million. The IBT, with 26 branches now, plans to open five new branches by the end of the year and another 15 in 2009.
Dr Somchai said the bank was also studying other Islamic banks around the world for ideas on how best to improve customer services and operations.
The IBT expects to turn its first profit this year, albeit a small one at four million baht. Accumulated losses to date amounts to around 700 million baht. Executives hope to eventually list the IBT on the Stock Exchange of Thailand.
The Finance Ministry is the IBT's largest single shareholder at 48.54%, with the Government Savings Bank holding another 39.8% and Krung Thai Bank 9.8%. The bank's remaining shares are held by minor investors, including a 0.6% stake by the Brunei Islamic Bank.
Investment funds from Kuwait have expressed interest in taking up to 49% in the IBT through a buyout of the shares held by the GSB and Krung Thai Bank.
Dr Somchai said he would hold talks with the Kuwaiti investors during a conference in Malaysia from Aug 16-17. A deal would require Finance Ministry approval and a waiver of the 25% foreign shareholding limit set on the bank.
"If we can bring in Middle Eastern investors to the bank, this would help lead to significant benefits for our operations by helping us gain a channel to the international market," he said.
Relative to other commercial and specialised state-owned banks, the IBT is one of the smallest in the country, with deposits at the end of April of just 13.2 billion baht, outstanding credit of 11.4 billion and assets of 16.9 billion.
Non-performing loans are relatively high at 16% of total loans, although bank executives hope to bring this to below 10% by year-end through restructuring.
Instead, it needs to rebrand into an "I-bank", ready to offer services to all.
"The IBT isn't only a bank for the country's six million Muslims. It must be a bank for all people, with faster, more efficient services," he said.
The improvement campaign includes a 100-million-baht investment in new computer systems to assist in processing and data management. Staff uniforms will be redesigned to focus on modernised Muslim style.
Dr Somchai, who holds an economics doctorate from the State University of New York, said the bank would also change its expansion policies.
Instead of buying commercial buildings for development into branches, the bank would now lease space in shopping complexes for use as mini-branches to better reach out to customers.
The change will also help cut investment costs sharply, from five to 10 million baht for a full-size branch to just one million. The IBT, with 26 branches now, plans to open five new branches by the end of the year and another 15 in 2009.
Dr Somchai said the bank was also studying other Islamic banks around the world for ideas on how best to improve customer services and operations.
The IBT expects to turn its first profit this year, albeit a small one at four million baht. Accumulated losses to date amounts to around 700 million baht. Executives hope to eventually list the IBT on the Stock Exchange of Thailand.
The Finance Ministry is the IBT's largest single shareholder at 48.54%, with the Government Savings Bank holding another 39.8% and Krung Thai Bank 9.8%. The bank's remaining shares are held by minor investors, including a 0.6% stake by the Brunei Islamic Bank.
Investment funds from Kuwait have expressed interest in taking up to 49% in the IBT through a buyout of the shares held by the GSB and Krung Thai Bank.
Dr Somchai said he would hold talks with the Kuwaiti investors during a conference in Malaysia from Aug 16-17. A deal would require Finance Ministry approval and a waiver of the 25% foreign shareholding limit set on the bank.
"If we can bring in Middle Eastern investors to the bank, this would help lead to significant benefits for our operations by helping us gain a channel to the international market," he said.
Relative to other commercial and specialised state-owned banks, the IBT is one of the smallest in the country, with deposits at the end of April of just 13.2 billion baht, outstanding credit of 11.4 billion and assets of 16.9 billion.
Non-performing loans are relatively high at 16% of total loans, although bank executives hope to bring this to below 10% by year-end through restructuring.
Friday, 1 August 2008
Iran senior cleric says corruption should be uprooted
Tehran, 1 Aug: Provisional Friday Prayer Leader of Tehran referring to Supreme Leader's recent remarks on Mab'ath Eid, said here Friday [1 Aug] his eminence called on people to be resistant and observe patience at all time, and in confrontation with hardships.
According to IRNA Political Desk reporter, Ayatollah Ahmad Jannati addressing thousands of Tehrani worshippers at central campus of Tehran University, further reiterated in his second sermon, "Continuing resistance is a need, we will tolerate sanctions and enmities, and stand tall at our Islamic stronghold."
The Secretary of the Guardians Council of the Constitution said, "Jut like the Infallible Imams (P), who resisted in
confrontation with hardships, and their resistance and patience led to Islam and Shi'i's enduring, as well as the victory of the Islamic Revolution against the power of atheist enemies thanks to resistance, today, too, we are in need of continuing resistance."
Elsewhere in his sermon Jannati appreciated the Judiciary force, the Intelligence Ministry and the Disciplinary Forces for arresting, putting to trial, and execution of the hooligans, arguing, "This decisive move was praiseworthy, since the roots of corruption need to be dried."
The Interim Friday Prayer Leader of Tehran reiterated, "It does not make sense that in the Islamic Republic of Iran a single person would kill 50 human beings and then walk at large in the streets, or that someone found guilty of raping would roam freely in the society." He added, "Such moves should have been made decades ago, and yet, even today they are to be appreciated."
Jannati condemned those "who are sitting abroad, receiving prizes from the foreigners, and condemning such moves," arguing, "If they had suffered miseries, such as being raped, they would have approved of the Iranian nation's move in this respect."
Source: Islamic Republic News Agency website, Tehran, in English 1110 gmt 1 Aug 08
According to IRNA Political Desk reporter, Ayatollah Ahmad Jannati addressing thousands of Tehrani worshippers at central campus of Tehran University, further reiterated in his second sermon, "Continuing resistance is a need, we will tolerate sanctions and enmities, and stand tall at our Islamic stronghold."
The Secretary of the Guardians Council of the Constitution said, "Jut like the Infallible Imams (P), who resisted in
confrontation with hardships, and their resistance and patience led to Islam and Shi'i's enduring, as well as the victory of the Islamic Revolution against the power of atheist enemies thanks to resistance, today, too, we are in need of continuing resistance."
Elsewhere in his sermon Jannati appreciated the Judiciary force, the Intelligence Ministry and the Disciplinary Forces for arresting, putting to trial, and execution of the hooligans, arguing, "This decisive move was praiseworthy, since the roots of corruption need to be dried."
The Interim Friday Prayer Leader of Tehran reiterated, "It does not make sense that in the Islamic Republic of Iran a single person would kill 50 human beings and then walk at large in the streets, or that someone found guilty of raping would roam freely in the society." He added, "Such moves should have been made decades ago, and yet, even today they are to be appreciated."
Jannati condemned those "who are sitting abroad, receiving prizes from the foreigners, and condemning such moves," arguing, "If they had suffered miseries, such as being raped, they would have approved of the Iranian nation's move in this respect."
Source: Islamic Republic News Agency website, Tehran, in English 1110 gmt 1 Aug 08
Wednesday, 30 July 2008
Oman steps out of the shadows
Largely lacking its neighbours' energy revenues, Oman is often portrayed as the Gulf's most somnolent country. But, in one regard at least, that characterisation would be an injustice: Muscat's stock market has been far from dozy.
Undeterred by global credit worries and inflation concerns, Muscat is one the best performing bourses in the Gulf - up 19 per cent this year. A dollar invested in the Muscat Securities Market 12 months ago would have doubled by now.
While the size of the market is a relatively modest $27bn - about 3 per cent of the overall market capitalisation of the six states of the Gulf Co-operation Council - the MSM is deeper than most regional equity markets with 134 listed companies.
This is the second-highest number of listed shares in the Gulf, after the Kuwait stock exchange, and more than Dubai and Abu Dhabi's exchanges combined.
The reason for the bourse's performance is not hard to trace. The Omani economy expanded a nominal 42.9 per cent year-on-year in the first quarter, supporting corporate earnings and disposable incomes of Omanis, according to analysts. "People tend to overlook how strong the Omani economic story is," says Simon Williams, chief Gulf economist at HSBC.
Aided by the healthy economy, earnings are expected to grow 35 per cent this year according to Vision Investment Services, an Omani brokerage, adding to the allure of a market that is still cheap relative to other Gulf stock exchanges.
Oman is also open to foreign investment. While many individual companies have statutes that cap non-Omani ownership, the MSM allows foreign ownership of up to 100 per cent, with no capital gains tax, and investors may appeal to the Capital Markets Authority to overturn ownership limits.
Tellingly, Gulf investors hold nearly a fifth of the market while non-Arab investors own almost a 10th.
Unlike the rest of the Gulf, book-running when launching an initial public offering is the norm, reducing volatility when the shares are listed. Thus Oman may be less prone to the extravagant boom-and-bust cycles of its neighbours, bankers say.
The market has recently dipped, as second-quarter earnings of big companies such as Raysut Cement failed to meet expectations. Furthermore, while the economy may be doing well, inflation is soaring.
Inflation has spurred Omanis to place their savings in the stock market, rather than in the banking system where real interest rates are negative. But in the long run inflation is likely to put pressure on spending power and weaken investment appetite.
Investors in the Muscat stock exchange, however, remain optimistic for the present.
Vision Investment Services, whose Emerging Oman fund has returned nearly 30 per cent this year, expects the stock exchange to gain a further 10-15 percentage points this year.
Inflation remains a concern, says Mr Ibrahim, but "the underlying growth story is very strong".
Undeterred by global credit worries and inflation concerns, Muscat is one the best performing bourses in the Gulf - up 19 per cent this year. A dollar invested in the Muscat Securities Market 12 months ago would have doubled by now.
While the size of the market is a relatively modest $27bn - about 3 per cent of the overall market capitalisation of the six states of the Gulf Co-operation Council - the MSM is deeper than most regional equity markets with 134 listed companies.
This is the second-highest number of listed shares in the Gulf, after the Kuwait stock exchange, and more than Dubai and Abu Dhabi's exchanges combined.
The reason for the bourse's performance is not hard to trace. The Omani economy expanded a nominal 42.9 per cent year-on-year in the first quarter, supporting corporate earnings and disposable incomes of Omanis, according to analysts. "People tend to overlook how strong the Omani economic story is," says Simon Williams, chief Gulf economist at HSBC.
Aided by the healthy economy, earnings are expected to grow 35 per cent this year according to Vision Investment Services, an Omani brokerage, adding to the allure of a market that is still cheap relative to other Gulf stock exchanges.
Oman is also open to foreign investment. While many individual companies have statutes that cap non-Omani ownership, the MSM allows foreign ownership of up to 100 per cent, with no capital gains tax, and investors may appeal to the Capital Markets Authority to overturn ownership limits.
Tellingly, Gulf investors hold nearly a fifth of the market while non-Arab investors own almost a 10th.
Unlike the rest of the Gulf, book-running when launching an initial public offering is the norm, reducing volatility when the shares are listed. Thus Oman may be less prone to the extravagant boom-and-bust cycles of its neighbours, bankers say.
The market has recently dipped, as second-quarter earnings of big companies such as Raysut Cement failed to meet expectations. Furthermore, while the economy may be doing well, inflation is soaring.
Inflation has spurred Omanis to place their savings in the stock market, rather than in the banking system where real interest rates are negative. But in the long run inflation is likely to put pressure on spending power and weaken investment appetite.
Investors in the Muscat stock exchange, however, remain optimistic for the present.
Vision Investment Services, whose Emerging Oman fund has returned nearly 30 per cent this year, expects the stock exchange to gain a further 10-15 percentage points this year.
Inflation remains a concern, says Mr Ibrahim, but "the underlying growth story is very strong".
Friday, 25 July 2008
Iron Silk Road inaugurated amid rapprochement with Yerevan
Turkish stretch of a strategic railway project excluding Armenia inaugurated in Kars at a time when Ankara signals positive moves to normalize ties with Yerevan. 'The project is open to all countries in the region,' says Gül ANKARA – Turkish Daily News
Turkey joined with two other regional leaders in a show of power yesterday in inaugurating the 76-kilometer Turkish section of a strategic railway that bypasses Armenia, which has long opposed the project.
The presidents of Turkey, Georgia and Azerbaijan launched the railway project, which is considered a potential source of isolation and an economic setback for Armenians, in the eastern Anatolian province of Kars. The inauguration of the long awaited project comes at a time when Ankara has gestured positively towards mending fences with Yerevan through secret diplomatic negotiations, raising questions about the viability of a rapprochement.
“The project is open to all countries in the region who want to contribute to good, neighborly relations, peace and prosperity,” President Abdullah Gül said in Kars, a Turkish city near the Armenian border.
The Baku-Tbilisi-Kars railroad excludes Armenia, which has long opposed the project. Yerevan has argued that there is already a railway running from Kars to the northern Armenian city of Gyumri and that the Kars-Gyumri link, which has stood idle for over a decade, could be used to build a trans-Caucasus railroad.
But Turkey, Azerbaijan and Georgia have pressed ahead with plans to realize the long-awaited project, a move that is expected to cast a shadow on Turkey's recent opening toward Armenia.
“The Baku-Tbilisi-Kars railroad project will revive the historic Silk Road,” Gül said during yesterday's ceremony, also attended by the presidents of Azerbaijan and Georgia, Ilham Aliyev and Mikhail Saakashvili. He said the railroad, also known as the Iron Silk Road, would not only link Turkey's rail network with that of Georgia and energy-rich Azerbaijan but also connect Central Asia and China to Europe. The Georgian section of the 180-kilometer project was completed in 2007. With an estimated cost of $450 million, the project is expected to be complete in 2010. The railroad will carry one million passengers and 6.5 million tons of freight annually, while the number of passengers it will carry will reach three million in 2034, private NTV television reported. Parallel to the Marmaray Project to link the European and Asian halves of Istanbul by an undersea rail tunnel across the Bosporus, the Baku-Tbilisi-Kars project will pave the way for transfer of freight from Europe to China, so that the freight transfer between Europe and Central Asia will shift to the railways.
Railroad creates economic zone, says Gül Gül said the project was revived in 2004 and after negotiations between the three countries and strong political will it is becoming a reality. He noted that Kazakhstan and China have extended strong support for the project. The relevant ministries of Turkey, Georgia and Azerbaijan will be in charge of following up on the project and will write periodical reports to the presidents, informing them of all phases of the railroad work. “The project somehow created a new economic zone that has not been named,” said Gül. European Union candidate Turkey sees such infrastructure projects as boosting its role as a bridge for trade and energy between the East and the West.
Turkey joined with two other regional leaders in a show of power yesterday in inaugurating the 76-kilometer Turkish section of a strategic railway that bypasses Armenia, which has long opposed the project.
The presidents of Turkey, Georgia and Azerbaijan launched the railway project, which is considered a potential source of isolation and an economic setback for Armenians, in the eastern Anatolian province of Kars. The inauguration of the long awaited project comes at a time when Ankara has gestured positively towards mending fences with Yerevan through secret diplomatic negotiations, raising questions about the viability of a rapprochement.
“The project is open to all countries in the region who want to contribute to good, neighborly relations, peace and prosperity,” President Abdullah Gül said in Kars, a Turkish city near the Armenian border.
The Baku-Tbilisi-Kars railroad excludes Armenia, which has long opposed the project. Yerevan has argued that there is already a railway running from Kars to the northern Armenian city of Gyumri and that the Kars-Gyumri link, which has stood idle for over a decade, could be used to build a trans-Caucasus railroad.
But Turkey, Azerbaijan and Georgia have pressed ahead with plans to realize the long-awaited project, a move that is expected to cast a shadow on Turkey's recent opening toward Armenia.
“The Baku-Tbilisi-Kars railroad project will revive the historic Silk Road,” Gül said during yesterday's ceremony, also attended by the presidents of Azerbaijan and Georgia, Ilham Aliyev and Mikhail Saakashvili. He said the railroad, also known as the Iron Silk Road, would not only link Turkey's rail network with that of Georgia and energy-rich Azerbaijan but also connect Central Asia and China to Europe. The Georgian section of the 180-kilometer project was completed in 2007. With an estimated cost of $450 million, the project is expected to be complete in 2010. The railroad will carry one million passengers and 6.5 million tons of freight annually, while the number of passengers it will carry will reach three million in 2034, private NTV television reported. Parallel to the Marmaray Project to link the European and Asian halves of Istanbul by an undersea rail tunnel across the Bosporus, the Baku-Tbilisi-Kars project will pave the way for transfer of freight from Europe to China, so that the freight transfer between Europe and Central Asia will shift to the railways.
Railroad creates economic zone, says Gül Gül said the project was revived in 2004 and after negotiations between the three countries and strong political will it is becoming a reality. He noted that Kazakhstan and China have extended strong support for the project. The relevant ministries of Turkey, Georgia and Azerbaijan will be in charge of following up on the project and will write periodical reports to the presidents, informing them of all phases of the railroad work. “The project somehow created a new economic zone that has not been named,” said Gül. European Union candidate Turkey sees such infrastructure projects as boosting its role as a bridge for trade and energy between the East and the West.
Wednesday, 23 July 2008
A Comprehensive Report on the War for the Energy Resources of Southern and Central Europe, the Caspian Region and Central Asia
DUBLIN, Ireland - (BUSINESS WIRE) - Research and Markets (http://www.researchandmarkets.com/research/48fa31/war_for_energy_res) has announced the addition of the "War for Energy Resources of Southern and Central Europe, the Caspian Region and Central Asia" report to their offering.
The struggle between the Russian and anti-Russian pipeline projects in the South and Center of Europe becomes more and more intense. A dramatic fighting for hydrocarbons of the Caspian Sea, Central Asia and Iran, as well as the transportation routes has been in progress.
The EU keeps saying about the necessity of finding an alternative to Russia as the main supplier of hydrocarbons to the EU. The countries of the Central Asian Region are proposed to play this role. Russia answers to these moves both by promising to start exporting hydrocarbons to China and by negotiating on new joint gas and oil pipeline projects in the EU with the European companies. “The export wars” become more and more hot.
The new study focuses on the following subjects:
Future development of the gas market in Europe and the forecast of gas demand
- Is it possible to find an alternative to the Russian gas?
- Alleged and actual sources of hydrocarbon supplies to the EU
The place and role of Ukraine and Belarus as the main transit countries of the Russian hydrocarbons to the EU
- The current condition of the gas system, and issues associated with investments, rates and “shadow” export
Fight for Central Asia
- The possibility of the Kazakh oil export into the European market
- The potential expansion of the Caspian pipeline system
- Burgas-Alexandrupolis project as a potential long-term project
- The Baltic export against that of the Black Sea
- Competition for the control of the Turkmen and Uzbek gas
- The role of the EU, China and the US
Russian and anti-Russian projects of oil and gas supply to the EU
- Economic and political prospects of the new pipelines:
the South Stream
the Blue Stream
the White Stream
Nabucco
Future short- and mid-term scenarios
- The possible Russia’s moves on diversification of its risks in natural gas and oil transit to the EU
Key Topics Covered:
- How much gas Europe needs?
- Condition of the Pipeline System in Ukraine and Belarus
- Russia’s Projects for the Transport of Gas to Southern and Central Europe Round Ukraine and Belarus
- Fight for Gas from Central Asia: New Risks for Russia
- Problems of Oil Export to Southern and Central Europe
For more information visit http://www.researchandmarkets.com/research/48fa31/war_for_energy_res.
Research and Markets Laura Wood Senior Manager Fax from USA: 646-607-1907 Fax from rest of the world: +353-1-481-1716 press@researchandmarkets.com
The struggle between the Russian and anti-Russian pipeline projects in the South and Center of Europe becomes more and more intense. A dramatic fighting for hydrocarbons of the Caspian Sea, Central Asia and Iran, as well as the transportation routes has been in progress.
The EU keeps saying about the necessity of finding an alternative to Russia as the main supplier of hydrocarbons to the EU. The countries of the Central Asian Region are proposed to play this role. Russia answers to these moves both by promising to start exporting hydrocarbons to China and by negotiating on new joint gas and oil pipeline projects in the EU with the European companies. “The export wars” become more and more hot.
The new study focuses on the following subjects:
Future development of the gas market in Europe and the forecast of gas demand
- Is it possible to find an alternative to the Russian gas?
- Alleged and actual sources of hydrocarbon supplies to the EU
The place and role of Ukraine and Belarus as the main transit countries of the Russian hydrocarbons to the EU
- The current condition of the gas system, and issues associated with investments, rates and “shadow” export
Fight for Central Asia
- The possibility of the Kazakh oil export into the European market
- The potential expansion of the Caspian pipeline system
- Burgas-Alexandrupolis project as a potential long-term project
- The Baltic export against that of the Black Sea
- Competition for the control of the Turkmen and Uzbek gas
- The role of the EU, China and the US
Russian and anti-Russian projects of oil and gas supply to the EU
- Economic and political prospects of the new pipelines:
the South Stream
the Blue Stream
the White Stream
Nabucco
Future short- and mid-term scenarios
- The possible Russia’s moves on diversification of its risks in natural gas and oil transit to the EU
Key Topics Covered:
- How much gas Europe needs?
- Condition of the Pipeline System in Ukraine and Belarus
- Russia’s Projects for the Transport of Gas to Southern and Central Europe Round Ukraine and Belarus
- Fight for Gas from Central Asia: New Risks for Russia
- Problems of Oil Export to Southern and Central Europe
For more information visit http://www.researchandmarkets.com/research/48fa31/war_for_energy_res.
Research and Markets Laura Wood Senior Manager Fax from USA: 646-607-1907 Fax from rest of the world: +353-1-481-1716 press@researchandmarkets.com
Tuesday, 22 July 2008
Convention spoils plate record bid
A bid to trumpet the UAE’s date growing industry around the world with a record-breaking plate of dates may be in tatters after world-record judges disqualified the entry.
The organisers of the Liwa Date Festival sought to put the pride of the show and the region on the global map with an enormous platter filled with dates. Judges from Guinness World Records, however, found a hitch: the 12- by two-metre dish was not made from porcelain, crystal or clay, but stainless steel.
The record-breaking bid was meant as the culmination of 17 days of festivities, including numerous auctions of dates, poetry evenings, a group wedding, the Mazayin al Ratb competition to find the best dates and lectures on date palm cultivation. Yet there is, in fact, no official record for the biggest plate of dates; Liwa would have competed in the largest plate category, a record clinched in August 1996 in Gifu, Japan, where the Inatsu town planning association created a ceramic plate that measured 2.8 metres in diameter.
“We are very disappointed,” said Mohammed al Qubaisi, one of the festival organisers, as his team tried a final push to persuade the judges to waive the criteria yesterday. “We had the stainless steel plate made about a month ago but were only told two weeks ago that the dish had to be porcelain, crystal or clay. We tried to explain that it is traditional for dates to be displayed in steel plates or wicker baskets, but they would not listen.
“With only two weeks’ notice before the festival started, there was not enough time to make a regulation plate. We do not have an oven big enough to create a clay plate and the crystal or china plates would be even harder for us to get hold of.”
Mr Qubaisi said festival officials, who first put in their record-breaking bid at the beginning of June, still planned to display the huge platter of dates on Aug 1, but would have to be satisfied with not making the record books.
“It is not the fault of Guinness, but their agents who did not tell us the right information,” he said.
Farah al Masri, the Dubai-based agent for Guinness World Records, denied the festival organisers had been told of the criteria too late, saying: “We are obliged to follow the rules and have no other choice. Steel is simply not acceptable as plates are not usually made of it. They should be made from porcelain, clay or glass.
“We gave them the options at the beginning of this month.”
She said Liwa officials had initially wanted to set a record for the largest bowl of dates but, as the category does not exist, they were advised to go for the biggest plate. Liwa’s bid may also have fallen foul in other ways as the dish is rectangular rather than round.
“It sounds like something has been lost in translation,” a spokesman for Guinness World Records said. “Any [record-breaking] item must be made from exactly the same material as the original.”
Guinness World Records was last night reconsidering whether the attempt could be allowed or a new category added to accommodate the entry.
“There seems to have been a misunderstanding,” said the spokesman. “The claimants need to contact us directly so we can assess the situation.”
The organisers of the Liwa Date Festival sought to put the pride of the show and the region on the global map with an enormous platter filled with dates. Judges from Guinness World Records, however, found a hitch: the 12- by two-metre dish was not made from porcelain, crystal or clay, but stainless steel.
The record-breaking bid was meant as the culmination of 17 days of festivities, including numerous auctions of dates, poetry evenings, a group wedding, the Mazayin al Ratb competition to find the best dates and lectures on date palm cultivation. Yet there is, in fact, no official record for the biggest plate of dates; Liwa would have competed in the largest plate category, a record clinched in August 1996 in Gifu, Japan, where the Inatsu town planning association created a ceramic plate that measured 2.8 metres in diameter.
“We are very disappointed,” said Mohammed al Qubaisi, one of the festival organisers, as his team tried a final push to persuade the judges to waive the criteria yesterday. “We had the stainless steel plate made about a month ago but were only told two weeks ago that the dish had to be porcelain, crystal or clay. We tried to explain that it is traditional for dates to be displayed in steel plates or wicker baskets, but they would not listen.
“With only two weeks’ notice before the festival started, there was not enough time to make a regulation plate. We do not have an oven big enough to create a clay plate and the crystal or china plates would be even harder for us to get hold of.”
Mr Qubaisi said festival officials, who first put in their record-breaking bid at the beginning of June, still planned to display the huge platter of dates on Aug 1, but would have to be satisfied with not making the record books.
“It is not the fault of Guinness, but their agents who did not tell us the right information,” he said.
Farah al Masri, the Dubai-based agent for Guinness World Records, denied the festival organisers had been told of the criteria too late, saying: “We are obliged to follow the rules and have no other choice. Steel is simply not acceptable as plates are not usually made of it. They should be made from porcelain, clay or glass.
“We gave them the options at the beginning of this month.”
She said Liwa officials had initially wanted to set a record for the largest bowl of dates but, as the category does not exist, they were advised to go for the biggest plate. Liwa’s bid may also have fallen foul in other ways as the dish is rectangular rather than round.
“It sounds like something has been lost in translation,” a spokesman for Guinness World Records said. “Any [record-breaking] item must be made from exactly the same material as the original.”
Guinness World Records was last night reconsidering whether the attempt could be allowed or a new category added to accommodate the entry.
“There seems to have been a misunderstanding,” said the spokesman. “The claimants need to contact us directly so we can assess the situation.”
The oil price how long can it go on rising?
The oil price how long can it go on rising? In an exclusive interview with The Middle East, Robert Mabro, a world-renowned expert on oil and gas, talks to Pamela Ann Smith.(Interview)
Robert Mabro is widely regarded as one of the world's foremost experts on oil and gas. He is the founder and current honorary president of the Oxford Institute for Energy Studies and emeritus fellow of St. Antony's College at Oxford University, England. Born and educated as an engineer in Alexandria, Egypt, he has received awards from leaders around the world, including a CBE from the Queen of England, others from the presidents of Venezuela and Mexico and, last November, the Distinction Prize from King Abdullah of Saudi Arabia for his lifelong contribution to energy research
In this wide-ranging interview with The Middle East, Mabro explains why he feels it is the banks and hedge funds, rather than Opec, that are driving the oil price to record highs, and why he believes, sooner or later, it will come down.
Daniel Yergin, one of the most influential oil experts in the US, said in May that he thinks with the current high price of crude oil, economic realities will start to kick in and lower demand in the US, one of the world's biggest consumers of oil.
Demand has already come down in the US, even before it hit $125 a barrel.
The US investment bank, Golfman Sachs, says that oil could hit $200 a barrel, on a surge.
Yes, 'a spike'.
But, is this realistic? Doesn't this assume that there is no change in the world's demand for oil, even if it starts to lower because of the high price?
What Goldman Sachs says, is that supply tightened. Demand doesn't fall until the price goes up. So you have disequilibrium, an imbalance, which pushes the price up. They say it gives you a spike and then it's the spike that kills demand. Why not?
But, for me the question is, 'why $200?'.
Why?
Chakib Khelil, the Algerian minister and president of Opec, made a statement to the press saying that we could have a price of $200. But it is foolish to predict that. Perhaps it will happen but there's no point in saying it.
If what the market believes is the importance of Opec, when its President says it could reach $200, they see this as a message from Opec. Then when Goldman Sachs, which plays a leading role in the futures market, says it could hit $200 in a spike, and given that the same analyst in Goldman Sachs said a year ago that it would hit $100 a barrel when it was only $60, the bank's predictions have double authority. Their analyst was right once and people in the market, in the futures market, know that Goldman Sachs has weight. So you have the weight coming from Opec, and the weight coming from the financial sector behind the same prediction. This fuels the bullish mood.
To what extent do you think there are real supply constraints, or an imbalance between supply and demand?
There are supply constraints already. The people who try to explain the high price by the economic fundamentals of supply and demand say something very simple. They say supply is not in good health. We have great disappointments about the growth of oil production in the non-Opec countries. Mexico is down, Norway is down and also the US and the UK. Now, Russia, too, apparently, plus Egypt, Oman and Syria. The oil companies are also trying to produce more, but they are not doing very well. So the string of news coming out of the non-Opec region is pessimistic, disappointing.
And Opec does not seem to be increasing its capacity very much.
Do you mean capacity, or actual production?
The ability to produce the stuff.
We have problems in Venezuela, in Nigeria, in Iraq and in Iran. Production in Indonesia has been coming down, their production is declining. So we cannot expect much growth in supply.
On the other hand, Goldman Sachs claims demand is very robust. But it is not robust in the US. Demand in Europe is flat, Japan is flat. But we have the three others China, India and the Middle East.
Where it's going up, rapidly?
Yes. Fine, I accept both sides. But you have to put them together. If supply is tight and demand is robust, the price has to go up. But, can we predict that as the price goes up the Chinese will carry on growing at seven or eight per cent? I can't believe that.
[GRAPHICS OMITTED]
India is always put together with China, but the scale is different. The rate of growth in India is high, but the absolute volumes are not very big. So I would not put India with China.
In the Middle East, of course, there's plenty of money, so you have an income effect. People have more money in their pockets, so they go on burning petrol. Why not?
But Saudi Arabia and the Gulf countries are also linked to the dollar, and their oil is subsidised ...
No, it's not really subsidised. It's cheaper than elsewhere, but for it to be subsidised, the price of the gallon, or litre, of petroleum to the consumer has to be less than the price of it when it comes out of the ground. It has to be below cost.
There is not a subsidy that is paid out. There is an opportunity cost, an opportunity lost, if you like. The government could have sold that barrel of crude oil for, say, $120 but is selling it domestically for $50. This is not a subsidy in the sense of money coming out of the budget to pay the difference, even though the budget is not getting as much as it could. It's a subsidy only in a very loose sense.
On the supply side, there is a huge controversy about what Saudi Arabia's reserves really are. There is talk of a peak, very soon, in oil supplies worldwide and that after that, we will have to learn to live with much less oil.
It's all irrelevant. It's nonsense.
When we talk about reserves, we are talking about oil in the ground. The concepts about reserves are metaphysical concepts. They have never been accurate, and they never will be.
So, the distinction between proven and probable reserves is meaningless?
No, it's not meaningless. But it is one phony number compared to another phony number. I'll give you an example. I tell my students, do the following exercise. 'Go to the BP Statistical Review of World Energy and see what the reserves of the non-Opec countries were 20 years ago. Then, compare them with the reserves of the same countries in the latest issue.' Then, they have to make a longer calculation: 'See how much these non-Opec countries have produced in these past 20 years.' Now, if the first estimate is correct, they, the non-Opec countries, would not have a drop of oil left. That's the first point.
The second point is, 'Why should I care? Why should anybody on earth care whether Saudi Arabia has 260bn barrels of crude oil reserves, or 100bn?' It doesn't matter, not at all. Because what you can produce today, whether it's 260bn or 100bn, the answer is the same. You cannot produce on the basis of 300bn, or 260bn in reserves. But if you produce at the same rate vis-a-vis reserves that the North Sea has, Saudi Arabia would be now be producing more than the whole world's consumption. Of course, its oil would then run out quickly.
So, it's irrelevant unless you are thinking 40 or 50 years ahead. But I will certainly be dead by then ...
And all sorts of things could happen by then?
Yes. There is a hysteria about what the reserves are. But there is an even worse hysteria produced by a guy called Simmons. I have met him, he is a fun guy, but he is dangerous.
You mean Matthew Simmons, the author of Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy?. The book that is a bestseller in the States?
He has said that the Ghawar field in Saudi Arabia, which is something like 110 miles long and 17 miles wide ....
It's huge. It's the biggest one in Saudi Arabia, isn't it?
Yes, and it is well behaved, too. Simmons has said, "It cannot produce anymore. It is declining, and there is water in it." Well, every field has water. If there isn't water in it, the oil doesn't come out! Oil is not like a swimming pool, it is in rock, in porous rock. There is water and gas, so when you make the hole, you bring the pressure down, and the water pushes up, so all oil has water in it, and you have to take it out. He claims it's a lot more, and makes a comparison with a field in Oman which is declining. But this is like comparing a calf with an elephant. A small thing with something big. He has written nonsense on Ghawar.
Then he said Saudi Arabia has no surplus capacity. In other words, that they don't have the capacity to produce more than they are producing today. Why? I was in Saudi Arabia, and I haven't seen this. Whose leg is he pulling? You can't see any evidence for this. We have lists of the fields that Saudi Arabia has shut down. This is public knowledge. 'Surplus capacity' means that you can produce more, but you keep it in the ground, you shut down certain fields so that you can re-open them when you need it.
So if Saudi Arabia, the world's number one exporter, has surplus capacity, why is the oil price so high?
Well, you have different theories about this. There is one theory which is led by Paul Horsnell of Barclays Capital. He worked with me at the Institute for 10 years. I respect his views, but I cannot accept them 100%. He argues very forcefully and consistently that it is a supply/demand problem. That the market sees that there is tightness of supply, and that demand is still going on
My argument is that the futures market for oil is only partly an oil market, because it is also a financial market. People buy and sell a financial instrument, which is called a futures contract and decides that this is not a tenable situation in the long run. So his theory is that the market is testing the limits. It is like a child who wants to explore the boundaries to see how far he can go before his parents start screaming at him. So what we are observing is a period where the market is testing the boundary, trying to establish what the boundary is, what the price should be. Since no one is intervening, the market can carry on wondering and pushing the boundary. I see a lot of merit in that theory.
But, this is not the whole of the story. There are several dimensions in the oil market, because you have to remember that what is happening is that the reference price of oil comes from the futures market, from Nymex (New York Mercantile Exchange) in New York and from ICE (Intercontinental Exchange) futures in London. Nymex is the WTI (West Texas Intermediate, a pricing benchmark for crude oil) price, ICE the price for Brent crude (a pricing benchmark for oil from the North Sea that is also widely used for other crude oils traded in the West). People say no, it is the spot price as well. But the spot price and the futures price move together, because nobody is going to bid the spot price without looking at the futures price and vice-versa. So, they are co-determinant.
We have to understand that. And the reference price comes from this. Countries which have oil to export and who want to sell it in the Western hemisphere put this reference price in their formula, i.e. if they are selling to the USA. The same for Europe and Africa. It's only Asia where it is done differently.
So, the reference price ...
So, to understand how the oil price is determined, you have to have some views about how the financial markets work. My argument is that the futures market for oil is only partly an oil market, because it is also a financial market. People buy and sell a financial instrument, which is called a futures contract.
Your argument is?
My argument is that there is also a financial dimension in the operation of the oil futures market. It is not only a question of supply and demand. Now what does that mean? It means that when I go there and I want to buy or sell oil in the futures market, if I am a hedge fund, or whatever, I look at the sentiment, or other opportunities, in other financial markets. If I find that the equity markets are not so attractive, and if I see that the bond market is not attractive, and that the foreign exchange market is not attractive, because we don't know where the dollar is going, I might ask, 'What are the financial markets that are rooted in the real world?'
Equities are not rooted in the real world. There's no real supply and demand for equities, for bonds, for foreign exchange. But there is for wheat, for gold, for metals, and for oil. So, I would tend to move to these markets, or to move out of them. Or vice versa.
Suppose I think that the oil price will not go up. But I expect the bond price to go higher. And I don't have an infinite amount of money, so I move my funds from oil to bonds. So the oil price comes down, even though I expected it to go up.
Then take the mirror image. If I am investing in oil because everything else is unattractive, and I think that oil should come down because there is a fear of recession, the oil price actually goes up, because money comes in to it.
In other words, it's a question of expectations, what people think? But people think that the oil price should come down if growth slows, don't they?
They don't think that, but they should think that. In normal circumstances, the price would come down because there is fear of recession. And everybody in the press is writing about this. There is bad news on the front pages, that the economies are coming down. So demand for oil has to come down, except for this miracle, this miraculous China. But, you know, this is not the Olympics, this is economics.
The oil price should come down, but it doesn't. So what is the counterforce, what it preventing that?
Horsnell would say the counterforce is that there is tightness.
Scarcity?
Yes.
Following US President George Bush's visit to Saudi Arabia in May, there were conflicting reports about whether the Saudis agreed to increase their oil output. What do you think?
It was a Friday. Saudi Arabia made a statement that it would increase output by 300,000 barrels a day to compensate for shortfalls among other Opec countries. But what happened? The oil price went up instead of down. That same day, Goldman Sachs had produced a report saying that the average price later this year would be $147. So, who is leading the market? Saudi Arabia or a big US investment bank?
If the oil price continues to go up, will Saudi Arabia produce more oil?
Saudi Arabia produces as little, or as much, as its customers want, subject to its own production constraints. If customers go to, let's say, Algeria, Algeria may say no. Saudi Arabia has much more oil, much more. They will say yes. The production quota set by Opec is not relevant, except if the market is tight. What determines the level of production is demand.
There is one exception. If the oil price collapses and prices are going very, very low, then Saudi Arabia will produce less than the market wants. This happened in 1998. But the rest of the time, they produce for the market.
So, is Horsnell right? That too little supply is the main problem?
Some other people would say that oil, along with wheat and some metals, remains more attractive than other investments in the financial markets. And we know that the people who lead these markets are financial institutions, the banks and the hedge funds. They are the leaders. So the paradox is that, consciously or unconsciously, the determination of the oil price has gone away from the producers to the financial sector. It went away from the oil people to the non-oil people.
So is there anything that could stop the oil price from rising in the coming year?
Yes, of course. A bubble has formed. We know one thing about bubbles, and that is that they burst. When, I don't know. It could be tomorrow, it could be in four years' time.
Robert Mabro is widely regarded as one of the world's foremost experts on oil and gas. He is the founder and current honorary president of the Oxford Institute for Energy Studies and emeritus fellow of St. Antony's College at Oxford University, England. Born and educated as an engineer in Alexandria, Egypt, he has received awards from leaders around the world, including a CBE from the Queen of England, others from the presidents of Venezuela and Mexico and, last November, the Distinction Prize from King Abdullah of Saudi Arabia for his lifelong contribution to energy research
In this wide-ranging interview with The Middle East, Mabro explains why he feels it is the banks and hedge funds, rather than Opec, that are driving the oil price to record highs, and why he believes, sooner or later, it will come down.
Daniel Yergin, one of the most influential oil experts in the US, said in May that he thinks with the current high price of crude oil, economic realities will start to kick in and lower demand in the US, one of the world's biggest consumers of oil.
Demand has already come down in the US, even before it hit $125 a barrel.
The US investment bank, Golfman Sachs, says that oil could hit $200 a barrel, on a surge.
Yes, 'a spike'.
But, is this realistic? Doesn't this assume that there is no change in the world's demand for oil, even if it starts to lower because of the high price?
What Goldman Sachs says, is that supply tightened. Demand doesn't fall until the price goes up. So you have disequilibrium, an imbalance, which pushes the price up. They say it gives you a spike and then it's the spike that kills demand. Why not?
But, for me the question is, 'why $200?'.
Why?
Chakib Khelil, the Algerian minister and president of Opec, made a statement to the press saying that we could have a price of $200. But it is foolish to predict that. Perhaps it will happen but there's no point in saying it.
If what the market believes is the importance of Opec, when its President says it could reach $200, they see this as a message from Opec. Then when Goldman Sachs, which plays a leading role in the futures market, says it could hit $200 in a spike, and given that the same analyst in Goldman Sachs said a year ago that it would hit $100 a barrel when it was only $60, the bank's predictions have double authority. Their analyst was right once and people in the market, in the futures market, know that Goldman Sachs has weight. So you have the weight coming from Opec, and the weight coming from the financial sector behind the same prediction. This fuels the bullish mood.
To what extent do you think there are real supply constraints, or an imbalance between supply and demand?
There are supply constraints already. The people who try to explain the high price by the economic fundamentals of supply and demand say something very simple. They say supply is not in good health. We have great disappointments about the growth of oil production in the non-Opec countries. Mexico is down, Norway is down and also the US and the UK. Now, Russia, too, apparently, plus Egypt, Oman and Syria. The oil companies are also trying to produce more, but they are not doing very well. So the string of news coming out of the non-Opec region is pessimistic, disappointing.
And Opec does not seem to be increasing its capacity very much.
Do you mean capacity, or actual production?
The ability to produce the stuff.
We have problems in Venezuela, in Nigeria, in Iraq and in Iran. Production in Indonesia has been coming down, their production is declining. So we cannot expect much growth in supply.
On the other hand, Goldman Sachs claims demand is very robust. But it is not robust in the US. Demand in Europe is flat, Japan is flat. But we have the three others China, India and the Middle East.
Where it's going up, rapidly?
Yes. Fine, I accept both sides. But you have to put them together. If supply is tight and demand is robust, the price has to go up. But, can we predict that as the price goes up the Chinese will carry on growing at seven or eight per cent? I can't believe that.
[GRAPHICS OMITTED]
India is always put together with China, but the scale is different. The rate of growth in India is high, but the absolute volumes are not very big. So I would not put India with China.
In the Middle East, of course, there's plenty of money, so you have an income effect. People have more money in their pockets, so they go on burning petrol. Why not?
But Saudi Arabia and the Gulf countries are also linked to the dollar, and their oil is subsidised ...
No, it's not really subsidised. It's cheaper than elsewhere, but for it to be subsidised, the price of the gallon, or litre, of petroleum to the consumer has to be less than the price of it when it comes out of the ground. It has to be below cost.
There is not a subsidy that is paid out. There is an opportunity cost, an opportunity lost, if you like. The government could have sold that barrel of crude oil for, say, $120 but is selling it domestically for $50. This is not a subsidy in the sense of money coming out of the budget to pay the difference, even though the budget is not getting as much as it could. It's a subsidy only in a very loose sense.
On the supply side, there is a huge controversy about what Saudi Arabia's reserves really are. There is talk of a peak, very soon, in oil supplies worldwide and that after that, we will have to learn to live with much less oil.
It's all irrelevant. It's nonsense.
When we talk about reserves, we are talking about oil in the ground. The concepts about reserves are metaphysical concepts. They have never been accurate, and they never will be.
So, the distinction between proven and probable reserves is meaningless?
No, it's not meaningless. But it is one phony number compared to another phony number. I'll give you an example. I tell my students, do the following exercise. 'Go to the BP Statistical Review of World Energy and see what the reserves of the non-Opec countries were 20 years ago. Then, compare them with the reserves of the same countries in the latest issue.' Then, they have to make a longer calculation: 'See how much these non-Opec countries have produced in these past 20 years.' Now, if the first estimate is correct, they, the non-Opec countries, would not have a drop of oil left. That's the first point.
The second point is, 'Why should I care? Why should anybody on earth care whether Saudi Arabia has 260bn barrels of crude oil reserves, or 100bn?' It doesn't matter, not at all. Because what you can produce today, whether it's 260bn or 100bn, the answer is the same. You cannot produce on the basis of 300bn, or 260bn in reserves. But if you produce at the same rate vis-a-vis reserves that the North Sea has, Saudi Arabia would be now be producing more than the whole world's consumption. Of course, its oil would then run out quickly.
So, it's irrelevant unless you are thinking 40 or 50 years ahead. But I will certainly be dead by then ...
And all sorts of things could happen by then?
Yes. There is a hysteria about what the reserves are. But there is an even worse hysteria produced by a guy called Simmons. I have met him, he is a fun guy, but he is dangerous.
You mean Matthew Simmons, the author of Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy?. The book that is a bestseller in the States?
He has said that the Ghawar field in Saudi Arabia, which is something like 110 miles long and 17 miles wide ....
It's huge. It's the biggest one in Saudi Arabia, isn't it?
Yes, and it is well behaved, too. Simmons has said, "It cannot produce anymore. It is declining, and there is water in it." Well, every field has water. If there isn't water in it, the oil doesn't come out! Oil is not like a swimming pool, it is in rock, in porous rock. There is water and gas, so when you make the hole, you bring the pressure down, and the water pushes up, so all oil has water in it, and you have to take it out. He claims it's a lot more, and makes a comparison with a field in Oman which is declining. But this is like comparing a calf with an elephant. A small thing with something big. He has written nonsense on Ghawar.
Then he said Saudi Arabia has no surplus capacity. In other words, that they don't have the capacity to produce more than they are producing today. Why? I was in Saudi Arabia, and I haven't seen this. Whose leg is he pulling? You can't see any evidence for this. We have lists of the fields that Saudi Arabia has shut down. This is public knowledge. 'Surplus capacity' means that you can produce more, but you keep it in the ground, you shut down certain fields so that you can re-open them when you need it.
So if Saudi Arabia, the world's number one exporter, has surplus capacity, why is the oil price so high?
Well, you have different theories about this. There is one theory which is led by Paul Horsnell of Barclays Capital. He worked with me at the Institute for 10 years. I respect his views, but I cannot accept them 100%. He argues very forcefully and consistently that it is a supply/demand problem. That the market sees that there is tightness of supply, and that demand is still going on
My argument is that the futures market for oil is only partly an oil market, because it is also a financial market. People buy and sell a financial instrument, which is called a futures contract and decides that this is not a tenable situation in the long run. So his theory is that the market is testing the limits. It is like a child who wants to explore the boundaries to see how far he can go before his parents start screaming at him. So what we are observing is a period where the market is testing the boundary, trying to establish what the boundary is, what the price should be. Since no one is intervening, the market can carry on wondering and pushing the boundary. I see a lot of merit in that theory.
But, this is not the whole of the story. There are several dimensions in the oil market, because you have to remember that what is happening is that the reference price of oil comes from the futures market, from Nymex (New York Mercantile Exchange) in New York and from ICE (Intercontinental Exchange) futures in London. Nymex is the WTI (West Texas Intermediate, a pricing benchmark for crude oil) price, ICE the price for Brent crude (a pricing benchmark for oil from the North Sea that is also widely used for other crude oils traded in the West). People say no, it is the spot price as well. But the spot price and the futures price move together, because nobody is going to bid the spot price without looking at the futures price and vice-versa. So, they are co-determinant.
We have to understand that. And the reference price comes from this. Countries which have oil to export and who want to sell it in the Western hemisphere put this reference price in their formula, i.e. if they are selling to the USA. The same for Europe and Africa. It's only Asia where it is done differently.
So, the reference price ...
So, to understand how the oil price is determined, you have to have some views about how the financial markets work. My argument is that the futures market for oil is only partly an oil market, because it is also a financial market. People buy and sell a financial instrument, which is called a futures contract.
Your argument is?
My argument is that there is also a financial dimension in the operation of the oil futures market. It is not only a question of supply and demand. Now what does that mean? It means that when I go there and I want to buy or sell oil in the futures market, if I am a hedge fund, or whatever, I look at the sentiment, or other opportunities, in other financial markets. If I find that the equity markets are not so attractive, and if I see that the bond market is not attractive, and that the foreign exchange market is not attractive, because we don't know where the dollar is going, I might ask, 'What are the financial markets that are rooted in the real world?'
Equities are not rooted in the real world. There's no real supply and demand for equities, for bonds, for foreign exchange. But there is for wheat, for gold, for metals, and for oil. So, I would tend to move to these markets, or to move out of them. Or vice versa.
Suppose I think that the oil price will not go up. But I expect the bond price to go higher. And I don't have an infinite amount of money, so I move my funds from oil to bonds. So the oil price comes down, even though I expected it to go up.
Then take the mirror image. If I am investing in oil because everything else is unattractive, and I think that oil should come down because there is a fear of recession, the oil price actually goes up, because money comes in to it.
In other words, it's a question of expectations, what people think? But people think that the oil price should come down if growth slows, don't they?
They don't think that, but they should think that. In normal circumstances, the price would come down because there is fear of recession. And everybody in the press is writing about this. There is bad news on the front pages, that the economies are coming down. So demand for oil has to come down, except for this miracle, this miraculous China. But, you know, this is not the Olympics, this is economics.
The oil price should come down, but it doesn't. So what is the counterforce, what it preventing that?
Horsnell would say the counterforce is that there is tightness.
Scarcity?
Yes.
Following US President George Bush's visit to Saudi Arabia in May, there were conflicting reports about whether the Saudis agreed to increase their oil output. What do you think?
It was a Friday. Saudi Arabia made a statement that it would increase output by 300,000 barrels a day to compensate for shortfalls among other Opec countries. But what happened? The oil price went up instead of down. That same day, Goldman Sachs had produced a report saying that the average price later this year would be $147. So, who is leading the market? Saudi Arabia or a big US investment bank?
If the oil price continues to go up, will Saudi Arabia produce more oil?
Saudi Arabia produces as little, or as much, as its customers want, subject to its own production constraints. If customers go to, let's say, Algeria, Algeria may say no. Saudi Arabia has much more oil, much more. They will say yes. The production quota set by Opec is not relevant, except if the market is tight. What determines the level of production is demand.
There is one exception. If the oil price collapses and prices are going very, very low, then Saudi Arabia will produce less than the market wants. This happened in 1998. But the rest of the time, they produce for the market.
So, is Horsnell right? That too little supply is the main problem?
Some other people would say that oil, along with wheat and some metals, remains more attractive than other investments in the financial markets. And we know that the people who lead these markets are financial institutions, the banks and the hedge funds. They are the leaders. So the paradox is that, consciously or unconsciously, the determination of the oil price has gone away from the producers to the financial sector. It went away from the oil people to the non-oil people.
So is there anything that could stop the oil price from rising in the coming year?
Yes, of course. A bubble has formed. We know one thing about bubbles, and that is that they burst. When, I don't know. It could be tomorrow, it could be in four years' time.
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