Business

AMMAN – A team from the International Monetary Fund (IMF) is carrying out a two-week review of Jordanian economic reforms.

The IMF executives are scheduled to meet with officials at  the Ministry of Finance, Central Bank of Jordan and other government institutions to discuss the Kingdom’s economic performance under the sixth review of a three-year programme supported by a stand-by-agreement, according to Finance Ministry Secretary General Ezeddin Kanakriyeh.

He noted that despite the challenges, the Kingdom’s reforms have “greatly” contributed to improving most economic and financial indicators in a way that helped achieving financial and monetary stability. 

AMMAN — A delegation representing the Union of Bilateral Chambers of Commerce from Romania on Tuesday visited the Muwaqqar Industrial Estate and had a first-hand look on investment opportunities in the Kingdom.

The delegation, headed by the union’s President Nasty Vladoiu, was briefed on the Jordanian experience in industrial estates, considering that the Jordan Industrial Estates Corporation (JIEC) attracted more than 745 projects until the end of 2014.

JIEC Chief Executive Ali Madadha called on Romanian investors and businessmen to establish projects in industrial estates affiliated with JIEC and to benefit from incentives and exemptions the corporation offers to Arab and foreign investors.

Vladoiu described the delegation’s visit, which was planned in coordination with the Jordanian Businessmen Association, as another step forward in the Romanian-Jordanian relations which started 50 years ago, stressing the union’s endeavours to further boost these ties.

AMMAN — Industry and Trade Minister Hatem Halawani on Monday said the Joint Jordanian-Tunisian higher committee meetings will be held during the next two months, following a meeting with Tunisian officials in Amman.

Halawani stressed the importance of increasing trade and economic cooperation between the two countries, especially that the annual joint commercial volume does not exceed JD20 million.

Halawani asked that meetings at the technical level be held as soon as possible to look into all issues that can increase economic cooperation between the two countries. He also called on Tunisian businessmen to invest in Jordan and to benefit from the Jordan-US Free Trade accord, highlighting the various incentives offered to investors in Jordan. Also on Tuesday, Tunisian Assistant Minister of Foreign Affairs Al Tuhami Al Abdouli met with members of the Amman Chamber of Commerce. At the meeting, Abdouli stressed that his country is serious to move ahead in its economic and commercial ties with Jordan from the cooperation level to partnership.

Jordan’s exports to Tunisia during the first 11 months of 2014 reached JD8 million, while Tunisian exports to the Kingdom reached JD11 million.

AMMAN — A total of 39,578 building licences were issued in 2014 across the Kingdom, 8.1 per cent higher than the 36,601 licences issued in 2013, the Department of Statistics (DoS) revealed on Monday.

In its monthly report, the DoS indicated that the total area of licensed buildings in 2014 stood at 14,992 square metres, 7.2 per cent more than the 2013’s licensed area of 13,985 square metres.

AMMAN – The second round of meetings of the Jordanian-Romanian Business Council kicked off on Monday, with participants looking into ways to establish joint investment ventures.

Representatives of the two countries’ trade and economic sectors stressed the need to benefit from incentives offered by the Jordanian investment environment, especially in the Aqaba Special Economic Zone Authority.

Jordanian Businessmen Association President Hamdi Tabaa highlighted “promising” fields of cooperation between Jordan and Bucharest, such as tourism, energy, healthcare and ICT services.

Meanwhile, head of the Investment Commission, Muntaser Oqlah, noted that the Jordanian-European partnership agreement “did not achieve the aspired goals for the Kingdom”, particularly in increasing exports to the European markets and attracting investments from EU countries.

The diplomatic partnership between Jordan and Romania will soon mark 50 years.  

AMMAN — Amman Chamber of Commerce (ACC) President Issa Murad stressed on Monday the importance of Kuwaiti Emir Sabah Al Ahmad Al Sabah’s visit to the Kingdom, and its role in developing bilateral relations, especially in the economic and investment fields.

Noting that current Kuwaiti investments are among the most important Arab and foreign investments covering different economic sectors, Murad called for increasing Kuwaiti investments which are estimated at more than $12 billion.

The ACC president also expressed hope that the visit would increase investments and partnerships between Kuwaiti and Jordanian businessmen in a way that would contribute to developing joint economic and commercial relations.

He underlined the significance of activating signed economic agreements between the two countries, especially at the private sector level, and addressing any obstacles that face developing commercial ties.

Murad said the Kingdom’s exports to the Gulf country during the first eleven months of 2014 reached JD114 million, while Kuwaiti exports to Jordan stood at JD97 million. 

MADRID — Spanish five-star hotels are serving up white rice for breakfast as Spain offers quicker visas and seeks more direct flights from China to tap into the surging wave of Chinese tourists.

When Spanish Prime Minister Mariano Rajoy visited China in September, he announced that visa applications from the country's travellers would be processed within 48 hours.

The government is also in talks with Asian airlines to boost traffic through Madrid's underused airport by offering reduced fees and promoting Spain as a hub for travel to Latin America.

So far, only one airline, Air China, offers direct flights between Spain and China seven times a week. In contrast, Italy has 28 direct weekly flights to China, France has 70 and Germany 87.

While Chinese travellers usually visit several countries during a trip to Europe, they are unlikely to include Spain if they land in another country because of its geographic location, said University of London lecturer Keven Lathan, author of a book on Chinese tourism in Europe.

"Spain's location is less central. You have to add two to three days to make it feasible. There is not much you can do about it," he added at a recent tourism fair in Madrid.

China has been the world's fastest-growing source of tourists over the past decade due to rising incomes and the easing of restrictions on foreign travel, according to the Madrid-based UN World Tourism Organisation.

Over 100 million Chinese are expected to make trips abroad this year.

Spain is the world's third-most visited country after France and the United States and has long been a favourite sunshine destination for Europeans who flock to its beaches.

But the country received just 288,000 visitors from China last year, according to tourist board Turespana.

By comparison the United States welcomed 1.8 million Chinese visitors in 2013, the last year figures are available, while France received over 1.2 million Chinese tourists that year.

"We are clearly missing the train of Chinese tourism," said Hilario Alfaro, the president of the Madrid Business Forum, a lobby group.

'Give a medal' 

While travel industry leaders welcomed Spain's moves to attract Chinese tourists, they lamented that Madrid was lagging behind other Western nations.

Spain has just three consulates in China that can issue entry visas, compared to eight in France, Alfaro noted.

And Spain requires Chinese applicants to pick up their visas in person, which discourages would-be travellers from cities that do not have a consulate, he added.

France offers home delivery of entry visas while the US allows them to be picked up at bank branches across China.

"You should give a medal or build a monument for any Chinese who manages to arrive in Spain directly from China since it is so difficult," Alfaro said.

Tourism accounts for 10.9 per cent of Spain's economic output and one in nine jobs.

The tourism sector has taken steps to adapt to the tastes of Chinese visitors, who are one of the biggest spenders among foreign visitors to Spain, as part of a broader strategy to attract more urban travel.

Madrid's Thyssen-Bornemisza Museum, which houses many 19th century Impressionist paintings, last year started offering maps in Mandarin, the first major museum in the Spanish capital to do so.

Spanish department store chain El Corte Ingles' flagship Madrid store offers special services for Chinese tourists, including a gift guide in Mandarin and a top-end Chinese restaurant.

Some hotels are also adapting by offering small comforts to please Chinese visitors.

Madrid's five-star Silken Puerta America Hotel revamped the menu of its cafeteria to cater to Chinese tastes, including items such as noodles with chicken, dim sum and white rice at breakfast.

The hotel also offers access to a Chinese TV station, Madrid travel guides in Mandarin and rooms with Chinese guests are equipped with an electric tea kettle.

The avant-garde hotel received over 6,000 Chinese guests last year, more than double the 2013 figure.

It is one of a handful of Spanish hotels that have obtained a certificate labelling them as "Chinese Friendly" because they have met a list of requirements deemed necessary to adapt to Chinese tastes.

"We have to adapt so the client feels at home," said the spokeswoman for the Silken hotel chain, Sara Diaz.

DAMASCUS — The Syrian government does not expect to import wheat this year because domestic grain supplies will be boosted by heavy rainfall and wider control over farmland, a minister said.

Hassan Safiyeh, the minister of internal trade and consumer protection, also told Reuters that a credit line extended by Iran to its Syrian ally had been unaffected by the collapse in world oil prices and fuel imports continued.

Safiyeh's ministry oversees the provision of heavily subsidised foodstuffs and fuel to Syrians in areas of government control, making it a vital arm of the state in a country about to enter its fifth year of conflict.

The state has lost control of oilfields and wide areas of agricultural land seized by insurgents during the conflict that has devastated the economy.

Sanctioned by the United States and some European governments that say President Bashar Al Assad should leave power, Damascus has received crucial backing from Iran and Russia.

Wide areas of the north and east, where much of Syria's grain is grown and its oil is extracted, have been seized by Daesh terror group.

Safiyeh said the state had won back farmland, and he expected a strong wheat harvest.

"We had acceptable output [last year], but this year output will be abundant, because this year the rains have been excellent, and the farmed lands are much wider. This year, there is no fear for wheat," Safiyeh indicated.

Last year, the government imported wheat from "friendly states", he added. "I expect that if the season is this good and this strong, God willing, in 2015 we will not need to import."

He declined to give any figures for Syria's wheat production or imports, saying these were strategically sensitive.

In the 2010/11 season, around the time the crisis began, Syria's wheat production was estimated at 3.3 — 3.6 million tonnes, according to a US Department of Agriculture report.

The government, operating according to a socialist-inspired economic system, provides staples including sugar, rice, bread and cooking oil at subsidised prices, in additional to fuel.

Bread is sold at about a quarter of what its real cost.

The state in January increased the price of a standard bundle of bread by 40 per cent to 35 lira [15 US cents]. Safiyeh said consumers had been protected from that increase by a 4,000 lira monthly allowance which Assad had ordered paid to state employees and retirees.

"Subsidising bread is a red line for the government," said Safiyeh, a lawyer from the coastal city of Latakia who assumed his post last August. 

When he was sworn in, Assad had told the government to secure the needs of the population "regardless of the circumstances", Safiyeh added.

Iranian credit continues

While the state has lost control large areas of Syria during the conflict estimated to have killed 200,000 people, the bulk of Syrians still live in areas under its control.

The conflict has created more than 3 million refugees and displaced more than 6.5 million within Syria, according to the UN refugee agency. The World Food Programme says it provided food to 3.8 million people in hard-to-reach areas of Syria in 2014.

Having lost control of its oil wells, Syria has been forced to import crude. Iranian support has remained solid, despite the decline in world oil prices which are around half the level they were at last June, said Safiyeh.

"The import of petroleum products did not stop because of the fall in the oil price. It continued, with the Iranian credit line, and continues until now," Safieh added. He did not give numbers.

"There is an Iranian credit line. The truth is there are excellent (credit) facilities, and also Russia stands with us and the BRICs are standing with us in any matters requiring the provision of necessary supplies," he continued. The BRICs nations are Brazil, Russia, India and China.

While the state has lost control of its oil fields, it is producing more than enough gas from fields, said Safiyeh. Syrian gas fields were currently producing the equivalent of 140,000 gas bottles a day, more than consumption of 120,000.

The state in January raised the price of subsidised diesel fuel in what Safiyeh described as an effort to stamp out a black market where it is sold for double or even more.

Explaining shortages, Safiyeh said cold weather and use of power generators had led to a surge in demand. The black market had not entirely been stamped out, he added.

He stressed that "despite four years of global war [against Syria] ... the government was still "ensuring food security". 

DUBAI — Yemen’s foreign exchange reserves have stabilised after a steep fall due to its political turmoil, but ballooning government debt issuance indicates the country may be moving closer to a fiscal crunch, central bank data showed on Friday.

Shiite Muslim Houthi rebels completed a takeover of the capital Sanaa last month while in the south, forces loyal to former president Abed Rabbu Mansour Hadi still appear in charge. 

Tribal conflicts and Al Qaeda insurgency are also disrupting Yemen’s oil and gas exports and other parts of the economy.

Gross foreign reserves, which had sunk to $4.65 billion in November from $5.35 billion at the end of 2013, recovered slightly in December to $4.67 billion, equivalent to 4.6 months of the country’s imports, the central bank figures showed.

This suggests that for now at least, Yemen can avoid a collapse of its external payments position. But a sharp rise of domestic borrowing by the government shows it is being forced to borrow heavily from local banks to stay afloat.

The government issued a record 77.2 billion riyals ($359 million) of domestic bonds in December, up 18 per cent from a year earlier, while outstanding treasury bill issuance climbed 9 per cent to 1.55 trillion riyals.

In addition to the political turmoil, the plunge of oil prices has slashed the government’s energy income; the value of oil exports fell to $1.67 billion last year from $2.66 billion in 2013, the central bank data showed.

That makes foreign aid more critical, but the political instability has called aid into question; Saudi Arabia has suspended most of its financial aid to Yemen, worried that the rebels will gain access to it, Yemeni and Western sources said.

The International Monetary Fund (IMF) agreed in July to provide a $553 million loan to Yemen over the next three years after the government pledged economic reforms, including a cut of about 50 per cent in fuel subsidies and higher tax revenues.

So far, the IMF deal is holding together, officials on both sides told Reuters.

An official in Yemen’s planning ministry, declining to be named, said the IMF had not made any decision to suspend the loan, and that the future of the deal would depend on a solution to the political crisis.

A senior IMF official said his organisation was maintaining regular contacts with Yemeni officials and continuing to provide them with technical analysis.

“What I’m in a way pleasantly surprised by is that despite all this, at the working level, at the policy level, even the ministers are continuing to engage on the policy discussion, on the agenda,” the IMF official said.

“I could have imagined everything would come to a halt right now. And yet they’re very keen to keep at it. And also, they keep saying that they’re pursuing the things they committed to do, so they would like the IMF-supported programme to continue. So I hope that will be the case,” he added.

WASHINGTON — President Barack Obama on Saturday began a broad sales pitch to the US public about the merits of free trade deals, an area in which he faces stiff resistance from many in his own Democratic party.

Obama has said he wants to work with Congressional Republicans to finalise the Trans Pacific Partnership (TPP) trade pact, an agreement that would stretch from Japan to Chile, covering 40 per cent of the world economy.

“I’m the first to admit that past trade deals haven’t always lived up to the hype,” Obama said in his weekly address. “But that doesn’t mean we should close ourselves off from new opportunities.”

The first step in working with other nations to finalise the TPP deal is to pass “fast track” legislation to streamline the passage of trade deals through Congress.

Polling data from the Pew Research Centre shows Americans from both parties are skeptical about trade. Only one in five Americans think trade creates jobs, and only 17 per cent believe trade leads to higher wages.

Congressional Republicans have been supportive of trade deals. Senator Orrin Hatch, the Republican chairman of the Senate Finance Committee, has said he hopes to introduce a “fast track” bill in February.

Senate Majority Leader Mitch McConnell said in a statement that Obama needed to “continue what must be a sustained effort to move his own party forward” on working on trade legislation.

Labour and environmental groups allied with Democrats have been pushing hard against the idea. Even among the Obama-friendly crowd at the Democratic National Committee on Thursday, several people wore “Stop Fast Track” stickers.

Obama said fast track authority would protect workers and promote businesses, noting that exporting companies pay higher wages.

He cast it as a way to push back against the exporting powerhouse of China.

“As we speak, China is trying to write the rules for trade in the 21st century,” Obama said. “We can’t let that happen. We should write those rules.”

Separately, US Senator Bernie Sanders lashed out last week at widespread use of offshore tax havens by US companies, and the liberal independent targeted a group that represents chief executive officers (CEOs) of big corporations and wants corporate taxes lowered.

Sanders, top opposition member on the US Senate Budget Committee, released a report decrying what he called “legalised tax fraud”. It showed that 111 of the 201 member companies of the Business Roundtable are sheltering more than $1 trillion in profits overseas, where they are not subject to US taxes.

Using the Cayman Islands, Bermuda and other tax havens, these companies have saved more than $280 billion in tax liabilities, Sanders concluded in the report.

Sanders noted that Business Roundtable companies account for roughly half of an estimated $2 trillion in profits held overseas by US companies under a loophole that lets them defer taxation on profits from overseas subsidiaries.

The “last thing” Congress should do is provide more tax breaks to such profitable businesses, Sanders said.

“Instead of sheltering profits in the Cayman Islands and other offshore tax havens, the largest corporations in this country must pay their fair share of taxes so that our country has the revenue we need to rebuild America and reduce the deficit,” Sanders added in a statement.

Many business groups have sought a “repatriation holiday” that would allow them to bring home overseas profits at a reduced tax rate.

The senator’s report relies heavily on data compiled in June 2014 by Citizens for Tax Justice, a left-leaning activist group, and US Public Interest Research Group, a consumer advocacy group that says it “stands up to powerful special interests”.

The report said the data come from Securities and Exchange Commission filings compared with offshore subsidiaries listed in a 2008 Government Accountability Office report on tax havens.

Among Business Roundtable members listed in the report with large amounts of profits held abroad were General Electric Co.  with $110 billion, Pfizer Inc. with $69 billion and IBM Corp. with $52.3 billion.

A spokeswoman for the Business Roundtable said the group was studying the report and could not immediately comment on it.