Business

AMMAN — Amman Chamber of Commerce (ACC) President Issa Murad commended the Central Bank of Jordan’s (CBJ) issuance of bonds for individuals, describing it as a sound step that enhances citizens’ participation in investment with high-profit rates, according to an ACC statement received on Sunday. The step is also good for the economy, he indicated.

This type of bonds is used in many countries due to its flexible characteristics that offer citizens a chance to enrol in the economy with a new, secure and less-risky method, Murad added in the statement.

Under the name “Saving Bonds for Individuals”, the bonds will be issued on July 3rd, at a fixed interest rate of 4.25 per cent with a maturity term of five years.

The issuance will provide all citizens, including those living abroad, with the chance to effectively participate in the economy, and will enable them to use these bonds for mortgages and loans, he said.

AMMAN — Arab Businessmen Association President Hamdi Tabbaa on Friday stressed the importance of establishing economic integration among Arab countries, as a means to mitigate the fallout of the past five years of regional turmoil.   

The regional economic outlook continues to be dim, amid the state of ongoing political and security uncertainty witnessed in several Arab countries for more than five years now, Tabbaa said in an interview with the Jordan News Agency, Petra.

Tabbaa put the Arab countries’ losses at around $245 billion annually, amounting to $1,225 billion in the past five years.

These figures are in accordance with reports of the HSBC Bank that estimate that the losses of Syria, Iraq, Yemen, Libya, Egypt, Tunisia and Lebanon represent 35 per cent of their annual gross domestic product, Tabbaa said. 

A report of the Arab Investment and Export Credit Guarantee Corporation unveils that direct foreign investment inflows into Arab countries were down to $44 billion in 2014 from around $48 billion in 2013, he said.

In 2008, foreign investment in Arab countries reached a record of $96 billion.

In order to deal with the ongoing challenges, Tabbaa also recommended the restructuring of the Arab League, calling for a full makeover, as well as reviewing the overall educational system of Arab countries, to focus on instilling the spirit of creativity and innovation. 

SAN FRANCISCO/BENGALURU — Apple Inc. said its iPhone 6 and 6 Plus were still available for sale in China after Beijing's intellectual property regulators barred their sales saying the designs had infringed a patent held by a Chinese company.

"We appealed an administrative order from a regional patent tribunal in Beijing last month and as a result the order has been stayed pending review by the Beijing IP Court," Apple said in a statement on Friday.

The notice, dated May 19, banning sales of certain iPhone models in Beijing was posted on a Chinese government website. 

The Chinese market is vital to Apple, driving more of its sales than any other region outside the United States. But the tech giant has faced greater scrutiny there in recent months, with its online book and film services blocked by Chinese regulators earlier this year.

Apple historically had enjoyed favourable treatment in China, but Beijing's crackdown on the iPhone 6 and 6 Plus is a reminder that the tech giant is not immune to the scrutiny that other US tech firms have long faced in the country, said analyst Colin Gillis of BGC Partners.

"There's a variety of risks of having dependence on sales in China to Apple, and government intervention in whatever form is one of them," he said.

Last month, Apple announced that it would invest $1 billion in Chinese ride-hailing firm Didi Chuxing, a move that was widely viewed as an attempt to shore up relations in China. 

AMMAN — Jordan has seen a decline of its agricultural sector productivity over the last six years as a result of prolonged cycles of negative growth and a decrease of productivity per worker. Regional conflict has also curtailed Jordan’s export opportunities substantially, according to a World Bank (WB) report.

“The Cost of Irrigation Water in the Jordan Valley” looks at innovative ways to better manage water in agriculture in one of the world’s most water-stressed countries. The study looks at ways to improve irrigation services delivered by the Jordan Valley Authority (JVA), and efficiency of water use across different cropping patterns.

The recent study, funded by the WB’s Water Partnership Programme, also reviews mechanisms to improve financial cost recovery, through reducing costs and increasing revenues, to manage farmers’ demand for water. Findings reveal that significant cost savings can be made through a larger focus on energy efficiency programmes and better asset management.

Towards improving revenues in a resilient way, the report combines tariff scenario analyses with cropping patterns to show how both farmers and the environment could benefit from shifts in the types of crops produced in some areas.

Growing less water-intensive crops would improve farm resilience to water scarcity in the long-run while providing an opportunity for more sustainable service delivery through higher tariffs — which would affect farmers who grow vegetables much less than those who grow the other major crops (citrus and banana). 

An analysis of the distributional impacts of irrigation tariffs demonstrate they are relatively modest, while the number of farmers in the Jordan Valley is small, and the number of poor farmers even smaller, making it relatively easy for the government to provide support or subsidies to poor farmers in the Valley if tariffs were to increase.

In its conclusion, the report says it is clear that the JVA can significantly improve its revenue flows. The rapid increase in industrial tariffs shows that the revenue base can be increased. This increase in revenues will also require a change in accountability regarding the revenues, the report says. Currently, all revenues are transferred to the Treasury and do not return to JVA. As such, the incentive for the JVA to bill and collect efficiently and effectively to expand its revenue base is small.

Jordan is one of the most water-stressed countries in the world. Its annual renewable resources of 145 cubic metres per capita are far below the threshold of severe water scarcity of 500 cubic metres. 

The competition among water needs for irrigation, industrial and domestic uses, wetland protection, and  in-stream habitat needs continues to pose serious challenges in the Kingdom, according to the WB report. 

CAIRO/RIYADH — Egypt’s efforts to stamp out illicit currency trading is pushing black market dealers to carry out transactions abroad, beyond the reach of the law, robbing the economy of its last vital source of foreign currency.

Dealers say they are scooping up dollars held by expatriate workers and exporters before they ever enter Egypt, exacerbating the dollar shortage at the heart of the currency crisis that has already undermined investment and hit trade and manufacturing.

Egyptians working abroad send back about $19 billion a year in remittances, an important source of hard currency for a country that has seen tourism, foreign investment and exports dwindle in the political turmoil that followed the 2011 revolt.

The central bank has sought to crack down on the black market, revoking the licenses of exchange bureaus found dealing far beyond the official rate. This month, the government approved plans to impose jail terms for black market trading.

But the gap between an official dollar rate of 8.8 Egyptian pounds and a black market rate close to 11 pounds is encouraging expatriates to circumvent banks altogether.

“It’s a vicious cycle because the only way for the black market to end is for banks to start providing dollars and the banks don’t have the dollar resources, because they are being sucked up by the black market abroad,” said one banker who declined to be named due to the sensitivity of the matter.

Abu Marwan, an Egyptian engineer who works in Saudi Arabia, used to transfer money each month to his wife’s bank back home. For the past year, he has gone instead to black market dealers who offer a better rate if he hands over his cash abroad.

“Me and my colleagues here stopped transferring money through the banks to Egypt because when you do that you lose,” said Abu Marwan, who makes the equivalent of $2,600 a month.

“We all open a phone line and agree on the price together, then I give the man in Riyadh the money and at the same time his partner gives my wife in Egypt the money in Egyptian pounds at a higher rate.”

Central bank officials were not immediately available to respond to queries about black market dealers carrying out transactions abroad.

Egypt has struggled to restore growth since the 2011 uprising that toppled Hosni Mubarak and scared away tourists and foreign investors - key earners of foreign currency.

Foreign reserves have halved from over $36 billion before the revolt to about $17.5 billion in May.

The central bank has been forced to ration dollars and prioritise essential goods like food, introducing restrictions on the transfer and deposit of foreign currency.

RAWABI, West Bank — After years of setbacks, Palestinians are proudly starting to move into their first planned city being built in the West Bank — a move that isn't just about real estate, but also a symbol of their quest for statehood after nearly 50 years of Israeli military occupation.

Though Rawabi is still unfinished, its glistening high-rises and shopping centres bring a rare sense of pride and excitement to the territory at a time of growing malaise over a standstill in Mideast peace efforts.

Palestinian-American developer Bashar Masri dreamed up Rawabi, which means "hills" in Arabic, back in 2007. 

But the construction of the city, located about 40 kilometres north of Jerusalem, has repeatedly stalled due to political obstacles. Work only began in 2012.

Perched on a once desolate hilltop, it's the first Palestinian city being built according to a modern urban design plan. The organised layout and modern facilities are in jarring contrast to chaotic Palestinian towns and villages in the area.

Since January, the first residents have been slowly moving in.

Mahmoud Khatib came here with his wife and three children from a nearby village because they wanted to live in a modern city. First, "it was an idea", the 41-year-old banker told The Associated Press. Then "it became a reality".

His wife Sanaa, 40, is thrilled about her new home.

"Here everything is organised. There is a safe playing area for the kids where you don't feel worried when they go out. The services are central and available around the clock," she said. "That's the place I dreamed to live in."

Palestinians see the West Bank, which Israel captured in the 1967 Mideast, as part of their independent state, along with East Jerusalem and the Gaza Strip. Under interim accords reached two decades ago, the Palestinian government now rules about a third of the territory. The rest remains under Israeli control, and home to some 370,000 Jewish settlers. The last round of peace talks broke down two years ago, and prospects for resuming negotiations — much less reaching an agreement — are dim.

Masri said one of the major hurdles in starting Rawabi was getting approval from Israel for an access road and water supply to the city, which took years.

"Dealing with occupation is not dealing with a proper nation," he said. "It's dealing with an ugly system."

Rawabi now has a yearly renewable permit to use a narrow road that passes through an adjacent one-kilometre stretch under Israeli control. A pipeline, which passes through the same area, brings in 300 cubic meters of water a day — insufficient for the residents as well as the construction that is underway.

Additional water is currently being brought in on tankers, and some people supplement their supply from a nearby village. Masri said his next battle is to triple both the width of the seven-metre road and the water supply.

He said Israelis from a nearby settlement have gone to court to curb Rawabi's expansion.

"I'm a strong believer that a Palestinian state is in the making and part of the pillars of building a proper state is to have a strong economy and higher standard of living," Masri said.

Israel's defense body, COGAT, blamed the delays on the "unwillingness" by the Palestinian officials to convene a necessary Joint Water Committee but said that despite this, water connection to the city was approved and work is underway to increase supplies. In addition, COGAT said it is working with the Palestinian developer to find solutions to the access road.

Currently 250 families live in the city. That population is expected to swell to 60,000 when construction ends in about five years.

For Masri, Rawabi has become part of history — "the first Palestinian city to be established in thousands of years" — and he is sure more cities like this will follow. The Palestinian government has envisaged a new city near Jericho, though it's still in the planning stages.

Rawabi building costs have reached $1.2 billion, so far. Funding has come from a Palestinian company run by Masri as well as the Qatari holding company Diar. A three-bedroom apartment averages about $100,000, about 25 per cent less than in the main Palestinian West Bank city of Ramallah nearby.

Along with a large amphitheater that can hold 12,000 people, Rawabi now boasts also an industrial zone, schools, and the first big Western-style open-air shopping centre in the West Bank. Such attractions lumped together in one city are unheard of in Palestinian areas.

There is a mosque under construction and also a church, which will serve the Palestinian Christian minority. About 10 per cent of Rawabi residents are expected to be Christian.

Masri can see it all so vividly.

"I would love to sit at a café in Rawabi and watch the people going around, enjoying themselves, living in a nice clean environment and being happy," he muses.

"We deserve some relaxation and happiness... we have been dealt a terrible deal, dozens and dozens of years. We deserve better."

WASHINGTON/ HELSINKI  — Microsoft said Monday it signed a deal to acquire the professional social network LinkedIn for $26.2 billion in cash.

“This deal brings together the world’s leading professional cloud with the world’s leading professional network,” Microsoft Chief Executive Satya Nadella said in a statement.

According to a statement from the two firms, LinkedIn “will retain its distinct brand, culture and independence”, with Jeff Weiner remained at CEO of LinkedIn.

“Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn’s network, now gives us a chance to also change the way the world works,” Weiner said.

The two firms said they had reached a “definitive” agreement that would close later this year, with the support of LinkedIn Chairman and controlling shareholder Reid Hoffman.

The move comes with Microsoft refocusing its efforts away from being a pure software firm, and LinkedIn seeking ways to boost growth.

LinkedIn, which enables members to connect with similar-minded professionals and facilitates job hunting, has some 433 million members worldwide.

Also on Monday, Nokia said it has signed a 1.36-billion-euro ($1.53 billion) frame agreement with China Mobile to create a “cloud network” for the Chinese operator. 

The deal would entail “seamless connectivity that will more efficiently meet the ever-growing data demands of its subscriber base”, the Finnish telecom equipment giant said in a statement.

Nokia is to deliver a new type of base station which allows the use of multiple radio technologies simultaneously and is scalable to support all connection speeds from the oldest to the upcoming, ultra-fast 5G networks and connected objects. 

China Mobile is the world’s largest mobile operator and one of three public operators in the Chinese market.

Nokia, the world’s former number one in handsets, now concentrates on network equipment.

The deal was signed in Beijing at the Sino-German Economic Forum by Li Huidi, China Mobile’s vice president, and Hans-Juergen Bill, head of Nokia Networks in Germany, while German Chancellor Angela Merkel and China’s Prime Minister Li Keqiang present.

It “strengthens Nokia’s position as a leading provider of next-generation technologies in China”, said Nokia’s Mike Wang who leads operations in China.

Listed both in the Hong Kong and New York stock exchanges, China Mobile had around 835 million mobile clients in April.

AMMAN — Royal Jordanian (RJ) on Monday announced the addition of six new destinations to its network in an expansion of its code-share agreement with Qatar Airways. 

“In joining forces with Qatar Airways, we are able to extend our customer experience beyond our existing destination network, to include several new destinations around the world,” said RJ President Captain Suleiman Obeidat, according to a statement by the airline.  

RJ customers will have access to Dhaka in Bangladesh, Muscat in Oman, Karachi in Pakistan, Colombo in Sri Lanka, Perth in Australia, and Singapore, subject to regulatory approvals, the statement said.

The expansion will also open up 18 weekly flights between Doha and Amman, the airline added.  

Qatar Airways said its partnership with RJ opened up the world to passengers travelling from Amman through Doha. 

“Our code-share agreement enables Royal Jordanian to benefit from connectivity to some of our most popular routes, including Perth and Singapore amongst our more than 150 worldwide destinations,” said Akbar Al Baker, Qatar Airways Group chief executive. 

“We welcome the partnership with Royal Jordanian, and look forward to seeing our collaboration flourish in the years to come,” Al Baker said, according to the RJ statement.  

Qatar Airways and RJ launched the code share agreement in August 2015.   

SAN FRANCISCO — The beauty industry has long relied on creating a sense of mystery, magic even, around its creams, powders and potions. But now it has something else up its sleeve: high technology.

French cosmetics giant L’Oreal has opened a “tech incubator” employing two dozen people in San Francisco and elsewhere seeking ways to use big data and algorithms to win the hearts and minds of customers.

It may involve analysing large data sets to find the right colour for nail polish, or patches that measure absorption of ultraviolet radiation — or using technology to spot emerging beauty trends ahead of the curve.

The French group is hoping that Silicon Valley’s talents can help it improve its products and connect better with customers.

Guive Balooch, who heads the San Francisco incubator, said he sees how these kinds of analytics and other technologies can help improve beauty products.

One of the innovations from the team has resulted in the L’Oreal Lancome brand developing an individualised makeup foundation, known as “Le Teint Particulier”.

This system, now used in some retail outlets, scans a person’s skin and uses an algorithm that designs a custom-blended product based on skin tone. The system was developed by California startup Sayuki, which L’Oreal bought in 2014.

L’Oreal’s team also created the Makeup Genius application which uses virtual reality to allow people to try various makeup schemes on their smartphone. It has been downloaded some 20 million times.

The cosmetics company also worked with California Organovo for “bioprinting”, creating three-dimensional human tissue to test its cosmetics and pharmaceuticals, and with PCH Lime Lab, a San Francisco design and engineering firm on the patch that sticks to one’s skin and changes color with exposure to sun rays.

Hair tech

The L’Oreal team also hopes one day to have a Genius app on hair colour, which could help another key product line, if it can overcome technical challenges.

“Hair colour is very complex, because you have 100,000 fibres on average in your hair, on your head, and they’re all moving in different directions,” Balooch said.

L’Oreal wants to stay on top of trends, and the data analytics team can play an important role, says Balooch.

“We do know from anonymous data what colours people are trying all around the world, we know what products they’re trying, we know how long they’re using them before trying something else,” Balooch said.

Being aware of new trends is also critical for marketing efforts. L’Oreal is working with Google, with whom it has an online advertising deal, to help better understand fashion trends by studying search queries.

This could allow L’Oreal to place ads better based on keywords, according to its digital strategist Axel Adida.

Adida said it is important “to be on point with the latest fashion that comes up on the street”.

“The thing which is very cool when you work with Google, it’s a sort of beauty insight centre,” he added.

“So the things that come up and that pop up as a novelty, the new fashion and beauty, a lot of it is being searched very early. You see little things moving in the trends — and you end up with something as big as smoky eyes.”

AMMAN — Consumer price index (CPI) average dropped by 1.2 per cent at the end of the first five months of 2016 compared with the figure recorded at the end of May last year, according to a Department of Statistics (DoS) statement.

The figure was the computed outcome of an increase in the prices of some commodities coupled with a drop in the prices of others. 

The DoS statement, which followed its release of a monthly report on inflation, said the decline was due to a slowdown in transport, fuel and lighting prices, reflecting international trends and a base effect (the elimination of fuel subsidies in 2012 had triggered a one-off upward adjustment in fuel prices). 

Since then, the contribution of these commodities to inflation has dropped. 

Also, the prices of meat and poultry dropped by 7.6 per cent, according to the DoS statement. 

While rents continued to be the main driver for the increase, recreation, clothing and education expenses ticked up, though at a lesser degree.  

The increase in rents partly reflects additional demand by Syrian refugees on housing, especially in the northern governorates.