Business

AMMAN — A recent survey that focused on small and medium-scale enterprises (SMEs) in Jordan said banks should adopt appropriate finance mechanisms that cater to increasing credit facilities to SMEs furthermore, especially that they represent more than 98 per cent of the companies registered in the Kingdom.

The study, conducted by the Association of Banks in Jordan (ABJ), also recommended that SMEs' managerial bodies work to develop the financial and marketing skills of their employees.

According to the study, the interest rate of credit facilities extended by commercial banks to SMEs ranges between 8 and 14 per cent, whereas the rate is between 5 and 12 per cent at Islamic banks, according to the Jordan News Agency, Petra.

ABJ Chairman Musa Shehadeh underscored the outcome of the study, emphasising the SMEs large contribution to the economy. 

KUWAIT CITY — The UN special envoy to Yemen on Thursday called for an economic rescue plan for the war-battered and impoverished Arab nation.

"I propose the establishment of an economic rescue authority as soon as possible to save the Yemeni economy from further deterioration," Ismail Ould Cheikh Ahmed told a press conference.

He said the body would comprise experts proposed by Yemen's warring parties which are locked in five-week-old peace talks in Kuwait.

It would be consultative in nature and have the full backing of the United Nations and its agencies as well as the World Bank among others, Ould Cheikh Ahmed said.

"The Yemeni economy requires an urgent intervention... Economic deterioration is expected to boost inflation and price rises," he said.

Even before the war escalated in 2015, Yemen was one of the poorest nations on earth with unemployment of more than 40 per cent and over half its 25-million population living under the poverty line.

Ould Cheikh Ahmed said the peace talks had started discussing "security arrangements and specific details" regarding withdrawals and the surrender of weapons.

On Wednesday, he said the two sides were moving "towards a general understanding that encompasses the expectations and visions of the parties".

The main sticking point has been reaching agreement on a transitional government.

Shiite Huthi rebels and their allies are demanding a unity government, while the government delegation insists that President Abedrabbo Mansour Hadi's legitimacy be respected.

A Western diplomat told AFP in Kuwait that the UN envoy had proposed a "national salvation government" that would be "consensual and inclusive".

MOSCOW — Russia and member countries of the Gulf Cooperation Council (GCC) have approved projects in oil and gas, energy and high-tech spheres, Russian Foreign Minister Sergey Lavrov said on Thursday.

Lavrov made the statement following a joint ministerial meeting for the strategic dialogue between the GCC and Russia held in Moscow.   

"Our meeting, which, together with outlining common approaches to international and regional problems, establishes directions of development of our trade and economic, investment, humanitarian ties and other ties between GCC countries," Lavrov said.

"We are talking about promoting concrete projects between Russia and our Arab friends in the oil and gas sphere, in the sphere of energy, including nuclear energy, in the sphere of informational and telecommunications technologies and peaceful exploration of space, medicine, transport infrastructure and other spheres," he added.

"We tasked our experts to prepare a plan of action for Russia and GCC in the aforementioned spheres so that we, ministers, can consider it and approve [it] sometime in September when we plan to hold another meeting, on the sidelines of [the] UN General Assembly," Lavrov said.

"I consider the meeting in the framework of our strategic dialogue as very useful," he noted, according to the Russian news agency.

 "I am confident that further cooperation between Russia and GCC will be even more effective, taking into account the results achieved today," he concluded.

Established in 1981, the GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

The joint ministerial meeting for the strategic dialogue between the GCC and Russia is the fourth, but was hosted for the first time in the Russian capital.

The talks came ahead of an OPEC meeting, scheduled for June 2.

LONDON — Oil prices jumped on Thursday above $50 for the first time this year as a long-lasting global supply glut shows increased signs of easing.

In a boost for countries exporting crude, including the likes of crisis-hit Venezuela, prices are once more on the rise having nosedived from above $100 a barrel two years ago to around $27 in early 2016.

Futures had slumped owing largely to a global supply glut, fed by rising production of oil extracted from North American shale rock that competed in the market place with crude from key producers, including the OPEC cartel, Russia and Norway.

But in recent weeks, oil prices have rebounded on lower output caused by wildfires in Canada, as well as unrest in Nigeria, Africa's biggest oil producer. Outages in Venezuela have also lent support.

On Thursday, benchmark oil contract Brent North Sea crude struck $50.36 a barrel — the first time above $50 and highest level since early November.

US contract West Texas Intermediate (WTI) hit $50.08 a barrel.

"Oil has broken through the $50 per barrel level for the first time in nearly seven months, supported by government data that illustrated steeper than expected drawdown in US crude oil stockpiles last week," said analyst Dorian Lucas at energy consultancy Inenco. 

Crude had been edging close to $50 for the last fortnight, but a strong dollar caused by rising expectations of a US rate hike next month curtailed gains. A firmer greenback makes the dollar-priced commodity more expensive, hampering demand. 

The tip finally above the psychological level came thanks to official data Wednesday that showed US commercial crude inventories fell by 4.2 million barrels last week, indicating strong demand in the world's top oil consumer.

The Bank of Canada meanwhile said that the destruction by fire of homes and businesses and the halt to oil production would shave about 1.25 percentage points off the country's gross domestic product in the second quarter.

"News about the US inventory, coupled with Canada's announcement, gave prices the boost it needed to push past the $50 mark," CMC Markets trader Alex Wijaya told AFP. 

Around (1150 GMT), Brent oil for delivery in July stood at $50.35, up 61 cents from Wednesday's close.

New York's WTI crude for July rose 50 cents to $50.06 a barrel.

Respite for producers?

Shailaja Nair at global energy information provider Platts told AFP that it remained to be seen whether oil producers would find respite after prices breached the $50 mark.

"There's a little bit of demand, but not like suddenly we've found a huge pocket of demand, we are not seeing that. Whether it will stay above $50 or not, that is going to tell us whether the producers can breathe a sigh of relief," she said.

Traders are eyeing next week's meeting of the Organisation of the Petroleum Exporting Countries in Vienna where a deal on reducing production may be reached. 

ANKARA — A presidential system in Turkey will make it easier for the government to take decisions and boost the economy, Finance Minister Naci Agbal told Reuters, saying the new Cabinet is as focused on the investment climate as on changing the constitution.

In an interview hours after being reappointed to the new Cabinet late on Tuesday, Agbal said the government would take "swift and bold" economic decisions this year and promised reforms — which many investors say are overdue — to boost exports and employment.

Investors are concerned that reform momentum will become more sluggish under new Prime Minister Binali Yildirim, a close ally of President Recep Tayyip Erdogan who has promised to introduce the executive presidential system that Erdogan wants.

Agbal dismissed such worries, saying a reform package on financial markets and the real economy would be presented to the Cabinet soon, adding that he would do "whatever it takes" to attract foreign investors.

"Improving the investment and production environment is as important to us as making a new constitution and introducing the presidential system," he said in an interview at his office in Ankara. 

"We will especially work on attracting foreign investors to Turkey... we will do whatever it takes legally to attract them within this year."

The reappointment of Agbal and of Deputy Prime Minister Mehmet Simsek, an anchor of investor confidence who has been in charge of economic policy, helped to reassure financial markets.

Still, the new administration's focus on winning popular support for the presidential system is seen as an obstacle to progress on economic reforms. Investors want measures to boost the savings rate, liberalise the labour market and develop a higher-value manufacturing sector to reduce reliance on imports.

Turkey also needs to lure foreign investment to plug a yawning current account deficit of around 4.5 per cent of the GDP and finance its heavily indebted companies.

Such reforms are likely to prove unpopular in the short term, economists say, making a government bent on winning votes less likely to push them through.

No downgrade to growth

Agbal said there would be no need to downgrade the government's forecast of 4.5 per cent economic growth this year. However, the World Bank expects growth at 3.5 per cent this year, citing slowing exports and weak private investment.

He also said discipline in the budget would be maintained. Recent central bank interest rate cuts would also help the economy, he said.

Erdogan, who favours consumption-led growth, has repeatedly said high interest rates cause inflation, a stance at odds with orthodox economics.

"The central bank is cutting rates as inflation falls. This is positive news for investment and production," Agbal said

Turkey's central bank cut rates for a third month running on Tuesday, lowering its overnight lending rate — the highest of the multiple rates it uses to set policy — by 50 basis points.

He also expressed confidence that the government may finally be able to privatise the national lottery after two failed attempts last year. 

The sale had been expected to bring in $2.76 billion for the government.

"The national lottery tender has become feasible, we are getting positive signals, local and foreign companies are interested," he said.

AMMAN — Dubai presented ambitious plans on Tuesday for its hosting of the 2020 World Expo, the first in the Middle East, with organisers hoping to attract 25 million visitors.

Representatives of more than 100 countries gathered in the Emirati city for talks on the event, which Dubai won the right to host in 2013, Agence France-Presse reported.

"For the first time in the history of World Expos, each country will have an individual pavilion, enhancing the ability of nations to showcase themselves," organisers said in a statement.

The Expo site will cover 438 hectares next to Dubai's smaller second airport, Al-Maktoum International, which opened in 2013.

Panel discussions and workshops were held during the two-day planning meeting aimed at providing potential participants with details on the Expo 2020 plan and highlighting "business opportunities in the UAE for innovation, trade and investment, and knowledge transfer," the statement said.

The fair will take place from October 2020 to April 2021. 

According to economic reports, Dubai  has managed to bounce back from the 2009 crisis when the emirate needed to pay its debts and its economy contracted by around 2.5 per cent.

It is expected to achieve 5 per cent in economic growth this year.

Unlike most of the Gulf, the emirate has been successful in diversifying its income sources, developing a very good reputation in trade, tourism and property business.

Expo 2017 is scheduled to take place between June 10 and September 10, in Astana, Kazakhstan, under the theme  "Future Energy".

AMMAN — A Jordanian businessmen delegation on Wednesday started a visit to the Bangkok-based Thai food and beverage industry exhibition “Thaifex 2016”, to explore means to increase trade between Jordan and Thailand.

The delegation, which also comprises members of the Jordan Exporters and Producers Association for Fruits and Vegetables (JEPA), will work to establish commercial ties with international firms and food manufacturers participating in the event.

The delegates also want to increase Jordan's commercial exchange with Thailand in the various different fields, according to JEPA President Maher Shakhatreh.     

DOHA — The oil market is slowly recovering from its steep drop over the past two years, but crude is still not trading at a "fair price" to encourage necessary investment, Qatar's energy and industry minister said on Tuesday, ahead of next week's meeting of OPEC producers.

In an interview with The Associated Press, Minister Mohammed Bin Saleh Al Sada, whose country currently holds the rotating presidency of OPEC,  said a minimum price of $65 a barrel is badly needed at the moment.

He cautioned that the security of future supplies is a risk because of the price slump that has squeezed oil producers since 2014.

"The oil market is recovering slowly, but steadily. Luckily, the fundamentals show it is heading in the right direction," Al Sada said.

 "I don't think we are yet at a fair price. We need to have a fairer price, so that we can have the ability to invest more in order to secure the energy supply to the world and avoid any price shock."

In the interview, Al Sada did not rule out reviving talks of a freeze in production among major producers, after similar negotiations collapsed in Doha last month.

"Nothing actually is canceled but we are reacting to the parameters of the market," he said. 

The idea for a production freeze was the outcome of a meeting between Russia and OPEC members Saudi Arabia, Venezuela and Qatar in February as they attempted to stem a slide that at the time had pushed prices to around $30 a barrel from over $100 in the summer of 2014.

Other major producers gathered in Qatar to discuss the proposal last month, but failed to agree on a cap after Iran, which wants to boost its oil exports after years of sanctions, refused to join in.

Al Sada was careful not to blame Iran for the collapse of the freeze plan, saying the April meeting was nonetheless productive, because it gave producers a chance to discuss "new market fundamentals”.

Even without an output freeze, prices have been clawing their way back, settling Monday above $48 a barrel. That's still less than half their level less than two years ago.

Qatar and other OPEC member states will gather in Vienna next week to discuss what to do next, although industry observers are not expecting a major shift in policy.

 It will be the first such gathering where Saudi Arabia will be represented by Khaled Al Falih, who has been recently named energy minister in a surprise Saudi Cabinet shakeup.

Venezuela has suggested that non-OPEC producers might also take part in the June meeting. At the interview, Al Sada did not rule that out.

TRIPOLI — Crude production in oil-rich but conflict-ridden Libya is now more than 300,000 barrels per day since a new terminal opened in the east, the Libyan News Agency (LANA) announced on Tuesday.

It cited a spokesman for the National Oil Corporation (NOC) as saying that with Friday's reopening of Al Hariga terminal near Tobruk in the east, "production today has passed the 300,000 bpd mark".

NOC officials were not immediately available to confirm this, but the corporation's website said on Friday exports from Al Hariga had resumed with the departure of the tanker Seachance, loaded with 660,000 barrels of crude.

The specialised Marine Traffic website said the Malta-flagged vessel departed Al Hariga on May 20, bound for the French port of Fos-sur-Mer.

LANA said on Tuesday the North African nation's production could soon reach 360,000 bpd.

Oil is Libya's main natural resource, with reserves estimated at 48 billion barrels, the largest in Africa.

Libya had an output capacity of about 1.5 million bpd before the 2011 revolt, accounting for more than 95 per cent of exports and 75 per cent of the budget.

But production later slumped amid violence as rival militias battled for control of oil terminals.

The new UN-backed Government of National Accord (GNA) last month secured the backing of the Tripoli-based National Oil Corporation as GNA seeks to assert its control over the country.

The GNA plans to focus on the country's key oil sector after the country's economy was hard-hit in the wake of the 2011 uprising.

AMMAN — Private cement deliveries to the Gaza Strip resumed on Monday after Israel lifted a six-week ban it imposed over an alleged diversion of materials by an official in the Palestinian territory.

Israel imposed the ban in early April in the territory run by the Palestinian group Hamas, which is still rebuilding after an Israeli 50-day offensive on Gaza in 2014.

Israel claims that Gazans use cement to rebuild tunnels under the Egypt-Gaza Strip border and to rebuild military infrastructure. 

The ban affected private providers, mainly Qatar, a major donor to Gazan reconstruction, and the United Nations who were still able to bring in cement to Gaza, despite an Israeli blockade that has been in place for nearly a decade.

Raed Fattouh, who oversees the entry of goods into the Gaza Strip, said private deliveries had resumed for the first time since April 3, according to the Agence France Presse.

Robert Piper, the UN humanitarian coordinator for the Palestinian territories, confirmed that more than 90 trucks entered Gaza on Monday, calling it a "decent return" close to levels towards the beginning of the year.

Israel said late on Sunday that it was lifting the ban "in accordance with the security assessment and the understandings reached with the international community".

It had imposed the ban after accusing Imad Al Baz, deputy director of the Hamas economy ministry, of diverting supplies, which he denied.

Israel restricts the entry of goods into Gaza out of fears they will be used to make weapons or build tunnels that can be used for attacks while Gazans say they desperately need the commodity for reconstruction purposes.

More than 20,000 homes were reduced to rubble in the strip during the 2014 war.

Israel and Palestinian militants in Gaza have fought three wars since 2008.

UN officials point out that cement deliveries are vital to Gaza's reconstruction and pushed for the ban to be lifted.

Nickolay Mladenov, UN special coordinator for the Middle East peace process, welcomed Israel's decision to lift the ban.

"It is critical for the security of both Palestinians and Israelis that Gaza remains calm and hope is restored to its people," he said.