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ATHENS — Greeks took to beaches, cafes and churches on Sunday, just like they do every week, but the mood was downbeat as the country teetered on the brink of a default that could see it crash out of the euro.

“Everyone is very sad, very upset and depressed,” said 42-year-old Anna Apostolopoulos as she sipped a coffee on the terrace outside the trendy Balux cafe in Glyfada, a well-heeled resort half an hour from Athens.

It will be a “miracle”, she added, if Greeks vote in favour of the creditors’ bailout proposal when it goes to a referendum next Sunday, and she blasted her government as “immature children” for putting it to a public vote in the first place.

“They are terrible negotiators,” she indicated. “The prime minister is very, very irresponsible. He was elected to make decisions.”

Greeks were nevertheless refusing to let the crisis ruin their weekend entirely, and all the deckchairs on the beach were occupied.

“Yesterday I didn’t want to go to the beach,” Apostolopoulos said. “I watched TV all day and I felt down. But I promised my son we would go, so we went.”

A short stroll away, laboratory chemist Joanna Avayanos said she was worried by talk of a return to Greece’s former currency, the drachma.

There have been queues at some ATMs amid growing signs of a bank run, and like other jittery compatriots worried that the government may introduce capital controls, Avayanos has been trying to withdraw cash.

“Yesterday with my mother we went to two cash machines and it said there was a problem,” added Avayanos as she walked her daughter along the beach in a stroller. “In the supermarket, we could not use our card. That made me suspicious. I don’t know what is going on.”

‘Cash running out at ATMs’ 

Since Prime Minister Alexis Tsipras announced the referendum early Saturday, about 1.3 billion euros ($1.45 billion) have been withdrawn from Greek banks, according to the head of the bank workers’ union Stavros Koukos.

According to an anonymous banking source in Greece, only 40 per cent of the nation’s cash machines currently have money in them, purely because they cannot be restocked with banknotes quickly enough.

Tsipras’ governing radical left party Syriza, which rose to power in January on an anti-austerity ticket, slammed the creditors’ latest offer, arguing it would hurt workers, pensioners, young people and farmers, and has urged Greeks to vote against it in the referendum on July 5.

But Andreas Nikolopoulos, waiting outside a church in Athens with her young daughter, described the referendum issue as “tricky”.

“It [would be] a yes to Europe, not a yes to austerity measures,” she indicated.

She said that a Greek exit from the eurozone would be “painful, very painful. I have family in Australia, Canada... I have a job opportunity in Munich. But the neighbours, my friends, my family, are trapped.”

Among other demands, Greece’s creditors want public sector wage cuts and higher taxes on food and restaurant meals, in return for five-month, 12-billion-euro ($13.4-billion) extension of the bailout programme.

Retired nurse Fotini expressed anger at six years of economic downturn and painful austerity measures demanded by previous European Union (EU)-International monetary Fund (IMF) bailouts, including cuts to her pension.

“We have had too much [of the] bad times,” the 76-year-old told AFP as she sat on a bench in Syntagma Square in central Athens, waiting for a friend.

“The money the government gives me is down every month,” she said in reference to her pension, a key area which creditors had targeted for state cutbacks. “Greek people want good lives, work... We have too many men and women without jobs. It is not right.”

By the time Greeks vote next Sunday on whether to back the proposed bailout package, Greece may have already defaulted on the IMF payment that is due Tuesday.

Marina Stoianovitch, 17, said people would simply have to put on a brave face.

“We are going to be a different country. We are going to control our economy,” she said as she stood outside a church in Athens. “This is not good, but I don’t see another way. We will find a way.”

Separately, Alexis Kalaitzoglou makes a swift gesture to describe what he thinks about Tsipras: the shopkeeper in Paros, a busy tourist island, pulls his leg back and swings it forward as if to give Greece’s leader a good kicking.

Kalaitzoglou is angry because his family’s shop of jams, honeys and wooden handicrafts, part of a wider tourism industry that is the only bright spot of Greece’s struggling economy, may be in for a rough ride.

A rise in consumer taxes on Greek islands’ goods and services such as the ones Kalaitzoglou sells is one of the sacrifices creditors are seeking from Athens to unlock bailout funds that will allow Greece to remain in the euro. 

The tax hike is one of the sticking points thwarting a deal and prompting Tsipras to call a July 5 referendum on the bailout terms.

Yet even before the vote, Greece is likely to default on a debt payment, setting off a financial crisis that could damage an upcoming tourist season expected to be one of the most vibrant in years.

The creditors want to raise VAT rates for services such as restaurants and hotels as well as ending the tax breaks for islands like Paros in the Cyclades.

The tax breaks are intended to make resorts more attractive and also shield poorer, more remote communities from the higher costs of transporting goods. Raising them would force businesses to jack up their prices at the risk of driving customers away, or face a sharp drop in revenues.

“If the VAT rises to 23 per cent in all goods, we better jump in the sea and be done with it,” said the 62-year-old Kalaitzoglou. 

On Paros and other islands, VAT rates are 30 per cent lower than on the mainland. For example, they pay a VAT rate of 9 per cent on food that could be raised to 23 per cent.

“The sea and the tourism are the backbone of our economy, if we touch that too, there is no future anymore,” he indicated.

The anger of Kalaitzoglou and others underscores Greece’s dilemma as it flirts with an exit from the euro single currency.

“We all know, the biggest importer of currency is tourism. If tourism is hurt, it will have a knock-on effect on the economy, a recessionary spiral, and then how will lenders be repaid?” said Paros hotel owner George Mbafitis.

One bright spot

One in four Greeks is out of work and an average of 59 businesses are closing daily, according to the National Confederation of Hellenic Commerce.

But tourism, which accounts for nearly a fifth of Greek’s yearly output, has shrugged off the gloom. The Association of Greek Tourism Enterprises reported a provisional 15.4 per cent increase in tourism arrivals through international airports in the country in 2014.

Year to date data by the association put arrivals up by 17.5 per cent in the first quarter of 2015.

Proposals for tax hikes have emerged after a months-long tug of war with the Greek government over where to find cost cuts.

Tsipras’s junior coalition ally has threatened to pull the plug on the government if any tax hikes on islands materialise.

Critics argue the tax rises are a lazy way to raise revenue at the expense of real reforms to the Greek economy, such as tackling corruption and tax evasion, overhauling labour regulations and cutting down a bloated pension system.

“They don’t want to touch the privileged, which are mostly public workers, who are the customers of the political parties,” said Nicolas Stephanou, who runs a tourism web portal in Paros.

Beyond the tax hikes, heightened uncertainty over whether Greece will stay in the eurozone is also beginning to hurt tourism business. Some companies have reported a drop in bookings from such travellers, partly perhaps because of scare stories of possible bank runs and street protests.

On Sunday, Germany’s foreign ministry advised tourists travelling to Greece to take plenty of cash with them in case of problems with local banks.

“I had customers this morning asking me what was happening, what they should do,” said Dimitris Stavrakis, a hotelier from Paros. “This thing has gone on for too long. Will they sign, won’t they sign. Now a new round of uncertainty might start with the referendum.”

Some economists argue that returning to a sharply devalued drachma, the prospect Greece faces it if does exit the euro, could boost tourism and other service sectors by making them cheaper.

But for Paros hotelier Stavrakis, it’s not worth the risk:

“There are so many unanswered questions on how it would work if we did return to the drachma, what it would cost now, I’m not sure. Definitely it would make holidays cheaper but I don’t think that it is a realistic option,” he added

Kalaitzoglou of the jam and handicraft shop says life is already difficult enough. His wife, who works at a travel agency, has seen her salary reduced by 200 euros. And the shop, run by his daughter, could struggle.

“We can’t be wishing to buy an ice cream for our grandchildren and start having second thoughts about it,” he added.

ATHENS/BRUSSELS — The eurozone got ready to deal with a Greek debt default this week after refusing to extend credit following Prime Minister Alexis Tsipras’s surprise announcement of a referendum on an offer from creditors that his leftist government rejected.

Athens asked for an extension of Greece’s bailout programme beyond Tuesday, the day it must pay 1.6 billion euros to the International Monetary Fund (IMF) or go bust.

But the other 18 members of the eurozone unanimously rejected the request, freezing Greece out of further discussions with the European Central Bank (ECB) and IMF on how to deal with the fallout from a historic breach in the European Union’s (EU) 16-year-old currency.

The swift rejection was a startling demonstration of the degree to which Tsipras had alienated the rest of the currency bloc with a final-hour announcement that upended five months of intense talks.

The Eurogroup of finance members shut Greece’s Yanis Varoufakis from a meeting in Brussels and issued a statement without him, accusing Athens of breaking off negotiations unilaterally.

“The current financial assistance arrangement with Greece will expire on June 30, 2015, as well as all agreements related to the current Greek programme,” it said, making clear its refusal of a grace period to hold the vote.

Varoufakis said the refusal to provide an extension “will certainly damage the credibility of the Eurogroup as a democratic union of partner member states”.

“I’m very much afraid that that damage will be permanent,” he added.

The offer from creditors requires Greece to cut pensions and raise taxes in ways that Tsipras has long argued would deepen one of the worst economic crises of modern times in a country where a quarter of the workforce is already unemployed.

But voters in other eurozone states, including economic powerhouse, other southern states which have suffered harsh austerity in return for EU cash and poor eastern countries with living standards much lower than Greece, have lost patience.

Jeroen Dijsselbloem, the Dutch finance minister and chair of the Eurogroup, said Greek lawmakers should think about whether the referendum was wise before agreeing to hold it, essentially appealing directly to the Greek parliament to defy Tsipras.

Worried the country could default and even leave the eurozone, some Greeks queued up at cash machines to withdraw funds, though there were no signs of panic in Athens. Many sounded defiant, saying Tsipras had offered them an important chance to determine their own fate.

The eurozone finance ministers met in Brussels for what had been intended as a final negotiation for a deal.

But after they were blindsided by Tsipras’ surprise middle-of-the-night announcement that he rejected their offer and would put it to voters only after Tuesday’s deadline, one after another said all that remained to discuss was “Plan B” — how to limit the damage of default.

“We have no basis for further negotiations,” German Finance Minister Wolfgang Schaeuble said ahead of the meeting. “Clearly we can never rule out surprises with Greece, so there can always be hope. But none of my colleagues with whom I’ve already spoken see any possibilities for what we can now do.”

Finland’s Alexander Stubb called it “potentially a very sad day, specifically for the Greek people. I think with the announcement of this referendum we’re basically closing the door for any further negotiations”.

With most Greek banks closed for the weekend, there was no sign of panic on the streets of Athens. Government officials said there was no plan to impose capital controls that would limit withdrawals.

But police tightened security around bank teller machines as lines formed at some in the darkness almost as soon as Tsipras’ early hours televised speech was finished.

The Bank of Greece said it was making “huge efforts” to ensure the machines remained stocked.

One branch of Piraeus bank that is normally open on Saturdays was shut, with around 100 people queued outside. A senior executive said the plan was to open the branch but staff were weighing security concerns because of the queue.

After months of wrangling with the lenders, Tsipras announced that he would put the terms of the creditors’ “humiliating” offer to a popular vote on July 5.

Tsipras said he would respect the outcome of the vote, but he argued the lenders demands “clearly violate European social rules and fundamental rights”, would asphyxiate Greece’s flailing economy and aimed at the “humiliation of the entire Greek people”.

Greece’s stricken banks depend on emergency liquidity from the ECB to stay open, and the banking system faces at the very least a further flood of withdrawals after billions have left in recent weeks.

Long lines were reported in some supermarkets in Athens as people stocked up with supplies.

However, along with the worry, there were also signs of defiance and almost relief after years of relentless austerity and seemingly endless rounds of crisis meetings with lenders.

“The referendum, I think, is necessary in the sense that we must send a message to Europeans that the Greek people are not enslaved, we are no longer under occupation,” said Elias Papachadzis, a 49-year-old Athenian resident.

WASHINGTON () — The US House of Representatives on Thursday voted to renew assistance for American workers hurt by liberalised trade, an important step in President Barack Obama’s drive for a massive Pacific Rim trade deal.

Without action by Congress, the worker aid programme would have expired on September 30, just as the Obama administration could be trying to wrap up a 12-nation Trans-Pacific Partnership (TPP) trade deal encompassing 40 per cent of the world’s economy and ranging from Chile to Japan.

The Senate passed the legislation on Wednesday. With House passage, it now goes to Obama for signing into law.

By a vote of 286-138, the House approved a renewal of the Trade Adjustment Assistance (TAA) programme, which has been in place for decades to ease the domestic impact of free trade deals such as the North American Free Trade Agreement between the United States, Canada and Mexico in 1993.

Democrats have long been fierce defenders of the programme that Republicans mostly oppose.

But on June 12, Democrats voted to defeat the worker aid programme. It was a ploy, which ultimately failed, to block so-called fast-track authority that allows Obama to more easily complete TPP without fear that Congress could amend the pact.

In debate on the worker aid bill on Thursday, Democratic Representative Louise Slaughter said, “The very fact of passing this bill is an admission of knowing we are going to lose jobs.”

The conservative Heritage Foundation, which is influential among congressional Republicans, has called the programme “ineffective and wasteful” and complained that its benefits are more generous than those received by unemployed people who do not lose their jobs as a result of trade deals.

In a December 2014 analysis, Heritage argued that the money spent on TAA “appears to do little to improve displaced workers’ job prospects”.

The White House, however, has said 2.2 million workers have benefited from the programme since 1974.

According to the US Department of Labour, thousands of those displaced workers were veterans who used the aid to earn education degrees or industry-recognised certifications. In 2013, 71 per cent of programme participants returned to work, the department has said.

Many of the workers who lost their jobs and participated in the trade assistance programme have come from the manufacturing sector, according to government figures.

DUBAI — The cost of construction materials in Qatar is likely to jump as the host nation intensifies infrastructure building ahead of the 2022 World Cup, and other building projects could finish late as a result, industry experts say.

Qatar is set to spend more than $200 billion on the soccer tournament as part of a 2030 development plan, although tough contract terms and state bureaucracy have left some contractors in difficulties.

Corruption allegations at soccer’s governing body FIFA have put renewed media focus on Qatar, although Qatari officials say they are confident the 2022 tournament will go ahead as planned.

The high level of construction activity, predominantly in the capital Doha, is already making it hard for contractors to get workers and materials to sites.

“The pinch point will likely be in 2017-19 when the construction work peaks, but the government can take measures to mitigate that,” said Nick Smith, partner at engineering consultants Arcadis in Qatar. 

He predicted materials inflation would be about 3 per cent in 2015.

“This will include early supply chain engagement, standardisation of products and direct procurement of certain items. Qatar is already pursuing some of these initiatives.”

Materials inflation could surge to 15-20 per cent from 2018, said Steven Humphrey, a director at infrastructure specialists AECOM.

Qatar witnessed a similar phenomenon ahead of hosting the Asian Games in 2006. Also, construction inflation fluctuates more than general inflation and small markets such as Qatar are less able to absorb changes in workload, a report by Arcadis unit EC Harris states.

“Qatar, like most other Gulf states, has suffered from projects being delivered late, sometimes over budget and usually because the scope has changed from what was originally set out,” said AECOM’s Humphrey.

“With a fixed deadline like 2022 these attitudes will not be permitted. As prices get squeezed, contractors who bid at the incorrect prices will shy away from doing the projects and move their resources into more profitable projects,” he added.

Qatar will import many of the building materials it needs from neighbouring United Arab Emirates. Doha’s limited port facilities mean these goods must travel on small barges or via truck through Saudi Arabia, adding to supply chain pressures.

“Contractors pick and choose what their priorities are, so there’s a real danger, looking at bids today where they seem very competitive, that these are projects that may not be able to be delivered on time,” added Humphrey.

Commodity prices have dipped, helping to mollify materials inflation in the short term, with spot iron ore prices slumping to a near four-week low last week as slow Chinese steel demand kept steel futures near their weakest since their 2009 launch.

Separately, sources say that Qatar Investment Authority (QIA), one of the world’s most aggressive sovereign wealth funds, will set asset allocation targets for the first time and restructure internal decision-making, in response to a drop in oil prices that has crimped available funds as competition for assets grows.

In a cryptic reference on QIA’s website, a tab saying ‘QIA Review — Coming Soon’ leads to a page which does not yet exist. The sources, who all either work in Qatar or for foreign institutions which work with the QIA, said the review process was currently ongoing.

They spoke on condition of anonymity as they did not want to jeopardise working links with the secretive fund.

A spokesman for the QIA, which is estimated by industry tracker the Sovereign Wealth Centre to have $304 billion of assets, declined to comment.

QIA, set up in 2005 by the Supreme Council of Economic Affairs, a body chaired by Emir Tamim Bin Hamad Al Thani, was one of few sources of capital available to stressed sellers during the global financial crisis and thus snapped up, at rock bottom prices, many indiscriminate assets like ownership of the Shard skyscraper in London and Harrods department store, and stakes in Credit Suisse and Volkswagen.

Now, however, as the global economy recovers, QIA faces competition from other funds again as it seeks to diversify its hydrocarbon-centric economy. On top of that lower oil prices have reduced new investment funds available to it — though they still stand at tens of billion of dollars.

It’s also faced criticism for extreme secrecy because the fund doesn’t disclose its performance or total assets under management.

“As any organisation grows up, it makes much more sense to take a more institutionalised approach, and this is something which has happened at other sovereign funds in the past,” said a senior Gulf-based banker. 

Formal targets

The review would enshrine formal asset allocation targets for geographies and sectors for the first time, according to a senior Doha-based banker and a private equity source, ending the scattergun approach that marked the fund’s early years as it prioritised fast growth.

The fund was run between 2008 and July 2013 by Sheikh Hamad Bin Jassim Al Thani , a charismatic dealmaker who was also prime minister and foreign minister for most of his tenure and often used the QIA as a foreign policy tool, deploying its cash into areas which would help boost Qatar’s power and prestige.

Setting targets now could result in the fund exiting areas like food and mining where it overlaps with specialist funds such as Hassad Food and Qatar Mining. QIA is already evaluating its investments in some mining assets, sources told Reuters last week.

The review could also see tens of billions of dollars flow into new geographies to diversify a fund which in late-2013 was believed to be around 80 per cent invested in European assets.

That would crystallise a recently-announced shift towards the developed markets of Asia and North America. The fund said in April it would open an office in New York in light of its growing portfolio in the United States and last November announced plans to invest $20 billion in Asia over the next five years.

Those funds are likely to flow in particular to sectors where QIA has a penchant such as financial services, real estate and consumer goods, said a second source, a senior Doha-based banker.

Consensus

The other major shift expected to emerge from the review is a greater use of consensus in decision-making.

Its current director Sheikh Abdullah Bin Mohamed Bin Saud Al Thani, chairman of telecommunications firm Ooredoo for 14 years prior to joining the QIA, is heavily involved in most matters and asks to be briefed on everything going on, according to a Doha-based lawyer.

“There now seems to be a greater ethos of valuing all opinions, which makes people feel they are bringing their value added to the fund,” said the senior Doha-based banker.

It remains to be seen whether the review will advocate greater transparency for a fund rated in October by political risk group GeoEconomica as the only SWF not complying with the Santiago Principles, a voluntary code of practice meant to govern these often highly-secretive funds.

“Transparency is not an end here,” said the first source, a senior Gulf-based banker.

“There are always shades of grey when it comes to SWFs, especially when they are still evolving like the QIA, so it’s more of a case of gradual, steady progress and not just flipping a switch,” he added.

AMMAN —  Lower earnings and profits during the first quarter (Q1) of this year took the shine off  the rock-hard annual 2014 and 2013 financial results at Mediterranean Tourism Investment Company (METICO).

METICO, a public shareholding company that owns the Four Seasons Hotel in Amman, earned JD3.9 million during the first three months of this year, 7.1 per cent less than the JD4.2 million earned during the same period in 2014.

The 193 rooms generated JD2.3 million of total earnings, with food and beverages bringing in JD1 million and “others”  JD0.6 million.

Gross profit generated from the hotel’s operations amounted to JD1.1 million, compared to JD1.3 million.

After taking into consideration administrative and general expenses, depreciation, other income and other expenses, the net profit after-tax came at JD0.4 million during January-March 2015, down from 0.5 million in the first quarter of the previous year.

Based on the changes to the Income Tax Law effective from the start of 2015, the tax rate was adjusted to 20 per cent for the first quarter of this year from 14 per cent during the same period of last year.

The company’s income statement as of December 31, 2014, showed a JD19.3 million in overall earnings, 3.8 per cent higher than the JD18.6 million registered in 2013.

According to notes accompanying the auditor’s financial statements, the earnings from hotel operations were derived mainly from rooms and food which amounted to JD10.1 million and JD5.3 million respectively.

Income from beverages came at JD1.3 million and from renting party halls at JD0.4 million. Under “other income”, the earnings were JD2.2 million.

By comparison, the earnings in 2013, were JD9.8 million from rooms, JD5.0 million from food, JD1.2 million from beverages, JD0.4 million from rentals, and JD2.1 million from “other income”.

Last year’s gross operating profit and the net profit after tax stood at JD6.5 million and JD3 million respectively, slightly down from the previous year.

METICO Chairman Abdul Qader Al Qadi wrote in the 18th annual report that the JD6.5 million operational profit was achieved despite higher costs that resulted from increases in energy prices, staff salaries and taxes.

Qadi described the JD3 million net profit as the highest among hotel companies in Jordan.

In a foreword, the chairman indicated that the occupancy rate at the Four Seasons Hotel rose from 74.2 per cent in 2013 to 76.7 per cent in 2014, noting that the average rate at other 5-star hotels in Amman was 60.64 per cent, down from 61.53 per cent in 2013.

He said that the average room rate in 2014 was JD187.68 compared to JD188.28 in the previous year, while the average rate at 5-star hotels in Jordan was JD125.50, down from JD132.78 in 2013.

As such, the report revealed that the average room profitability was JD97 compared to JD45 at other 5-star hotels.

“The hotel was able to increase its market share in terms of room occupancy, topping all competitors, and was at the forefront in terms of earnings from food and beverages, or income from catering,” it said.

The balance sheet as of March 31, 2015, showed total assets at JD52.2 million, of which JD42.7 million was the net value of property and equipment.

Financial assets at fair value amounted to JD1 million representing investments in shares of Al Dawliyah for Hotels and Malls (JD0.6 million), and Arab Jordan Investment Bank (JD0.4 million) which are listed on Amman Bourse, and a Jordanian company for hotel and tourism education, which is not listed on the stock exchange.

Current assets totalled JD8.4 million, JD0.5 million of which were receivables and JD6.8 million was cash in hand and at AJIB, which owns a 9.6 per cent stake in METICO.

Total equity at the end of March 2015 stood at JD49.1 million comprising JD45 million capital, JD3.2 million mandatory reserve besides other reserves and profit.

Liabilities totalled JD3.1 million.

According to notes accompanying the auditor’s 2014 financial statements, METICO earned JD0.2 million in bank interest last year as “the JD5.2 million six-month term deposit at a local bank was carrying a 3-5.5 per cent annual interest rate”.

Reflecting the company’s healthy financial standing and profitability, the general assembly of shareholders agreed to disburse JD2.7 million in cash dividends at a rate of 6 per cent for the year 2014, unchanged from the previous year.

At the end of 2014, METICO was owned by 25 Arab and foreign shareholders who accounted for 33.2 per cent of the capital while 132 Jordanians controlled the remaining 66.8 per cent.

Main shareholders were Abdul Qader Al Qadi, Mahmoud Zuhdi Malhas, and Mahmoud Khalil Abulrub who respectively owned 15.7 per cent, 23.6 per cent and 11.2 per cent equity. AJIB had a 9.6 per cent stake and Sheikh Hamad Bin Jassem Bin Jaber Al Thani followed with 6.6 per cent.

Out of 403 employees who worked at the Four Seasons Hotel at the end of 2014, 12 were foreigners.

As per the agreement signed with the Canadian international luxury, five-star hotel management for 15 years from 2003 when the Amman hotel began actual operations, METICO has to pay Four Seasons Holdings Inc. management expenses at the rate of 0.25 per cent of total operational earnings, and concession fees at the rate of 0.05 per cent of total operational earnings.

METICO also has to pay 1.75 per cent of total operational earnings as consultation expenses, 9 per cent as operational expenses, 0.87 per cent as marketing fees and 0.6 per cent as promotional fees.

Last year’s financial statements of Amman’s Four Seasons Hotel show JD1.1 million as expenses related to management fees for Four Seasons Holdings Inc. and also JD1 million as payables due to the Canadian management.

AMMAN — Advertising expenditure in Jordan during the first quarter of 2015 went down to around $47 million, compared to the same period of 2014 when it stood at $48 million, Ipsos Jordan’s data showed Wednesday. 

The data also showed that the pattern of advertising expenditure has changed. 

Dailies, classified advertisement newspapers and monthly magazines used to amount to more than 67 per cent of advertising expenditure until the first quarter of 2012, when it started to decrease until it reached 51 per cent of the expenditure in the first quarter of 2015.

The decline of expenditure on printed items in the first quarter of 2015 was accompanied by a similar increase for radio, where the advertisement share for radio increased from 12 per cent in the first quarter of 2012 to 21 per cent in the same period of 2015.

The television’s share of advertisement slightly decreased in the current January-March period reaching 10 per cent, compared to the same period of 2012 when it stood at 11 per cent, while the advertisement expenditure on billboards maintained its 18 per cent over the past three years.

Banking, for the second consecutive year, topped the list of sectors spending on advertisement accounting for 14 per cent, followed by restaurants, travel and tourism businesses, and communications with 6 per cent each, while the mall sector’s share stood at 4 per cent.

Ipsos Group is a marketing research company that works in more than 87 countries, and it ranks the first on the Middle East and North Africa in terms of research based on field survey; the group started it operations in the Kingdom in 1988.

AMMAN — Jordan Chamber of Commerce (JCC) President Nael Kabariti announced on Tuesday that the chamber has inaugurated a liaison office at the Aqaba Chamber of Commerce (ACC) in partnership with the Amman Chamber of Commerce.

The office aims at following up on the commercial sector's issues and complaints related to merchants' containers and ways to overcome such challenges, Kabariti said.

He added that the office reflects JCC's activities to serve the national economy, and to ensure the smooth flow of goods through the Aqaba Container Terminal (ACT).

Kabariti praised Aqaba Special Economic Zone Authority Chief Commissioner Hani Mulki's efforts in contacting all relevant parties to follow up on the work progress and supervising the handling in the ACT.

Kabariti also highlighted the important role of JCC and ACC in assisting all investors until reaching solutions that can best serve the national economy.

AMMAN — Stuck for years in a cycle of losses, Jordan Clothing Company (CJC) accumulated a big financial deficit that eroded more than 50 per cent of its JD4 million capital.

According to auditor Arab Professionals, a member of Grant Thornton,  the accumulated losses reached JD2.3 million at the end of March 2015  following a JD300,000 loss during the first quarter of this year.

During the first three months of 2015, sales also were down by 40.3 per cent to JD300,000 from JD600,000 during the same period of last year.

Arab Professionals said the company should inform the Jordan Securities Commission and Amman Bourse about the extent and percentage of the losses and the reasons behind it, as required when accumulated losses of a company exceed 50 per cent of capital.

The review of the interim summary of the consolidated financial statements was qualified because the auditor was unable to quantify the JD800,000 worth of finished goods and goods under process through a physical verification of inventories.

The auditor also could not verify the balance of raw cloth and sewing materials worth JD700,000 and JD300,000 respectively because of mistakes in their quantities and prices.

Arab Professionals said CJC's management did not take necessary provisions to guard against JD400,000 of slow-moving goods.

The balance sheet as of March 31, 2015 showed total assets at JD4.2 million, JD2.5 million of which were goods, JD500,000 were property, machines and equipment, and around JD700,000 in receivables with  a single client owing JD200,000 to CJC. 

Short and long-term debt amounted to JD1.1 million, down from JD1.6 million at the end of last year, while accounts and notes payable totaled around JD1.1 million.

Net shareholders equity stood at JD1.9 million, down from JD2.2 million at the end of December 2014.

CJC's annual report covering the year 2014 indicated that sales last year dropped by 30 per cent to JD2.2 million, JD1.1 million of which were retail sales and JD700,000 were channeled through tenders.

Of the JD3.2 million of sales in 2013, JD1.4 million were retail and JD1 million were special orders, with exports and tenders each accounting for JD500,000.

Among several difficulties and challenges mentioned in the report was the weak purchasing power of consumers who, CJC noted, opted buying food and other basic necessities over clothes.

To counter lower demand, clothiers had to put forward discounts and special offers for long periods, at the expense of diminished profit margin, the report said.

It described wholesale activities as important but weak until now, pointing out that some traders took advantage of the company's trademark in the past and, as a result, CJC  lost some customers.

Noting that the wholesale business is still unfavourable because it entails a high degree of risk, in terms of settling bills, the company added that  it will consider a new approach to enter wholesale activities with competitive prices and new designs, while being vigilant against deceitfulness.

The company listed Algeria, United Arab Emirates and Saudi Arabia as export markets where it seeks to expand noting that CJC participated in an Algerian fair and will continue to join others in 2015. 

Other markets eyed by CJC include Hebron and Nablus, in the Palestinian territories where the company has a branch in Ramallah, and Aqaba.

Sales in Aqaba, considered by CJC as an export outlet because of its free area status, declined last year by 30 per cent to JD51,594 and its retail shop in the city posted a JD19,210 loss.  

Sales seemed worthwhile through government and military tenders, especially that a deal was clinched to supply the gendarmerie with special clothing over four successive years.

The gendarmerie will account for 31 per cent of the purchases from CJC as the company seeks profitable tenders without accompanying risks after countering some troubles in the past with certain government and military tenders.

Besides continuing to seek some tenders, the company will work on upgrading its clothing business for hotels, schools and hospitals and bringing in new designs that satisfy customers.

Reflecting lower demand, production dropped from 292,182 clothing pieces in 2013 to 221,658 pieces in 2014, the report indicated, mentioning Hong Kong Selection, Kerim Group, Union Garment and B.G.T Company as suppliers of more than 10 per cent of CJC's purchases.

The report listed several action plans to revitalise operations pointing in particular to production reorganisation at the factory with the assistance of highly qualified technical experts, and a marketing campaign, besides  merging the subsidiary Central Clothing Company with the mother firm CJC.

"The reorganisation would include production lines, worker's productivity, and distribution of industrial costs in addition to replacing unprofitable production lines with what used to distinguish the authenticity of the company's products," the report said.

The marketing campaign would focus on underpinning the CJC trademark, opening a number of outlets in commercial centres to sell goods on commission basis, encouraging wholesale dealings once again, completing the establishment of three branches in Palestine, and expanding the marketing of new products such as men's underwear. 

Moreover, the company plans to evoke past tradition and concentrate on shirts and trousers, its primary products, and to participate in local and international fairs in order to broaden its reach and enter new agencies.

Despite these remedial steps, a number of risks remain, such as higher production costs arising from the increase in the minimum wage to textile workers from JD170 to JD190 a month, and electricity charges.

Additional risks that "greatly affected" the company's sales were the high cost of living and labour strikes such as the one that took place at the Aqaba Container Terminal, CJC said.

It added that the company does not enjoy any government protection except the prime minister's decision which granted local manufacturers a 10 per cent preference over foreign industry for government purchases and tenders.

Another decisions that had a material effect on the company's performance, its products or competitiveness was the tax increase on imports from 5 per cent to 20 per cent.

CJC's labour force comprises 192 employees, 164 of whom work at the   head office and factory in Al Tajamouat Industrial City located in Amman's Al Raqeem southern suburb. The remaining staff are employed at over a dozen retail shops in Amman, Zarqa and Aqaba.  

The company, which estimates its capital investment at JD600,000, is owned by the retirement fund of the members of the Jordan Engineers Association (47.4 per cent), the social insurance fund of the members of the Jordan Engineers Association (1.9 per cent), and the solidarity fund at the Jordan Engineers Association (1.4 per cent) besides other investors.

AMMAN — Total exports during the first four months of 2015 amounted to JD1.7 billion, 12.1 per cent less than the figure during the same period of 2014, according to the Department of Statistics (DoS).

Data showed a 13.7 per cent drop in domestic exports to JD1.5 billion, and a 2.2 per cent decline in re-exported items to JD262.3 million, compared to the same period of 2014. Imports, at JD4.5 billion, were lower by 14.3 per cent, a DoS statement indicated.

The trade deficit in the January-April of 2015, stood at JD2.8 billion, marking a 15.7 per cent drop compared to the same period of 2014.

Exports of clothes increased by 11.1 per cent, while the value of fertilisers, fruits and vegetables, and pharmaceutical exports dropped by 45, 37.1 and 19.7 per cent respectively, the statement pointed out.

Imports of machinery and spare parts increased by 18.5 per cent; vehicles, motorbikes and their spare parts went up by 12.3 per cent; and electronics and their spare parts rose by 3.4 per cent, while imports of crude oil and its derivatives, decreased by 44.1 per cent and iron went down by 16.6 per cent, the DoS concluded.

LONDON — Capacity to generate power from renewable sources, including solar, wind and hydro, hit a new high in 2014, driven by a rise in the number of countries with green energy goals, according to an international group of experts.

An 8.5 per cent increase in renewable energy capacity allowed the global economy and energy consumption to grow without a parallel increase in carbon emissions for the first time, according to a report from green energy policy network REN21.

The growth in renewables was powered by green energy targets and other support policies now in place in 164 countries, up from 144 in 2014, indicated Paris-based REN21.

“Renewable energy and improved energy efficiency are key to limiting global warming to 2OC and avoiding dangerous climate change,” REN21 chair Arthouros Zervos said in a statement.

China’s push for renewables and efforts to promote them in wealthy countries helped keep carbon emissions at the same level as in 2013, despite an annual 1.5 per cent increase in world energy consumption in recent years and 3 per cent growth in global gross domestic product last year, said the report.

But government policies such as subsidies for fossil fuels and nuclear energy are constraining the renewables sector, keeping energy prices from non-renewable sources at artificially low levels and encouraging waste, the report added.

“Creating a level playing field would strengthen the development and use of energy efficiency and renewable energy technologies,” said Christine Lins, REN21 executive secretary.

“Removing fossil-fuel and hidden nuclear subsidies globally would make it evident that renewables are the cheapest energy option,” she added.

Renewable energy made up almost 28 per cent of global power generating capacity in 2014, enough to supply close to 23 per cent of electricity demand, the report pointed out.

The amount of energy available from renewable resources worldwide was greater than that produced by all coal-burning plants in the United States, the world’s second-largest coal consumer, it indicated.

Green energy investments in developing countries rose 36 per cent in 2014 from the previous year, reaching $131 billion and coming the closest ever to investments in developed economies, which stood at $139 billion.

China accounted for 63 per cent of the renewable energy investment in developing nations, while Chile, Indonesia, Kenya, Mexico, South Africa and Turkey each invested more than $1 billion.

Solar energy capacity has grown at the fastest rate, largely thanks to rapidly falling costs, followed by wind power, REN21 said.

Globally, more than 1 billion people still lack access to electricity, the majority of them in developing countries.