Business

AMMAN — Jordan Industrial Ports Company on Sunday signed an agreement with a consortium of two Spanish companies to expand the industrial Port, according to a company statement.

Under the agreement, the consortium will work to re-qualify and expand the industrial pier at the southern port of Aqaba, which is equally owned by the Arab Potash Company and the Jordan Phosphate Mines Company (JPMC). 

JPMC  Chairman Amer Majali said that after expansion works are completed, the pier capacity will be doubled and it will be able to receive larger ships carrying from 5 to 100,000 tonnes.

This will enable the company to export its produced DAP fertiliser, potash and other  products such as phosphorus pentoxide and also import needed raw materials, he added. Expansion and re-qualifying works will take 22 months, according to Majali. Spain’s Ambassador to Jordan Santiago Ansorena attended the signing ceremony, besides representatives of the companies involved. 

AMMAN — Airport International Group (AIG), the Jordanian company responsible for the rehabilitation, expansion and operation of Queen Alia International Airport (QAIA), announced on Sunday in a press statement that annual traffic at the airport reached 7,089,008 passengers during 2014, an impressive 9 per cent year-to-date (YTD) increase compared to 2013. 

The statement indicated that since the beginning of 2014 and up until December, YTD aircraft movements (ACM) rose by 7.6 per cent totalling 73,125 ACM.

"These annual traffic figures are the culmination of 12 months of robust growth experienced at QAIA in terms o f passenger traffic (PAX) and ACM," it said.

"During 2014, QAIA achieved several firsts in the airport’s history by exceeding 500,000 monthly PAX in January and February; 600,000 monthly PAX in April and May; 700,000 monthly PAX in August; and 600,000 monthly PAX in September, as opposed to the same months during 2013.

" AIG Chief Executive Officer Kjeld Binger attributed the overall growth experienced during 2014 to strong traffic performance during peak holiday seasons.

ERBIL, Iraq — Billboards still read "Welcome to Erbil, 2014 Arab Tourism Capital", but most of the visitors Iraq's Kurdistan region welcomed last year were people made homeless by a jihadist offensive.

It was supposed to be tourism's takeoff year but the Islamic State (IS) group's June onslaught dashed those hopes overnight when it plunged Iraq into chaos.

"I cannot even talk about a decline in numbers, it's more like everything collapsed," said Hearsh Ahmad Karem, the manager of the Kurdistan Hotels and Restaurants Association.

What was a growing $1 billion (885-million-euro) sector in 2013 came to a screeching halt when IS fighters took over large parts of Iraq north and west of Baghdad and moved within striking distance of Erbil.

Plans for a new zoo, the renovation of Erbil's UNESCO-listed citadel and many similarly ambitious projects have been halted.

"Instead of getting tourists, we got IDPs," said Karem, referring to the 900,000 internally displaced persons (IDPs) who fled conflict in Iraq and found refuge in Kurdistan.

The autonomous three-province region has been spared most of the violence that tore Iraq apart but Kurdish peshmerga forces were mobilised en masse, transport was disrupted and the destination's image took a big hit.

"After June 10, you can't say we were the 2014 tourism capital anymore. Tourism was annihilated," said Karem.

Iraq hasn't been an obvious tourism destination in recent decades but Kurdistan has long been a holiday spot for Iraqi Arabs and was starting to draw adventure-seeking foreigners.

While the rest of Iraq mired itself in sectarian politics and corruption, Kurdistan lured investors and built up a region with most of the trappings of a functioning state.

Hotels closing

Spectacular waterfalls and snow-capped mountains, archaeological sites and cultural tours, as well as a no-visa policy for most Westerners meant Kurdistan could attract a broad range of visitors.

"Everything was ready, we spent a lot to welcome them," the tourism board's Nadir Rwsty said, adding that there were no reliable figures for visitor numbers last year.

Close to 3 million tourists visited Erbil in 2013 and estimates predicted up to 4 million would come in 2014.

The oil-producing region had hoped to make tourism the second pillar of its economy. Now cash is in short supply, with oil prices at a six-year low and soaring military spending.

According to Karem, at least 72 hotels have closed down over the past six months. He noted that at least as many had empty rooms and only kept their restaurants running.

The absence of tourists has affected thousands of people who worked in hotels, restaurants or as taxi drivers.

Sitting in front of his souvenir shop at the foot of the citadel in Erbil, Burwa Mohammed Aziz said he would have to close if business did not pick up soon.

"I could make up to 3 or 4 million dinars (more than $3,000) a month but now it took me four months to bring in one million," the 22-year-old said. "Consider that my monthly rent is 500,000."

He held up a pair of white "klash", the traditional hand-knitted Kurdish moccasin made of cotton and cowhide that had become a hit with foreign tourists.

"They used to snap these things up. The few Westerners I get now are Erbil residents and know how to bargain," Aziz added, shaking his head.

Travel agents worried  

Baxtiar Sadiq Ahmed runs his own travel agency in central Erbil and specialises in high-end customised tours focusing on the region's multi-millennial history.

"Everything was going well, business was really picking up... I was expecting up to eight groups in 2014. I only had time for two before the crisis," he said.

His tours included sites beyond Kurdistan's official borders and were popular with young retirees from Europe eager to escape mass tourism and discover new cultures.

"I had prepared tours looking at the Armenian presence in the region, Jewish heritage, Assyrian history or the Yazidi shrine town of Lalesh for example," he added. "There is so much to do, there are 700 archaeological sites in Erbil governorate only."

Although visiting Kurdistan remained safe throughout the crisis, Ahmed said travel agents and their insurance companies were worried.

"Now I need to go to Europe to market my business properly and reassure them. I am ready to pay for them to come here and see for themselves," he added.

DUBAI — A lavish payout to public employees ordered by Saudi Arabia's new King Salman will help to sustain the kingdom's consumer boom and reassure financial markets that the government is not slashing expenditure in the face of low oil prices.

On Thursday, Salman ordered the immediate payment of two months of bonus salary to all state employees and pension to retired government workers, in a string of decrees which also reorganised the economic policy making apparatus.

The announcement did not give a monetary figure, but Saudi Arabia's 860 billion riyal ($229 billion) state budget plan for 2015 said salaries, wages and allowances would comprise 50 per cent of total spending.

That implies the new payout, announced a week after Salman succeeded his brother Abdullah as king, will be worth up to around 70 billion riyals, about 8 per cent of the original budget, or 2.5 per cent of the last year's gross domestic product (GDP).

Other benefits announced by Salman will increase spending further. 

He ordered payments to students, grants to professional associations and sports and literary clubs around the country, and 20 billion riyals in spending to improve electricity and water services, though it was not clear if the utility spending was part of a previously announced plan.

A Reuters poll of economists earlier in January found them predicting GDP growth of 3.2 per cent this year, down from 3.6 per cent in 2014, on the grounds that the plunge in oil prices would cause the kingdom to slow some energy and petrochemical investments and make the government more cautious about spending in general.

Salman's announcement on Thursday suggested the government remained willing to spend heavily despite the hit to its oil revenues from low prices, and that GDP growth this year might, therefore, be higher than originally expected.

"I believe it will be growth supportive, especially on the consumption side," said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

Saudi retail industry shares such as Jarir Marketing, United Electronics and Fawaz Alhokair, plays on the kingdom's fast-growing private consumption, may benefit.

Salman's announcement appeared to take a step back from a pledge in the 2015 budget, which was announced in December when he was already overseeing economic policy, to "rationalise" spending on public salaries.

But it is in a long Saudi tradition of welfare handouts at times of political transition or tension. The 2015 budget plan projected a deficit of 145 billion riyals; the actual deficit now looks likely to be much larger, but with government reserves at the central bank totalling some 900 billion riyals, Riyadh can easily cover such shortfalls for now.

Economic council 

Salman may intend to recoup some of the costs of his handout through economic and bureaucratic reforms.

Thursday's decrees kept the identity of key economic ministers unchanged, suggesting to many observers that major, politically sensitive reforms, such as cutting energy subsidies, or large tax shifts, are not on the cards for now.

"With the oil, economic and finance portfolios remaining steady, I do not expect to see wider change in policy," said Malik.

But Salman replaced many other ministers including telecommunications, agriculture and the civil service, suggesting he may seek changes in the way those ministries operate. 

Economy Minister Muhammad Al Jasser said last week that the next reform drive should focus on efficient administration.

King Salman appeared to be seeking bureaucratic efficiency on Thursday when he abolished 12 committees and councils, creating a new Council of Economic and Development Affairs to substitute for some of them.

The new council, chaired by King Salman's son Prince Mohammed Bin Salman, who is only 34, may give the king a platform to push controversial economic reforms in the future if he wishes.

AMMAN — Arab Bank Group generated $577.2 million net profit after tax and provisions in 2014, according to a bank press statement received Saturday.  

The net profit, the press release indicated, was 15 per cent higher than amount recorded in the previous year. 

"To enhance the bank’s capital adequacy ratio and to further expand its business, the board of directors recommended distributing dividends at a rate of 24.5 per cent for the year 2014: cash dividends of 12% and two free shares for every sixteen shares," the press release stated.

"Despite the challenging environment and the devaluation of several major currencies, the bank managed to grow loans and advances by 3 per cent to $23.7 billion, compared to December 2013," it added. 

According to the bank, customer deposits grew by 2 per cent to  $35 billion. Adjusting for the impact of exchange rates and extraordinary items, loans and customer deposits increased by 9 per cent and 7 per cent respectively.

Sabih Masri, Arab Bank’s chairman described the results as a confirmation of the bank's ability to deliver strong results, maintain a solid balance sheet and a quality portfolio.

"Loan quality remains very strong with no increase in non-performing loans and a provisions coverage ratio in excess of 100%, excluding the value of collaterals held," he indicated

Nemeh Sabbagh, Arab Bank’s chief executive officer, stated that Arab Bank succeeded in growing its operating income benefiting from its diversified business model, and controlling operating expenses.

"Key financial indicators remain strong as the bank’s liquidity continues to be robust with a loan-to-deposit ratio of 67.7 per cent," he pointed out. "Capital adequacy ratio reached 14.8 per cent as at end of December 2014."

Sabbagh reiterated confidence in the bank's soundness and strength of its legal position in the appeal stage of the lawsuit filed against the bank in New York. 

Masri expressed full confidence in the bank’s ability to maintain sustainable growth in profits and a strong level of capital adequacy.

The bank’s results are subject to the final approval of the Central Bank of Jordan.

AMMAN — Amman Chamber of Commerce (ACC) President Issa Murad on Saturday discussed  ways to expand trade and investment ties with Malaysia and South Africa.

At separate meetings with Malaysian Ambassador Zakri Jaafar and South African Ambassador John Davis, Murad and ACC board members looked into various means to increase commercial trade volume, hold economic forums and promote joint investment opportunities.

Murad stressed the importance for Malaysia to benefit from Jordan’s distinguished geographical location that could be used as a hub for Malaysian exports of palm oil to the Middle East and Africa, according to an ACC statement.

Murad also reiterated the importance of encouraging more Malaysian businessmen and investors to come to the Kingdom and benefit from the investment opportunities in many industrial sectors. 

Jaafar stressed the need to increase Malaysian exports to Jordan, especially the palm oil, his country’s most important agricultural product, noting that Malaysia is also focusing on attracting more Jordanian tourists.

At his meeting with Davis, Murad highlighted the need to develop commercial ties with South Africa and benefit from available investment opportunities. 

The ACC president said there is a noticeable development in the commercial balance between the two countries, where the Kingdom’s exports to South Africa increased from JD11 million in 2010 to JD25 million in 2014, while South African exports to Jordan during the same period went up from JD15 million to JD21 million.

Davis noted that he would review the investment environment in the Kingdom and acquaint the private sector in his country with them, inviting the Jordanian private sector to visit South Africa to explore investment opportunities there.

SEOUL — Samsung Electronics posted its first drop in annual net profit in three years Thursday and saw resurgent archrival Apple barge in on its pole position as the world's top smartphone maker.

The South Korean firm, whose key mobile phone operations have struggled in the face of intense competition from cut-price Chinese rivals, also warned that it expected 2015's "business environment... to be as challenging as 2014".

The tech giant said Thursday it recorded a net profit of 23.4 trillion won ($21.45 billion) in 2014, down 23.2 per cent from a year ago and the first decline since 2011.

Operating profit fell 11.7 per cent to 25 trillion won in the year and sales also tumbled 10 per cent to 206 trillion won.

Under growing pressure to boost shareholder returns, the company still managed to announce an increased dividend of 19,500 won a share, up from 13,800 won a year earlier.

The Samsung results contrasted sharply with the triumphant surge in the fortunes of California tech titan Apple, which reported a fourth quarter net profit of $18 billion, the largest ever made by a public company.

Apple's performance was driven by the sale of 74.5 million iPhones, which included a doubling of sales volume in the crucial Greater China region.

Samsung's fourth quarter net profit, meanwhile, was down 27 per cent at 5.3 trillion won.

Chip cushion  

The fall was cushioned by a boom in high-margin chip sales that helped offset the downturn in the key mobile sector, with operating profit in the semi-conductor division rising 35.7 per cent to 2.7 trillion won in the October-December period from a year earlier.

Samsung shares closed the day down 1.31 per cent at 1,360,000 won.

The annual profit figure marked a dramatic reversal for the company, which is also facing a once-in-a-generation leadership change after several years of stellar growth, driven by the once all-conquering mobile division.

The popularity of the iPhone 6 helped Apple catch up with Samsung to share the title of world's top smartphone vendor, market researcher Strategy Analytics said Thursday. 

Apple shipped 74.5 million handsets in the fourth quarter of last year with a market share of 19.6 per cent, on a par with Samsung, whose shipments and market share slipped markedly from a year ago.

Samsung had held the global smartphone vendor crown on its own since dethroning Apple in 2011.

Samsung's flagship Galaxy phones have suffered in the high-end market thanks to the popularity of the iPhone 6, while its dominance of the middle- and low-end handset segment has been challenged by Chinese firms such as Huawei, Xiaomi and Lenovo.

New strategy 

Samsung plans to slash the number of smartphone models it issues in 2015, while boosting production of remaining models that can be sold more cheaply to compete with Chinese rivals.

Streamlining the product mix should increase sales in the current quarter, Samsung's head of investor relations Robert Yi predicted, while nevertheless warning of a tough year ahead.

"When we look at 2015 as a whole, we fully expect the business environment... to be as challenging as 2014," Yi said.

Handset sales will be driven by growth in emerging markets including China and India, indicated Park Jin-young, vice president of Samsung's mobile unit.

Sales of tablet computers are expected to grow, largely boosted by sales of mid-priced and low-end products, Park said.

A more fundamental restructuring is assumed to be in the pipeline, with control of the family-run conglomerate's main business expected to pass from ailing patriarch Lee Kun-hee to only son Lee Jae-yong.

Needing cash to pay for what will be a massive inheritance tax bill, Lee and his siblings are expected to pare down and simplify the byzantine system of cross-holdings that link the many branches of the Samsung empire.

The anticipated reforms have helped keep Samsung on the "buy" list of many analysts, despite the recent profit downturn.

Thursday's dividend increase will help appease disgruntled shareholders who watched Samsung's stock price take a battering last year.

The company is currently in the middle of a $2 billion share buyback process announced in November.

With a market capitalisation of about $185 billion, Samsung accounts for nearly 17 per cent of the weighting on South Korea's benchmark Kospi composite index.

With its hot-selling large-screen iPhones released last year, Apple has roared back to the top of the pack with South Korea's Samsung in the smartphone market.

A separate survey by IDC analysts said Samsung had a tiny edge over Apple with 75.1 million units sold.

Apple "beat everyone's expectations", said Ryan Reith at IDC. 

Even more surprising is that Apple managed to increase the average selling price of its phones at a time when many consumers around the world are looking to low-cost handsets.

Another surprise was growth of iPhone sales in the US, "which is considered a saturated market", according to Reith, and in China, where competition is intense.

"Sustaining this growth and higher [selling prices] a year from now could prove challenging, but right now there is no question that Apple is leading the way," Reith said in a statement.

Strategy Analytics said Samsung now faces "intense competition from Apple at the higher-end of the smartphone market, from Huawei in the middle-tiers and from Xiaomi and others at the entry level."

"Samsung may soon have to consider taking over rivals, such as Blackberry, in order to revitalise growth this year," it added.

Even Apple has been surprised by its growth. Chief Executive Tim Cook said during an earnings call this week that iPhone demand "has been staggering, shattering our high expectation".

IDC's Ramon Llamas told AFP that Apple is still seeing strong demand in early 2015 but that "it's going to be difficult to maintain that breakneck pace."

He said: "The fact that they attracted a number of Android users gives them growth prospects for 2015."

According to analysts, the smartphone market appears to be diverging with Apple dominating the high end and other manufacturers scrambling at the low end.

"There's been so much scepticism for so many years about Apple's ability to continue to make its unique business model work over the long term, and Apple continues to prove them wrong," said Jan Dawson at Jackdaw Research in a blog post. 

Rise in China  

IDC said overall global smartphone sales hit a new record for the quarter and for the year: 375.2 million units shipped during the fourth quarter, a 28 per cent increase from a year earlier, bringing the annual total to 1.3 billion, a gain of 27.6 per cent.

Strategy Analytics said more than a billion Android-powered phones were sold last year, representing 81 per cent of all handsets.

Chinese firms made headway in the smartphone market, led by Lenovo, which completed its acquisition of the Motorola brand last year.

IDC indicated that Lenovo sold 24.7 million units for a 6.6 per cent market share, edging out Huawei which delivered 23.5 million for a 6.2 per cent share.      The rising Chinese star Xiaomi captured the number five spot, selling 16.6 million units with a 4.4 per cent market share. Xiaomi's growth from a year ago was 178 per cent, IDC said.

But "Xiaomi's grip on the number five spot is tenuous at best, with [South Korea's] LG and [China's] ZTE following close behind," the IDC report said.

MISRATA, Libya — A power struggle between two rival governments that threatens to tear Libya apart has started to take its toll on Misrata, an important shipping and industrial hub that had shrugged off the turmoil until now.

Production at the country's biggest steel works has been cut and the port of Misrata has been forced to restrict operations.

Armed factions allied to the competing governments are fighting for control of the oil producing nation four years after the civil war that ousted Muammar Qadhafi.

Oil production has collapsed to a fifth of what Libya used to pump before the NATO-backed uprising, while wheat imports and other activity at seaports have been disrupted by clashes in the east of the country.

Misrata had so far not been affected by the unrest, since its port serves much of the country and it became a major air gateway to Libya when fighting forced Tripoli's main airport to close in the summer.

The country's third largest city is also home to the biggest free trade zone and the largest dairy products company, making it the only place with significant non-oil industrial activity in a country that relies on petroleum for most of its revenues.

But Misrata is also a power base of Libya Dawn, the  faction that seized Tripoli in summer by expelling armed rivals in a month-long battle. After Libya Dawn set up its own rival government, Misrata became part of the front line.

War planes allied to the recognised government, holed up in the east since losing the capital, have bombed Misrata's steel plant, the port and the airport. Little was hit, but the campaign has scared away shippers as well as Turkish Airlines, the last foreign carrier to serve Libya.

Forces from Misrata once formed a major rebel brigade battling alongside fighters from Zintan to topple Qadhafi. But since then, Libya has descended into factional fighting as regions and cities turn against one another.

Steel output down

In Misrata, the Libyan Iron and Steel Company, one of Africa's largest steel firms, is facing gas shortages and will have to cut production this year by shutting down two of its three direct iron reduction plants, its chairman said.

"We agreed with the electricity firm, as instructed by the government, to reduce production to 33 per cent due to gas supply problems to save natural gas and power," Chairman Mohammed Abdul Malik Al Faqih told Reuters in an interview.

Output of direct reduced iron, a key steel-making ingredient, would be just 550,000 tonnes in 2015, a further decrease from last year when it had planned to produce 1.6 million tonnes, but achieved only about 60 per cent of the target due to power shortages.

The cutbacks would affect steelmaking operations and two of the company's six furnaces would shut down.

Libya's gas production has fallen since a group allied to Libya Dawn launched an offensive to take control of the Es Sider oil terminal in the east. Forces from the eastern government still hold the facility but it became damaged and had to close. 

The Tripoli government says it was also forced to lower gas output at the Mellitah plant in the west due to the risk of air strikes.

Though security in Misrata is still better than in Benghazi or Tripoli, where gunmen killed nine people in an attack on a hotel on Tuesday, Turkish and Austrian steel contractors have pulled out staff due to the air strikes, Faqih said.

He said ships importing raw materials or fuel were increasingly reluctant to dock at Misrata, though marketing manager Ali Darrat said one ship had just arrived.

At Misrata's commercial port, container volumes fell last year to 174,340 twenty foot equivalent units (TEUs) from 225,929 in 2013, the latest data show, ending years of steady growth.

Some foreign shippers have diverted cargo to smaller Libyan ports such as Khoms, west of Misrata, after a warplane hit a quayside warehouse, an industry source said.

On Monday, warplanes deployed by the official government forced a Libyan fuel tanker sailing from Greece to Misrata to divert to Tobruk, an eastern city that is home to the elected parliament.

It was allowed to go back to Misrata after troops searched it for weapons.

Earlier this month, a Greek-owned oil tanker was hit by an air strike that killed two crew members, and a fishing vessel carrying fuel was also bombed by war planes from the forces of a former Libyan general now allied with the recognised government.

The United Nations is holding talks in Geneva with some of the warring factions, but the Tripoli-based government has stayed away. Misrata representatives are taking part, keen for a quick solution.

"In Misrata, 70 per cent of our people work in trade and industry," said Mohammed Al Tumi, a member of the Misrata council. "We really want to stop this war."

NEW YORK — Earnings Tuesday from American multinationals revealed a downside to the comparatively robust US economy: The drag from a rising dollar.

Dow component Procter & Gamble (P&G) cited "unprecedented" foreign-exchange fluctuations as it missed earnings expectations and slashed its profit outlook.

Chemical producer DuPont and technology giant Microsoft also highlighted the strong greenback as a headwind for earnings, adding to commentary last week from fast-food chain McDonald's and consumer goods firm Kimberly-Clark. 

"US companies are not immune to global weakness," said Christine Short, senior vice president at Estimize, a financial tech company that collects earnings research.

Foreign exchange "is going to be a big impact", she added.

The dollar has been on a tear in the wake of mostly improving data on US jobs and economic growth. That has lifted expectations that the US Federal Reserve will raise interest rates before other major central banks. 

A strong dollar has upside for US companies that import goods or raw materials from weak-currency economies and sell the goods in the US.  Analysts have said some sectors could benefit from this differential, such as clothing retailers.

However, many US multinationals face challenges due to a strong dollar, which last week hit an 11-year high against the euro, which itself has jumped against the battered Russian ruble.

The strong dollar can sting multinationals if they import goods or materials from the US or other strong-currency markets into a weak-currency state like Russia if prices to consumers are not adjusted. 

Companies also suffer when overall earnings are transposed from weak currency markets like Russia back into dollars for reporting purposes.

In P&G's case, the grim commentary on foreign exchange also reflected a negative impact from Switzerland. P&G's European headquarters is Geneva, which means it also has exposure to the Swiss franc, which has risen sharply following an unexpected move by the Swiss central bank earlier this month to abandon the franc's cap against the euro.

P&G projected 2015 earnings would be hit by 12 per cent, or at least $1.4 billion, due to currency effects.

"This is the most significant fiscal-year currency impact we have every incurred," P&G chief financial officer Jon Moeller said in a conference call with analysts.

Kimberly-Clark, another leading consumer products company, last week announced a $462 million charge in Venezuela stemming from the revaluation of its assets due to the plummeting value of bolivar. 

Kimberly-Clark Chief Executive Tom Falk predicted a negative currency earnings hit of more than 15 per cent in 2015.

At McDonald's, weak currencies in Russia and Ukraine battered earnings in 2014 and the company expects more of the same in 2015 in those countries and others.

The fast-food giant forecasts a full-year impact of 35-40 cents per share in 2015, said McDonald's chief financial officer Pete Bensen.

Raising prices abroad 

To offset the impact of the strong dollar, US companies are seeking to raise prices in badly hit markets. 

"Generally, the principle is that over time you recover the amount of the price effect," P&G's Moeller told reporters in a conference call.

That means if a good is in a market where the dollar has appreciated 20 per cent, the price of the good to consumers will also increase by 20 per cent, but the jump may not happen all once, Moeller said.

Other steps include boosting local sourcing of goods and materials in Russia, Venezuela and other hard-hit markets, he added.

However, company officials acknowledged that price increases are difficult in some cases, such as when the economy is weak, as with eastern Europe.

"This is just a bit of unchartered territory," Kimberly-Clark's Falk said. "If the Russians and some of the other Eastern European economies declined by mid-single digits, which is what some of the forecasters say, we'll see how that plays out in terms of consumer purchasing power." 

Separately, New York restaurant owner Jeremy Merrin has seen business droop in recent weeks at his Havana Central eatery in Times Square. The reason: Not enough international tourists.

"We're fighting a double-whammy," said Merrin, who owns three restaurants and is on the board of the New York State Restaurant Association. "Not only is the dollar going up and making things more expensive, Europe as a whole is not doing well."

International tourists to the United States spend more than $200 billion annually on travel, hotels, dining and shopping, but growth in 2015 is expected to decelerate as would-be visitors balk at the stronger dollar and grapple with weaker economies at home.

"That could impact the length of their stay and the composition of their spending in the United States," said David Huether, senior vice president, research, at the US Travel Association, which sees the influence of the stronger dollar becoming more severe in 2015's second half.

Travel experts hope some of the drop in spending in the United States will be made up for by increased tourism from China, where visitors can now get a visa that lasts 10 years. 

Lower gas prices and a stronger US economy also may encourage more domestic travel, they said.

Still, some retailers, including Tiffany and Co., are already feeling the impact.

"The strong dollar has created headwinds for foreign tourists in the United States," said Mark L. Aaron, vice president of investor relations at Tiffany, which warned of slower sales to tourists at its flagship New York store.

"Tiffany is the first poster child of this issue," said Craig Johnson, president of consulting firm Customer Growth Partners. "A lot of retailers might be hit to some degree."

He added that the trend could slow the growth of other successful luxury brands that depend heavily on tourists. 

"We believe that Michael Kors and Kate Spade will still be showing solid growth, but not the robust, double-digit we've seen over the last couple of years," he indicated.

Kate Spade did not respond to a request for comment. Michael Kors declined to comment.

Rising dollar

The dollar has climbed about 15 per cent against the yen and the euro over the past six months. It is up about 6 per cent against the won.

Chris Gaffney, senior market strategist at EverBank Wealth Management in St. Louis, expects the strong dollar will affect a number of US sectors that serve foreign tourists, including airlines, hotels, and retail. 

Companies with tourism operations abroad could see relief because "for American tourists, Europe is on sale," he said.

Morningstar equity analyst Paul Swinand said department store chains with a large presence in some of the "gateway cities" could see a 1 per cent or 2 per cent slip over the next year because of lower tourist spending.

A 10 per cent appreciation in the dollar typically results in about 2 per cent fewer international visitors annually, indicated Adam Sacks, president of consulting company Tourism Economics, which expects the number of international visitors to climb by 3.5 per cent in 2015, compared with 5 per cent annual growth over the past 10 years.

Growth in the number of foreign tourists coming to the United States had already started to slow last year, largely because of economic problems in home countries. 

The number of Japanese visitors through last October was 4 per cent lower than the previous year, according to the most recent Department of Commerce numbers. The number of Venezuelans was off 18 per cent, but Mexican and Chinese tourists both were up more than 20 per cent.

"Despite the higher dollar, the Chinese have saved money to travel," said Evan Saunders, chief executive and co-founder of Attract China, which is expecting many more Chinese tourists this year.

He added that the Chinese tourists his company works with are eager to try everything from Shake Shack to outlet malls. 

"They want to do what they have seen in TV shows or American movies," he remarked.

AL OUR, Egypt — Facing grim economic prospects at home, desperate young Egyptians are seeking jobs in Libya, a country sliding into lawlessness where armed groups battle for control and dozens of their compatriots have been kidnapped.

Tackling unemployment in Egypt, where half of the rapidly growing population is under 25, is one of the toughest challenges facing President Abdul Fattah Al Sisi.

He rules a country that has seen two presidents deposed in the past four years. The 2011 popular uprising that toppled autocrat Hosni Mubarak was fuelled by anger over joblessness.

Affording a home and getting married is still difficult under Sisi for many young men unable to make a living.

The political and social unrest since Mubarak was ousted has deterred foreign investors and tourists from Egypt, the world's most populous Arab nation with 90 million people. This has exacerbated the jobs crisis, and the unemployment rate has climbed from 8.9 per cent to 13 per cent in that time.

Thousands of Egyptians have travelled to neighbouring Libya in search of jobs since 2011, despite their government advising against going to one of the most dangerous countries in the region.

They can be seen working in building sites, factories, restaurants and shops in cities across Libya, which has descended into chaos since a revolt toppled Muammar Qadhafi four years ago and where two rival governments vie for power.

In the Egyptian village of Al Our, about 200km south of Cairo, it is easy to see why young men take the risk.

There are no paved roads, clean drinking water or adequate health care, the kind of conditions that have driven young men to give up on the state and join militant groups in the past.

Jobless men sit beside a canal filled with stinking and stagnant water.

Samuel Alham lived with his wife and three children, his three siblings and their children, and his elderly parents in a small cement house. Like many young Egyptians, he dreams of one day buying a small plot of land to build his own home.

The 30-year-old's decision to go to Libya to work as a plumber was costly. In December, he was kidnapped on his way back to Egypt.

'How can people eat?' 

"I want my son. He went to support his children. He did nothing wrong," said Alham's weeping mother.

He is among 27 Egyptians, low-paid workers, who have been kidnapped in Libya since August, 13 of them this month.

Their Christian faith may have put them at greater risk. Militants claiming allegiance to Islamic State, the group that has seized swathes of Iraq and Syria, have said they are responsible for the abductions of the "crusaders".

Al Our is in Minya Province, a traditional stronghold of the Muslim Brotherhood, a movement which Sisi has cracked down on since, as army chief, he ousted its president Mohamed Morsi from power in 2013 after protests against Mursi's rule.

The government has said it plans to invest in Minya, a hotbed of militancy under Mubarak in the 1990s, and other parts of southern Egypt after decades of neglect.

But just outside Al Our, cars with Libyan licence plates are a reminder of the tough decisions forced on its residents.

Abanob Ayyad, in his early 20s, was unable to make ends meet or support his younger siblings, let alone save money to buy an apartment so he could get married.

So he tried his luck in Libya, as a construction labourer.

The funds Ayyad sent home to pay for his brother and sister's college education ended abruptly this month when militants stormed his home in the Libyan city of Sirte and dragged him away along with 12 other Egyptian labourers.

"There is no work that can help here. How can people spend, eat, learn," said his mother Aziza Younan. "The country does not help them or treat them fairly... what can they do?" 

Flight into unknown

At the World Economic Forum in Davos last week, Sisi said Egypt aimed to lower unemployment to 10 per cent by 2020. He has announced major infrastructure projects such as a second Suez Canal and major roadworks designed to create jobs.

But those promises have yet to stir hope in villages like Al Our.

"I have made all attempts to get a job for my son, either in the government or the private sector, but in vain," said Bushra Shehata, whose son has been looking for a job since graduating from college nine years ago.

"People need connections to get a job," he added, echoing a common complaint made under successive Egyptian leaders.

More than 100 relatives of the 27 kidnapped workers protested outside the United Nations offices in Cairo last week after meeting Egyptian foreign ministry officials.

Holding up pictures of their loved ones, they urged the government to help secure their release. One tearful man was desperate for information about his son and three nephews.

Officials have said they are doing their best to help.

But across town, more and more Egyptians lined up to buy tickets at Libyan Airlines offices.

One of them, a furniture painter who came back from Libya five months ago hoping for work in Egypt, said he had no choice but to return despite the growing risks.

Heavily armed gunmen stormed a luxury hotel in Tripoli favoured by Libyan officials and visiting delegations on Tuesday, killing at least nine people, including foreigners, before blowing themselves up with a grenade.

"We are going and it is God who is protecting us," said the painter, before rushing to the airline ticket counter when his number was called.