ECONOMIC NEWS

A European fund for small loans to the Arab world

Germany and the European Union announced the establishment of a fund to provide small loans to support the Arab economies.

The Fund "Sanad" (obligation or support) is about thirty million euros, including 20 million euros from Germany and 10 million from the European Union. Other investors from the private sector or the public / private sector should join the Fund by the end of the year, according to a statement.

The Fund will be used to offer small and medium enterprises loans from local banks financed by the fund. Egypt, Jordan, Tunisia, Morocco and the Palestinian territories will benefit from these loans soon.

Since the beginning of the year, Germany has launched two other funds for the Arab world, one to support the creation of democratic institutions in the region and the other for the dissemination of education.

Foreign direct investment in Belgium

Belgium received last year nearly $ 62 billion of foreign direct investment, making it the fourth largest recipient after the United States (228 billion dollars), China (108 billion) and Hong Kong (69 billion).

These figures come from the World Investment Report 2011 by UNCTAD. Direct foreign investments are mainly related to the creation of subsidiaries and mergers and acquisitions. Investments at the global level stood at 1,244 billion dollars, 15% below the average for 2005-2007 and 37% below the peak of 1,971 billion in 2007.

Europe experienced a significant decline by 19% to 313 billion in comparison with 2009. The trend was also negative in Japan, while North America recorded a 44% increase to 252 billion.

In 2009, Belgium was only 17th worldwide with 24 billion dollars.

GCC countries invest $142 billion into road and bridge projects

Major road and bridge projects valued at $142 billion are underway or at the planning stages in the Gulf region, with the United Arab Emirates leading the way with $58 billion worth of road and bridge projects, almost 40 per cent of the regional total.

Saudi Arabia has $48 billion worth of projects either planned or underway, while Qatar continues with its infrastructure developments for the 2022 FUFA World Cup, with road projects valued at $17 billion in progress. Kuwait will be a most attractive market for road projects in the coming years as well, with $9.4 billion in the pipeline ; Oman has road projects worth $8 billion (5.5 per cent of the regional total), and another $2 billion worth of schemes at various stages in Bahrain.

The Gulf is this offering huge opportunities for transport sector manufacturers and supplies, as increasing road safety and reducing traffic congestion are major concerns in countries which have, according to the United Nations, some of the highest road traffic fatality rates in the world.

Kuwait registers a significant budget surplus

The Central Bank of Kuwait announces a budget surplus of 5.3 billion dinars ($19.5 billion) for the period 2010-2011, thanks to high oil prices.

According to the Bank, the total actual expenditure during the fiscal year 2010-2011 amounted to 16.221 billion dinars ($59.5 billion), while the actual revenues were 21.5 billion dinars ($79 billion).

The value of income far exceeded the budget estimates, put at $35.7 billion. The difference is explained by the high oil prices and the increased production, exceeding 2.2 million barrels per day, the quota set by the Organization of Petroleum Exporting Countries (OPEC).

According the Minister of Petroleum, Dr. Mohammed Al-Busairi, Kuwait indeed currently produces 2.6 million barrels per day.

In the 2010-2011 budget, total spending was put at $64.3 billion, but actual expenditure totaled $59.5 billion, or 92% of the estimated figure.

Over the past 12 years, Kuwait announces every year a budget deficit, but the country each time realises a surplus, because of estimated oil prices at a minimum. Kuwait has achieved a total surplus of $200 billion in the past period.

Morocco elected « African country of the Future »

Morocco was elected "African Country of the Future for the year 2011/12" by the IDF Intelligence,a division of the prestigious The Financial Times, specializing in foreign direct investment (FDI).

Morocco improved its ranking, climbing from the third position in 2009/10, to a leadership position among African countries, displacing South Africa, which occupied previously the first position. The breakthrough of Morocco "is due to its success in attracting FDI," said IDF Intelligence, noting that FDI declined in South Africa and Egypt (first and second in the ranking of 2009 / 10), in contrast to Morocco, where foreign investment has increased by 8% in 2010.

Morocco is one of the few countries in the region registering an increase of foreign direct investment projects, said IDF Intelligence. The Top-10 African countries, led by Morocco, include Egypt (4th), Ghana (5th), Seychelles (6th), Tunisia (7th), Namibia (8th), Ethiopia (9th) and Kenya (10th). In addition to its first position in the standings, Morocco was awarded first place in the categories of infrastructure and strategy to promote FDI. In the category of economic potential, Morocco ranks second behind South Africa and the fourth in the category human resources. The Kingdom also outperforms other African countries in terms of Internet use per capita.

IDF Intelligence is a subsidiary of The Financial Times Limited and specializes in competitive intelligence related to foreign investment in the world.

Saudi non-oil exports on the rise

Saudi non-oil exports to the world markets rose by 14 per cent in the first quarter of 2011 as compared to the same period in 2010, while imports increased 7 per cent. The increase is due to a global rise for pitched products and plastics.

According to Adnan Mandourah, Secretary general of Jeddah Chamber of Commerce and Industry, the rising exports highlight the strong momentum created by the recovery of global trade flows and in particular the continuing robust development of the Asian emerging markets. The data on shipping destinations reveal the deepening commercial relationship between Saudi Arabia and its Asian market neighbours and this strong Asian demand underpins the large investments made in the Saudi petrochemicals industry which now accounts for the lion’s share of the Kingdom’s non-oil exports.

Petrochemicals account for 31 per cent of the total non-oil exports, plastic products represent 26 percent, and food items 9 per cent. The Chinese market topped the list of the Saudi exports accounting for 26 per cent, the United Arab Emirates 9.8 per cent, Singapore 6.5 per cent, Jordan 4.3 percent and other countries 66.3 per cent.

Free land for investors in Sudan

The Sudanese President announced the granting of free land for investors, both Sudanese and foreign, for the establishment of industrial projects. He called on all governments to exempt or reduce taxes and costs imposed on industry.

The Sudanese Minister of Industry reaffirmed the openess of the country to all local and foreign investors undertaking industrial projects.

Sudan is striving to develop cash resources following the independence of the South, where 80% of Sudanese oil, or 480,000 barrels per day, is produced. According to the Sudanese government, the country’s budget has lost 36% of its revenues as a result.

The Sudanese foreign ministry stated last July that investors in Sudan are looking to have a solution for the issue of land ownership in the country.