Last Thursday, President Obama met with the Emir of Qatar, Hamad bin Khalifa al-Thani, expressing his appreciation for the Emir’s leadership about democracy in the Middle East and the work that they have done to try to promote a peaceful transition in Libya.
Obama’s Words at the Meeting
As Obama said at the meeting, “Qatar is not only supportive diplomatically but is also supportive militarily, and we are very appreciative of the outstanding work of that the Qataris have done side by side with the other international coalition members. In addition to our efforts in Libya, we have a strong relationship between our two countries. It is an economic relationship. It is a military relationship. It is a cultural relationship.”
Obama also congratulated the Emir for having the World Cup coming to Qatar in 2022.
Obama’s Off-the-Record Words
Thursday evening, during a political donors event in Chicago, Obama has other words to say about the meeting. While meeting with the donors at the q-and-a session, Obama didn’t realize that he was speaking on an open mike.
As Mark Knoller of CBS News recorded, Obama said, that evening that, Emir Hamad bin Khalifa al-Thani was a “Pretty influential guy…”He is a big booster, big promoter of democracy all throughout the Middle East. Reform, reform, reform — you’re seeing it on Al Jazeera.”
Obama went on to put his foot in his mouth when he said, “Now, he himself is not reforming significantly. There’s no big move towards democracy in Qatar. But you know part of the reason is that the per capita income of Qatar is $145,000 a year. That will dampen a lot of conflict.”
Saudi Arabia, the top oil exporter in the Middle East wants to reassure everyone. They have recently explained that they are ready to supply Asia with more oil. Oil Minister Ali Al Naimi explained in his remarks that were carried by the state news agency that their spare output capacity allows them to counter any issues with supply or demand.
As the Oil Minister explained, they are ready to help South Korea, Asia and other countries with “volumes needed as it has huge spare capacity to meet any rise in global oil demand or a decline in supplies.” They did not offer any solid figures about their spare capacity or about exactly how much oil the kingdom has. But they did explain that they have raised their output to about nine million barrels per day to help to compensate from the shortfalls in Libya.
Taking Over the Shortfall
With the unrest in Libya, Saudi Arabia is stepping in to take over the shortfall. It has already sold approximately 2 million barrels to European buyers.
Oil prices have recently surged, with the highest prices so far that they’ve had in the last few weeks. Brent jumped $4 a barrel, creating a 32 month high.
Naimi explained that the oil prices were not actually driven by a lack of oil, but by speculation and fear about supply and demand due to the upheaval in the Middle East.
As if the Middle East didn’t have enough to deal with already – rising food prices are now threatening to cripple many already strapped people. QNB Capital reported that the rising food prices in the area are a result of many factors including rising income levels in countries like China, unseasonal weather and fule price spikes.
Food prices rose a record amount in 2010, with a 25% increase. As reported by QNB Capital, the index of global food prices maintained by the UN Food and Agricultural Organization rose by 25% in 2010, surpassing previous records set in June of 2008. This number has increased even further in 2011, increasing by another 9.9% so far this year.
Hitting the Poor
The World Bank reports that these figures are hitting the poorest in society the hardest and bringing the world, as they report, near a “breaking point.” The World Bank’s food price index is at record levels as well, having increased 15% between October 2010 and January 2011. The Economist Intelligence Unit (EIU) has also projected a 19% rise in food prices for this year.
Food Price Impact
The impact that these food price increases have on the area depends on the share of household food expenditures in each location. For instance, in Egypt, food represents 39,9% of the Consumer Price Index compared to Qatar where it’s only 13.2%. In addition, the current food price increases are mostly for basic foods, rather than for more expensive or processed food items. This impacts poor populations more than it does the wealthy, since poorer people tend to buy more basic foods such as rice.
As QNB Capital reported, “As the Middle East relies mainly on food imports, the region is particularly vulnerable to food security concerns. If this trend of rising food prices continues, Arab countries will likely be forced to increase their strategic food reserves and develop technologies to boost domestic production to meet growing food demand.”
After approximately seven weeks of silence, the Egyptian stock exchange is finally back on its feet. As expected, the first few days were difficult, as shares fell and sent the benchmark index to a 23 month low. Many international investors sold holdings to free money that had been locked up for the almost two month duration.
EFG-Hermes Holding SAE, for instance, the nation’s biggest investment bank, went to the lowest point since July 2009. In general, international investors, including Arabs, sold US$28 million.
Mohamed Abdel Salam
In addition, the head of Egypt’s stock market, Mohamed Abdel Salam, recently announced that the exchange was suspending the trading of 46 companies. These companies have failed to meet disclosure requirements that ask them to disclose if they have assets or shareholders under investigation.
Press Conference News
As Abdel Salem said in a televised press conference on state television, “The market has been closed for almost 60 days, so we required all companies to tell us how they’ve been affected and if they have shareholders under investigation.”
Those in the know predict that the market will continue to fall for a bit, as investors try to exit positions from the lock up period.
It’s that time again. Voting has officially closed in the 2011 Banker Middle East Product Awards and those interested will soon know the results. The results will be presented at the Gala dinner being held at the Emirates Towers in Dubai on March 23, 2011.
These product awards are part of a region-wide awards program that is open to all banks and financial institutions in the MENA region. The awards are given out based on peer-vote decisions.
Purpose of Awards
The purpose of these awards is to encourage, inspire and reward those who rise above others in the banking industry and to raise the standards employed by all MENA banking sectors. The way the voting process works is that institutions can nominate themselves. A short-list was then created and institutions were allowed to provide supporting information for themselves. Voting then takes place with only registered readers of Banker Middle East, Islamic Business & Finance, WEALTH, financeME or www.cpifinancial.net given eligibility to vote.
The Banker Middle East Product Awards 2011 included three main categories: Institutional & Investment; Business Finance; and Retail Finance and the entire program is sponsored by Thomson Reuters and PIC Solutions.
Tune in March 23rd to see who wins!
Certainly, the Middle East is in turmoil in many ways; one way that they are rising above the rest, however, is in golf. The new KPMG Golf Benchmark Survey showed that rounds and revenues around the world were down last year – but that the Middle East is leading the way in golf profits.
Less than half (49%) of the golf courses in Europe, the Middle East and Africa were profitable in 2010 – but for those in the MENA region, the figure was 73%. The report showed, as well, that one out of every 12 owners was considering selling their facility. The survey included 350 golf courses. 33% of the courses in Eastern Europe reported that they performed poorly, while 73% of those in the Middle East and North Africa reported good results.
A Great Game
The study explained that the Middle East facilities were mostly aligned with resorts and residential communities and that their performance levels remained high.
Report from KPMG
As Andrea Sartori, the head of the KPMG’s Golf Advisory Practice said, “Undeniably, the effects of the economic downturn remain evident in the business performance of golf courses across Europe, the Middle East and Africa. However, there are some positive signs and the performance of courses in both Central Europe, as well as the Middle East and North Africa, lead the way.”
If you’re looking to relocate somewhere in the Middle East, Saudi Arabia might be just the right locale.
Certainly, while most of the Middle East is experience upheaval at the moment, there’s one locale that seems to be constantly moving in the right direction, at least financially. Saudi Arabia is heading towards the title of “Richest Middle East Economy” in terms of their GDP per capita. Citibank, in a recent forecast, reports that by the year 2050, Saudi Arabia will have an average wealth per family of $98, 311. This is almost four times the current rate of GDP per capital, according to figures from the CIA World Factbook.
It’s Not All About the Oil
While the figures for Saudi Arabia are impressive, they don’t place it at the top of the global list. Singapore is set to stay on top of this economic list with an estimate of $137,710 per family in 2050. Next are Hong Kong, Taiwan, South Korea, and then the U.S. Saudi Arabia is set to come in sixth, right after the United States.
More Immediate Growth
With these figures in the future, Saudi Arabia is also set to see economic growth for 2011 by 3.9%. This, from a country that holds approximately 20% of the world’s proven petroleum reserves and gets 45% of its GDP from this sector.
Interestingly enough, the report showed that Saudi Arabia’s non-oil sector will become more of an important role for the economy. As the report said, “The government’s initiative to diversify the economy away from the hydrocarbon sector will bolster private consumption and gross fixed capital formation [GFCF].”
I don’t normally write about particular business leaders, but in a world where depleting carbon resources is a reality, FirstCarbon Solutions CEO James Donovan strikes as interesting enough to write about. As Omani advisor to Goldman Sachs one thing that I noticed was the trend towards clean fuel (carbon free) investments. At Goldman Sachs though no one took it to the level that James Donovan has taken it.
When James Donovan left Lehman Brothers he wanted to use his experience and no how to change the world beyond just making lots of money. His passion for the environment and the outdoors was one of the founding reasons for establishing FirstCarbon Solutions, which advises businesses and companies around the world how they can reduce their “carbon output.”
“We know that if we help even the most skeptical CEOs move one inch down a lower-carbon path today, those same CEOs may fly 1,000 miles farther in the future – especially when they can see and quantify their business results in terms of regulatory compliance, operational efficiencies and sometimes even increased market share.”
Its this passion and vision that James Donovan brings to the energy arena and its this energy that we in Oman need to move beyond just being rich petroleum exporters. We should strive to move into alternative energy resources not just for the environment, but because we need and can be successful leaders int hat field as well.
Omran News quoted ARC China as saying that the Persian Gulf states and China forming long term economic partnerships. This is a very natural direction and as we move closer together in more than economic spheres we will see both the Middle East and China develop cultural and social ties as well.
In fact in my home country of Oman H.E. Maqbool Bin Ali Bin Sultan, Minister of Commerce and Industry, on Sunday received in his office Zhong Shan, Vice-Minister of Commerce of China and his delegation. The Oman Tribune reports:
The meeting discussed means of promoting economic and trade relations between the two countries and stressed the importance of raising the inter-trade between the Sultanate and China.
It also discussed the field of promoting the non-oil inter-trade by intensive participation of the private sector in both countries in the trade exhibitions held in the two countries to promote local products.
They also discussed the organising of economic seminars to attract investment and cooperation in the fields of energy, infrastructure, telecommunications and means of reaching the free trade agreement between China and the GCC states during which the agreement will cover products and services.
The meeting was attended by Dr Salim Bin Nassir Al Isma’eli, Chief Executive Officer of the Omani Centre for Investment Promotion and Export Development (Ociped), a number of senior officials at the commerce and industry ministry, the Chinese ambassador to the Sultanate and the delegation accompanying the Chinese official.
Dr. Fahad Bilghoneim Minister of Agriculture made an imminent issuance of decisions on the cancellation of licenses to some poultry farms, due to repeated violations of health and regulatory rules repeated again and again from those companies. The withdrawal of these licenses and the closure of the farms are in order to preserve the public interest.
This was revealed according to the newspaper “Today” Saudi Arabia in the open meeting held by the East Room with the minister, businessmen and those concerned with agriculture and related sectors in the ministry.