In Tunisia, the gross domestic product (GDP) will register no growth in 2011, compared with growth of 3.1% the year before. In the case of Egypt, GDP will grow by 1.2% compared with 5.1% in 2010. The prospects for oil-rich Libya are not promising.

The IMF writes that social turmoil has caused a sharp decline in tourism to Egypt, Jordan, Lebanon, Syria and Tunisia during the first five months of the year.

By contrast, the oil-rich Gulf countries which have not been affected by political turmoil are likely to register economic growth of about 7% this year.

Source: Al-Sharq Al-Awsat, London, October 27, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 28 Oct 2011 05:58:56 PST The Arab Forum for Environment and Growth issued a report yesterday titled "The Green Economy in a Changing Arab World" which points out that the performance of the Arab economies was poor during the last four decades despite the fact that some Arab countries have adopted aggressive models for economic growth. The report criticizes Arab countries for having undermined progress in the social and environmental areas thereby causing poverty, unemployment, threats to food and water security and environmental deterioration. These shortcomings, the reports emphasizes, are not the result of natural causes but are the result of political choices.

The report calls for a growth model rooted in a green economy, giving equal weight to economic growth and social justice with sustainable environment. It says that the switch to a green economy requires a re-examination of government policies to provide incentives in the patterns of production, consumption, spending and investment.

In a related news item, the Lebanese minister of the environment said that environmental deterioration had cost the Arab countries $67 billion in 2006, or 4% of GDP and tenfold of inter-Arab trade of goods and services.

Source: daralahyat.com , October 27-28, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 28 Oct 2011 05:58:34 PST The Central Bank of Syria is actively intervening in the foreign exchange market in an effort to maintain the stability of the exchange rate of the Syrian lira in the face of big pressures on the Syrian economy caused by both international sanctions and the massive daily demonstrations.

The governor of the central bank Adib Myala was quoted by the local press saying that for the first time the central bank will sell foreign currency to authorized money changers in an effort to stem the decline in currency value.

The Syrian government has so far been able to meet the payroll for 1.2 million government employees in addition to hundreds of thousands of military and security personnel.

[Editor's comments: In a desperate attempt to absorb public anger the Syrian government has recently authorized the recruitment of tens of thousands of Syrians to government and public sector to non-existing jobs. Experience shows that it takes decades to reform a public service that was used as a public welfare system.]

Source: Al-Sharq Al-Awsat, London, October 27, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 28 Oct 2011 05:58:17 PST Jordan is considering the purchase of natural gas from a number of suppliers because of the repeated interruption in the supply of Egyptian natural gas caused by the bombing of the gas pipeline that carries natural gas to Jordan and Israel. Iran is among a number of countries who offered to supply natural gas to Jordan through a pipeline that currently carries gas to Iraq and Turkey. Russia and Qatar are other potential suppliers.

In recent years, the Egyptian natural gas met 80% of Jordan's needs. However, the most recent interruption which lasted 82 days is impelling Jordan to avoid being heavily dependent on Egyptian supply in the future.

Source: menafn.com, October 26, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 28 Oct 2011 05:57:58 PST The Qatari minister of economy and finance Yousef Hussein Kamal said that the volume of Qatar's spending on infrastructure is expected to reach $150 billion over the next five years. The minister said that spending on the non-oil sector will be between $120 and $140 billion over the next five to six years in addition to $30-40 billion in the oil and gas sector, thereby averaging about $30 billion a year. Qatar's nominal rate of economic growth for 2011 is projected to reach 30%. Qatar has achieved a real growth of 15% in each of the last five years, making it one of the fastest growing economies in the world.

Source: menafn.com, October 26, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 28 Oct 2011 05:57:40 PST The central government of Iraq and the semi-autonomous Kurdistan Regional Government (KRG) have agreed to work on amendments to a draft hydrocarbon law and to reach an accord by the year-end, potentially defusing a major conflict. The agreement was reached at a meeting between Kurdish prime minister Barham Salih and Iraqi prime minister Nouri al-Maliki in Baghdad early this week.

[Editor's comment: Al-Maliki depends on the Kurdish Alliance with their 60 votes to keep his job. Oil is only one of the issues over which the two parties disagree. There are at least two other issues that keep festering: the nature of Iraq's federalism and the degree of autonomy exercised by the KRG, and the status of the so-called disputed territories, particularly oil-rich Kirkuk, which the Kurds consider part of their historic homeland.]

Source: arabnews.com, October 28, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 28 Oct 2011 05:57:20 PST Moody's rating agency announced yesterday that it was downgrading Egyptian debt to B1 because of the weak economic situation in the country, the deteriorating financial situation and the absence of political stability. It warned that its expectations about Egypt remain negative and said that debt classified as B1 is speculative and places higher risks on creditors.

In the meantime, the Egyptian deputy prime minister and minister of finance Hazem al-Biblawi declared that increasing government revenues will not be achieved by higher taxes but by fighting tax evasion and preventing the smuggling of cigarettes and liquors.

Source: alquds.com, October 27, 2011; ahram.org, October 28, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 28 Oct 2011 05:57:05 PST A Saudi banking expert, Turki al-Huqail, attributed the problem of unemployment in Saudi Arabia to the nature of Saudi government revenues which draws 88% of its share from the oil and gas sector. By its very nature, this sector is characterized by a high value added but it is not labor intensive and at best it can absorb 3% of the country's labor force.

Al-Huqail said that the contribution of the oil sector to the national economy has declined to 40% in the last 40 years and that the tourism and religious tourism sector are the only sectors, other than oil, that have potential for rapid growth.

The expert called on the government to provide an improved investment climate and proper incentives and to reform the education sector, particularly technical and vocational training. He said that of the 175,000 engineers in the various sectors of the economy only 10% are Saudis.

Source: Al-Sharq Al-Awsat, London, October 28, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 28 Oct 2011 05:56:49 PST Managing director of the National Iranian Gas Export Company said that Iran aims to gain a 10% share in the global gas trade by the end of the Fifth Economic Development Plan (2011-2015). Iran's current share in global gas trade is 2%. He noted that the country also intends to triple its natural gas exports and was ready to export gas to Russia.

[Editor's comment: Russia has the largest natural gas reserves in the world and is the largest gas exporter. It is not obvious why Russia would import gas from Iran any more than Saudi Arabia would import crude from Kuwait.]

Source: presstv.com , October 27, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 28 Oct 2011 05:56:30 PST Former Lebanese prime minister Saad al-Hariri has sold his share in the Saraya al-Aqaba project comprising luxury homes, a five-star hotel, shopping malls, etc. on the Red Sea to an Emarati investor for $250 million.

[Editor's comment: Saad al-Hariri and his sister, the children of Rafiq al-Hariri, another former prime minister who was assassinated by operatives of Hizbullah, are considered to be part of one of the wealthiest families in the Middle East. They own, among others, the most exquisite areas in the center of Beirut, the Lebanese capital]

Source: menafn.com, October 27, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 28 Oct 2011 05:56:07 PST The poster carried by a smiling woman near the London Stock Exchange last week as part of a wave of protests by ordinary people in tens of cities the world over campaigning against the excesses and perceived greed of bankers and the collusion and inefficacy of politicians in dealing with the financial and economic crisis, simply read "Let's Bank the Muslim Way?"

The woman, who one assumes was not a Muslim, was obviously referring to Islamic banking, whose potential role as an alternative financial system which connects banking and finance to real economic activities and which proscribes the receiving and paying of interest (Riba) and therefore speculative activities based on gambling, has come to the fore ever since the global financial crisis surfaced in 2008.

But whether the Muslim countries and the Islamic banking industry are rising or even capable of rising to the challenge remain a moot point. Whether it is at the Annual meetings of the World Bank/International Monetary Fund or the G20 meeting, whose members include three important Muslim countries in Saudi Arabia, Turkey and Indonesia, any talk of a potential role for Islamic finance, especially raising finance through a proven and increasingly popular off balance sheet mechanism such as sukuk issuance, is conspicuously absent. Muslim countries, it appears are either embarrassed by the attention Islamic finance is receiving or are living in denial because it may not be perceived as cool in the bastions of the Dar Al-Riba.

Contrast the uttering of two leaders at meetings last week - one Luc Frieden, the finance minister of Luxembourg, a Christian country which is trying to eke out a role as a European hub for Islamic finance especially as a domicile for funds and for sukuk listing, and the other King Hussein of Jordan, the ruler of a Muslim kingdom faced with dire economic and youth employment problems.

Frieden, leading a Luxembourg financial delegation to Singapore, Malaysia and China on October 17-20 to promote the Duchy as a major international financial center, was unequivocal about the value and the potential contribution Islamic finance can make to economic growth and financial stability.

Speaking at a financial forum in Kuala Lumpur, Frieden declared that "Europe can indeed learn a lot from Islamic finance through its principles of financial partnership between the creditor and the debtor; the absence of speculation and respect for ethical principles. The provisions against speculation and gambling which is prohibited in Islamic finance, is what we can concentrate on. The elements of ethical principles should not be limited to Islamic finance alone," he explained.

He reiterated the willingness and the policy of the Luxembourg government to develop Islamic finance in the context of the strategy of diversification and internationalization of the Duchy as a major global financial center. "Islamic finance has a growing interest in the international financial community, mainly because of the stability it has shown throughout the financial crisis. Islamic finance is now a component of more and more important in a diversified portfolio of assets. Working together we enrich our cultures and use our various financial products to contribute to the prosperity of all humanity," he added.

On the other hand, the words Islamic finance was nigh absent from the agenda and the speech of Jordan's King Abdullah when he opened the World Economic Forum's special meeting on "Economic Growth and Job Creation in the Arab World" which took place on October 21-23 at the Dead Sea in Jordan.

"Our region stands today at the gates to the future," said the King, noting that there are "four gates or crucial areas for consideration: dignity, opportunity, democracy, and peace and justice." King Abdullah emphasized that the region urgently needed economic growth, and that it has one of the world's highest youth unemployment rates, which is estimated between 25-40%.

The region, he maintained, required entrepreneurs, innovators, educators and policy-makers to create in excess of 85 million new jobs that are needed especially for the youth, who make up to 65% of the Arab population.

Corporate participants were equally disappointing in their perception and appreciation of the role Islamic finance industry can contribute to employment generation. In Malaysia for instance, the Islamic finance industry accounts for a 22% market share of the total banking sector, but provides over 35% of employment in the financial sector. Similarly, the financing and credit the sector extends to the general economy has a multiplier effect on employment in general.

Even Mohamed Al-Mady, vice-chairman and chief executive officer, Saudi Basic Industries Corp. (SABIC), which has marketed three sukuk issues, failed to note the growing role Islamic finance is playing as a diversification tool of sources of funding for global and local corporations.

The plenary sessions once again highlighted the increasing lack of efficacy of the WEF as a global platform to discuss the pressing issues faced by the world economies.

Even in the "New models for economic governance, and other sessions, Islamic finance was hardly on the agenda, even though topics such as enhancing institutions; addressing social and economic inequities; and building an inclusive private sector were addressed.

The only fleeting reference to an Islamic financial concept was the institution of Waqf (endowments). "Arabs," stressed a WEF communiqué, "should identify whatever is valuable in their own heritage and useful to solving today's problems. One suggestion was to revive the status and role of the Waqf system, an endowment that not only supports and finances religious services, but also non-religious, charitable services, and which encourages the wealthy to give back to society through donations to the Waqf."

The WEF has had the odd session on Islamic finance at its forum in Davos in the past. But judging by the transcripts, the level of debate has been woefully superficial and parochial, with the implication that Islamic finance has only got something limited to offer the Muslim countries and not beyond. This is because the phenomenon has grown rapidly in the Muslim world over the last decade or so and that it is now getting into the mainstream banking sector in these countries. However, its scope is limited because of various legal, regulatory and market constraints and because its market share of banking system assets is still low compared to the conventional banking sector.

Source: Arab News, Saudi Arabia, October 23, 2011. Changes were made in keeping with the editorial policy of www.memrieconomicblog.org.]]> staff@memrieconomicblog.org (By: Mushtak Parker) Fri, 28 Oct 2011 06:03:47 PST THE ECONOMIC BLOG WILL BE SUSPENDED UNTIL FURTHER NOTICE.]]> staff@memrieconomicblog.org (MEMRI) Fri, 28 Oct 2011 06:05:27 PST In anticipation of even harsher sanctions by the European Union than those that have been put in place since last March, the governor of the central bank of Syria Adib Mayala has added the Russian Ruble and the Chinese Yuan for international transaction should a ban on the Euro be imposed by the EU. The United States has already banned the use of the dollar for Syrian transactions and prohibits the use of Visa and Master Card by Syrian citizens.

The governor conceded that Syrian reserves in foreign currencies have declined by $1.2 billion to $18 billion as a result of the EU and the European Investment Bank suspending their financing of on-going projects.

[Editor's comment: The introduction of two inconvertible currencies, the Ruble and Yuan, in foreign exchange activities points to the Syrian regime's economic despair.]

Source: Al-Sharq Al-Awsat, London, October 26, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 26 Oct 2011 06:23:41 PST A spokesman for the IMF mission currently visiting Cairo said that the mission is not currently discussing new loans to the country. It is simply a fact-finding mission to assess the economic situation and determine the needs of the country at the current juncture.

As to his expectation about the growth of the Egyptian economy for this year and next year, the spokesman said that the weakness of the international economy will add a new burden on the Egyptian economy in terms of exports, revenues from tourism, money transfers by overseas Egyptians and the flow of foreign investment.

Egypt is eligible, under the quota system, to borrow as much as $3 billion from the Fund but that amount could be raised to $8-$9 billion if the country would be in need.

The Egyptian government has announced earlier this year that its budget deficit will be 28 million pounds ($4.6 billion) on top of interest payments on government borrowing of 106 billion pounds ($17.4 billion), bringing the total deficit to 134 billion pounds (22 billion) or the equivalent of 8.6% of gross domestic product. The government plans to cover the deficit through domestic borrowing of 120 billion pounds ($19.7 billion) and with loans and grants from Arab countries valued at $2.3 billion.

According to the minister of finance Hazem al-Biblawi government subsidies have skyrocketed from one billion Egyptian pounds in 1991 to 95 billion pounds this year.

Source: Al-Sharq Al-Awsat, London, October 26, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 26 Oct 2011 06:23:20 PST While there is an air of optimism after the formation of a new government under 'Awn al-Khasawneh [the third government this year], the economic reality the government is likely to confront remains difficult. Among the key problems is the rise of public debt and twofold increase in budget deficit. Prices on food commodities are spiking and poverty is on the rise.

There are also problems relating to the tourism, transportation, telecommunication sectors and competitiveness in the industrial sector.

At the World Economic Forum held in Jordan last week the countries of the Gulf Cooperation Council (GCC) declared that Jordan joining the JCC will be economically beneficial to all parties, particularly given the quality of Jordan's human resources.

Source: menafn.com , October 23 and 25, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 26 Oct 2011 06:22:56 PST The vice president of the national business council in Iraq Karim al-Shamri underscored three factors that impede investments in Iraq:: the absence of "a single window" system or platform [a single window system is a single point of contact to reduce the time and efforts involved in various clearances of a proposed investment]; the absence of a comprehensive investment roadmap; and the severe government control and bureaucracy on all matters relating to the economy.

[Editor's comment: Often, strict government regulations encourage the seeking of illicit payments throughout the processing of an investment activity.]

Source: alsabah.com , October 26, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 26 Oct 2011 06:22:38 PST Director general for international affairs of the National Iranian Oil Company Mohsen Qamsari said that Iran was diligently developing its liquefied natural gas (LNG) industry as an alternative to crude oil exports.

The official stated that global natural gas reserves have grown by 230% in the past three years while oil reserves have only increased by 2.7%. He stressed, "We must try to gain control of Indian and Chinese LNG markets which are close to our country and account for 45% of LNG consumption in the world."

In a related news item, managing director of Iran's LNG company Ali Kheirandish said that Chinese companies will likely finance the construction of an LNG plant in Assalouyeh, Bushehr Province.

Source: presstv.ir , October 24-25 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 26 Oct 2011 06:22:06 PST In an interview with Iraqhurr radio (Arabic) on October 24, the MEMRI Economic Blog editor, N.Raphaeli, took a contrarian view with analysts who argued that the demise of al-Qadhafi will speed up the restoration of oil production to pre-revolt level within a short time. He used historical precedents to support his position:

· Iraq could only return to a pre-invasion level after eight years

· Iran's oil production has declined from six million barrels/day during the Shah's regime to three million barrels/day currently [Sanctions have hampered Iran's ability to acquire new technology to increase oil production from aging oil fields or to develop new ones]

· Libya was producing three million barrels/day in 1970, a year after Qaddafi took power. It was producing 1.6 million barrels/day during most of Qaddafi's years in power.

There are other difficulties involved in restoring production to old levels: ports of oil exports were damaged, workers and technicians left the country with the outbreak of violence and there are political divisions with the National Transitional Council that could impede the development of an effective oil policy.

Source: iraqhurr.org , October 25, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 26 Oct 2011 06:21:39 PST Saudi Aramco is planning to raise its domestic refining output capacity to 3.5 million barrels per day (bpd) by 2016 with the start-up of new plants. The current refining capacity is 2.26 million bpd. However, the addition of three refineries under construction, each with a capacity of 400,000 bpd, will bring the total to 3.5 million bpd. Saudi Arabia also operates in refineries in the U.S., South Korea, Japan and China. Aramco is considering the construction of new refineries in Vietnam, Indonesia and in China.

The domestic fuel consumption in the Kingdom has been booming on the back of a rising population and economic growth. Heavy government subsidies on fuel, making the price at the pump a fraction of what it is in the global markets, has exacerbated the problem.

[Editor's Comments: A number of oil experts have warned that if the level of fuel consumption in Saudi Arabia is not checked, the Kingdom might find itself devoting as much as half of its production to domestic consumption and thereby falling behind Iraq, a rising oil producer.]

Source: arabnews.com, October 25, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 26 Oct 2011 06:21:14 PST Egypt will seek to participate actively in the reconstruction of Libya and will send a high-level delegation to Tripoli for that purpose by the end of the month. Of primary importance for Egypt is finding work for many of its unemployed citizens.

Meantime, Egyptian authorities have warned their citizens to avoid falling into a trap of accepting fraudulent contracts issued under the name of the defunct regime "al-Jamahiriya" and said that all new legitimate contracts will be issued by "Free Libya."

The new Libyan authorities have announced that they will give Egyptian workers priority for employment in Libya, followed by Tunisians.

Source: Al-Sharq Al-Awsat, London, October 25, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 26 Oct 2011 06:20:54 PST Kuwait has received the fourth and last giant oil tanker built in South Korea. The tanker can carry as many as 2.1 million barrels of crude oil.

Source: menafn.com , October 25, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 26 Oct 2011 06:20:33 PST DUBAI: Saudi Arabia, the UAE and Qatar have the opportunity to become engines of growth in the Arab world in the aftermath of the Arab Spring, said Nasser Saidi, chief economist at the Dubai International Financial Centre (DIFC) and executive director of the Hawkamah-Institute for Corporate Governance.

He was speaking at an exclusive forum hosted by the Capital Club Dubai, the region's private business club and a member of the ENSHAA group of companies, to discuss the need for policy reforms, institutional change and extensive investment in the region in the wake of the Arab Spring.

"The GCC has big incentive to do it," said Saidi, who is a member of the IMF's regional advisory group for MENA and co-chair of the Organization of Economic Cooperation and Development's MENA Corporate Governance Working Group.

He said that the idea goes back to Egypt of 1953. But Egypt couldn't become the engine of growth. That opportunity has come to the GCC countries now.

"The GCC member states should take more active role, economically. They should widen the net and include countries like Egypt, Yemen, Jordan and Morocco into the GCC fold," he said.

He suggested that the GCC countries should prepare a roadmap for countries like Egypt and Yemen and present it to their governments while making it clear that they would have to follow the roadmap if they want to join the group.

Saidi, who was also named among the 50 most influential Arabs in the world by The Middle East magazine for the third time, this year, suggested privatization and more public-private partnerships to develop infrastructure in the countries torn by war and violence.

He also suggested setting up a MENA bank dedicated to reconstruction and development of the region. He pointed out that the US, Asia, Africa and Europe all have their own financial organizations for reconstruction and development. But MENA is the only region that doesn't have a bank for the cause.

Stressing upon the need for setting up the bank, Saidi said, "This is the time when we need an institution like this, because the transition is going to take years and we have to address all the challenges and vulnerabilities."

He said that the oil exporting countries in the GCC might be the main stakeholder in the bank. "We the Arab countries have to do it on our own. We cannot wait for people from other parts of the world to come and resolve our problems. This is the time that the Arab countries play their role in transformation, build their own institutions and bring the change.

"Although it seems very challenging at the moment, we need to realize that we are very rich, and have the natural resources. The potential is also certainly there," he added.

In the wake of the looming fear of global sovereign debt crisis, Saidi said that the increasing stature of Asian countries like China and India are the saving grace for the MENA region.

He said that the UAE has benefited from the recent political turmoil in the Arab region because of its political stability. The UAE remains an important hub for India and China to enter the GCC countries and the MENA region.

The economist said that Dubai recovered from the financial crisis much faster because of its strong links to India and China. He pointed out that Dubai's multinational companies like Dubai World, Emirates and Dubal are doing well in the emerging markets and tourist flow from Asia has increased substantially.

He suggested the GCC countries should benefit from the growth of India and China because they are growing much faster. The growth rate of the emerging markets is two to three times faster than the advanced economies of the world.

"The trade policies as well as economic and investment policies should be reoriented toward Asia, because that is where the growth is coming from. If you strengthen your links to the Asian giants, you will be less vulnerable than you were five to 10 years ago to what is happening in Europe and the United States," he said.

Source: Arab News, Saudi Arabia, October 22, 2011. Changes were made in keeping with the editorial policy of www.memrieconomicblog.org.]]> staff@memrieconomicblog.org (MEMRI) Wed, 26 Oct 2011 08:33:45 PST The World Economic Forum which yesterday concluded its two day meeting at a Dead Sea resort on the Jordan side declared that recent developments in the Arab world require focusing the light on existing social and economic challenges, particularly finding rewarding and sustainable job opportunities for 2.8 million young people who enter the labor market annually. It said that there should be a particular focus with regard to employment on the youth, women and the educated.

See "Special Meeting on Economic Growth and Job Creation in the Arab World," by the World Economic Forum.]]> staff@memrieconomicblog.org (MEMRI) Mon, 24 Oct 2011 07:16:15 PST The recent political turmoil in the Arab world has served to put pressure on the governments in the region to enhance economic growth and provide jobs. This will require economic reform that the governments are reluctant to make for fear of raising public anger against the elite in the business sector or that any reform could impact adversely the standard of living in the short-term.

The following are brief measures taken by a number of governments to address the political turmoil:

Algeria: Raised salaries in the public sector, generous increase of support for food items, and payment of allowances to unemployed youth. Country has reserves of $150 billion to cushion the splurge but its gas fields are reaching maximum production capacity.

Egypt: Food subsidies cost $5 billion annually. It is wasteful and corrupt. Change are necessary but will be postponed until after the 2012 election. Under popular pressure, privatizations of government businesses have been overturned.

Jordan: Government control of economy and expenditures on military are a heavy burden on budget. The recent firing of the governor of the central bank raised fears that government would use the central bank's assets to finance its deficits. The newly-designated prime minister is a former judge and it is doubtful that he would change the economic system.

Saudi Arabia: Extremely low price of electricity undermines rational consumption or switching to other forms of energy. Hopes for engaging the private sector in major infrastructure projects such as railroads have not materialized and these projects will be financed by the government. Stock market hamstrung by regulations to prevent flow of competing money from overseas.

Source: alarabonline.org , October 23, 2011]]> staff@memrieconomicblog.org (MEMRI) Mon, 24 Oct 2011 07:07:22 PST A transitional government with no clear vision does not encourage investors while violence deters tourists from going to Egypt. Experts say repeated strikes in recent weeks from university professors to taxi drivers represent a growing political risk compounded by the absence of a government's plan to face social discontent and a growing budget deficit.

Standard and Poor's has recently downgraded Egypt's sovereign debt. Foreign currency reserves have declined by one-third in the first eight months of the year and the budget deficit has reached 9.5% of the gross domestic product. Economic growth has also declined from an average of 5-7% annually in the past five years to 2-3% in the current year.

The tourism sector has sustained losses of $3 billion while the Egyptian bourse has declined by 40%. Egypt is also witnessing rising Islamist forces while secular forces appear to be on retreat.

Source: Al-Sharq Al-Awsat, London, October 24, 2011]]> staff@memrieconomicblog.org (MEMRI) Mon, 24 Oct 2011 07:00:12 PST The proposed budget for 2012 is estimated at 1,326 billion Syrian liras, or about $25.02 billion. The budget is assessed at 50% of gross domestic product (GDP), provided the GDP does not decline, compared with 33.4% of GDP in 2011.

The2012 budget would show a deficit of 509 billion liras ($9.51 billion) but could be larger if Syria fails to sell its oil which is estimated to bring revenues of $11 billion. The projected deficit, even if the oil were to be sold and the GDP were not to decline, represents 19% of GDP while the deficit for 2011 was $4.4 billion, or 11.2% of GDP.

Commenting on the budget, Syrian minister of finance Dr. Mohammad al-Jalali declared, "We shall rationalize the expenditure and will place every lira in its proper place."

[Editor's comment: The huge budget deficit is the result of re-introducing subsidies to some categories of oil, expanding social expenditures and the recruitment of thousands of new civil servants as a means of social welfare. Unless it receives large subsidies from its political sponsors, Syria is likely to witness a soaring inflation and the devaluation of its currency.]

Source: Iqtisadi.com October 23, 2011; thawra.alwehda.gov.sy, October 24, 2011]]> staff@memrieconomicblog.org (MEMRI) Mon, 24 Oct 2011 06:59:41 PST The UAE's minister of state for financial affairs Obaid Humaid al-Tayer declared that his government plans to provide $3 billion in the form of financial aid to Egypt but was still reviewing the mechanism of extending it.

Saudi Arabia plans a package of aid to Egypt in the form of loans, grants and investments worth $3.9 billion.

Qatar granted Egypt $500 million in aid. Egypt is also considering asking for a $3 billion loan from the International Monetary Fund.

In a related news item, the Central Bank of Egypt announced that the budget deficit for this fiscal year has reached $22.3 billion.

Source: menafn.com , October 23, 2011; menafn.com , October 23, 2011]]> staff@memrieconomicblog.org (MEMRI) Mon, 24 Oct 2011 06:59:21 PST The CEO of Dana Gas, the largest private gas company in the Gulf, said that the company was not holding discussions with the Syrian government on investments. In early October, Emarati dailies reported that Dana Gas, with businesses in Iraq and Egypt, was in an advance state of negotiation with the Syrian government.

The CEO, Ahmad Rashed al-'Arbid, said that his company was no longer conducting discussions with the Syrian government in view of the fact that a growing number of foreign companies are reluctant to do business in Syria because of the sanctions on the Syrian government.

Source: daralhayat.com , October 24, 2011]]> staff@memrieconomicblog.org (MEMRI) Mon, 24 Oct 2011 06:58:59 PST Iran's ambassador to Turkey Bahman Hosseinpour said that the trade volume between the two countries was expected to hit $15 billion by the end of the year. He said that the volume of bilateral trade stood at $10.561 billion during the first eight months of 2011 and was projected to reach $30 billion by 2015.

Source: presstv.com, October 22, 2011]]> staff@memrieconomicblog.org (MEMRI) Mon, 24 Oct 2011 06:54:37 PST Syria and Iraq have initialed an agreement to open two free trade zones on each side of the border. Syria expects the zones to attract domestic and Arab investments to build an industrial base that would provide employment. Most importantly, from the Syrian perspective, the new free trade agreements will generate transit shipment in the Syria ports heading for Iraq.

Source: Thawra.alwehda.gov.sy, October 24, 2011

Source: presstv.com , October 22, 2011]]> staff@memrieconomicblog.org (MEMRI) Mon, 24 Oct 2011 06:54:21 PST Egypt, Jordan Agree On Raising Price Of Egyptian Natural Gas

The Egyptian and Jordanian governments have agreed to raise the price of natural gas exported to Jordan. According to an agreement signed in 2004, Egypt was to provide 240 million cubic feet of gas daily that will meet 80% of the power generation requirement in Jordan. The revised agreed calls on Egypt to increase gas exports to Jordan to 300 million cubic feet daily.

Source: menafn.com , October 22, 2011]]> staff@memrieconomicblog.org (MEMRI) Mon, 24 Oct 2011 06:53:51 PST Recent shifts in the Arab world coupled with an economic contraction at the global level have created a new urgency for decision-makers across the region: the need to address the fundamental conditions required to revive growth and support human development.

Now more than ever, it is critical to match employment, entrepreneurship and education prospects with the aspirations of young populations. This has clearly become a key in the decisions taken by government, industry and civil society in the Arab world. To respond to these apparent and urgent imperatives, the World Economic Forum will convene a "Special Meeting on Economic Growth and Job Creation in the Arab World" at the Dead Sea, Jordan.

The Special Meeting ended with a call for action and radical change in the region's mindset. "In the Middle East, we need fewer leaders and more doers," said Habib Haddad, Chief Executive Officer, Wamda, United Arab Emirates, a Co-Chair of the Special Meeting and a Young Global Leader. "We need to be ready to push all the buttons we have," he said. Haddad emphasized that the region needs more courageous investment. "It is not that the region doesn't have money," he said, "it is how we leverage and use it."

H.M. Queen Rania Al Abdullah of the Hashemite Kingdom of Jordan spoke of how education and support for small businesses can unlock Arab youth potential. "Partnering with academia, NGOs and the private sector could reposition the Arab world as a hub of creativity and innovation. We have within our people all the potential and power to change our fate," she told participants in a plenary session on Addressing the Employment Challenge. Tony Blair, UN Middle East Quartet Representative, speaking on a panel about geopolitical trends, said that translating the political changes of the Arab Spring into improvements in people's lives is the greatest challenge facing governments in the region today.

In an effort to tap into the potential of the youth generation, especially given recent events in the Arab world, the World Economic Forum today launched the Global Shapers Middle East Community. The Global Shapers Community is a worldwide network of Hubs led by 20- 30 year-olds who are exceptional in their potential, achievements and drive to make a positive contribution to their communities.

The Schwab Foundation announced two winners of the Social Entrepreneur of the Year for the Arab World award. Curt Rhodes of Questscope in Jordan provides non-formal education to vulnerable dropouts and Sameh Seif Ghali of Together Association for Development and the Environment in Upper Egypt improves sanitation and access to clean water in remote villages.

The Arab World Competitiveness Report, which continues the successful collaboration of the World Economic Forum and the Organization for Economic Co-operation and Development (OECD), is a contribution to understanding the key factors determining future prosperity and economic growth in the Arab world at this critical juncture. It offers policymakers and business leaders an important tool in formulating improved economic policies and institutional reforms.

The fourth edition of this report is published at a critical time for the region. The important changes taking place in North Africa and the Middle East have brought to light a number of socio- economic challenges - such as youth unemployment, regional inequalities, corruption, weak institutions, limited entrepreneurship, and the need to advance the role of women in the economy - that must be addressed if the aspirations of the region's citizens are to be met.

The Scenarios for the Mediterranean Region project began in August 2010 with the objective of exploring the long-term evolution of regional dynamics and the role of the private sector in the Mediterranean region, looking out to the year 2030. The project drew on the World Economic Forum's deep expertise in multistake-holder scenario thinking, competitiveness analysis and our long-standing engagement with the wider Europe and Middle East and North Africa (MENA) region.

The Scenarios for the Mediterranean Region report explores three possible futures for the region, based on long-term uncertainties related to the development of regional politics, regional resource management and the regional labor market.

H.M. King Abdullah II Ibn Al Hussein of the Hashemite Kingdom of Jordan opened the World Economic Forum Special Meeting on Economic Growth and Job Creation in the Arab World by observing that the Arab world has reached a critical turning point. "Our region stands today at the gates to the future," said the King, noting that there are four gates or crucial areas for consideration: dignity, opportunity, democracy, and peace and justice.

Source: Dead Sea, Jordan 21-23 October 2011 Special Meeting on Economic Growth and Job Creation in the Arab World. Changes were made in keeping with the editorial policy of www.memrieconomicblog.org.]]> staff@memrieconomicblog.org (MEMRI) Mon, 24 Oct 2011 07:17:20 PST Standard & Poor's has reduced Egyptian rating by one notch in the face of growing risks faced by the economy during the transition period. It warned that rating reduction is possible.

The lowering of rating increases the difficulties both for government to borrow as well as well as for the cost of borrowing. It may also increase the premium on marine insurance that would eventually affect the price of goods and services in the domestic market.

Al-Sharq al-Awsat, October 20, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 21 Oct 2011 08:30:01 PST The tourism sector, particularly Cairo bazaars, has been the most affected by the January 25 revolution. Most of these bazaars open at noon and often operate 2-3 days a week because there are no tourists. The situation has further deteriorated following the recent clashes between the security forces and the Egyptian Coptic Christians.

In the past, tourist groups would stop at the bazaar after visiting the National Museum which is close to the Liberation Square. Nowadays, tourists no longer do that because of the security situation.

Tourism is considered one of the main sources of income as its represents 11% of the gross domestic product and employs 12% of active work force. The absence of tourism has also affected other sectors of the economy such as the aviation sector has lost $370 million so far this year.

Al-Sharq al-Awsat, October 21, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 21 Oct 2011 08:28:58 PST The American invasion of Iraq has provided eight years not only to free the Iraqis from Saddam Hussein but also from a state-run economy that depends entirely on oil revenues. However, when the U.S. forces withdraw from Iraq at the end of this year, they will leave behind a nation whose economy suffers from a widespread corruption, bureaucratic impediments and shortage of electric power.

Oil revenues continue to represent 95% of the government's budget while the economic focus since the fall of Saddam has been on raising oil production. Illegal gains and bureaucracy are the two main challenges for freeing the economy even for a simple matter such as obtaining a visa by a foreign businessman.

The demand for bribes at all levels for starting a new business has forced entrepreneurs either to withdraw or to operate outside the legal framework. A recent survey shows that 55% of the 900 small-business establishments are not registered and pay no taxes.

Al-Sharq al-Awsat, October 20, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 21 Oct 2011 08:27:07 PST The main index of Syria's stock exchange fell this week below the psychologically sensitive 900 mark, capping 10 consecutive days of decline as a solution to the country's political stalemate appears as remote as ever.

The Syria Report, October 20, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 21 Oct 2011 08:25:11 PST The director for MENA of the International Finance Corporation [the business arm of the World Bank Group], George 'Abd, said that the record increase in the price of crude has widened the gap between the oil producing countries which have accumulated this year a surplus of $793 billion and the countries that are going through political turmoil that have lost more than $35 billion of its national income and a similar amount to capital flight.

A report issued by the IFC projects the oil-producing countries to grow by 6.5% while the others will grow by 0.4%. It also projects that most foreign direct investments this year will target Saudi Arabia and the UAE with some going to Tunisia, Lebanon and Jordan.

www.daralhayat.com October 21, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 21 Oct 2011 08:24:30 PST A report on "The Conditions of Arab Food Security" issued by the Arab Organization for Agricultural Development (Cairo) said that animal production does not satisfy the growing needs of the Arab population. It said the fact that most Arab countries import animal products indicates a dysfunction in management of this wealth and the policies governing animal production both at the national and regional levels.

The report points out that animal production faces a number of fundamental difficulties, including the shortage of animal feed, fluctuation in the supply of the feed due to divergent levels of rainfall, and poor and traditional breeding methods. As a result the imports of red and white meats, fish, eggs and dairy product had risen the years 2009 and 2010.

According to the report the average water availability per capita in the Arab countries is below the water poverty line established at 1000 cubic meters annually. Self-sufficiency in grains, sugar and oil seeds averaged in 2010 between 26-48% while self-sufficiency in legume and animal products ranged between 58% and 89%. The food gap reached $36.99 billion

www.daralhahat.com October 21, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 21 Oct 2011 08:21:17 PST The European Union has extended through March 2012 the ban on imports of Egyptian seeds and plants in the wake of a discovery of deadly E-coli bacteria in fenugreek (plant) imported from Egypt early this year. The ban was first imposed last July to prevent the spread of the plant disease.

The ban was supposed to be lifted on October 31 but Brussels has decided to extend it because the EU has considered the measured taken by Egypt to be "unsatisfactory."

www.alarabonline.org October 18, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 21 Oct 2011 08:18:21 PST Gulf Cooperation Council (GCC) countries have jointly decided to rationalize recruitment of foreign workers as part of their efforts to create more job opportunities for their nationals. The decision was taken by the GCC labor ministers at a meeting at abu Dhabi on Wednesday.

Member countries have been asked to provide accurate employment statistics to determine whether progress has been made.

The meeting stressed the need to implement economic projects that create more jobs for nationals and achieve sustainable growth.

Arabnews.com October 20, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 21 Oct 2011 08:13:51 PST A report by the International Energy Agency which represents the interests of the major oil consumers points out that the Arab Spring is delaying the investments in oil and gas projects as governments shift their focus toward meeting the increasing expectations of their people. The report said the rising demand for oil and gas would require investments in the neighborhood of $38 trillion by 2035. It said the 90% in the growth of oil supply in the next 10 years ought to come from the Middle East and North Africa.

www.almowatenniews.com October 19, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 21 Oct 2011 08:12:58 PST A report issued by the Swish bank Credit Swiss sheds lights on the sharp increases of personal wealth in the oil producing countries. Between January 2000 and mid-2011 Qataris enjoyed the greatest wealth accumulation, averaging $146,620 per capita, an increase of 456%. They were followed in second place by Kuwaitis with average wealth of $134,590 per capita, an increase of 156% and by the Emaratis in third place with $115,770 per capita, an increase of 104%. Saudi Arabia ranked fourth with per capita wealth of $35,900, an increase of 56%. Surprisingly, Egypt came fifth among countries in the Middle East and North Africa with average wealth of $10,420 per capita, an increase of 47%.

Switzerland registered the highest level of wealth per capita at $540,000 while the average wealth per capital worldwide was $51,000.

France has the largest number of millionaires in the world at 2.6 million while Britain and Germany have the largest number of millionaires worth $100 million and over.

Al-Watan (KSA), October 20, 2011]]> staff@memrieconomicblog.org (MEMRI) Fri, 21 Oct 2011 08:12:09 PST The energy world is changing and so is Saudi Aramco, the world's leading energy supplier.

The global dependence on crude is undergoing a major metamorphosis. It is definitely going to change, if not evaporate, over the next few decades. While the global economy already is in tatters, being kept in an oxygen tent as the capitalistic model is under threat all around, crude intensity is changing fast and for good. More efficient machines - from cars to airplanes and refrigerators to industrial equipment - all are attempting to reduce energy consumption. This would have a major impact on the global energy demand.

In the meantime, new energy frontiers are cropping up on the global horizon. Shalegas, oil sands, emerging Arctic, biofuels, growing Iraqi output - all are impacting the global resource structure immensely. Global energy centers are in transition.Indeed behind this transition is a lurking political desire. For strategic, geopolitical reasons, the West simply wants to reduce its dependence, if not move away outright, from the Middle Eastern crude.

Hence despite all the talk of creeping Peak Oil point, most now agree that the resource side may not be a major growth constraint in the coming decades. This is a changing equation with major, strategic implications.

Sitting at the giant Ghawar Center of Saudi Aramco, witnessing the signing ceremony of the strategic joint venture, SADARA, between Saudi Aramco President & CEO Khalid A. Al-Falih and Andrew N. Liveris, the DOW Chemical Company Chairman & CEO, the mind kept venturing into the changing future of the energy world. And that carries implications for Saudi Arabia too.

The state energy enterprise seems preparing for the eventuality. Senior people within the global energy giant are already talking in terms of "Accelerated Transformation Program."

While witnessing the signing ceremony and then the speeches thereafter, one also recalled the grand old man of the energy world, Ahmed Zaki Yamani, underlining repeatedly before the energy fraternity to remember, "coal didn't end, coal era came to an end." Indeed in the remarks one can't fail noticing the interesting analogy to oil.

One also can't miss out the changing regional environment and its impact. There seems an ongoing intellectual movement all around - extract oil from beneath the surface, add value to it, over the next few days, and then push it out of its shores. The stress seems on moving away from exporting the crude without adding value to it. Indeed planners from Riyadh to Muscat are insisting today on re-exporting the value-added product in the form of one plastic or the other. The prevalent model is to change. This also meant moving away from exporting the commodity resins. The current thinking emphasizes moving a further step beyond now - away from just producing and exporting the resin. Indeed this strategy also invoked the possibility of attracting, in the process, foreign direct investment. Then it also goes hand in hand with the increasing stress throughout the region from Riyadh to Manama on generating employment for the unemployed, frustrated youth.

A major transition thus seems to have taken place in the overall thinking process over the last few years. Saudi Aramco is acknowledging the changing times - with a rather big bang - the close to $20 billion SADARA jv in Jubail.

SADARA is to be a game changer - from Al-Falih to Liveris everyone emphasized that day. This was a major strategic in more than one sense. Some decades down the line, Aramco may not be the same organization as it is today. Indeed Aramco and to that effect Saudi Arabia, would continue to be a major player on the global energy horizon; it would continue to impact the global energy balance, yet the very orientation, the overall direction of the country and the company are changing.

Al-Falih was blunt. "This joint venture signals an important new chapter in Saudi Aramco's storied history, as well as the logical next step in our company's evolution. From our earliest days, Saudi Aramco has grown and changed with the times, and being a commercially driven entity, seized opportunities while anticipating the world's energy needs and responding to national interests," Al-Falih said in his speech at the SADARA signing ceremony.

"As such, we have progressed from primarily an oil and gas producing company, to an integrated petroleum enterprise with a sizable refining portfolio and significant global footprint.

Our downstream business is expected to further expand over the coming decade to encompass one of the world's largest refining portfolios. This evolution is in line with our primary strategy of steadily adding greater value to our hydrocarbon supplies," he said.

"Now, entering high-value chemicals is naturally our next phase, as we move down the petroleum value chain. Investing at the scale of Sadara, and with such an advanced product slate, is also consistent with our intent to become the world's leading integrated energy company by the year 2020," the Saudi Aramco CEO underlined.

Source: Arab News, Saudi Arabia, October 16, 2011. Changes were made in keeping with the editorial policy of www.memrieconomicblog.org .]]> staff@memrieconomicblog.org (By: Syed Rashid Husain) Mon, 24 Oct 2011 07:18:05 PST A report issued by Moody's Rating Agency warned that the recent clashes between the security forces and the Copts will raise the pressures on the Egyptian economy and reduce the confidence of investors in it. It said that the submission of resignations by the prime minister and his deputy [rejected by the Supreme Military Council] gives a negative perspective regarding the financial rating of the country.

Moody's said that it is vital for Egypt to receive international aid because of the sharp decline in its foreign reserves from $36 billion at the end of 2010 to $24 billion at the end of September. While Egypt retains the capacity to cover external debt payments for the next 12 months, the pace of decline in reserves may weaken the country's capacity to meet its obligations.

Moody's wrote that the pressure on the Egyptian economy will continue until the political uncertainty dissipates and political stability is restored.

With the withdrawal of assets by foreign investors, Egypt is resorting to short-term borrowings. The interest paid on 91-day treasury bills has reached 13.02%, the highest since 2008.

In a related news item, the foreign exchange component of the balance of payment has recorded the lowest level in four years in the fiscal year 2010-2011 as a result of declines in tourism, foreign direct investments, official transfers from countries and international organizations and on the returns on the government's foreign investment.

Source: Al-Sharq Al-Awsat, October 18, 2011; menafn.com , October 18, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 19 Oct 2011 06:32:06 PST The Iranian Student News Agency reported that the country's oil reserves have increased to 158 billion barrels. Iran has previously announced an increase in its reserves from 138 billion to 150.31 billion in the wake of an announcement by Iraq of an increase in its reserves following recent explorations.

Experts estimate oil production in Iran at 3.6-4.0 million barrels/day.

[Editor's comment: The new crude estimates by Iran must be viewed in the context of a statement issued by Iraq last week that it planned to announce bigger crude reserves than were previously estimated. Regardless of how much "proven" reserves each of the two countries holds there is hardly any doubt that Iraq's oil production will exceed that of Iran in the next two to three years unless the sanctions on Iran are lifted and the country is able to acquire new technology and new equipment to increase production from its aging oil fields.

Western and UN sanctions in force over Iran's controversial nuclear program already weigh heavily on the country, which is dependent on its rich oil and gas sector for revenues.]

Source: menafn.com , October 17, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 19 Oct 2011 06:31:47 PST Iran appears to be having a currency problem because it is bartering more and more of its oil, especially to Asia, against consumer products to circumvent sanctions on its banking sector. Tehran is reported to be spending $3-4 billion a month to shore up its currency, the rial, and to pay handouts to population to compensate for energy and food subsidies that were cut last year. As a possible indication of the problem, the rial has made several drastic movements downward in recent months despite the stated goals of the central bank to maintain currency stability.

Another symptom appears to be delays piling up in government payments to suppliers, mainly because the state is believed to be drawing money from ministerial budgets to pay the public handouts, according to parliament. For example, the energy ministry is thought to be $2.7 billion behind in its payments, according to the head of the parliamentary committee on energy, Hamidreza Katouzian.

Source: Arab Times, Kuwait, October 17, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 19 Oct 2011 06:31:25 PST The International Food Program reports that, despite some improvements, there are one million Iraqis who are in need of food aid. In 2010, the Program launched a two-year initiative to support the weak segments of the population and to build the government's capacity, at the local and institutional levels, to plan and implement active safety networks such as school meals, as well as mother and child health and nutrition.

[Editor's comment: It is ironic that a country as rich as Iraq with billions of dollars of oil revenues flowing into the Treasury every month would need outside support to feed its people. The problem is massive corruption at all levels of government. Transparency International has rated Iraq almost at the bottom in terms of corruption. The most recent outcry was the allocation of $2 million to the President of Iraq Jalal Talabani to attend the UN General Assembly in New York.]

Source: almowatennews.com , October 17, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 19 Oct 2011 06:31:08 PST The Palestinian Authority in Ramallah has initialed yesterday a free trade agreement with Mercosur [Common Southern Market comprising Argentina, Brazil, Paraguay and Uruguay] to strengthen trade between the two parties. The agreement will be formally signed at the next annual meeting of Mercosur which will be held in Montevideo in December in the presence of President Mahmoud Abbas.

Apart from its economic benefits the agreement is viewed by the Palestinian Authority as a step in its efforts to secure recognition at the United Nations as a state.

Source: Al-Hayat Al-Jadida, Palestinian Authority, October 19, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 19 Oct 2011 06:36:25 PST Qatar has announced a plan to spend 150 billion riyals (more than $40 billion) on three metro and railroad projects within the framework of a comprehensive Gulf plan designed to invest $200 billion in ground transportation with particular emphasis on railroads.

The transportation projects are seen as complementing the economic integration among the six members of the GCC.

Source: Al-Sharq al-Awsat, London, October 18, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 19 Oct 2011 06:28:57 PST The newly designated Jordanian government to be head by Awn al-Khasawna is bound to face difficult economic conditions and uncomfortable financial indicators.

The Treasury is burdened by an $18 billion debt which will require the new government to have strict control of expenditures and to find a real solution to a budget deficit estimated at $1.6 billion.

Economic analyst Salama al-Dar'awi claims that the new government is inheriting the worst economic situation in the history of the Kingdom and called for a study of the economic imbalances suffered by the public sector. He called for restoring the confidence between the public and the private sectors and addressing immediately the major corruption cases faced by the Kingdom.

Source: al-sharq.com, October 19, 2011]]> staff@memrieconomicblog.org (MEMRI) Wed, 19 Oct 2011 06:28:43 PST