Archive for category GCC

Oman urges GCC to reduce domestic energy consumption

2013-10-21

DUBAI – Oman and neighboring Gulf states must move towards curtailing energy consumption drastically, reduce subsidies and boost efficiencies to keep the region’s rapidly rising oil and gas demand in check, the sultanate’s top energy official said Monday.

“We must drastically reduce our consumption, not only in Oman but in the region as a whole,” Oman’s Minister of Oil and Gas Dr. Mohammed Hamad Al-Rumhy said in a national keynote address at the first Gulf Intelligence Oman Energy Forum in Muscat today. The forum’s theme is focused on game changers impacting the Omani and global energy industry.

Today, the six Gulf Cooperation Council (GCC) states consume more primary energy than the whole of Africa even though their population is only one-twentieth the size of the continent’s, according to Chatham House’s Saving Oil and Gas in the Gulf report published in August. Heavily-subsidized energy has fuelled consumption growth in the region in recent years and led to rising energy subsidy bills for governments. According to International Monetary Fund estimates, energy subsidy costs in GCC countries ranged from 9-28% of government revenues in 2011.

“Subsidy is killing us. We should preserve energy on a daily level and use it wisely, which we’re not doing. We can do so much ourselves. We don’t need to start any nuclear, coal, bio-fuel activities in Oman,” the minister said. He added that there wasn’t much need for the sultanate to pursue renewable energy projects at present as “there is enough gas in the world.”

Abdulla Bin Hamad Al-Attiyah, President of Qatar’s Administrative Control & Transparency Authority and the country’s former oil minister, said in an on-stage interview at today’s forum that GCC states need to make a collective effort to curtail energy subsidies or be faced with drastic consequences.

“This is not a single country issue but a GCC problem. The region needs to move quickly to find a solution,” he said.

The emergence of Gulf states as major energy consumers has fuelled concerns over their ability to maintain oil export capacity. Domestic oil consumption among Organization of Petroleum Exporting Countries (OPEC) members has increased seven‐fold in 40 years, to 8.5 million bpd. They consume almost as much oil as China, which is equivalent to one-fourth of their production.

According to OPEC Secretary General Abdalla Salem El-Badri, who gave the international keynote address at the forum, the organization should be able to produce an additional 6 million barrels per day (bpd) of crude by 2018.

The increase would make up for declining output elsewhere, in particular in the U.S. where tight oil output is expected to start declining that year, El Badri said. OPEC output stood at 30.05 million bpd in September, down 400,000 bpd versus August levels.

Oman is the largest oil producer in the Middle East that is not a member of OPEC. The sultanate has set ambitious targets to boost the share of oil it produces from Enhanced Oil Recovery projects by 2021 in a bid to sustain a five-year trend of rising crude production levels. The country is also moving forward with an ambitious program to diversify the local economy as it seeks to reduce its dependence on income from hydrocarbons, add value to its oil and gas resources, and create jobs for its young and growing population, while at the same time strengthening ties with East Africa and South Asia.

“Oman is in an advantageous position and we must continue to make the most of our geographical location. We, as a nation, are at the gateway of the rapidly expanding regional as well as Asian and African markets,” said Mulham Al-Jarf, Deputy CEO of Oman Oil Company, which is the Title Partner at the Gulf Intelligence Oman Energy Forum.

Today’s forum is also being addressed by Nasser K. Al Jashmi, Under Secretary at Oman’s Ministry of Oil & Gas on the sultanate’s Oil & Gas In-Country-Value Program, and Dr. Aldo Flores-Quiroga, Secretary General, International Energy Forum (IEF) on Building New Partnerships for Post-Easy Oil Era.

Source: Middle East Online.
Link: http://middle-east-online.com/english/?id=62076.

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GCC single currency on track: Saudi central bank

Issac John / 16 September 2011

DUBAI — The launch of the Gulf single currency, which had been delayed following the withdrawal of the UAE and Oman, is on track, Saudi Arabia’s Central Bank Governor Muhammad Al Jasser said.
Al Jasser said on the sidelines of a meeting of Arab central bank governors in Doha that the economic conditions in the Gulf are “excellent” for forming a monetary union and that a plan to launch a Gulf single currency was on track.

“There was no postponement, and I have said from the beginning that there will not be a specific date [for the single currency launch]… the economic situation in our countries is excellent and nothing is delaying the currency,” he was quoted as saying. The UAE and Oman have withdrawn from the Gulf single currency plan. The UAE abandoned the plan in May 2009 withdrawing in protest against placing the forerunner of the future joint central bank in Riyadh.

The Institute of International Finance, or IIF, has pointed out that a monetary union between the other four countries of the GCC would be delayed due to a lack of progress in putting institutional arrangements in place, the IIF said.

Although most of the technical and policy convergence criteria have been achieved, a monetary policy framework and a common system of payments and settlements are yet to be put in place, said the Washington-based institute.

According to economists, it is unlikely that a GCC currency will be active within the next few years.

Economists argue that the Gulf monetary union needs to establish monetary independence for member countries, all of which are pegged to the US dollar, except Kuwait. Al Jasser said the kingdom had no plans to revalue the riyal at this time.

The UAE and Saudi Arabian central bank governors said on Thursday that they were happy with current interest rate levels in their countries.

Sultan bin Nasser Al Suweidi, the UAE Central Bank Governor, said on the sidelines of the meeting that the current interest rates were good and there was no need to change them.

Al Jasser also said he was happy about the rates. The Saudi central bank has been keeping its repo rate at two per cent since January 2009 and the reverse repo rate at 0.25 per cent since June 2009.

Saudi Arabia’s currency is pegged to the US dollar, which limits the central bank’s scope to combat inflation because it needs to keep interest rates closely aligned with US benchmarks to avoid excessive pressures on the riyal. Al Jasser said that “everyone” was concerned over the fragile state of the US economy and Europe’s ongoing sovereign debt crisis. His comments did not provide a vote of confidence for the United States, nor for the eurozone, as he also said Saudi Arabia would not consider purchasing eurozone debt.

With the US dollar under pressure since Standard & Poor’s unprecedented US debt downgrade, speculation has also grown over whether GCC countries might consider revaluing their currencies. While Al Jasser drew attention to the fact that Saudi Arabia is not interested in incurring risk by buying eurozone debt, he didn’t address any Middle East exposure to the eurozone debt crisis via other ties.

Outside market watchers, however, can point to possible risks for the area. Arab countries hit by unrest may need to turn to financial support from international institutions such as the World Bank and the International Monetary Fund as growth slows in the region, central bank governors said.

“They [Arab central bank governors] expressed their fears from an expected drop in growth rates this year,” they said after the meeting. The central bank governors also said they would offer support to each other. “The governors expressed their support to all central banks in Arab countries that are witnessing political developments and transformations,” they said.

Source: Khaleej Times.
Link: http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/business/2011/September/business_September215.xml&section=business.

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GCC plans five-year aid scheme for Jordan, Morocco

WAM & Reuters
September 11, 2011

UAE Foreign Minister Shaikh Abdullah Bin Zayed chairs Gulf bloc meeting

Jeddah: Foreign Ministers of the Gulf Cooperation Council (GCC) met here Sunday under the chairmanship of UAE Foreign Minister Shaikh Abdullah Bin Zayed Al Nahyan to discuss the latest developments in the regional, Arab and international arena.

Foreign ministers of Jordan and Morocco are attending the meeting for the first time.

Gulf Arab countries plan to fund a five-year development aid program for Morocco and Jordan, aspiring members of the Gulf Cooperation Council (GCC) political and economic bloc, and the amount will be set in December, the GCC’s chief said on Sunday.

Oil-exporting Gulf monarchies are seeking closer ties with Arab counterparts outside the Gulf to help contain pro-democracy unrest that is buffeting autocratic ruling elites throughout the Arab world, analysts say.

The six members of the GCC — Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain — said in May they would consider a request by the two Arab monarchies to join, but as yet few practical steps have been taken.

“There is a call for creating an economic development program for the two brotherly countries Jordan and Morocco,” GCC Secretary-General Abdullatif Al Zayani said after a Gulf foreign ministers meeting in Jeddah.

“A recommendation on the size (of the aid) will be made and a decision taken by the heads of states of the GCC at their next summit (in December),” Zayani said of the five-year program.

Within the bloc, the richer Gulf countries have offered $10 billion each in development funds to Bahrain and Oman, where protesters took to the streets this year demanding reforms.

Source: Gulf News.
Link: http://gulfnews.com/news/gulf/gcc-plans-five-year-aid-scheme-for-jordan-morocco-1.864684.

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GCC to discuss accession of Jordan, Morocco

2011-09-09

RIYADH – The foreign ministers of Jordan and Morocco are to hold talks with their six-nation Gulf Cooperation Council counterparts on possible accession to the Gulf bloc, the GCC chief said on Thursday.

Abdulatif al-Zayani said in a statement the foreign ministers of Jordan and Morocco have been invited to discuss the “strengthening of relations and cooperation” on the sidelines of a GCC meeting on Sunday in Saudi Arabia.

The discussions in the port city of Jeddah would focus on implementing decisions taken at a May meeting of the GCC where the organization announced that both monarchies would be considered for membership of the bloc.

The oil-rich Arab states of the Gulf, which have seen entrenched regimes in Egypt and Tunisia fall, are seeking reliable allies in the region, singling out fellow monarchies.

Thousands of retired Jordanian army officers have obtained citizenship in the Gulf states and hold important positions in the region’s armed forces.

Source: Middle East Online.
Link: http://www.middle-east-online.com/english/?id=47988.

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Jordan-GCC talks in Sept

Sunday 21/8/2011

The first round of talks for Jordan’s admission to the Gulf Co-operation Council (GCC) will be held between September 10 and 15, Jordanian Foreign Minister Nasser Judeh said yesterday.

Judeh is to meet his GCC counterparts in Saudi Arabia to outline a road map for Jordan’s admission to the bloc, he told a private sector panel set up to follow the issue.

In May, GCC leaders decided at a meeting in Riyadh to accept Jordan as a new member. The council comprises Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates, Qatar and Oman.

Both Jordan and the GCC countries “stand to benefit” from Amman’s admission to the group, Judeh said.

Source: Gulf Times.
Link: http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=453936&version=1&template_id=37&parent_id=17.

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Qatar has lowest unemployment rate in GCC

Tuesday, 05 July 2011

DOHA: Qatar has the lowest rate of unemployment in the GCC region at 0.5 percent but experts warn that future trends point towards an escalation rather than a decline.

Among the GCC states, Oman and Bahrain top as far as unemployment is concerned as the rate in these countries is quite high at 15 percent each, with Saudi Arabia trailing with 10.8 percent.

The UAE and Kuwait have lower joblessness rates at 2.2 percent and 2.4 percent, respectively, Al Masah Capital said in a report on unemployment in the Mena (Middle East and North Africa) region.

The region (MENA) has the dubious distinction of having the highest unemployment rate in the world, Al Masah said talking of the political upheaval jolting some countries in the region.

The cause of the various civil uprisings in these countries can easily be traced to authoritarian rule, corruption, large rural-urban divide, high inflation and unemployment in the region, Al Masah said in its report.

It added that unemployment, in particular, has played a significant role in energizing the masses.

The situation in the GCC is somewhat better, the report noted, putting the unemployment rate in the region at 4.2 percent. The report, however, said that the total number of new jobs required in the GCC states is 3.3 million.

The services sector accounts for 70 percent of the jobs in the GCC region whereas the average for MENA is 52 percent and that for the world is 43 percent.

Shailesh Dash, founder and CEO of Masah Capital, was quoted as saying that expatriates will keep dominating the jobs market of the GCC since private sector employers prefer foreigners over nationals due to a number of reasons, including their knowledge and skills, lower salaries, higher productivity and flexible recruiting arrangements.

Source: The Peninsula.
Link: http://www.thepeninsulaqatar.com/qatar/157941-qatar-has-lowest-unemployment-rate-in-gcc.html.

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GCC courts new kingdoms

Ahmed Shihab Eldin
01 Jun 2011

Social media commentators analyze Saudi Arabia’s proposal to ask Jordan and Morocco to join with Gulf monarchies.

It all started – as many stories do these days – on Twitter.

In May, rumors that Jordan and Morocco might be asked to join the Gulf Cooperation Council (GCC) spurred a flurry of tweets questioning the motives of Saudi Arabia, the main proponent of the project, and speculating on the respective incentives for this potential alliance.

At dinner tables across the Arab world many gawked at and mocked these apparent rumors. But soon it became clear that not only was this a serious proposal, but also that it could mark the beginning of a seismic shift in regional policy.

Muna Abu Sulayman, a Saudi TV anchor with the MBC broadcasting company tweeted:

New GCC is about ensuring no one has power except Old GCC…Big lesson to Egypt – they have rendered Arab League obsolete

Perhaps her claim is overstated. Still, the initiative can be seen as an effort by the six-nation group to counter the growing influence of Iran and to find new ways of defending common interests following the successful popular uprisings in Tunisia and Egypt.

“This movie is primarily about the internal politics of each country concerned,” said Steven Fish, professor of political science at the University of California Berkeley.

“The GCC plus Jordan and Morocco is a coalition of the trembling. Each of the timorous monarchs is far more afraid of his own people than he is of Iran, the United States, or any other external power,” Fish told Al Jazeera.

The Iranian threat?

Iran’s threat, whether perceived or real, intensified earlier this week when its military announced a new ballistic missile system, demonstrating the country’s advances in weapons production.

This followed the February arrival – and Egypt’s allowing – of two Iranian warships through the Suez Canal for the first time since the 1979 revolution.

“I don’t believe the Iranians take this seriously at all,” said Seyed Mohammad Marandi, an associate professor at the University of Tehran.

“Jordan and Morocco are unpopular dictatorial regimes that are firmly in the American camp. These regimes are weak and they are extremely worried about the winds of change sweeping through the region and they are in no position to influence events in the Persian Gulf.”

As Iran seems to be strengthening its footing, the region continues to witness unprecedented expressions of revolt from its people. After former Egyptian president Hosni Mubarak was driven from power in a popular uprising, many Arab leaders, including those from GCC countries, took steps to appease voices of dissent and opposition.

Kuwait’s Emir, Sheikh Sabah al Ahmad al Sabah, ordered the distribution of $4bn and free food for 14 months to citizens, just three days after Tunisian president Zine El Abidine Ben Ali was ousted from power on January 14.

On February 11 in Bahrain, prior to anti-government protests, King Hamad bin Isa al Khalifa ordered approximately $2,500 to be paid to every Bahraini family, according to the state news agency.

In Morocco, one week before anti-government rallies were held, the government announced on February 20 that it would offer approximately $2bn in subsidies to curb price hikes for staples.

And Jordan’s King Abdullah, who welcomed GCC leaders to his country on May 9 to wish them “every success in their joint Gulf work to achieve the nations’ ambitions and aspirations,” dismissed his government and appointed a new prime minister after three weeks of protests over rising food prices and the unemployment crisis.

Saudi Arabia also tried to quell its own voices of dissent, when on February 23 King Abdullah bin Abdul Aziz announced $36bn worth of handouts. When this did not succeed in suppressing a flurry of protests across the country, he added another $67bn worth of spending on March 18.

A club for kings

In light of these developments, the GCC countries are hoping to strengthen their base by allowing Jordan and Morocco to join, despite having turned them down in the past.

The idea of solidifying a region-wide alliance and pooling resources from fellow monarchies looks all the more appealing.

Sultan al Qassemi, a UAE commentator on Arab affairs, tweeted:

Basically the GCC is turning into a club for Arab monarchies. #Morocco #Jordan

As the region scrambles to re-align itself within a fast-changing political landscape, the proposal to have Jordan and Morocco join the GCC highlights the anti-revolutionary roots of the group’s foundation in 1981.

The GCC was founded in part as a response to the revolution in Iran that took place in 1979 and the Soviet invasion of Afghanistan. Among its main goals were plans to allow citizens to travel without visas and to develop a common currency and trade tariffs. Military cooperation was also one of its aims, but was never achieved, until Saudi Arabia’s deployment of troops to Bahrain last month.

Jordan’s armed forces, also known as the Arab Army, has more than 100,000 soldiers and the force is considered to be among the most professional and well-trained in the region. They have a relatively sophisticated special forces unit and almost all their equipment comes from the US, France and Taiwan.

Morocco’s military, founded in 1956, consists of almost 190,000 active personnel, with a similar number on reserve.

Both countries have well-trained Sunni armies which the GCC can call on to counter the “Iranian threat”, which some say is seen in Bahrain’s manifestation of civil unrest, as the majority Shia population are protesting against the Kingdom’s Sunni-led royal family’s rule.

While the Saudis and GCC have much to gain, at least militarily, from allowing Jordan and Morocco to join them, some are still skeptical.

“I don’t see what the Gulf is getting out of this,” said Ahmed al Omran, a Shia Saudi blogger made famous by his blog SaudiJeans.org.

“Economically Jordan will benefit a lot from this. If it becomes part of the GCC market, their labor force will have access to work freely in the gulf,” al Omran told Al Jazeera.

The much-needed economic incentives for Jordan and Morocco are clear. Both countries face high unemployment and serious budget deficits.

But perhaps most tangibly, the largest incentive would be that their citizens would be able to easily work in the Gulf, where employment opportunities are plentiful. Jordan and Morocco, like the rest of the GCC countries, are pro-Western, Sunni-led monarchies, but unlike the Gulf, their per capita gross domestic product is just around $5,000 whereas Saudi Arabia’s is $24,200 (2010) and Qatar’s, for example, is a whopping $88,000 (2010).

In March the GCC provided Oman and Bahrain with $10bn each over a decade to meet protesters’ demands for improved living conditions. This type of cash influx would immediately alleviate some of the economic problems troubling Jordan and Morocco.

Already the US is sending large amounts of money to the two countries. Overall US aid to Jordan this year is expected to surpass $700m, including the economic assistance plan announced last week by president Obama.

It is plausible that part of the reasoning behind the GCC initiative is that Saudi Arabia wants Jordan to know it can rely on Saudi too, not just the United States.

It is unlikely Jordan or Morocco will become full members anytime soon; instead it is likely that they will be granted observer status, which could begin with improved bilateral investments, but still with restrictions on travel and residency.

Still, if the GCC leaders want the Jordanian and Moroccan armies to be ready to die on GCC soil, they will need to provide full economic and travel rights. Currently, it is extremely difficult for Jordanians to get jobs and visas in many Gulf countries.

US role

The US was caught off-guard on January 25 when Egypt’s 18-day revolution began. It found itself in the role of a fair weather fan at a sports game, first supporting Mubarak and then quickly siding with the Egyptian people against him.

“There’s no question that the Saudi rulers, like other US-allied dictators in the region, despise the Obama administration’s quick abandonment of Mubarak and the rapid deterioration of its support for [president Ali Abdullah] Saleh after the popular uprisings started in Yemen,” Fish told Al Jazeera.

“The US would aid Saudi Arabia in the event of a real threat from Iran, and Saudi rulers know it. The question is whether the US would protect the Saudi government against its own people. Here, Saudi rulers fear – and rightly so – that the US government would not and could not protect them.”

These concerns mark what some are calling the beginnings of a souring in Saudi-American relations.

“There was a big disagreement over Mubarak and Bahrain,” al Omran told Al Jazeera.

“Saudis were supporting Mubarak and they did not want him to go, prompting King Abdullah to make two very angry phone calls to Obama in less than two months.”

Since then, Saudi Arabia has been campaigning to have other Muslim countries join an informal alliance at the cost of heightening sectarian divisions that would permeate the Arab world.

Should civil unrest sweep across the GCC, Saudi Arabia may fear that the US will, as was the case with Egypt, side with the people against the leader. So, it is looking to pursue new alliances.

The Saudis have been diversifying their exports of oil, rather than solely relying on the United States, which purchases nearly 15 per cent of Saudi’s exports (150,000,000 barrels) each year.

“For the last couple years, Saudis have been pushing for a more independent foreign policy, but also economically, they are selling more oil to India, China and Brazil,” al Omran said.

Through the potential GCC alliance, Saudi Arabia would inject massive amounts of cash flow into the Jordanian and Moroccan economies, in an attempt to shore up relations with the remaining monarchs in the region.

But as Professor Fish points out: “Obama does not want to be seen as a bully or as a self-righteous preacher; in this respect he aims to differentiate himself clearly from Bush. Saudi aid didn’t do Ben Ali or Mubarak much good; nor is it saving Saleh. The uprisings are demonstrating the limits of Saudi financial power to shape events in a region whose people are fed up with tyranny.”

Both Saudi Arabia, Iran and the US are vying for influence and trying to protect their interests in the rapidly transforming political scene in the Middle East.

After the announcements by president Obama to relieve up to one-billion-dollars in debt and guarantee another one-billion-dollar loan for Egypt, the Saudis last week pledged to provide Egypt with $4bn US dollars to support its economic recovery.

“I don’t think it’s really a matter of the US and Saudi Arabia competing for influence in the Arab world,” Professor Fish said, “but more a matter of Saudi rulers being more assertive in defending their fellow despots – and, by extension, themselves – given the Obama administration’s inability or unwillingness to prop up dictators in the region.”

Prince Waleed bin Talal al Saud, a high-profile member of the Saudi royal family, told The New York Times’ editorial board recently: “We’re sending a message that monarchies are not where this is happening… We are not trying to get our way by force, but to safeguard our interests.”

Although the Saudi Arabian ambassador Adel al Jubeir was sitting in the front row during Barack Obama’s first speech on the Middle East since the recent uprisings, Obama did not refer to Saudi Arabia once in the speech.

This omission of Saudi Arabia, Washington’s closest ally in the region, is indicative of the strained relations between them.

“Truth be told, the Arab revolts are very popular among the American people,” Professor Fish said. “Obama and much of Congress are facing elections next year and American politicians do not want to be seen – or characterized by their political rivals – as protectors of despotism.”

Hypocrisy and militarization

Obama also made no mention of Saudi Arabia’s active support for the crackdown in Bahrain because it was the first instance of the GCC making use of its option to intervene in member countries’ conflicts. With Morocco and Jordan in the mix, this ability would be greatly strengthened and make the military option potentially more appealing than negotiations.

Obama spoke about women and freedom in his speech, but did not mention the women’s fight for freedom in Saudi Arabia or the sporadic protests across the eastern part of Saudi Arabia.

Malak Jaaphar noted:

@AJStream He gave a shout out to women & freedom but failed to mention Saudi Arabia? Hypocrisy.

As noticeable as Obama’s omission of Saudi Arabia was, he reserved some of his harshest words for Iran, accusing them of taking advantage of the turmoil in the region.

“Thus far, Syria has followed its Iranian ally seeking assistance from Tehran in the tactics of suppression. This speaks to the hypocrisy of the Iranian regime,” Obama said.

Marandi, the Tehran university professor, accused Obama of trying to justify what he calls “the crimes of the Bahraini and Saudi governments”.

“Obama attacks Iran for verbally supporting the oppressed people of Bahrain, yet he is completely silent about the brutal Saudi-led invasion and occupation of the country,” Marandi said

Jordan and Morocco’s military might aside, the UAE has already taken its own protective measures, hiring a company run by Erik Prince, the billionaire founder of Blackwater Worldwide, to provide “operational, planning and training support” to its military.

Blackwater’s $529m contract with the Emirati government to recruit and train a foreign battalion for counter-terrorism and internal security missions highlights the much-desired ability to strengthen the GCC’s military capabilities, clarifying the logic behind the potential acceptance of Jordan and Morocco.

Singling out Iran and citing it as a justification is no longer convincing, al Omran said. “The Saudis and other countries in the region use Iran as a bogey man to justify their policies. Everyone is trying to increase his or her influence in the region. They say Iran is meddling in Lebanon and Bahrain – well, the Saudis are too.”

Source: al-Jazeera.
Link: http://english.aljazeera.net/indepth/features/2011/05/201153073955794306.html.

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