Middle East Business News Review – 16 October

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Today’s top business and economy news from the Middle East and North Africa:

Abu Dhabi included in the Global Cities list

The fifth edition of Cities of Opportunity released by Price Waterhouse Cooper and the Partnership for New York City has ranked the city of Abu Dhabi as the 22nd city of opportunity out of 27 global metropolises.

Twenty seven of the world’s largest and most influential global cities are evaluated on their ability to provide opportunity to their residents, which includes both long term residents and new immigrants. Not only does it evaluate the ability of cities to grow and develop, but to provide opportunity broadly. It notes the adaptability and resilience of cities and highlights the connection between quality of life, or liveability, and long-run economic growth and development.

Middle East emerging as aviation industry hub – Etihad Airways CEO

Etihad Airways’ President and Chief Executive Officer James Hogan said on Tuesday the Middle East is one of the “strong pockets” for growth in aviation in an “uncertain world”. He delivered his keynote address to delegates at the International Air Transport Association (IATA) World Passenger Symposium taking place in Abu Dhabi.

“Middle East hubs and airlines are leading the way to confront and overcome the serious challenges to global aviation growth and stability and bring about positive change in the industry,” the Etihad Airways supremo said in his speech.

He also spoke in depth about the positive impact the Middle East is having on the global economy and how the focus is shifting from the traditional, more established markets to the emerging economic powerhouses in the Middle East, Asia, South America and Africa.

UAE’s new TV audience tracker goes live

The Emirates Media Measurement Company (EMMC) said on Tuesday that the UAE’s long-awaited television audience measurement system was now officially up and running.

The “people metre” system will be known in the UAE as tview and the objective is to advance the TV media industry by generating transparent, accountable and reliable ratings that will be used as a currency of trade.

Saudi Aramco to invest $35 billion in oil production

Saudi Aramco aims to maintain a steady oil production capacity and plans to invest $35 billion over the next five years in projects, the oil giant’s CEO said in an interview on Tuesday. He added that it is important to preserve the spare oil production capacity in order to protect world’s economy.

In the past five years, the oil reserves have been increased to more than 200 billion barrels. This is due to increased extraction of unconventional and heavy oils and new conventional oil discoveries around the world as the main drivers of abundant new supplies to the market. However, Al-Falih said that a downward pressure on demand is underway as life-style and demographic changes take hold along with environmental pressures and government policies that work against oil and fossil fuels.

Hyundai to build $3.2 bn Saudi Arabia power plant

South Korea’s Hyundai Heavy Industries said Tuesday it had won a $3.2 billion order to build a thermal power plant in Saudi Arabia.

Under the deal with Saudi’s energy authorities, Hyundai will build a 2,640- megawatt power plant at a location 20 kilometres south of Jeddah and near the Red Sea by 2017, Hyundai said in a statement.

The capacity of the plant is equivalent to five percent of the Middle East country’s total electricity supply, it said. South Korean shipbuilders including Hyundai, the world’s largest shipmaker, are trying to strengthen plant construction and other businesses as demand eases from European commercial shippers hit by the eurozone crisis.

Qatar’s World Cup spend seen at $130bn

Qatar is poised to spend $130bn on infrastructure projects ahead of hosting the FIFA World Cup tournament in 2022, according to a new report by KFH-Research.

The report said the government plans to invest $35bn to build a rail and metro line, a seaport ($7bn), new roads and stadiums and a slew of hotels and housing projects to upgrade the country’s infrastructure ahead of the event.

EU sanctions target Iran oil, gas, tanker companies

European Union governments on Tuesday imposed more sanctions against major Iranian state companies in the oil and gas industry, and strengthened restrictions on the central bank, revving up financial pressure on Tehran.

EU’s Official Journal has listed more than 30 firms and institutions as targets for freezing assets in the EU, including the National Iranian Oil Company (NIOC), a large crude exporter, and the National Iranian Tanker Company (NITC). Both are vital to the Iranian oil industry, the main source of revenue for the government.

However, Iran rejected the sanctions and insisted it would not work.

Hummawealth to save logistics industry

The Global Coalition for Efficient Logistics – a Swiss-based nonprofit organization with its MENA headquarters in Beirut is developing a comprehensive digital platform, dubbed Hummawealth, which can save about billions of dollars in trade and logistics.

Samuel Salloum, co-founder of Global Coalition for Efficient Logistics, explained that the online platform aims to achieve a double-digit figure in Lebanon alone. As a result of the system, Lebanon can bring down the cost of import and export by 12% to 16% and operating cost by 15%. This translates to a saving of about $1 billion.

The figures are far more impressive at global level. The savings on cost of trade is pegged around $691 billion a year and over $6 trillion from new markets. The system would be made available to end users free of cost.

Iraq suspends central bank governor in forex probe

Iraq’s cabinet named an interim central bank chief on Tuesday after the bank’s well-respected governor was suspended while on an overseas trip amid a currency manipulation probe.

The move followed the announcement of an inquiry into allegations that officials at the Central Bank of Iraq (CBI) had intentionally weakened the value of the Iraqi dinar against the US dollar.

France Telecom to pay Orascom for service contract

France Telecom said on Tuesday it will will pay its Egyptian partner Orascom Telecom Media & Technology (OTMT) $142.30 million for taking over a management services contract of their mobile phone venture Mobinil.

Egypt plays a key part in France Telecom’s efforts to expand in high-growth emerging markets such as Africa and the Middle East. The Paris-based telecoms giant gained a 94% stake after purchasing most of OTMT’s stake in Mobinil this year for $3.11 billion.

Some analysts are surprised by the payment announcement made by France Telecom as they expected OTMT to simply lose the service contract fees because of its reduced ownership of Mobinil.

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