Today’s top business news from the Middle East and North Africa:
The International Monetary Fund (IMF) said on Wednesday it expects oil rich Saudi Arabia, which has been running big budget surpluses on the back of high oil prices, to post a small deficit as early as 2016.
“The projected trend decline in oil prices over the medium term will reduce the surpluses, with the fiscal balance expected to turn into a small deficit by 2017,” the IMF said in a report completed in June and published on Wednesday.
The findings suggested that the euro zone’s debt crisis could lead to weaker global demand and lower oil prices, though it acknowledged that its forecasts involved great uncertainty.
Iraq’s planning ministry said on Wednesday it would be spending $250-275 billion on infrastructure projects and other investments over the next five years.
The oil-rich nation needs development in almost every sector from scratch, as buildings are pockmarked from bombings during the US invasion and subsequent civil war.
Jordan will sign grant and loan deals worth $650 million this month with the United States and several European countries, the state-run Petra news agency reported on Wednesday.
Jordan’s Minister of Planning and International Cooperation Jafar Hassan said the grants and loans will support the state treasury and the implementation of development projects in different fields.
About $200 million will be used to support the state budget, while another $200 million will be utilised for finance projects in fields of water, education, labour and energy, the minister said, adding that the rest will be used to support the state budget and other projects.
The World Bank warned on Wednesday aid-dependent Palestinian economy is on the verge of a collapse unless foreign funding increases and Israel eases its restrictions in the occupied West Bank.
The World Bank forecasted a $1.5 billion deficit in the PA budget in 2012 in a report issued ahead of a conference on Palestinian aid in New York next week. It said only $1.14 billion in donor funding to cover the gap had been received.
The Palestinian Authority (PA), which exercises limited self-rule in the West Bank, receives most of its aid from the United States, the European Union and Arab nations. But over the past several years there has been a shortfall in aid coming from Arab states resulting in the PA being unable to pay salaries to its 153,000 civil servants on time, on several occasions this year. Israel also frequently freezes the payment of taxation money collected on behalf of the PA, adding insult to the already bleeding economy.
Europe’s development bank announced on Wednesday it was preparing to invest up to €200m ($262m) by the end of the year in the Middle East and North Africa region especially in its first investments in Morocco, Jordan and Tunisia.
The European Bank for Reconstruction and Development (EBRD) was set up in 1991 to aid the transition of ex-Soviet bloc countries of eastern Europe and has expanded its mandate in recent years to invest in Jordan, Morocco, Tunisia and Egypt.
The EBRD said the three projects were the first in a series of planned investments for the region, which will be ramped up to €2.5bn ($3.37bn) a year by 2015. Its investments in eastern Europe have helped drive growth and structural change across a range of sectors in central European and ex-Soviet economies.
Iraq’s cabinet approved a $358.8m contract with Italy’s SICIM and Dubai-based Drake and Scull to lay pipelines in the southern Zubair oilfield, a government spokesman said on Wednesday.
The deal is part of a series of contracts aimed at developing Zubair which officials say should have an output of 1.2 million barrels per day by 2017.
Under the two-year extendable deal, the consortium will lay pipelines to transport crude from oil wells to production facilities, will lay water injection pipelines and will replace old lines in the field, Ali al-Dabbagh said.
Development of an offshore gas field by Kuwait and Saudi Arabia has been delayed for months, due to disagreement over where to share out the gas, and the project may not start up on time unless the dispute is settled soon, a senior Kuwaiti energy executive said on Wednesday.
The Dorra gas field, lying close to the shore of the two Gulf OPEC allies, has long been a bone of contention between Kuwait and Iran which also lays claim to part of the field.
While Tehran and Kuwait are yet to agree on their maritime claims, Riyadh and Kuwait stuck a deal in 2000 and have since worked to develop the undisputed part of the field.
Qatar Petroleum, the Gulf state’s energy giant, expects to borrow heavily in 2014 to finance new industrial projects, a senior company official said on Wednesday.
“We will approach the bank market, capital markets as well as consider conventional bonds and sukuk as part of the financing plan,” Meshaal al-Mahmoud, the company’s head of project finance, told reporters at a conference in Doha. “We don’t expect to issue anything this year or next year.”
The financing will be for three projects: Qatar’s Shell petrochemical plant, the Qapco petrochemical plant, and a planned aromatics plant at Qatar’s industrial city of Ras Laffan, he said.
Bahrain has announced it is to build 57,000 units over the next five years, using funding from the GCC’s US$10bn fund allocated to Bahrain in the wake of the Arab Spring unrest, it was reported on Wednesday.
Under the plans, 47,000 units will be built over the next five years and 10,000 more units will be built through partnerships with the private sector, Housing Minister Bassem Al Hamer told the National Assembly on Tuesday.
The plans will cost around BD2.1bn (US$5.5bn) and the majority of the funding will come from the US$10bn allocated to Bahrain by the GCC,Gulf Daily News reported.
The Cabinet approved Tuesday new packages of taxes in another move to fund the controversial salary hike amid indications that the debate on this issue would drag on for some time.
Among the decisions reached by the ministers was slapping a LL1,000 tax on every land line and cellular bill, raising tax on the profits netted by lottery winners from 10 percent to 15 percent and fines on illegal properties that were built along the coast during the Civil War.
Information Minister Walid Daouk told reporters after the Cabinet session ended that the ministers had asked Finance Minister Mohammad Safadi to prepare draft laws on the taxes that had been agreed upon.