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Dubais business invasion
Source: BI-ME , Author: Trevor Lloyd-Jones
Posted: Mon October 3, 2005 12:00 am

INTERNATIONAL. The surge of activity in Dubai this week, with reports of visitors to the GITEX show sleeping in their cars for lack of hotels, signals the continuing break-neck speed of developments in the city. Also in the news from around the region this week: a report of Iraqi business confidence, President Mubarak's son enhances his political position in Egypt, Syria braces for the UN investigation and we look at rising manufacturing costs in the light of inflation pressures and pockets of labour shortages.

GITEX is the 'Dubai Shopping Festival' of the IT industry

The 15th edition of the GITEX trade show and GITEX Shopper drew to a grand close in Dubai this week. There is possibly no other event in the year that demonstrates the draw of Dubai as a meeting point for global service industries as well as its growing pains under the weight of 2,000 exhibitor companies and trade visitors, whose numbers this year increased by 9.77% to 127,724. There were reports of visitors sleeping in their cars and traffic jams stretching across the length of Dubai, from Jebel Ali to Sharjah. All airlines were fully booked out.

In order to encourage more visitors to come to Airport Expo, special arrangements had been made for a shuttle service at 40-minute interval between the two events GITEX 2005 (Dubai World Trade Centre) and GITEX Shopper. ‘Dubai - The Future City 2030’, a unique and innovative talent contest designed to spur creativity witnessed many entries.

To deal with the significant increase in trade visitors, DWTC added 20 registration desks to decrease queuing and recruited 75 ushers to assist visitors in the registration process. Separate desks and soft seating areas were located near registration desk clusters to facilitate the visitor registration process. 

The retailers at GITEX Shopper also reported sales of AED76 million (US$20.7 million), marking a 36% increase and bright prospects for more post-event deals. The seven-day IT retail extravaganza proved to be a big draw for consumers who totalled 117,994, in addition to trade visitors, an increase in footfall of over 9.25% over last year. They were overwhelmed by promotions, value-addons, and cash prizes, one kilogramme gold a day offers and much more from vendors and resellers. A total of 1,011 local, regional and international media personnel also visited.

GITEX once again proved that it is one of the leading IT exhibitions in the world by attracting a huge number of trade visitors as well as the latest technologies and lifestyle products. A recent study of IT and business professionals in the Gulf has underlined its importance, with almost 88% of those surveyed aware of the event.

The 'GCC Technology Trends' study, which surveyed 642 users of the AME Info website, aimed to evaluate the response to this year’s GITEX. Among the main reasons for its success suggested by respondents, was the direct access to potential customers and high levels of interaction.

“What we found was extremely high levels of brand awareness for GITEX in the GCC, along with strong support for its extension and growth,” said Siva Raj, Account Director and survey leader at TNS Middle East and Africa, the global provider of market information that conducted the study.

Final figures are expected to show that laptops were this year's biggest seller, with 66% of respondents looking make a laptop purchase. In the 'Most Popular New Product Category,' the Toshiba Qosmio laptop was ranked of highest interest among respondents.

Mobile phones were also extremely popular, with a total 33% of respondents aiming to purchase one in the coming months. Motorola's stylish Razr phone finished highest among the phones in the 'Highest Interest' section. Innovative concepts discussed by respondents included a virtual PA capable of monitoring email and planning schedules, as well as a system that would be able to keep companies up-to-date with latest product sales and production problems.

The study recorded the views of a sub-sample of IT specialists, who were asked to name their key priorities in their business technology strategy. These included greater system integration, a technology-enhanced level of customer service, and an increased level of data security.

Management concerns were similarly taken into account with 61% citing higher IT enabled business efficiency as a top priority, 36% arguing for increasing their competitive advantage through utilising IT products, and 33% wanting to align IT and business goals.

Overall trends therefore portray the increased importance of the international IT business within the GCC as well as the burgeoning demand from consumers for technology in the home.

“In all, the study provides the most extensive insight into the technology market available today, indicating the new trends, challenges and opportunities within the Middle East for IT companies,” said Klaus Lovgreen, CEO, AME Info.

Helal Saeed Khalfan Al Marri, Director General, Dubai World Trade Centre (DWTC), said: “The significant increase in the number of visitors has proved once again that GITEX is the most important platform for industry professionals and businesses to network . Sizeable deals were concluded during the five-day event and potential business prospected during GITEX are expected to generate millions.”

The various product launches by IT majors, a marked increase in the number of deals and visits by corporate VIPs were the hallmarks of the show which has made IT history in its 25th edition.

Jyoti Lalchandani, Director, IDC Middle East and Africa, said: “In its role as a forum for the promotion of new technologies and services, it serves as a valuable educational outlet that helps generate interest in IT and its potential. In addition to encouraging uptake of the latest technology, this helps drive the sale of commodity products, which in turn furthers awareness.

Lalchandani added: “GITEX also brings people together who may not have otherwise met, companies and representatives from countries like Bangladesh, India, South Africa and even Canada and Australia as well as the Middle East establish relationships that can lead to long-term partnerships that not only promote the region's IT markets but helps the economy in general.’’

The telecom major Etisalat included an array of impressive futuristic technologies and applications in the 'Future' section of their GITEX 2005 stand. Much like science fiction, these technologies are propelling telecommunications and entertainment options into a whole new era.

Mohammed Sharaf, Marketing Manager, Middle East, Egypt & Pakistan, Lenovo, which made its debut at the show said: “Our participation at GITEX 2005 was an amazing success for a debutant company like us. Our new products launched during the show attracted keen interest from across the region.’’

Microsoft hosted a demonstration of the 'New World of Work'. This showcased a dramatic change in the way information workers access information, and it provides an opportunity for people to unleash their creativity and productivity, and realise their full potential.

Bahwan IT, one of Microsoft's most important partners in Oman, received qualification as a Gold Certified Microsoft Partner, the company announced at GITEX.

eCompany, Etisalat's one-stop e-powerhouse Business Unit announced new enhancements to its SecureAccess package meant for large enterprises and SME customers. Nokia enabled a Push-To-Talk service for Etisalat, by deploying its push-to-talk over cellular network solution during GITEX.

In other big announcements Emirates Computers reported a more than 25% increase over the US$3 million in sales last year. "We have met our expectations and improved our volume of sales by a substantial 25% this year," said Sales Manager, Nidal Ghazreddine.

Miran Ellahee, Marketing Manager of the local electronics retail chain Plug-Ins said that the crowds were definitely bigger and better than in the past and he had a 50% jump in sales from last year.

The success of GITEX also ensured extra benefits to Dubai city in terms of hotel occupancy. Given the rate of hotel openings in Dubai, that still progresses at the rate of one per month, this was a major achievement.

The Dubai Department of Tourism and Commerce Marketing (DTCM) reported 100% occupancy for all leading city and beachfront hotels during the event.

"This major annual event provides a momentum to the growth of the hospitality industry that has already witnessed all-round success," said DTCM Director Operations and Marketing, Mohammed Khamis bin Hareb. 

The multi-pronged strategy to ease traffic congestion was responsible for significantly easing the flow of vehicles in and around the DWTC complex. DWTC, DTCM, Dubai Police, Dubai Municipality, Avis and Valtrans contributed to the successful implementation of the strategy, DTCM said in a statement.

Constitutional meetings in Iraq, talks on oil exploration agreements

The American ambassador in Iraq, US Ambassador to Iraq Zalmay Khalilzad started what can be called as last moment negotiations with the Shiite and Kurd factions this week, with the aim to amend the draft constitution to ensure the support of the Arab Sunni in the referendum, weeks before it is held.

The Chairman of the Constitutional Committee Humam Hammoudi, a member of the Shiite coalition list, said that a delegation representing the American embassy discussed the paper of proposals given by the Arab Sunni to the Kurdish sides during a visit to the Kurdistan area.

He indicated the main points included in the paper are first: that Iraq to be one united country and the constitution to preserve this unity. Second: confirming the use of the Arabic language in Kurdistan. Third: the constitution to be only changed by a referendum, rather than getting two thirds of the votes of the parliament. It is worth noting, that in the US, a wide and very diverse country politically, a change of the constitution is very difficult, to ensure that the principals in it are well protected.

Hammoudi explained that the last (third) point was rejected and leads to the destabilisation of the country, but he said that his coalition does not oppose adding article one and two if they are agreed in the national society.

The Arab Sunnis oppose mentioning the principle of the federalism in the constitution and consider it a danger that will be conducive to partitioning the country.

In the same context, a high ranking Kurdish official said on Friday that the oil exploration agreements in North Iraq will be negotiated upon with the central Iraqi government and the regional Kurdish government if the permanent constitution is approved in the referendum to be carried out in mid-October.

However, the Prime Minister of the regional Kurdish government Omar Fattah said in a press statement following an Iraqi-Singapore work forum that the regional government will have control on the production in the district of Kurdistan and on exports abroad.

President Mubarak considers education as Egypt's gateway to future

Modernising education in Egypt is one of the top priorities of President Hosni Mubarak who considers education as Egypt's main gateway to the future, said Egypt's Minister of Higher Education and Scientific Research Amr Salama this week.

In an address marking the opening of the cultural season of Cairo University, he said that developing higher education and establishing a link between higher education and the demands of the labour market had been two of the main topics on the President's electoral platform.

Salama said that the academic sector was in need of a makeover based on guaranteeing the financial and academic independence of universities. He spoke about a bill currently being drafted by lawmakers to acknowledge the independence of the universities and define their relationship with the state.

Mubarak's son gears up his political machine

Egyptian President Hosni Mubarak’s strongest challenger to the presidency, Ayman Nour, has said that democratic transfer of power to rule the country is just a “matter of time”.

Nour, who was the presidential candidate of the Al Ghad (Tomorrow) Party, was responding to a statement of Jamal Mubarak, son of Egyptian President Hosni Mubarak, on his father winning the recent presidential election.

During the conference of the National Democratic Party conference which was concluded on Friday, Jamal Mubarak, who presides over the higher committee for policies, moved again to enhance his position.

He vowed in his speech before the conference on Thursday to introduce more constitutional and legislative reforms in order to develop the party life and enrich pluralism and political competition and opening new horizons for the freedom of the opinion and expression.

The younger son of the Egyptian President said: “We recall together today the general congress of 2002, when the party stood at a critical moment in which it entrusted the inevitability of making change, stressing that the party should launch the next parliamentary elections, confident in the vision and the views achieved since that conference."

Jamal Mubarak promised to improve public services and improve the quality of education and health care through stretching the umbrella of health insurance for every Egyptian citizen.

Jamal Mubarak denied news on his nomination for the elections of the next parliamentary term. He refused in a press conference that followed his speech to give a clear answer on the possibility of running in future presidential elections in 2011, saying that this is premature.

Ayman Nour has said he is already beginning to prepare to run against Mubarak junior in the next presidential election. On the other hand, the presidential candidate of the Al Wafd party, Nouman Gomaa, has said that he was sure Jamal Mubarak would contest the next presidential election on the ticket of the ruling National Democratic Party, (NDP).

“This means he is going to take up power in the same way his father did during the recent election,” Gomaa said and warned that Jamal Mubarak could even win the election by “recommendation” in case there were no other candidates to contest against him. He also said there could be “fake contestants” to divert him in the next presidential election.

Although President Mubarak has repeatedly denied there was plan to have his son succeed him, he did not deny that Jamal could be the NDP’s presidential candidate when the post becomes vacant. Architects of Mubarak’s campaign strategy in the recent election refused to comment on the issue, saying that it was not appropriate to mention names at this stage.

Whatever the case, the Egyptian on the street and other observers have drawn a number of scenarios for Jamal’s inheritance of power although the issue would not be as easy as it is being portrayed.

The stance of the "silent forces" on the issue of power inheritance is not yet known. Unlike the opposition parties that take to the streets in protest, these forces, including the armed forces and other security forces, cannot go on demonstrations nor can their stances be predictable and this leaves the door of surprise wide open.

Some observers say Jamal Mubarak’s economic experience has strengthened his position in setting up a new team of young men, which have succeeded in halting the sharp depreciation of the Egyptian Pound, after it lost more than half of its value within two years. The country’s foreign reserves have also been rejuvenated and they now stand at over US$20 billion, up from the US$14 billion in 2003.

Despite this monetary achievement, it has still not been reflected much in the living conditions of ordinary Egyptians, who continue to complain about the high cost of food, accommodation, and the high rate of unemployment. A UN report has indicated that about 43% of Egyptians live below the poverty line.

UAE manufacturing and construction feels rising costs
The rising cost of raw materials, rents, fuel costs and increasing wages have begun to hurt the margins of the UAE enterprises, according to a recent MEED-HSBC survey. While the manufacturing sector has begun to complain of the pressures, analysts have recently sounded warnings that the increasing input cost will adversely affect the UAE's non-oil economy in the near future.

Sharply rising housing rental costs in Dubai and the recent petrol price and cost-of-living increases, are feeding into higher salary demands and in some cases labour shortages. The increases in prices have resulted in rises in the cost of production in several key sectors.

"We are facing problems on all fronts as a locally based manufacturer," said Amjed Ali, an Ajman based furniture manufacturer and a major sub-contractor to the boat making industry, in an interview for the Khaleej Times.

“In one year, our raw material cost has gone up by more than 30%. Labour cost too is rising. The worst seems to be on our way. Last month we lost ten of our best carpenters and six technicians who opted for better paying jobs in Qatar,” he said.

The shortage of skilled labour is already being felt in many sectors of the economy. “We no longer get good skilled labour at viable costs. A good automobile mechanic is not willing to take up a job for anything less than AED4,000 per month. A year ago we could get the same labour for half that money,” said G S Menon, owner of an automobile workshop and body repair unit. Rising rents had also forced Menon to shift his garage from Sharjah's Industrial Area to a remote location near Sharjah University.

A recent survey by HSBC and the Middle East Economic Digest with YouGov confirms the inflation trend. The survey indicated that a shortage of skilled labour could hurt businesses in the region. As it is already happening, a number of skilled personnel are leaving their jobs because they simply cannot afford the rents and rising cost of living.

Some 75% of the respondents to the MEED survey said there is shortage in skilled labour, while out of 80% of contractors who said there was a skills shortage, almost half described the situation as "serious". Nevertheless, as the exclusive poll of senior business leaders in the region reveals, confidence remains high, even as inflationarypressures are beginning to take their toll.

The HSBC-MEED Middle East Business Confidence Index (MEBCI), combining the results of the regional business confidence survey and forward-looking economic data, shows a region full of optimism. In the four months since the publication of the last MEBCI in March 2005, the rolling four-month index of oil prices was up to US$49.10 a barrel from US$40.10, with production also up by 4%.

In the same short period, expert forecasts for 2005 gross domestic product (GDP) for the GCC countries along with Iran and Egypt rose 7%. Overall, the MEBCI has fallen slightly since Spring 2005.  However, this is by no means indicative of an economic slowdown, but more a reflection of already high expectations reaching a plateau.

“Business confidence is very high,” said Martin Amison, a partner and international head at the law firm Trowers & Hamlin. “And it has been a very short Summer. There hasn’t been much of a tail-off in activity, and there is unlikely to be in the foreseeable future. I’ve never seen Bahrain buzzing as it is now. The UAE is extraordinary and in Saudi Arabia there is a huge amount of work going on in petrochemicals, and lots of growth in most economies."

Notwithstanding oil production below the norm, Oman is doing well too, topping up the state reserve fund and announcing a number of major projects.

“Oil is a major driver, and the liquidity it creates allows increased government spending,” said RandaAzar-Khoury, Chief Economist at NationalBank of Kuwait.

“The spillover into the private sector brings increased confidence and reduced capital outflows from the region, and the combination of these factors with an increasingly favourable geopolitical environment has led to a boom.

”“The regional economy is doing extremely well,” added a senior banker at Saudi HollandiBank. “There are swathes of new contracts and major oil, gas, power and water projects allready for development. The market is very liquid, unemployment is falling and the banking sector is performing extremely well.”

On a scale of one to ten, prospects for economic prosperity over the next 12 months scored seven points, continuing the upbeat outlookof the last survey in March this year and only slightly behind in terms of the actual score.

Three-quarters of MEBCI respondents now expect year-on-year growth in net profits in 2005 to exceed 5%, including 28% who believe the profits increase will be in excess of 15%.

Similarly, 74% of those surveyed expected 2005 revenues to be at least 5% higher than those for 2004, with 35% expecting growth of more than 15%. Strikingly, 40% of respondents in the construction sector expect turnover to increase by more than 15%. Companies with a turnover of more than US$100 million a year expect the greatest rises, with almost half forecasting 2005 growth in excess of 15% and 87% expecting a rise of more than 5%.

Respondents were also confident of continued high oil prices. In terms of their importance as a driver of economic change, crude costs scored an average of eight out of ten among those surveyed. Only 11% of respondents thought that oil prices would fall below US$50 a barrel in the next six months, with 37% expecting prices to remain above that level for more than a year.

But inflation is of particular concern in the UAE. “The increasing cost of living is a very big issue, especially in Dubai,” said Martin Amison of Trowers & Hamlin. “Personnel at the low income end of the scale are leaving because they can’t afford rents, so companies are having to review their pay structure for secretarial and support staff. There is a huge dearth of office accommodation in Dubai and demand is so high that people can charge whatever they want. Either salaries will have to rise or support staff will be forced to move out.”

There is other evidence that wage levels are beginning to rise, although this is an added burden for employers. Project manager salaries for local labour in the UAE jumped by 9% in June 2005 to US$6,000 a month, and the monthly salaries demanded by local site engineers rose to US$3,500 from US$3,000 over the same period. Wages for skilled labour in Dubai have increased by as much as 10-15% in the last 12 months, according to MEED.  Two-thirds of those surveyed by MEED said that their government should do more to allow the import of skilled labour.

“The Labour Ministry gives us too few visas or the people that we need,” said one contractor in Saudi Arabia’s Eastern Province. “There is a block visa issue. The regulations just don’t fit with the reality of the situation.”

Over the long term, however, the quality of local labour has been gradually improving. “The restrictions on foreign labour do put some pressure on the market, but locals are replacing expatriates quite quickly,” said a Saudi banker. “Training is in place, but the problem is that particularly those workers coming to the cities for the first time lack experience, so it is taking two-three years for them to develop the necessary skills.

There are some fears that the rising prices may put a limitation on the country's rapidly expanding non-oil economy. According to economists, UAE's monetary policy measures are weak as far as inflation targeting is concerned. Unlike many other developed nations, without income tax, VAT or a consumer credit sector, the fiscal options for controlling inflation are more limited.

“The local interest rates follow the US rates due to the direct currency peg. The only other monetary policy tool used in the country is the sale of certificates of deposit (CDs) by the central bank. It is time the central bank had some control over the liquidity in the financial system through a variable or compulsory reserve ratio imposed on time and demand deposits held by banks,” said one economist.

The use of interest rates as an inflation control tool has become an issue in the current environment. “Minor interest rate adjustments are inadequate to deal with the overwhelming impact of high liquidity in the UAE. The money [supply] policy can work as an anti-inflationary tool only when the relative impact of liquidity is small and its opportunity cost is high,” said an economist with a foreign bank.

Syria braces against UN investigation

The Syrian regime is bracing itself for a political shock when the findings of the UN investigation into Rafiq al-Hariri’s assassination are announced. What will this mean for the economy?

As Detlev Mehlis, the German prosecutor heading the UN investigation, prepared on 20 September for his first round of interviews with Syrian security officials, the government’s senior economic policy minister was announcing a set of measures aimed at stabilising the exchange rate. Abdullah al-Dardari, recently promoted to the post of First Deputy Prime Minister for Economic Affairs (and rumoured to be in line to become Syria’s next Prime Minister), said that interest rates had been raised by half a percentage point to counter short-term pressures on the Syrian Pound.

Minister Dardari also said that higher ceilings had been set for permitted sales of foreign exchange to Syrians travelling abroad, and he announced plans to start issuing certificates of deposit yielding 9% returns. Flanked by the Governor of the Central Bank of Syria, Adib Mayaleh (a French-trained economist appointed at the end of 2004), Dardari said that the new measures come “in the framework of our economic reform programme, entailing a shift to a social market economy”.

These efforts to calm the foreign exchange market come amid reports that the value of the Syrian Pound on the black market has slipped to about S£56:US$1, compared with the bank rate of S£52:US$1, as the conclusion of the Mehlis investigation approaches. Any reference in the UN’s final report to a Syrian role in the assassination would have major reverberations in Damascus, and would be likely at the very least to lead to the imposition of economic sanctions.

According to Dardari, there are no grounds for concern. He pointed to a recent surge in investment in Syria by Gulf Arabs and Syrian expatriates, stemming from the enormous increase in liquidity in the Gulf states as a result of high oil prices. He also claimed that Syria enjoys an extremely strong foreign exchange position, with hard currency reserves equivalent to 29 months of imports. As the central bank does not publish figures for foreign exchange reserves, it is hard to check the validity of this claim, which, based on 2004 imports, would imply that reserves stood at some US$13 billion. However, this figure is consistent with the most recent entry in the IMF’s International Financial Statistics for net foreign assets of the banking system, which stood at the equivalent of US$13.5 billion at end-March 2004.

As a modest net oil exporter, Syria has drawn some benefits from the rise in oil prices. However, this has been offset by the sharp decline in Syrian oil production. The government has not provided any recent figures, but has conceded there has been a decline in output. The International Energy Agency (IEA) has estimated that production was around 500,000 bpd in 2004 and fell to around 480,000 bpd in the first months of 2005. However, figures from the country’s main producers suggest that output is actually significantly lower, and probably stands at less than 420,000 bpd.

The Royal Dutch Shell group, which is the operating foreign partner in Al Furat Petroleum Company, said in August that its oil production was running at 200,000 bpd. The only other significant foreign operator is Total of France, whose local affiliate produced at an average rate of 36,000 bpd in 2004, according to Total’s annual report. More recent data is not available, but output has been on a declining trend. The Syrian Petroleum Company is producing an estimated 180,000 bpd. With domestic demand running at around 280,000 bpd, net exports may be as low as 120,000 bpd, compared with a peak of around 400,000 bpd in the mid-1990s. Syria’s earnings were also boosted up to March 2003 by cut-price oil piped from Iraq.

Syria’s exports actually fell in 2004, resulting in the first trade deficit since 1998, as imports also recorded a sharp increase. The current account remained in surplus, mainly because of a 90% rise in services credit, arising from a big increase in the number of foreign visitors (principally Gulf Arabs and Iraqis). It appears that Syria is not well equipped to deal with a bout of tough economic sanctions, particularly given the country’s heavy reliance on foreign aid for capital projects.

Meanwhile Lebanese diplomatic and political sources expect that the Chairman of the UN investigation committee into the assassination of Lebanese Prime Minister Rafiq al-Hariri will implicate Syrian officials of involvement in the assassination of Hariri.

A Lebanese political source said that all "indicators say that Mehlis will get certain Syrian officials involved in the case," noting that "such a measure will place Syria under international pressures to hand over the suspects for trial, and will intensify the calls for the resignation of the Lebanese President Emil Lahoud."

Such a controversy is expected to create more instability in Lebanon which has been witnessing since the assassination of al-Hariri on February 14, the worst wave of explosions and acts of assassination since the end of the civil war in 1990.

Political sources said after Mehlis's visit to Syria, Syrian officials said that their country cooperated with the UN committee and that the investigator had no one Syrian suspect. Mehlis, whose investigations results will be announced later this month did not disclose the details of the investigations.

Saudi women may get Foreign Ministry posts

Saudi Arabia is likely to appoint a number of distinguished Saudi women for foreign ministry posts, including the status of ambassador, according to press reports quoted by the IslamOnline (IOL) website.

It was reported recently that a high-level Saudi committee was currently studying the nomination of women academicians to fill the posts of ambassadors, and that appointments were expected to be declared soon. An expert on Saudi affairs said the expected measure was meant to “change its image abroad”’ and to cope with reforms in other Arab Gulf states in the field of women’s rights, for example in Kuwait where women have just been given the right to vote.

Saudi female activist Salwa Haza’a told local reporters that during a meeting with the committee tasked with improving the Saudi image abroad, Saudi Foreign Minister Prince Saud Al Faisal stressed that Saudi women occupying top posts in the foreign ministry was around the corner.

Speaking in London on the sidelines of a meeting of a Saudi-British forum, Prince Saud said that this year would witness recruitment of women to the prestigious post of ambassador.

Ashraf Kishk, director of the Diplomatic Centre for Strategic Studies in Cairo, told IOL that Saudi Arabia was trying to catch up with other Arab Gulf states in the domain of women’s political rights. He added that the Saudi move came in reaction to a US State Department report issued in June 2005, alleging Riyadh was involved in human trafficking, a claim the Saudis have instantly dismissed.

The Saudi move follows an announcement by the Foreign Ministry during the last few months, which opened up about 70 vacancies for women, including 19 career opportunities for international affairs researchers.

The Saudi Labour Ministry has issued a decision employing women in retail sales of female clothing and prohibiting males from such jobs. As a result, lingerie stores were told to replace their male staff with women. In June 2005, Al Watan newspaper quoted Major General Mohammad Abdel Aziz Al Ferih, Secretary General of the Anti-Drugs Committee as saying the Saudi interior ministry was considering future employment of women to provide consultation on drugs addiction among women.

Iraqi business optimism about the future

An international survey of more than 600 Iraqi business owners and managers suggests that a majority of them are optimistic about Iraq's economic and political future.

The Center for International Private Enterprise (CIPE) and the Zogby International polling firm, both based in Washington, conducted the survey of 641 owners and managers of Iraqi small, medium and large businesses in five Iraqi cities: Baghdad, Arbil and Kirkuk in the North and Hilla and Basra in the South. The fieldwork for Baghdad, Hilla, Basra and Kirkuk was conducted from 17-25 July. For Arbil, it was conducted from 28-30 August. The results of the survey were released in Washington last week.

More than three-quarters of the businessmen said they anticipate growth in Iraq's national economy during the next two years, although 45% of them indicated that they do not expect their company profits to climb during the next six months, according to the survey. Some 3% of the respondents said they believe that the Iraqi economy will shrink.

The survey indicated that business has grown throughout most of Iraq since the end of Saddam Hussein's regime in 2003. More than 40% those surveyed said they have added employees since that time and about 30% said the number of their employees has not changed, for a total of 71% saying their employee figures have grown or remained stable.

The percentage of business leaders expressing optimism about Iraq's economic future - at 69% - is unchanged from the results obtained in a similar poll taken by the same groups a year ago. Optimism was highest in Arbil in the far North (99%) and in Basra in the far South (92%). The optimism quotient for Baghdad and Hilla was in line with the national figure. In stark contrast, only 9% of business people in Kirkuk said they were optimistic about Iraq's economic prospects.

As for Iraq's political future, the poll results indicated that 60% are optimistic, 9% pessimistic, 26% neutral and 6% unsure.

The level of optimism reached 93% in Arbil, followed by 73% in Hilla, and 71% in Basra. Among business leaders in Baghdad, 58% expressed optimism about the country's political future. In Kirkuk, the optimistic assessments accounted for 7%, the pessimistic for 24% and the neutrals for 55%.

The poll turned up a number of other indicators of the state of the Iraqi economy. Almost half the respondents said the new Iraqi government represents and protects their interests. One in five disagreed with that statement.

The number one way the Iraqi government could help the business community was to get the security situation under control, according to 33% of the business leaders. That figure rose to 45% in Baghdad. Some 57% of the leaders indicated that security has improved since the fall of Saddam Hussein, but 38% said it has worsened.

A substantial majority of the business people - 71% are optimistic about the prospects for nationwide stability following the elections, scheduled for December. And 84% of them said that economic stability in the regions will be enhanced by the elections.

The poll results showed that an overwhelming 82% of Iraqi business leaders believe that a democratic and diverse government will bring economic benefits. Another 62% said the business community is able to influence government policy.

In a sweeping change from the results of the poll taken in 2004, most of the business leaders named the political parties they thought best represent them in this year's sounding. Only 13% of the respondents declined to name the party they support. In the poll taken in 2004, 72% of the respondents did not express a preference for a political party.

Two years after the fall of Saddam Hussein, the Iraqi economy is still based primarily on cash, with 70% of business owners saying it is the basic means of exchange they use, according to respondents to the poll. Bank transfers are preferred by 24% of business people, and credit cards are used by 1% of the respondents to pay for goods and services, the poll showed.

Some 53% of the business people said they never have taken out loans to start or expand their firms, the poll showed. Another 8% said they attempted to receive loans but their application was rejected. 29% said they have borrowed money successfully.

Some 82% said they welcome opening Iraq's borders to international business. The Gulf states received the most endorsements (23%) as the place that offers the best commercial opportunities. In descending order were Syria (13%), followed by Lebanon, Europe, Turkey, Jordan, the US and Iran.

The employment of women in Iraq has surged during the past year, according to the poll. In late 2004, 43% of the business people said they employed women. In the 2005 poll, the figure was 63%. The percentage is even higher in Baghdad (68%) and highest in Arbil (91%).

UN envoy meets with Palestinian, Egyptian leaders on Lebanon      
The United Nations envoy seeking an end to foreign interference in Lebanon met with Palestinian Authority President Mahmoud Abbas in Cairo this week and conferred with Egyptian President Hosni Mubarak.                                                              
At the beginning of the year Terje Roed-Larsen was appointed Secretary General Kofi Annan's Special Envoy for implementing Security Council resolution 1559, which calls for withdrawing all foreign forces from Lebanon, disbanding all militias, extending government control over the whole country and holding free elections. Since then Syria has withdrawn its troops from its smaller neighbour, and Lebanese elections were held in June.                                      
Abbas expressed his full support for Roed-Larsen's mandate and the full and complete implementation of all the provisions of the resolution. They agreed to remain in close contact. The envoy also met with the Secretary General of the Arab League, Amr  Moussa, and reviewed the latest developments in the Middle East,  particularly in Lebanon.



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