Iraqis Vote, Hope for Better Future

By Afif Sarhan, IOL Correspondent

BAGHDAD — Amid tight security, millions of Iraqis went to polling stations on Saturday, January 31, in the country's provincial elections they hope to bring peace and security to the war-torn country.

"It is a pleasure to be here today on a shared democracy," Hassan Fawad, 26, told IslamOnline.net as he cast ballot in Yarmouk district polling station in Baghdad.

"Since I was kid I never understood the real meaning of this world but today it was clear to me.

"It is our chance to have our voice inside the government by electing someone we know or had the chance to hear their proposals."

About 15 million people are eligible to cast ballots to elect 440 councilors from among more than 14,400 candidates in 14 of Iraq's 18 provinces.

Polling closes at 5 pm (1400 GMT), with results expected to start rolling in on Tuesday.

In Sadr city, the major Shiite suburb in Iraq, voters did not hide their preference to cast ballot to candidates backed by Shiite leader Muqtada al-Sadr.

In southern Iraq, a huge preference was seen between the influential Islamic Supreme Council of Iraq and a coalition headed by Prime Minister Nouri Al-Maliki's Dawa Party.

"The democracy is everywhere in Iraq today," said Lt. Dirar Muhammad.

"Any person that eligible to vote, despite his actual profession or living condition, had a chance to chose their candidates.

"Security is guaranteed in all poling stations and people are leaving after voting with the sureness of safety never seen in their eyes before."

Iraqi authorities have sealed borders, shut down airports and imposed transport bans and night-time curfews as part of a massive security lockdown for the polls.

The provincial elections are part of a US-backed plan to reconcile rival groups, particularly Sunni Arabs, who boycotted the last round in 2005.

The poll results are also expected to set the national mood before the general elections, scheduled later in the year.

Jubilant Iraqis

Many voters hope that the provincial election will bring their country up from years of sectarian strife and strengthen its fledgling democracy.

"Four years ago we stayed in our home scared that on our way to the station we could be killed," Kassim Abid, 52, said as he cast ballot in a Baghdad polling station.

"But today I woke up in early morning, made my pray thanking God for the opportunity and went with my family to give our participation on our country's future.

"I never felt so good. The sensation of democracy could be touched and after years of imposed government, we could today choose the ones we thrust to represent us.

"I know it is a temporary illusion but it is nice to feel that Iraq is moving forward and not backwards.

Six policemen and a civilian were injured Saturday in a bombing in the mainly Shiite Turkmen town of Tuz Khurmatu north of Baghdad.

Four flash bombs also exploded near several polling centers in the Sunni Arab town of Tikrit, the hometown of former president Saddam Hussein, with no casualties.

But this did not discourage Iraqis from casting their ballot.

"Voters are showing pleasure in having their fingers stained with the blue-violet ink, while four years ago it was enough reason for people fear their lives," said Ahmed Moussa, a political analyst who was at one of Adhamiyah district's polling station.

"When you look at the polling stations voters, you find out the huge variety of gender, age, professions and sect. Soldiers, prisoners, housewives, teachers, students, all together in the same place looking for the same aim that is elect their representatives."

Voters were also expected to turn out in large numbers in areas where Sunnis largely boycotted the 2005 national elections.

"As much as Sunnis participate in this election, more probable of stability is expected in Iraq," said Samir Farhan, 41, father of two and resident of Ramadi, west of Baghdad.

"Many fighter groups have understood the importance of this elections for the country's future.

"I believe that it isn't only that security is high in everyplace because it never was an excuse for resistance groups, but they also expect changes and are aware that a fair and clear election is the best way to show American troops that their time in this land is over."

Source : IslamOnline.net

SABB Takaful seals deal With Saudi Arabian Airlines

by Martin Morris
Saudi insurance firm SABB Takaful said on Saturday it signed an agreement with the kingdom's flagship carrier Saudi Arabian Airlines to provide its passengers with sharia compliant travel insurance products.

The agreement will cover both Saudi Arabian Airlines' domestic and international flights, SABB Takaful said in a statement.

Saudi Arabian Airlines carried 18 million passengers in 2007.

SABB bank owns 32.5 percent of SABB Takaful and another 32.5 percent is owned by subsidiaries of HSBC.

Saudi Arabia, potentially one of the most lucrative markets in the world, has licensed about 30 insurance firms in the past three years and is considering applications by 10 others to try to open up the insurance sector in the world's top oil exporter.

The largest Gulf Arab economy is one of the world's most under-insured areas, partly due to a belief among some Muslims that insurance could indicate a lack of religious faith.

Saudi Arabia plans to make health insurance compulsory for both the indigenous population and expatriate workers.

Source : ArabianBusiness.com

Erdogan gets a hero’s welcome

ANKARA: Turkish Prime Minister Recep Tayyip Erdogan yesterday stood by what he said during a heated debate with Israel’s president as the Jewish state sought to calm tempers, saying bilateral ties would recover.

Erdogan received a hero’s welcome home and Hamas and Islamic Jihad hailed his “courageous stand” after he walked out of the debate on Gaza at the World Economic Forum at Davos following a clash with Israeli President Shimon Peres.

Peres had launched a fiery defense of his country’s offensive in Gaza over the past month, and with a raised voice and pointed finger, questioned what Erdogan would do if rockets were to be fired at Istanbul every night.

“President Peres you are older than me and your voice is very loud. The reason for you raising your voice is the psychology of guilt. I will not raise my voice that much, you should know that. When it comes to killing, you know very well how to kill. I know very well how you hit and killed children on the beaches,” he said during the panel discussion, which also included United Nations Secretary-General Ban Ki-moon and Arab League chief Amr Moussa. “The death of civilians cannot be seen as a simple work accident.”

Erdogan later stressed that he had not targeted Peres personally or the people of Israel. “My reaction (walkout) was to the moderation,” he said, explaining that Peres had been given 25 minutes by the moderator to talk while the others on the panel were given less time. The moderator, Washington Post columnist David Ignatius, had given him a minute to reply, then asked him to finish, saying that people needed to go to dinner.

On his return to Istanbul, Erdogan told a cheering crowd: “We will never allow anyone to show disrespect to the prime minister of Turkey.”

Thousands of people gathered at Istanbul’s Ataturk Airport to greet Erdogan, waving Turkish and Palestinian flags and chanting “Turkey is proud of you.”

Turkish President Abdullah Gul said: “Nobody should expect the prime minister of Turkey to swallow a disrespectful act. He gave the necessary response.”

Peres said yesterday he hoped relations with Turkey would not be affected by the heated exchange and added he had spoken to Erdogan by telephone after the debate.

“We don’t want conflict with Turkey. We are in a conflict with the Palestinians,” Peres told reporters in Davos.

“I called him up and said, ‘Yes, I do not see the matter as personal ... and the relations can remain as they are’,” Peres said. “My respect for him didn’t change. We had an exchange of views.” Some Turkish newspapers reported that Peres apologized to Erdogan. Peres spokeswoman Ayelet Frisch denied that.

The Turkish military indicated its ties with Israel would not immediately change.

“The rule is to act according to national interests in bilateral military relations with all countries,” Brig. Gen. Metin Gurak, the military spokesman, said in response to a question on the possibility of cutting military ties.

Red and white Turkish flags flapped next to green Hamas banners at rallies throughout Gaza City yesterday, as well as the ruins of a bombed-out mosque in the Gaza refugee camp of Jabaliya. About 5,000 Hamas supporters rallied in front of the ruined Palestinian Parliament, some waving Turkish flags and carrying pictures of Erdogan.

Source : ArabNews

DIB moves to improve corporate governance

by Rebecca Bundhun

Dubai Islamic Bank (DIB) has signed a "founding member" sponsorship agreement with corporate governance organisation the Hawkamah Institute, the bank announced on Thursday.

DIB said that the move shows its commitment towards strengthening its corporate governance standards.

“The Shariah Supervisory Board has become an indispensable aspect of our corporate governance and will be well paired with the objectives of Hawkamah, which aims to ensure these standards are being met to better protect all those associated with the bank,” said Abdulla Hamli, DIB’s chief executive officer.

Many experts have long called for increased regulation and transparency of Islamic banks, which are still relatively new to the market.
“Corporate governance plays a critical role in the development of modern businesses as it enhances investor confidence and helps in developing the capital markets of the region,” said Nasser Saidi, executive director of Hawkamah, said

“Islamic finance has experienced unprecedented growth so far, but the enactment and implementation of well defined corporate governance structures is essential if trust and confidence is to be maintained.”

Erdogan wants Obama to redefine terrorism in Mideast

DAVOS, Switzerland: Turkey’s prime minister had a message yesterday for US President Barack Obama: Redefine terror and terrorism in the Middle East and use it as the basis for a new American policy.

Recep Tayyip Erdogan, whose country has played a key role in trying to mediate between Israel and Syria and the Palestinians, said Obama’s new Mideast envoy, George Mitchell, will be in Turkey for talks Sunday.

“President Obama must redefine terror and terrorist organizations in the Middle East, and based on this new definition, a new American policy must be deployed in the Middle East,” Erdogan told the World Economic Forum here.

The Turkish leader appeared to be referring to the US position toward Hamas and Hezbollah, which the United States considers terrorist organizations. While both have military wings, Hamas seized control of Gaza in 2007 and remains in charge following the recent Israeli invasion.

Hezbollah is a major political force in Lebanon.

As a Muslim country that belongs to NATO and is seeking membership in the European Union, Turkey has served for the West as a bridge to Hamas and Hezbollah.

Alluding to Turkey’s unique position, Erdogan prefaced his message to Obama, saying that “compared to the Western countries, we speak best the language of the Middle East.” Before the Dec. 27 attack on Gaza, Erdogan said Turkey had been deeply involved in mediating between Israel and Syria and was awaiting a response from Israeli Prime Minister Ehud Olmert when the bombs started falling in the Palestinian territory.

“I saw this as a lack of respect for us and also a shadow cast over peace,” Erdogan said.

Erdogan later stormed out of the discussion, which also included Israeli President Shimon Peres, threatening to never return to the forum. “During his speech (Peres) from time to time turned and addressed me directly in a manner and style that is not in the spirit of free discussion that we see in Davos,” he told reporters.

He stressed that he had not targeted Peres personally or the people of Israel. “My reaction was to the moderation and I left the meeting which was about to end,” he said, explaining that Peres had been given 25 minutes to talk while the others on the panel had less.

UN atomic watchdog chief Mohammed El-Baradei told the forum that the election of Obama had given him hope for a “saner” world for the first time. The head of the International Atomic Energy Agency (IAEA) praised Obama’s offer of talks with Iran and, in an implicit criticism of former President George W. Bush, said isolating states was always doomed to failure. El-Baradei said: “For the first time I have started to have some hope that we will start to have a world that is safer, that is saner, that is more humane.”

He said talks between Washington and Tehran would help to resolve the deadlock on Iran’s nuclear program.

During another discussion at the forum, Iran’s Foreign Minister Manouchehr Mottaki said Iran was ready to cooperate with Obama if the United States changed its policies and practices in the region.

Britain’s The Guardian newspaper reported yesterday that officials in Obama’s administration were drafting a letter to Iran from the president aimed at unfreezing relations and opening the way for direct talks.

Source : Arab News

German Foreign Minister Presses Iran to Accept US Offer on Talks

Germany's foreign minister Friday warned Iran against rebuffing US President Obama's offer to hold direct talks as diplomats from six nations trying to push Tehran to curb its nuclear ambitions meet next week in Berlin.

Speaking in the German parliament on Friday, Jan 20, Frank-Walter Steinmeier urged Iran not to snub new US President Barack Obama's offer to open direct talks with Tehran on the country's controversial nuclear program, saying diplomacy was the only way to solve the problem.

"It is good that Obama extended his hand and showed willingness to hold direct talks with Iran," the German foreign minister said. "That's why I'm calling on the Iranians to be sensible and be open to the US offer."
It should be done for the people in Iran who "are suffering from the isolation and confrontation resulting from the policies of Tehran and many are also going hungry," Steinmeier added.

Germany to scale back trade with Iran

His comments came as a German official confirmed on Friday that senior diplomats from six world powers trying to persuade Tehran to halt its nuclear program would meet in Berlin next week.

German foreign ministry official Jens Ploetner said that diplomats from the UN Security Council's permanent members -- Britain, China, France, Russia and the United States -- plus Germany will meet on Wednesday near the western city of Frankfurt.

The six countries have offered Tehran a set of economic and energy incentives in exchange for halting its uranium enrichment program which the West suspects is being used as a cover to develop nuclear weapons.

Germany said this week it had drastically cut its export guarantees for companies trading with Iran.

Berlin's move came amid increased criticism, notably from the United States and Israel, over Germany's growing trade with Iran.

German exports to Iran rose 10.5 percent in the first 11 months of 2008 to reach 3.6 billion euros ($4.6 billion), according to government statistics.

US-Iran talks "long overdue"

Next Wednesday's meeting in Berlin of the six world powers on the Iranian nuclear program will mark the first gathering since Barack Obama took office on January 20.

In one of the biggest foreign policy reversals since taking the reins, Obama this week told Arab broadcaster Al-Arabiya he was willing to talk directly with Iran and map out a new future for US relations with Iran after a three-decade diplomatic freeze.

Washington is also at odds with Iran over its threats to destroy Israel as well as Tehran's support of the militant groups Hezbollah in Lebanon and Hamas in the Palestinian territories. The US broke off diplomatic relations with Iran after hard-line students stormed the US Embassy in Tehran in 1979.
At the same time, Obama's administration has refused to rule out any options -- including military strikes -- if Tehran refuses to abandon its uranium enrichment program.

The head of the UN nuclear watchdog welcomed Obama's overtures and called for direct talks without conditions.

"It is the way to go. It is long overdue," Mohamed ElBaradei, the head of the International Atomic Energy Agency (IAEA), said on Thursday on the sidelines of the Davos summit. "The security issue will not be resolved without direct dialogue between Iran and the US."

On Thursday, Iran, which insists its nuclear program is peaceful and solely geared toward electricity generation, promised a positive response if the United States makes genuine policy changes.

But earlier this week, Iran's hard-line President Mahmoud Ahmadinejad demanded Obama apologize for past US "crimes" against the Islamic republic.

Source : Deutsche Welle

Obama speaks Indonesian during state department visit

Jakarta (ANTARA News) - On his second day in office, Obama speaks Indonesian during state department visit Barack Obama visited the Department of State in Washington DC and had an opportunity to speak in Bahasa Indonesia, the US Embassy here reported on Friday.

His visit emphasized his administration`s focus on diplomacy, and also marked Hillary Clinton`s first day as the Department`s 67th Secretary of State.

The President also spoke Bahasa Indonesia with a Department employee and expressed a desire to visit his old neighborhood in Jakarta.

President Obama was accompanied by Vice President Joseph Biden and National Security Advisor General James L. Jones. During his visit, he announced special envoys to the Middle East, and Afghanistan and Pakistan, and addressed US diplomats.

President Obama joined Secretary of State Hillary Clinton to announce former Senator George Mitchell as Special Envoy to the Middle East peace process and Ambassador Richard Holbrooke as his Special Representative to Afghanistan and Pakistan - moves that underscore the new administration`s commitment to renewing America`s leadership through reinvigorated diplomacy.

"We are confronted by extraordinary, complex and interconnected global challenges," Obama said to the State Department employees.

"Progress will not come quickly or easily, nor can we promise to right every single wrong around the world. But we can pledge to use all elements of American power to protect our people and to promote our interests and ideals, starting with principled, focused and sustained American diplomacy."

After making his formal remarks, President Obama afterwards mingled with US diplomats, shaking hands and chatting casually. While doing so, Charles Silver -- a former counselor for public affairs at the US Embassy in Jakarta -- addressed him in Bahasa Indonesia, saying "Selamat Siang, Bapak."

Without missing a beat, Obama responded, "Terima kasih -- Apa kabar?" Silver responded "Baik, baik" and then told the President he had served in Indonesia several times, and Obama complimented him on his accent.

The President then said that if he visits Indonesia, he would like to visit his old neighborhood in Menteng, Central Jakarta.

Source : Antara

Iran hopes for positive U.S. policy change

By Stella Dawson and Emma Thomasson

DAVOS, Switzerland (Reuters) - Iran promised a positive response on Thursday if the United States makes genuine policy changes and held out hopes of a breakthrough in a long-running dispute over its nuclear ambitions.

Tehran's comments brought international security to the fore on the second day of the World Economic Forum, which has been dominated by fears over financial instability in the worst global economic crisis in 80 years.

In new signs of the deepening economic woes, Turkey and the International Monetary Fund failed to break an impasse over a loan deal in talks at Davos, and Russian state bank VEB said Russian companies had asked it for $90 billion in aid.

Britain's Guardian newspaper reported U.S. officials were drafting a letter to Tehran from President Barack Obama aimed at unfreezing relations and opening the way to direct talks.

The U.S. State Department has been working on drafts of the letter since Obama was elected in November, the report said. It was a response to a letter of congratulations sent by Iranian President Mahmoud Ahmadinejad after Obama's victory.

"Most parts of the Islamic world unfortunately have been suffering because of past U.S. administrations," Iranian Foreign Minister Manouchechr Mottaki told delegates in Davos.

"If President Obama is determined to change these policies certainly he will face the welcome of the Islamic world."

He said he hoped the U.S. stance on Iran's nuclear program would be among Obama's changes of policy.

DIRECT DIALOGUE?

Western powers fear Iran wants to develop nuclear weapons under the cover of a civilian atomic program. Tehran says its program is intended only for peaceful power generation.

In Berlin, the German Foreign Ministry said senior officials from the United States, Russia, Britain, France, Germany and China would discuss the nuclear dispute in Germany next week.

The head of the U.N. nuclear watchdog welcomed Obama's overtures and called for direct talks without conditions.

"It is the way to go. It is long overdue," Mohamed ElBaradei, the head of the International Atomic Energy Agency (IAEA), said in Davos. "The security issue will not be resolved without direct dialogue between Iran and the U.S.."

But Israel doubted Iran's intentions, blaming them for the recent crisis in Gaza. President Shimon Peres said: "The problem is the Iranian ambition to rule the Middle East."

Former Prime Minister Benjamin Netanyahu, front-runner ahead of a February 10 election was even more blunt.
"The biggest issue facing our time is not the extent of the current financial crisis," he said.

"If there is one mission we have to put before us it is to prevent the arming of Iran with nuclear weapons, that would also enable us to neutralize Iran's proxies."

FEARS OF PROTECTIONISM

The overall mood at the annual Davos meeting of policymakers and business executives is gloomy.

India's trade minister, Kamal Nath, said the global economic crisis could fuel protectionism to safeguard national industries and jobs. Such protectionism, if it led to retaliation, would intensify the downturn, he said.

"We do fear this because one must recognize that at the heart of globalization lies global competitiveness, and if governments are going to protect their non-competitive production facilities it's not going to be fair trade," Nath told Reuters.

The crisis, which stemmed from a collapse in the U.S. housing market and led to a credit freeze, has prompted billions of dollars to be spent on bank bailouts and economic stimulus packages.

It has also led the IMF to prop up a number of particularly hard-hit countries.

Turkish Prime Minister Tayyip Erdogan said he had long discussions with IMF First Deputy Managing Director John Lipsky on Wednesday but he cast doubt on prospects of a swift deal.

Official talks were suspended on Monday for 10 days to try to clear obstacles to a stand-by deal, expected to amount to about $25 billion, to help Turkey weather the crisis.

FIXING THE SYSTEM

Policymakers are working behind the scenes in Davos on ways to fix the financial system, ahead of a summit of the G20 group of leading developed and developing countries in April and a G8 summit in July.

Russian markets have been among the hardest hit as foreign investors have fled. Russian companies have made bids for about $90 billion in help from state corporation VEB to restructure foreign debts, VEB chairman Vladimir Dmitriev told reporters.

For full coverage, blogs and TV from Davos go to www.reuters.com/davos

(Writing by Timothy Heritage; editing by Guy Dresser and Erica Billingham)

Stormy debate in Davos over Gaza

The Turkish prime minister has stormed out of a heated debate at the World Economic Forum in Davos over Israel's offensive in the Gaza Strip.

Recep Tayyip Erdogan walked out of the televised debate on Thursday, after the moderator refused to allow him to rebut the Israeli president's justification about the war that left about 1,300 Gazans dead.

Before storming out, Erdogan told Shimon Peres, the Israeli president: "You are killing people."

Peres told Erdogan during the heated panel discussion that he would have acted in the same manner if rockets had been falling on Istanbul.

Moderator David Ignatius, a Washington Post columnist, then told Erdogan that he had "only a minute" to respond to a lengthy monologue by Peres.

Erdogan said: "I find it very sad that people applaud what you said. There have been many people killed. And I think that it is very wrong and it is not humanitarian."

Ignatius twice attempted to finish the debate, saying, "We really do need to get people to dinner."

Erdogan then said: "Thank you very much. Thank you very much. Thank you very much. I don't think I will come back to Davos after this."

'Understandable'

Amr Moussa, the secretary-general of the Arab League and former Egyptian foreign minister, said Erdogan's action was understandable.
He said: "Mr Erdogan said what he wanted to say and then he left. That's all. He was right," adding that Israel "doesn't listen".

The exchange took place on the second day of the summit, where business and political leaders have been discussing trade, financial regulation and global security.

After grappling with a bleak global economy on the opening day, leaders attending the forum switched to debates on the new administration in the United States and unrest in the Middle East, Pakistan and Afghanistan.

Kamal Nath, India's trade minister, warned that the global economic crisis could fuel protectionism to safeguard national industries and jobs.

Ban Ki-moon, the United Nations secretary-general, used the forum to announce the launch of an emergency appeal for $613m to help Palestinians recover from Israel's attack on Gaza.

Protectionist fears

Nath said that India saw growing signs of protectionism and would respond with its own measures if its exporters were threatened "which will be good for no one."

He said: "We do fear this because one must recognise that at the heart of globalisation lies global competitiveness, and if governments are going to protect their non-competitive production facilities it's not going to be fair trade.

India has raised tariffs on steel to protect local producers, a measure trade experts say was aimed at China, which India does not regard as a market economy.

The deepening economic crisis, and the failure to complete the World Trade Organisation's long-running Doha round on freeing up global commerce, have raised fears that countries will block their partners' exports to protect jobs at home.

Such protectionism, if it led to tit-for-tat retaliation, would intensify the current crisis.

Emerging economies

The economies of India, China and Russia, which have been experiencing rapid growth in recent years, have taken precedence at the forum.
Timothy Garton Ash, professor of European studies at Oxford University, said emerging markets are almost overshadowing the importance of the US economy.

"What is really striking to me about this Davos, is the lack of a sense of a new beginning with Barack Obama," he told Al Jazeera.

"That is not what we've been hearing about in the last 24 hours, we've been hearing about China, about Russia, about India, about emerging economies, and that I think is a very significant fact.

"It's not just the American investment banks that have gone down, it's America's own soft power, and ability to lead that has been badly damaged by the crash."

Rachid Mohamed Rachid, Egypt's minister of trade and industry, said there would be a rush towards emerging markets.

"People understand today that there will not be growth in developed countries for a long time to come, the growth will continue to be in emerging markets, even more than before," he told Al Jazeera.

Gaza appeal

The UN secretary-general said he had been deeply moved by his visit to Gaza and that he had given his word that the UN would help the Gazans in their hour of need.
He said the appeal for fund covered the requirements of the UN and other aid organisations for the next six to nine months.

Ban said it would help provide aid such as medical care and clean water and that an appeal for longer-term needs would be launched later.

Asked about achieving peace in Gaza, Benjamin Netanyahu, the leader of Israel's Likud party who was attending the forum, swiftly turned his answer to Iran, which he said was in a "100-yard dash" to get nuclear weapons.

While he did not specify any planned military action, Netanyahu said if Iranian rulers were "neutralised", the danger posed to Israel and others by Hamas in Gaza and Hezbollah in south Lebanon would be reduced.

Netanyahu said the global financial meltdown was reversible but "what is not reversible is the acquisition of nuclear weapons by a fanatic radical regime".

Meanwhile, Manouchechr Mottaki, Iran's foreign minister, who is also in Davos, said Tehran had taken note of the intention of Barack Obama, the US president, to withdraw troops from Iraq and believed he should also pull troops out of Afghanistan.

Mottaki told a panel at the forum that Obama had "courage" to say which of the policies of George Bush, the former US president, he disagreed with and said his approach marked a "milestone" away from an era of "might equals right".

Source: Al Jazeera and agencies

Kuwait NBK eyes steady 2009 profit despite Q4 fall

By Ulf Laessing

KUWAIT, Jan 27 (Reuters) - National Bank of Kuwait (NBK) (NBKK.KW) hopes to keep its net profit steady in 2009, its chief executive said on Tuesday, despite a fourth-quarter dive partly on provisions to offset the impact of the global financial crisis.

Ibrahim Dabdoub told Reuters 2009 would be difficult because of the global crisis.

"To be realistic we ... say hopefully we will be able to reach, this year, last year's figure," Dabdoub said.

Kicking off Kuwait's earnings season, NBK's fourth-quarter net profit fell 78 percent to 11.6 million dinars ($40 million), missing a forecast of 65 million dinars by Global Investment House analysts in December.

Full-year 2008 profit fell to 255.3 million dinars from 273.6 million in 2007, the bank said.

Shares in NBK, the country's biggest bank by assets, rose 5.43 percent after the release of the results, which were accompanied by a recommendation for a 45 fils cash dividend and one-for-10 bonus share issue. Still, the stock is down 18 percent this year.

"This is a good result given the economic environment. They take provisions as a precautionary measure and therefore will have more cash aside when they need it," said Mustafa Behbehani, a director at Gulf Consulting Co in Kuwait.

NBK took voluntary provisions of 45 million dinars as a precaution, CEO Dabdoub said. Without the provisions, net profit would have grown by 10 percent in 2008.

The bank expects retail lending to rise this year and corporate lending to be flat, he added.

Dabdoub told Reuters in October he expected NBK to post a net profit of 350 million dinars in 2008, but later warned it would not meet the target as the credit crunch hit the Gulf.

Behbehani Gulf Consulting said the crisis would also hit profits at other lenders, such as Islamic bank Kuwait Finance House (KFIN.KW) or Commercial Bank of Kuwait (CBKK.KW), but an expected increase in government spending would minimise the impact.

EXPANSION PLANS

The OPEC country's oldest bank, which has 69 branches in Kuwait, will lessen its foreign expansion but still plans to set up an Islamic lender in Switzerland, Dabdoub said.
"We will be slowing down our expansion unless we see a good acquisition opportunity," he said. "(Switzerland) has not been done. We are still waiting until we agree with our partners on a strategy."

NBK said in March that it planned to set up an Islamic lender in Switzerland with a Saudi partner aimed at Gulf investors in the European country.

NBK has been expanding to offset rising competition at home by buying Al-Watany Bank of Egypt and a 40 percent stake in Istanbul-based Turkish Bank in 2007. It is also active in Qatar through affiliate International Bank of Qatar (IBQ).

Both Egypt's Watany and Qatar's IBQ performed well last year, the CEO said without giving details.

Dabdoub said the bank was still eyeing expansion opportunities in Syria and North Africa, "but it takes time".

He also told CNBC Arabiya that NBK was in talks with Islamic firm Investment Dar (TIDK.KW) to buy their nearly 20 percent stake in local Islamic lender Boubyan Bank (BOUK.KW).

Operating income for the year rose 20 percent to $1.84 billion last year, compared with 2007, NBK said. Assets fell to 11.97 billion dinars at the end of December from 12.4 billion at the end of September.

There are 1,000 fils to the dinar. ($1=0.2887 dinars) (Additional reporting by Rania El Gamal; editing by David Cowell and Karen Foster)

US envoy outlines Gaza truce needs

Arms smuggling into Gaza must end along with Israel's blockade of the territory if ceasefires between the pair are to hold, George Mitchell, the US envoy to the Middle East, has said.

Mitchell's comments on Wednesday followed talks in Israel and Egypt during his tour of the region aimed at promoting what he said would be a bid for "lasting peace" between Israel and the Palestinians.

Speaking after meeting Shimon Peres, the Israeli president, and Ehud Olmert, the prime minister, Mitchell told reporters in Jerusalem there needed to be "a cessation of hostilities, an end to smuggling and re-opening of the crossings based on 2005 agreements" in order to consolidate the ceasefires.

'Engage vigorously'

But Olmert has insisted Israel would open Gaza's borders if Hamas released Gilad Shalit, the Israeli soldier the Palestinian group seized in June 2006.
"A permanent opening of the [Gaza border] crossings will be linked to solving the issue of Gilad Shalit," an Israeli official quoted Olmert as telling the US envoy.

Mitchell had flown into Israel from Egypt on the second leg of his trip, under instructions from Barack Obama, the US president, to "engage vigorously" in an effort to revive Israeli-Palestinian peace talks.

Mitchell’s arrival in the region coincided with Israeli bombing raids on Gaza early on Wednesday and the killing of an Israeli soldier near the border a day earlier.

'Deteriorating situation'

Al Jazeera's Barnaby Phillips, reporting from Jerusalem, said: "The original intention, as US president Barack Obama said yesterday, was that Mitchell would go to the Middle East to 'listen and to learn' - to show that the United States is not going to dictate terms in the Middle East.
"Having said that, the situation on the ground here has deteriorated in the past 24 hours.

"Mitchell has had to turn into a little bit more of a firefighter than he originally thought when he scheduled this tour."

Mitchell earlier discussed with Hosni Mubarak, the Egyptian president, an Egyptian initiative aimed at restoring relative calm between Israel and the Palestinians and the re-opening of Gaza's border points.

"The United States is grateful to Egypt for its leadership in bringing about a ceasefire. It is of critical importance that the ceasefire be extended and consolidated," Mitchell said afterwards.

"The United States is committed to vigorously pursuing a lasting peace and stability in the region.

"The decision by President Obama to dispatch me to this region less than one week after his inauguration is clear and tangible evidence of this commitment."

Ramallah talks

Mitchell is also due to head to Ramallah in the occupied West Bank on Thursday to meet with Mahmoud Abbas, the Palestinian president, who has criticised Israel ahead of the talks.
"Today, we are convinced more than ever, especially after the aggression against Gaza, that Israel does not want peace and we are going to say so to all those who come to see us," he said.

Abbas and Olmert had relaunched peace talks to great fanfare in November 2007 after a six-year hiatus, but the negotiations have made virtually no progress.

Following Israel's war on Gaza, Egypt has been holding separate talks with Israel and Hamas, the Palestinian group, as well as representatives of other Palestinian factions.

Ahmed Abul Gheit, the Egyptian foreign minister, said the talks have "evolved positively" and a "permanent" truce could be agreed in the first week of February.

He said such a ceasefire would lead to the reopening of crossing points into Gaza, where most of the 1.5 million population depend on outside aid, but which has been closed to all but basic humanitarian goods by Israel since Hamas seized power.

Hamas wants the border crossings into Gaza reopened, including the Rafah checkpoint bordering Egypt, to end the Israeli blockade in the territory.

Israel wants to stop the rocket fire and prevent Hamas fighters from using smuggling tunnels under the border with Egypt to rearm themselves with weapons.

"The Israelis' position is extremely tough," Phillips said.

"They are determined to show that the policy of deterrence - which they believed justified the recent attacks on Gaza - worked ... It makes it a very difficult situation for Mr. Mitchell."

Source: Al Jazeera and agencies

Indonesia joins race to host 2018, 2022 World Cup

The Indonesian football federation officially expressed interest in staging one of the tournaments to FIFA late Tuesday, becoming the sixth potential host to show interest ahead of Monday's deadline.

England, Japan, Qatar, Russia and a joint Spain-Portugal candidacy have already declared intentions to bid.

Other contenders including Australia, a combined Belgium-Netherlands-Luxembourg proposal, Canada, China, Mexico and the United States are expected to enter the first stage of a two-year selection process before the cutoff.

Though its team is currently No. 14 in the FIFA world rankings, Indonesia fulfills one major requirement of hosting the world's most-watched sports event - it has a stadium capable of holding at least 80,000 spectators for th opening match and final.

The government-owned Bung Karno Stadium in the capital Jakarta has a capacity of 88,000 and staged the 2007 Asian Cup final, when Iraq beat Saudi Arabia 1-0.

Indonesia has previously made World Cup history.

It became the first Asian nation to play at a World Cup, at the 138 tournament in France under its colonial name of the Dutch East Indies. The team lost 6-0 to eventual runner-up Hungary in a first-round match at Reims.

Indonesia was quickly knocked out of qualifying for the 2010 World Cup being played in South Africa. It advanced through the Asian first round when oppoent Guam withdrew, then lost 11-1 to Syria in a two-legged series in November 2007.

FIFA began the process of choosing the 2018 and 2022 World Cup hosts two weeks ago. It will issue official bid forms next month, which must be returned by March 16.

Candidates capable of providing around 12 stadiums eac holding at least 40,000 fans can apply for either the 2018 or the 2022 tournament, or for both.

FIFA said no South American country can apply for either tournament because Brazil is hosting the 2014 edition. African countries can bid only for the 2022 event because South Africa is hosting next year.

The hosts will be chosen by FIFA's 24-man executive committee in December 2010.

If successful, Indonesia would be the second World Cup host from Asia. The 2002 tournament was played in Japan and South Korea.
Source : The Associated Press

Iran president presents budget for 2009-10

by Edmund Blair, Hashem Kalantari and Parisa Hafezi

Iran's president presented his 2009-10 budget to parliament on Tuesday that he said was based on sliding oil prices and which analysts called contractionary because it will grow far slower than inflation.

Mahmoud Ahmadinejad did not give figures but an official earlier said the budget was worth 890 trillion rials ($92 billion), just three percent bigger than the budget approved for 2008-09, while inflation in the past year was over 25 percent. "That means the government has adopted the policy of tightening its belt for next year," a pro-reform newspaper, that is often critical of the president, wrote under a headline that referred to a "contractionary" budget.

One economist said it was "unfeasible" for the government to meet its spending needs with such a budget, and said the bill could be challenged by parliament, which must approve it. Another analyst said the overall figure indicated capital spending would be chopped, which will not help Ahmadinejad before a June vote when he is expected to seek re-election.
Ahmadinejad, who came to power in 2005 vowing to share out Iran's oil wealth more fairly, has lavished spending on rural and other poor areas. Many public projects may now be halted. But the outcome of the election may largely depend on whether the president retains the support of Supreme Leader Ayatollah Ali Khamenei, Iran's highest authority who has praised the president and whose views influence millions of loyalists.

"The budget bill for 1388 (the Iranian year starting in March 2009) has been drawn up by taking into account the drop in oil income," Ahmadinejad told parliament in his address broadcast on state radio. Oil surged to $147 a barrel in July but has tumbled to trade at $47 on Tuesday. The budget is based on a price of $37.50.

Any earnings above the budget price should go to a reserve fund meant to be saved for tougher times like now. But the government, even in oil windfall years like 2008-09, has often tapped those reserves to support budget spending.

Poul newspaper said the budget projected an increase of 54 percent in tax revenues, which in 2008-09 were targeted at 217 trillion rials. It also said this new budget eliminated any allocation for the import of gasoline and diesel fuel.

Iran, the world's fourth largest oil exporter, cannot refine enough gasoline and diesel for domestic needs and has to rely on expensive imports, which it has heavily subsidised. A reform bill proposed by Ahmadinejad aims to hike fuel prices, which an official said could save 85 trillion rials.

But the bill has yet to be passed and has been criticised by some lawmakers who fear it will stoke inflation. Saeed Laylaz, editor of the economic daily Sarmayeh, also questioned whether tax income could rise as swiftly as planned.

A senior government official said development or capital spending was 222 trillion rials in the 2009-10 budget bill, but could be increased if oil prices rose in the year, media said. Central bank figures showed the budget approved for 2008-09 was worth 864 trillion rials and included current spending of 583 trillion rials and capital spending of 245 trillion rials.

But parliament reallocated about 50 trillion rials in the year from capital spending to meet surging current needs. ($1=9.680 rials)

Source : Reuters

Finance the Islamic way at Michigan bank

By JEFF KAROUB and SEBASTIAN ABBOT
Big financial institutions have been battered by mortgages gone bad. But a tiny Michigan bank is getting attention in the industry by turning a profit on loans without even charging interest.

Its specialty: financial products that comply with Islamic law. That means no collecting interest, no short selling and no contracts that are considered exceedingly risky.
It also rules out some of the activity that got Western finance in trouble - subprime mortgages, credit default swaps and the like.

"When you look at the economic crisis we're in, if you were to follow Islamic or Sharia financing, you couldn't have this crisis," said John Sickler, corporate director for the bank, University Islamic Financial Corp. in Ann Arbor.

Islamic finance operations aren't prohibited from making a profit. Far from it. Instead, banks that comply with Islamic law, or Sharia, earn money from fees that are part of the cost of the loan, some paid up front and some over time.

University Islamic Financial has two types of financing, one called a marked-up installment sale and the other a lease-to-purchase sale. Fees in both cases are comparable to interest payments in traditional loans, bank officials say.

For example: A seller who bought a house for $100,000 could sell it for $120,000 or even $300,000, provided the buyer agrees it's a fair deal. The home could be sold on an installment plan negotiated by buyer and seller.

The bank is a subsidiary of Michigan-based University Bank, and its leaders say they have talked recently with executives from two national banks hoping to learn more about the business.
Islamic law says money cannot grow by itself, the way it does with compounding interest. Trade is acceptable as long as the equal amounts of money are traded or two different things are swapped with a fairly negotiated price.

So a dime for an apple would be considered "halal," or religiously acceptable, while one apple for two apples would be "harem," or unacceptable.

Even at University, not everyone is on board. Some customers have closed their accounts when they learned it was engaging in Islamic finance. Some employees who objected to the move quit. The bank also stopped having a Christmas party and no longer serves alcohol at after-hours events.

The Michigan bank focuses on contracts that clearly spell out the risk and reward between lender and borrower. University Islamic Financial says it's the nation's first to offer Sharia-compliant, federally insured deposits.

Islamic banking is more common overseas, but some U.S. banks and credit card companies are exploring the idea of branching out into Sharia products to reach out to the growing Muslim population.

So Islamic banking is only expected to increase in coming years. Already, Citigroup (nyse: C - news - people ) offers Sharia products and services to clients overseas, and Visa says it has worked with banks around the world to offer Islamic-compliant products.

The conventional banking system could learn a lot from the idea, said Jawad Ali, a finance lawyer based in Dubai and London who specializes in structuring Sharia-compliant deals.

"We haven't made as much money as the conventional banks because we can't, for example, sell what we don't own," he said. "We have to own it before we sell it. We may have missed out on gains in good times ... but we haven't suffered any losses."

Of course, there's no guarantee that banks will find immunity in Islamic finance from a severe global downturn.

"I am not doing banking on Mars," said Afaq Khan, the head of Saadiq, the Islamic banking arm of Standard Chartered (other-otc: SCBEF.PK - news - people ) Bank, based in London. "If real economic activity slows down significantly, the Islamic banking industry will also be affected."

A Sharia-compliant mortgage is like rent-to-own: There is no note, or mortgage, but typically part of each month's payment is held toward the ultimate purchase. The property is titled to an individual trust, or limited liability corporation.

Deutsche Bank (nyse: DB - news - people ) estimates total assets in the Islamic finance market at $1 trillion - a tiny fraction of global financial assets, but the bank said in a recent report that the sector been growing at a clip of 15 to 20 percent per year.

Most big international banks already have Islamic banking arms, and a November report by Moody's (nyse: MCO - news - people ) Investors Service shows that Islamic banks have been fairly resilient to the global economic downturn.

The U.S. banking industry has not embraced Sharia banking. Wachovia (nyse: WB - news - people ), Wells Fargo (nyse: WFC - news - people ) and JPMorgan Chase (nyse: JPM - news - people ) said they have not adopted Sharia practices and declined to comment about what they may do in the future.

"As far as the future, we are always looking for opportunities to better serve our customers, but our specific strategy is proprietary," Wells Fargo spokeswoman Lisa Westermann said.

University Bank President Stephen Ranzini declined to name the U.S. banks that University Islamic has talked to. But he said his bank soon plans to offer its services such as residential lending to other banks and credit unions nationwide.

Sharia banking is an idea "that is long overdue in this country," said Amal Berry-Brown, vice president at Comerica (nyse: CMA - news - people ), a Dallas regional bank that has talked with Ranzini. "At the same time, there really is quite a bit of work to be done."

Comerica has a strong customer base around Detroit, home to the nation's most concentrated Muslim population.

One issue: There is "a big variance" within Sharia law about exactly which financial practices are considered good and bad, said Mustafa Gultekin, a finance professor at the University of North Carolina at Chapel Hill.

For University Islamic, the niche appears to be paying off. Ranzini said he expects it to generate more than 25 percent of the overall bank's revenue this year, up from about 20 percent last year.

AP Business Writer Jeff Karoub reported from Detroit; Associated Press Writer Sebastian Abbot reported from Cairo; AP Business Writer Ieva M. Augstums reported from Charlotte, N.C.; and AP Business Writer Emma Vandore reported from Paris.

Source : Associated Press

Log Export expected to raise timber price

Jakarta (ANTARA News) - The Forestry Ministry's plan to open exports of logs produced from timber estates (HTI) would help HTI businesses strengthen their bargaining power in facing domestic pulp and paper industries at home, an executive said.

"It will increase HTI businessmen's bargaining position. So far, they are facing difficulties in developing their timber estates due to unfavorable prices," President Director of state-owned forestry company PT Inhutani IV, Mustoha, said here on Monday.

He said that Asia Pulp&Paper and Riau Andalan Pulp&Paper (Riaupulp) were two pulp and paper giants which absorbed some 85 percent of the timber produced by HTIs.

Mustoha who spoke during a discussion with forestry reporters on the government plan to export logs, said that the imbalance between pulp industries and HTI businesses caused a significant disadvantage to HTI companies.

Mustoha said the HTI log prices, which were set at a range of Rp220,000 to 230,000 per cubic meters, were less profitable as HTI businesses could not maintain the development and expansion of their estates.

"So far, the prices offered by the pulp and paper companies are too low but HTI owners have no choice because there are only two companies which purchase their products," Mostoha said.

He said that demand for timber in the world market in the last several years remained on the rise, although pulp and paper prices dropped to US$560 per ton.

Therefore, Mustoha expressed hope that the Indonesian Forestry Businesses Association (APHI) would play a decisive role in fixing prices of HTI logs. Thus, HTI businesses could resume the development of their forestry estates.

The Indonesian government is studying the possibility of exporting logs produced from timber estates (HTI).

According to the director general for timber estate development of the Ministry of Forestry, Bejo Santoso, the study on the possibility of log exports was aimed at expanding the export market and in response to a decline in domestic demand for timbe.

Islamic Studies Chair for Carolina Students

CAIRO — The University of North Carolina (UNC) is creating an endowed faculty chair in Islamic studies to meet the growing hunger for information on Islam and Muslims in the post-9/11 world.

"At Carolina, we're proud that our academic strengths include the study of diverse religions since that helps our students and the public better understand other cultures," Holder Thorp, the university chancellor, told the Herald Sun on Monday, January 26.

Along with money granted from the state tax, fundraising effort would be led by Cemalnur Sargut, president of the Turkish Women's Cultural Association in Istanbul.

"We're grateful that our distinguished friends from Turkey are providing a new opportunity to further enhance the university's expertise in Islamic studies," Thorp said.

Named after Turkish writer Kenan Rifai, who advocated women education and development in the 20th century, the chair aims to raise awareness about Islamic studies and the Muslim world.

"It's not teaching religion the way you might do it in Sunday school," notes Dee Reid, director of communications of the College of Arts and Sciences.

"It's not for a practitioner of Islam, it's for an expert in Islamic studies…for the academic study."

Chartered in 1789, the UNC was the first public university in the US and the only one to graduate students in the 18th century.

Today, it is a public, multi-campus university dedicated to the service of North Carolina and its people.

It encompasses 16 diverse constituent institutions and other educational, research, and public service organizations.

Growing Interest

The Islamic studies chair aims to meet the growing interest among American students for information about Islam and Muslims.

"There's increasing interest in this among students," explains Reid, the College of Arts and Sciences communications director.

"I think since 9-11 there's been tremendous interest in learning Arabic and learning about people who practice Islam in different parts of the world," added the official.

"It's an emerging field. Students are tremendously interested in going abroad because of this."

A recent Pew Research Center and the Pew Forum poll showed that the majority of Americans know very little about the practices of Islam.

The Islamic studies chair has drawn a "wait-and-see" stance from the Christian groups at the university.

"I'd really rather not comment on it until I have a chance to look into it and think about it," Lee Sullens, campus minister with Carolina Baptist Campus Ministry, told the newspaper.

"We would be interested in understanding it more," agreed Miles O'Neill, campus director of Cornerstone Campus Crusade for Christ.

"It's not the type of thing we're going to protest."

Source : IslamOnline.net & Newspapers

Auto firms will be in defensive mode: Ghosn

By Mohammed Rasooldeen, Arab News

RIYADH: Participants at the Global Competitiveness Forum (GCF), which opened yesterday in Riyadh, focused on the current global financial crisis which has affected many countries.

More than 100 leaders and 1,000 delegates from all parts of the globe gathered in the capital here to discuss solutions to the global financial crisis under the theme entitled “Responsible Competitiveness.” The forum sponsored by Saudi Arabian General Investment Authority (SAGIA) also provided foreign participants to get an insight into investment opportunities in Saudi Arabia. Around 20 panel discussions have been scheduled to take place during the course of the three-day forum.

The GCF was founded in 2006 by the SAGIA. It is an annual meeting of top business leaders, international political leasers, and selected intellectuals and journalists, to be held in Riyadh.

Carlos Ghosn, president and chief executive officer of Nissan Motors said that the world is in the middle of a financial crisis which is expected to continue for the next two years. He added that it would continue till the end of 2010. The problem could be gradually overcome provided the countries maintain a regular cash flow in cooperation between the public and the private sector. “Such measures could greatly reduce the impact of the crisis,” he stressed. He predicted that oil price would be increased to $80 as the financial crisis improves and such improvement would be conducive to the development of auto industry.

He also said that cash bailout alone will not help a company to come out of the crisis. “Governments must introduce regulations to facilitate such companies to come out of the crisis.”

Speaking about the automobile industry in the world, he said that the global car market has been affected a great deal. “During the year 2007, 69 million cars were manufactured and in 2008, the number was brought down to 63 million and in 2009, he predicted that it will be further reduced to 55 million cars. “It will be almost 14 percent reduction in 2009, after a 9-percent fall last year, due to the global financial crisis.”

Ghosn hoped that auto manufacturers will be in a defensive mode for the next couple of years to cope with the economic meltdown. “Manufacturers will reduce their investments and inventory as car sales continue to fall.” Ghosn noted that the car industry is already under a lot of stress from three sources: The economic recession, the credit crunch and foreign exchange volatility. “The combination of these three factors make the task more difficult,” he stressed.

Commending the organizers for organizing such a forum at a time when there is a need for meeting of economic experts to exchange ideas, Airbus Chief Executive Thomas Enders said: “Countries must gear themselves to meet the economic challenges of the time.” He predicted that the world demand for new aircraft could plunge 50 to 60 percent in 2009 due to the global economic crunch and tight credit.

Earlier this month, Enders warned that the number of deliveries this year would surpass the number of orders for the first time since 2003. According to the company’s website, Airbus delivered 483 aircraft in 2008, and won 777 net orders valued at $100 billion.

In July, when oil prices reached record prices, Airbus struck deals to sell eco-friendly passenger jets worth $15.2 billion (9.5 billion euros) to GCC (Gulf Cooperation Council) countries.

In his speech, Mohammad Hassan Omran, chairman of Emirates Telecommunications Corporation stressed on the importance of responsible competitiveness in supporting national economies and encouraging investment in infrastructure and trade. “Etisalat has been operating responsibly and competitively across the Middle East, Africa and Asia for over 30 years. Developing human resources and operating transparently and in ways which reduce our impact on the environment are key components of our business strategy. This strategy is helping to position Etisalat as a valued participant in the development of economies across the region and also helping us to achieve our ambition to be one of he largest international telecommunication companies in the world,” Omran said .

While addressing a press conference in the afternoon, Omran said that his company has been selected as the third mobile operator in Iran. Answering a question, he said that the company stepped into Iran since the volume of investment was not so huge as in other countries. However, he added that his company believes more on local resources for its businesses than relying on foreign funds. He noted that the company has got 3G license to operate in Iran. Describing the oil crisis as unhealthy for the global economy, Paolo Scaroni, head of the Italian oil company Eni SpA said that the time has come to look for ways and means to ensure certainty and stability. Scaroni said that increasing stability requires several issues to be addressed. He said there should be a rapid, precise and transparent global reporting system for production, consumption and inventories. He called on consumers to “Save energy and use it efficiently.” He also pointed out that the world has to concentrate on developing solar energy. “More research should be carried out on developing portable type of solar energy which is renewable too.”

In welcoming speakers and delegates to GCF, SAGIA Gov. Amr Al-Dabbagh, commented: “We are delighted to welcome so many highly regarded speakers to GCF 2009. This is our third GCF, and perhaps most important, given the current economic climate. The discussions and speeches at this year’s event will encourage lively debate as to how the World can address the economic downturn which it is currently facing.”

Other participants at the summit would include business leaders and political figures, including; Shinzo Abe, former Japanese prime minister, Mary Robinson, former Irish president, Mahathir Mohammed, former Malaysian prime minister, Jean Chrétien, former Canadian prime minister, and heads of many international companies.

US to hold 'direct talks' with Iran

The US ambassador to the United Nations has said the new Obama administration will engage in "direct diplomacy" with Iran.

Susan Rice said at UN that the US remained "deeply concerned" about Tehran's nuclear programme and that the issue remained a top priority for the White House.

"We look forward to engaging in vigorous diplomacy that includes direct diplomacy with Iran," she said after meeting Ban Ki-moon, the UN secretary-general, on Monday.

International powers have offered Tehran a set of economic incentives in exchange for suspending uranium enrichment programme which Western governments say is a cover for seeking to build nuclear weapons.

Tehran, however, insists the programme is only aimed at generating electricity.

The UN Security Council has adopted four resolutions, three of which included the imposition of sanctions, requiring Iran to suspend uranium enrichment.

Campaign pledge

Rice said the US remained "deeply concerned about the threat that Iran's nuclear programme poses to the region, indeed to the United States and to the entire international community."

"We will look at what is necessary and appropriate with respect to maintaining pressure toward that goal of ending Iran's nuclear programme," she added.

"Dialogue and diplomacy must go hand in hand with a very firm message from the United States and the international community that Iran needs to meet its obligations as defined by the Security Council and its continued refusal to do so will only cause pressure to increase," Rice added.

During his election campaign, Barack Obama, the US president, said he would consider holding direct talks with Iran and other powers with poor relations with the US.

Robert Gibbs, a White House spokesman, said on Monday the US would use "all elements of our national power" to address its concerns about Iran's nuclear programme.

He said Rice's comments were not a new initiative and that Rice was simply restating comments made by Obama on the presidential campaign trail.

Source: Agencies

Malaysia '09 corp sharia bond sales seen at $4bln-CIMB

KUALA LUMPUR, Jan 23 (Reuters) - New issuance of sharia corporate bonds in Malaysia will total about $4 billion this year, with Europe and Middle East issuers keen to tap the market, the world's top arranger of Islamic debt said on Friday.

Malaysia, one of the world's top Islamic bond markets, saw a 78 percent drop in issuance last year to $5.86 billion, according to Islamic Finance Information Service (IFIS).

"Issuers from other parts of the world are now trying to find new markets where they can actually issue and the ringgit sukuk market seems to be a very attractive market for them to tap," Badlisyah Abdul Ghani, chief executive of Malaysia's CIMB Islamic Bank told Reuters.

CIMB Islamic is part of CIMB Group, which is listed on the Malaysian stock exchange through Bumiputra-Commerce Holdings (BUCM.KL).


CIMB Islamic Bank Berhad (CIMB Islamic) is the global Islamic banking and finance arm of CIMB Group. It offers innovative and comprehensive Shariah-compliant financial solutions in the spheres of investment banking, consumer banking, asset management, takaful, private banking and wealth management.

CIMB Islamic’s products and operations are managed in strict compliance with Shariah principles under the guidance of the CIMB Islamic Shariah Committee, which comprises the world’s leading Islamic scholars.

CIMB Islamic is recognised as a pioneer in Islamic financial markets, having advised on the world’s first shariah-compliant exchangeable bond and the largest sovereign sukuk issue globally. It has garnered numerous awards such as Best Islamic Bank in Asia and Best Sukuk House in 2008 from Euromoney and Global Islamic Investment Bank for 2006 and 2007 from the Banker magazine.

Bumper oil earnings in the Gulf and rising demand for ethical investments have boosted the $1 trillion Islamic finance industry, but sharia debt issuance has shrunk in the past year due to the the global credit crisis.

Sales of new Islamic bonds fell two-thirds to a three-year low of $15.77 billion in 2008, IFIS estimates.

BI unconcerned about foreign banks` entry inti micro sector

Jakarta (ANTARA News) - Bank Indonesia (BI) Deputy Governor Mulyanaman D Hadad said the central bank was not concerned about the entry of foreign banks into the micro and small business sector in Indonesia.

"I don`t think we have to be concerned. I think it is the duty of all of us to improve the competitiveness of local banks," he said in response to a question on the entry of foreign banks into the small business sector in Indonesia.

He said the foreign banks` entry into the micro business sector would have a positive impact because it would enable small people to gain access to financing sources.

"There is a positive aspect to it because we still do not know when small people can have access to financing sources if we wait for domestic banks to help them out," he added.

He said that now only about 40 percent of the people had access to banks.

Hadad said that the entry into micro businesses of foreign banks was expected to bring not only capital money to them but also knowledge and managerial skills so that it would be beneficial for the development of banks in this sector.

He said that actually almost half of banking credits were provided for the micro, small and medium-sized businesses (UMKM).

Banks which provided credits for the UMKM sector were state-owned such as BRI which had units in rural areas.

BRI has a composition of credit provision where 80 percent went to the UMKM sector.

The BRI step has been followed by Bank Danamon, whose controlling shares are owned by Singapore`s Themasek Holdings through Asia Financial (Indonesia) Pte Lite.

Danamon built Danamon saving units in various rural areas which are intended to provide financial access for micro and small businesses.

Hamas to pay victims of Gaza war

Hamas is set to hand out money to Gazans afflicted by Israel's offensive on the Gaza Strip.

The territory's government was due to start giving out the money, expected to total about $45m, on Sunday - a day after a Hamas committee was established to oversee relief efforts.

Ahmed al-Kurd, the Hamas-appointed minister of social affairs, also heads the National High Committee for Relief which will distribute the money to those who lost family members or their homes.

"It will be the only body to oversee and supervise the rescue. We will be in contact with all other bodies, whether local, national or international, to organise the relief," al-Kurd said.

Re-building Gaza

Al-Kurd did not say how Hamas had raised the funds for the Strip, which has been under a strict blockade since the group took control of Gaza in June 2007.

"We are a government that is in charge of all of Gaza," he said. "The ministries have budgets, they have funds, just like in the rest of the countries of the world."

Taher al-Nunu, a spokesman for Gaza's de facto government, said that Hamas would grant €1,000 ($1,300) for the family of each "martyr" killed in the three-week-long conflict earlier in the month and €500 ($650) to for each one of those injured.

He also said that Hamas would pay €4,000 ($5,200) for each family whose house has been completely demolished.

He said that more than 20,000 Palestinian houses have been either completely demolished or partially damaged during the war.

More than 1,330 Palestinians were killed in the Israeli offensive, which Israel says was aimed at stemming rocket and mortar fire from Gaza.

Ten Israeli soldiers and three civilians were also killed.

'Death by blockade'

Both sides declared unilateral ceasefires last Sunday and Israel completed its withdrawal from the territory on Wednesday.

Al-Kurd would not specify the role the relief committee would play in rebuilding efforts in the battered territory, but demanded the lifting of Israel's blockade of the Strip and the reopening of Gaza's border crossings.

"From now on we will not accept a slow death by blockade. We sacrificed in this war ... and we did not sacrifice our youth to return to square one."

The Palestinian Authority of Mahmoud Abbas, the Palestinian president, has said that it should lead the reconstruction efforts, which it said would require about $1.9bn in aid.

Abbas's Fatah group were pushed from Gaza in June 2007 when Hamas took control of the Strip.

Source: Agencies

Shari'ah compliance issues hit sukuk - Moody's

by Rebecca Bundhun

Shari’ah compliance was a factor in the downturn of Islamic bond (sukuk) issuance in 2008, Moody’s said on Thursday.

Global sukuk issuance slumped by more than 50 percent in 2008, which is largely attributable to the international financial crisis.

But Moody’s said that debates over the Shari’ah compliance of some Sukuk structures, ignited by the Accounting Auditing Organisation for Islamic Financial Institutions (AAOIFI), also had a part to play in the slowdown.

“Early in 2008, the AAOIFI recommended that Islamic finance market participants should refrain from issuing sukuk structures that have a purchase undertaking or a guarantee from the sukuk issuer to repurchase at a specific price at a future date,” said Faisal Hijazi, Moody’s business development manager for Islamic finance.

“This is because AAOIFI believed that this structural mechanism is not compliant with a fundamental principle of Shari’ah, namely profit and risk-sharing,” he explained.

Ijarah sukuk, a form of capital leasing, became the dominant Sukuk structure in terms of issuance volumes in 2008, replacing Mudarabah, which was the dominant structure in 2007, Moody’s said.

A recent report by Kuwait Financial Centre (Markaz) revealed that while both conventional and sukuk markets plunged in the GCC in 2008, sukuk actually managed to grow its market share.

Sukuk’s market share grew to 45 percent of total the value issued by GCC bond markets, from 40 percent in 2007.

Source: arabianbusiness.com

Obama stimulus plan 'on target'

Barack Obama, the US president, has said a new $825bn economic stimulus plan is "on target" to be approved by the middle of February.

"We are experiencing an unprecedented economic crisis that has to be dealt with, and dealt with rapidly," Obama said as he met leaders from both major US parties at the White House on Friday.

Obama also said that he had been receiving bad news about the state of the economy during his new in-depth daily economic briefing, which he instituted after taking office on Tuesday.

"Frankly the news has not been good - each day brings, I think, a greater focus on the problems that we are having, not only in terms of job loss but also in terms of some of the instabilities in the financial system."
Obama has been hoping to secure a large bipartisan majority for the stimulus package in congress to register a major political success in the symbolic first 100 days of his administration.

But some Republicans have doubts over the size and focus of the package.

"I recognise that there are still some differences around the table and between the administration and members of congress about particular details on the plan," Obama said.

Accountability questions

Obama also warned that the second half of a $700bn bailout of financial firms being debated in congress must ensure more accountability than that implemented by the Bush administration.

He mentioned recent press reports which said some Wall Street executives at companies that had received public bailout money had recently upgraded offices and private bathrooms.

He said politicians must "put in place the kinds of reform elements, oversight, transparency, accountability, that's going to be required in order for the American people to have confidence in what we're doing".

Obama was flanked as he spoke by Nancy Pelosi, the speaker of the House of Representatives, John Boehner, the senior Republican in the House, Harry Reid, the Senate Democratic leader and Mitch McConnell, his Republican counterpart.

Obama's comments came a day after Timothy Geithner, the US Treasury secretary-designate, vowed to reform the US financial system to make it stronger and more able to withstand world market turmoil.
Source: Agencies

India's Financial Tech to launch new boarse in Bahrain

MANAMA, Jan 22 (Reuters) - India's Financial Technologies Ltd (FITE.BO) will launch a new bourse in Bahrain that will provide a secondary market for Islamic bonds, a company executive said.

The new exchange, called Bahrain Financial Exchange, has been licensed by the Gulf state's central bank and plans to start operations in the first quarter of next year, Financial Technologies' director Arshad Khan told Reuters.

Unlike conventional bonds the Islamic bond market, or sukuk, lacks a strong secondary market and most buyers hold the asset to maturity.

"This will be an opportunity to establish a secondary market where the transfer of ownership can keep happening, from buyer to seller," Khan, a director for business development in the Middle East and North Africa, said in an interview late Thursday.

"When a sukuk comes onto the market (today), banks will try to absorb it in their own portfolio, or sell it to their customers", he said.

The exchange will provide a trading platform for both Islamic and conventional products in equities, derivatives, commodities and currencies.

A strong secondary sukuk market could attract other important institutional investors such as pension funds to the sukuk market, Khan said.

"In so far, sukuk has gone to big financial players or high-end individuals, it has not gone to the retail market," he said.

Sukuk volumes dropped dramatically in 2008, hit by the global liquidity crunch. Total sukuk issuance stood at $14.9 billion, down 56 percent from 2007, according to ratings agency Standard & Poors.

Khan said he still sees fundamental demand for sukuk despite the current financial crisis. He said sovereign sukuk issuers, in particular, would be a key driver in reviving the market.

Singapore on Monday announced its first sukuk programme with a volume of $134 million to promote the growth of Islamic finance in the South East Asian city-state.

Islamic banks cater to investors who want to avoid earning or paying interest.

"There's a lot of money being aggregated or collected in Bahrain, but because local investment (opportunities) don't exist, it goes out," he said.

The small island kingdom of Bahrain has established itself as a regional banking centre on the back of Saudi oil wealth that uses Bahraini banks to invest on international markets. (Reporting by Frederik Richter; Editing by Kazunori Takada) (For Reuters content on Islamic finance, click on ISLAMIC)

Obama urges action on Gaza borders

Barack Obama, the US president, has called on Israel to open its borders with Gaza to humanitarian aid and commerce in his first public remarks on the crisis there since becoming president.

Obama, who said he was deeply concerned about the loss of life in Gaza, also reiterated the US view that Israel had a right to defend itself from Palestinian rocket attacks.

"Now we must extend a hand of opportunity to those who seek peace, as part of a lasting ceasefire, Gaza's border crossings should be open to allow the flow of aid and commerce," Obama said.

The US leader was speaking at the state department as he named George Mitchell, former peace negotiator in Northern Ireland, as US special envoy for the Middle East.

Obama also reiterated the US backing for international demands made of the Hamas movement - that it recognise Israel, end violence and agree to recognise previous peace agreements with Israel.

He said the US would support efforts to end weapons smuggling across the Gaza border from Egypt.

However, he called for a complete withdrawal of Israeli forces from Gaza following its offensive, and said the US would provide humanitarian and economic assistance to the millions of Palestinians living in the Gaza Strip.

Osama Hamdan, a Hamas spokesman, told Al Jazeera Obama's remarks seemed to show that the US viewed the situation through "Israeli eyes".

Veteran negotiator
Mitchell, 75, acknowledged there were "many reasons to be sceptical" about the prospects for peace between Israelis and Palestinians.

"The key is the mutual commitment of the parties, and the active participation of the United States government," he said.

He is best known for helping to broker Northern Ireland's historic Good Friday agreement in 1998 which ended decades of bloody conflict.

In 2000, he also presided over a committee investigating the ongoing violence of the Middle East conflict, which recommended Palestinians do more to stop attacks on Israel and an end to Israeli settlement building on occupied land.

Obama also named Richard Holbrooke, a former UN ambassador, as his special envoy to Afghanistan and Pakistan.

Source: Aljazeera and Agencies

City Developments issues S$100 mln of Islamic notes

City Developments (CTDM.SI), Singapore's second-largest developer, said on Thursday it sold S$100 million ($66.45 million) worth of Islamic notes to fund its shariah-compliant businesses. The 3.25 percent Islamic Trust Certificates are due in 2010.

CIMB is the sole dealer for the Islamic note issue. A property pioneer since 1963, City Developments Limited (CDL) is a listed international property and hotel conglomerate involved in real estate development and investment, hotel ownership and management, as well as the provision of hospitality solutions.

With a global presence in gateway cities across Asia, Europe, North America and New Zealand/Australia, CDL has more than 250 subsidiaries and associated companies together with 5 listed companies on notable stock exchanges.

Backed by a track record of over 22,000 luxurious and quality homes to its name, CDL’s properties are synonymous with prestige, good value, outstanding quality and a choice investment.

CDL is one of the biggest landlords in Singapore with over 4 million square feet of lettable office, industrial, retail and residential space. It also owns one of the largest land banks amongst private developers with over 4.5 million square feet that has the potential of being developed into more than 9 million square feet of gross floor area.

CDL strongly advocates a “Safe and Green” culture and has strict adherence to its Environmental, Health and Safety (EHS) policy which was instituted in 2003. CDL was the first private property developer in Singapore to be awarded the ISO 14001 (Environmental Management System) certification by the Building and Construction Authority for its commitment to raising environmental standards in its projects and incorporating eco-friendly features into its developments. CDL also received the OHSAS 18001 (Occupational Health and Safety Management System) certification for establishing an EHS policy to monitor the environmental impact of its operations and improve workplace safety.

In managing its investment properties, CDL was also the first private property developer in Singapore to be awarded the ISO 14001 and ISO 9001 (Quality Management System) certifications for 14 of its commercial buildings.

Millennium & Copthorne Hotels plc (M&C), the London-listed international hotel arm of CDL, is a dynamic hotel group that owns and operates over 110 hotels in 18 countries around the world, with a number of them being located in major gateway cities. CDL also has a dedicated subsidiary, the Hong Kong-listed City e-Solutions Limited, which provides technology solutions for the global hospitality industry.

Beyond its business operations, CDL believes in giving back to the community. It remains committed to an extensive range of Corporate Social Responsibility (CSR) programmes aimed at caring for the needy, raising awareness about the environment, nurturing the youth and promoting the arts. For its sustained commitment and outstanding contributions to the community and the environment, CDL was conferred the prestigious President’s Social Service Award and President’s Award for the Environment in 2007. It has also been listed on the coveted FTSE4Good Index Series since 2002, for meeting globally recognised corporate responsibility standards.