Oil prices stable and perfect says Saudi

CAIRO: Top oil exporter Saudi Arabia yesterday described the current oil price as stable and "perfect" for consuming and producing nations as he led talks in Cairo with other Arab oil ministers.

With oil around $75 a barrel, ministers said there was no need for the Opec to change its output targets when it met in Angola later this month.

"Everything is very good now," Saudi Arabia's Oil Minister Ali Al Naimi said at a meeting of the Organisation of Arab Petroleum Exporting Countries (OAPEC).

"Inventories are coming down, the price is perfect and investors, consumers, producers are all very happy," he added. "There is nothing to worry about." Kuwaiti Oil Minister Shaikh Ahmad Abdullah Al Sabah echoed him. "There will be no increase in production whatsoever," he said, adding he believes there is a consensus among all Opec members to maintain status quo.

Opec cut 4.2 million barrels per day of its production quotas in December, bringing down the total output of the 12-member group - excluding Iraq - to 24.84m bpd.

It took the measure to support flagging oil prices, which slumped from historical highs above $147 a barrel in July last year to just above $30 after a sharp decline in demand due to the global financial crisis.

Oil prices have rebounded strongly over the past months and are currently ranging between $70 and $80 a barrel. In October, prices jumped above $80 a barrel before easing.

Libyan Oil Minister Shukri Ghanem said there are no objections among Opec members to a production rollover in Angola.

"I don't think there are objections," to maintaining output quotas, he said.

Qatar's Energy Minister Abdullah Al Attiyah also said Opec will roll over current production levels but will monitor the market next year.

"I believe the decision will be to maintain the current production levels and then wait until 2010," to assess the situation.

A conference of the 12 Opec members on December 22 in Luanda will wrestle with the task of balancing oversupply against the risk any rise in oil demand could drive up prices and derail the world economy.

Source : Gulf Daily News

Saudi-EU ties enter new phase

Ghazanfar Ali Khan

RIYADH: Relations between Saudi Arabia and the European Union entered a new phase with the Riyadh-based European Commission Delegation changing its name to the “Delegation of the European Union to Saudi Arabia.”

EU officials also announced that Abdulrahman H. Al-Atiyah, secretary-general of the six-nation Gulf Cooperation Council (GCC), would pay an official visit on Dec. 22 to Sweden, which currently holds the EU’s rotating presidency.

Ambassador Luigi Narbone, chief of the Delegation of the European Union to Saudi Arabia, said on Tuesday that the new name of the local EU office reflected the changes that would enhance external representation provided by the Lisbon Treaty. Narbone pointed out that the Delegation of the European Commission was established in Saudi Arabia in 2004 and is also accredited to Bahrain, Kuwait, Oman, Qatar and the UAE.

He pointed out that the Riyadh-based delegation would work to enhance the visibility of the EU in the Gulf region and promote closer ties with the GCC states.

The EU delegation office will also encourage people-to-people interaction and highlight Europe’s cultural and linguistic diversity, promote European higher education and facilitate cooperation in science and technology.

Narbone said, “The change will ensure better cooperation between the EU and Saudi Arabia on the one hand as well as between the EU and the other Gulf states. More changes in terms of services will be visible after the transition phase of the EU comes to an end early next year.

The European Commission has over 130 delegations and representatives around the world. The names of all these changed as of Dec. 1. The EU today accounts for one-third of the world’s total economic production and has also started to play a greater political role in global affairs.

With the treaty coming into force on Tuesday, EU cooperation becomes more efficient, more active, and its action becomes more coherent especially on regional and international issues affecting the two major blocs — the GCC and the EU.

The EU and the GCC have forged close cooperation on all fronts. In 1989 an EU-GCC accord was signed according to which EU and GCC foreign ministers meet once a year.

Source : Arab News

UAE, Saudi among world's top website censors - project

by Neeraj Gangal

The UAE ranks high among countries that have blocked most websites, a recent report has revealed.

Internet users in the country reported the eleventh highest rate of blocked websites from among the countries in the world, according to the Herdict project.

Herdict is a project of the Berkman Center for Internet & Society at Harvard University. It seeks to gain insight into what users around the world are experiencing in terms of web accessibility. As on June 12, 11am UAE time, UAE users reported that 509 different webpages were flagged as “inaccessible”, the Herdict Web project statistics revealed.

China is the most reported country when it comes to website censorship, according to the report. From among the Gulf countries, Saudi Arabia ranked at No.4. and Bahrain at No.6 in the top 10 slots.

A noteworthy aspect of the report is that the Western countries were equally vigilant about restricting websites. Germany was ranked at No.2, US at No.3, France at No.7, Australia at No.8 and the UK at No.9.

According to the www.herdict.org website, Herdict is a portmanteau of 'herd' and 'verdict' and seeks to show the verdict of the users (the herd).
Speaking to the UAE’s The National newspaper, Jillian York, the social media manager for the project said that the websites that were found by UAE users to have been blocked ranged from pornography and dating websites to religious pages.

“But then, you also get some sites where you’ve got to wonder why they’re blocked – like Flickr.”

Top 10 countries that reported the most-restricted sites as on June 12, 11am, UAE time:

1. China (4,969)
2. Germany (6,972)
3. United States (5,162)
4. Saudi Arabia (2,364)
5. Iran (990)
6. Bahrain (1,004)
7. France (1,530)
8. Australia (911)
9. United Kingdom (1,237)
10. Philippines (909)

Syrian FM to Saudi as relations warm

by AFP

Syrian Foreign Minister Walid al-Moallem arrived in Saudi Arabia on Tuesday in another sign of warming ties between the two countries, the official Saudi SPA agency reported.

An Arab diplomat said Moallem was bringing a message to King Abdullah from Syrian President Bashar al-Assad.

He said Moallem would discuss with his counterpart, Prince Saud al-Faisal, means to bridge bilateral differences, including efforts to reconcile rival Palestinian factions Fatah and Hamas.

Ties between Damascus and Riyadh nosedived after the 2005 assassination of former Lebanese premier Rafiq Hariri, a Saudi citizen and protege, in a bombing widely blamed on Syria but denied by Damascus.

The two sides began mending fences last month with a meeting between Assad and King Abdullah on the sidelines of an Arab summit in Kuwait.

And earlier this month, Assad received Saudi intelligence chief Prince Meqrin bin Abdul Aziz with a message from the king on improving relations.

Source : ArabianBusiness.com

Why Saudi is banking on long-term success

by Joanne Bladd
Any pretence that the middle east is immune to the world's credit crisis evaporated last week following Saudi Arabia's announcement that it expects to post a budget deficit of $17.3bn in 2009 - its first in more than five years.

Word from the Kingdom's ministry of finance that government expenditures were budgeted at $126.6bn for fiscal year 2009, while total revenues sit at $109.31bn, is hard proof - were it needed - the world's largest oil baron is feeling the chill of falling barrel prices.

For critics of the Kingdom's mega-projects, the news adds fuel to speculation that the liquidity freeze could restrict Saudi's sprawling growth plans.
Flush with oil revenue in recent years, the Kingdom has diligently smoothed the path for foreign investment through widespread expansion in infrastructure.

As with Dubai, the scale of the plans, anchored in the promise of foreign finance, were met with questions over their long-term viability. And to a degree, it seems the detractors were right.

With foreign investors now a rare breed, a string of Saudi's infrastructure plans have been left wide open to the slowdown. Adding salt to the wound are falling oil prices and a shift to a more conservative attitude among Saudi businesses, the impact of which is starting to show.

Progress on King Abdullah Economic City, the $27bn jewel in the crown of Saudi's 10x10 plan, has already fallen behind schedule while its developer, Emaar, searches for financing.

That the project, a key component in Saudi's bid for a diversified economy, is struggling to attract private investment, is a sign to many that Saudi's star is on the wane, and must raise serious questions over the viability of the remaining five economic cities.

But rumours of Saudi Arabia's slowdown are premature. Simply, its projects are too big for the government to allow them to fail. In contrast to the debt-to-asset ratio crippling certain Western governments, Saudi holds an estimated $433bn in net foreign assets, and a $157bn budget surplus - a late "liquidity gift" from the days of $147 a barrel prices.

It's hardly overleveraged. And the ministry of finance has been quick to state that large-scale projects "that ensure sustainable development... [and] more employment opportunities" will be first in the queue for supplementary funding.

The fast-tracking on Riyadh's King Abdullah Financial District and the announcement by Modon, the government's industrial development arm, of the launch of a further four industrial cities is evidence of this. Rather than fiddling while Rome burns, Riyadh has sent a clear message it has no qualms about dipping into its reserves to cushion the immature private sector, now the credit crunch has come calling.

Appropriately for the holiday season, Saudi's government is learning that charity begins at home. Whatever the cost, the domestic wheels will keep turning because Saudi Arabia has its eyes on a bigger prize - economic diversity.

Source : ArabianBusiness.com

Global financial collapse - Is Islam the best cure?

Al Rajhi Bank


By Dr. Robert D. Crane

The recent implosion of the Western financial system and its adverse impact on the real economy may have a silver lining if it produces a paradigmatic change in attitudes toward the possibility of avoiding the injustices and inefficiencies of both populist socialism and oligarchical capitalism.

An immediate challenge is to explain in simple and politically sensitive ways the theory and workings of a just third way designed to overcome the mistakes of the past. Reliance on greater transparency and governmental regulation may accomplish nothing more than to solidify the current system rather than to address the fundamental changes necessary to replace its faulty premises with better ones.

As an example of the stubborn challenges, some Muslims do not see the difference between pure credit backed by real goods and the ponzi scheme of debt derivitives. Understanding the difference seems to pose almost a paradigmatic barrier to real change. Of all people, Muslims should be able to see the fraudulent nature of money treated as a commodity rather than merely as measure of exchange, because the nature of money is the absolute core of Islamic economics. The Islamic opposition to riba or financial interest is merely a by-product of more fundamental principles.

Another serious problem is mainline acceptance of the scarcity theory of value, whereby the expansion of population supposedly will outstrip the resources to support it. The Prophet Muhammad said, ‘’For every sickness there is a cure, so find it.’’ This applies to the use of human ingenuity in multiplying the bounties of God available in nature without destroying the source of the bounties. The ‘’limits to growth’’ doctrine, first accepted as mainline doctrine through efforts of the Club of Rome more than thirty years ago, is perhaps the most serious threat to both economic and political justice, because peacefully broadening access to wealth can come not from redistribution from the rich to the poor in a world of scarcity but only by the use of pure credit to assure that the millions of new people in the world will share not past wealth but the many trillions of dollars of new wealth that will be created in the future.

The only way equitably to ‘’spread the wealth around’’ is to create new wealth. Any other approach would violate the sanctity of private property in the means of production, which is the absolute bedrock of any just system of economics and is valued in every world religion as the surest protection against political oppression.

The National Association of Muslim Lawyers is trying to recruit scholars who can think beyond the box to give a paper on Islamic banking next year at the American Bar Association’s annual convention, because the professional Islamic banking experts can not see beyond their own noses. The people already invited to this session of the International Law Section are part of the establishment crowd of well-paid riba advisers - the top dozen earn on average more than a quarter million dollars a year in consulting fees. Perhaps this will provide an opportunity to break open the closed shop of paid professionals who can’t see the forest for the trees.

There is much to celebrate in the field of Islamic economics. Investors are now rushing to shift their assets to the so-called Islamic banking system because it does not allow creating money out of debt and then selling the fraudulent product supposedly with a guaranteed profit from interest. The Islamic banking industry now is approaching a trillion dollars in real assets, led by the three largest biggest Islamic banks, the Dubai Islamic Bank, the Kuwait Finance House, and the Al-Rajhi Bank of Saudi Arabia, which latter provided the early funding for the International Institute of Islamic Thought near Washington, D.C.

A good sign is that the goal of maintaining the fifteen percent annual growth rate that has obtained since the inception of the institution of Islamic banking by Prince Muhammad al Faisal thirty years ago is being surpassed by success. This permitted a veritable revolution in the business since the ninety billion dollar market in sukuk was declared to be un-Islamic a few months ago. This form of commercial paper was good because it is tied to a specific asset and confers ownership of it, but it generates a predetermined return that is identical to interest even though it is called a ‘’profit.’’ Once the sukuk was declared to be un-Islamic, the market in sukuk immediately fell by fifty percent, which shows that ethics can still trump profits in a just world.

During the past twenty years the real experts in Islamic economics, specifically in the branch of the maqasid al shari’ah known as haqq al mal, have been sidelined as threats to the status quo and to the billionnaire investors who like this new way to concentrate wealth because the ‘’experts’’ tell them that they are not doing so. The recent implosion of the Western financial system may prompt scholars outside of the Islamic banking world to take a more careful look at what until now has been merely an Islamic alternative. As a successful survivor in a world of collapse, Islamic banking based on the essential principles of Islamic economics could provide a model for a new generation of central banks and perhaps a world resource bank to address the need for a revolution in both money and credit. The details are readily available in an entire shelf of books available online and in print at the Center for Economic and Social Justice.

The current institution of Islamic banking is half right, but still has another half to go. The real problem may be that the so-called experts have been thoroughly brainwashed by graduate studies in mainline Western universities, so that their real objective is to fit Islamic banking into an un-Islamic paradigm. The result is a phenomenon that waddles and looks somewhat like an Islamic duck, quacks even louder than a Western duck, but really is an Australian platipus.

Source: The American Muslim (TAM)