Tag Archives: Media

Yemeni President Saleh Is Out, But Yemen’s Future Uncertain

Posted by on June 5, 2011 Comments Off
The Media Line Staff

San’aa, Yemen (TML) – The pitched battles have given way to occasional gun and mortar fire. Stores have re-opened, even if water and electricity remain in short supply. The city is bristling with troops, but many of them have flowers sprouting out of their guns, courtesy of the joyous opposition protestors.

But even with its long-serving president, Ali Abdullah Saleh, out of the country, the future of Yemen remains as murky as ever.

After repeatedly turning down offers to step down as part of a negotiated solution with the opposition, Saleh ended up leaving on a stretcher after he was wounded in a rocket attack on his compound over the weekend. He leaves behind a country in disarray, with a figurehead vice president officially in charge while powerful tribes and Saleh’s sons and nephews vie for power and Al-Qa’ida lurks in the background. The economy is paralyzed.

“We are looking at an extreme political vacuum. We don’t know exactly how long his sons and nephews can stay in control of security forces,” Christian Koch, director of the international studies program at the Gulf Research Center told The Media Line. “There are too many questions marks around. We’re looking for a period of continued volatility.”

A lot is at stake in the poor, perpetually unstable country. Astride a major route of world oil, Yemen risks devolve into a failed state and a base for Islamic radicals much like Afghanistan and Somalia. Yemen’s Gulf neighbors, together with the U.S., struggled to force Saleh out of office and see an orderly transition to a new government.

Saleh was a victim of a strategy to take on the tribal groups, led by the Hashis, which had emerged as the biggest challenge to his continued rule. Two weeks ago, he dispatched his troops to besiege the Al-Ahmar family compound, setting off the worst violence Sana’a had seen since protests against Saleh’s rule erupted in January..

Along with leaving more than 200 dead and bringing the city to a standstill, the violence touched the president himself on Friday when a mosque in the presidential compound was hit — probably by a mortar shell. Not only was Saleh wounded seriously enough for him to be flown out of the country, but the attack also injured the prime minister, two deputy prime ministers and the speakers of both parliamentary chambers, all of whom are now being treated in the Saudi capital of Riyadh.

For now, Yemen is formally under the rule of Abd-Rabbu Mansour Hadi. But the real center of governmental power lies with the Saleh family, according to Jeb Boone, who is managing editor of The Yemen Times. They could employ that to ensure the president’s return or take over the country themselves. Saleh briefly addressed the nation after the attack but didn’t say he was relinquishing the power he has clung to tenaciously over the course of the unrest.

“His sons, who are military commanders of the Republican Guard and central security, are still in the country,” Boone told The Media Line. “If he [Saleh] wanted to somehow secure his return through his sons as military commanders, I think they would have the ability to do that.”

Two other contenders for power are Hamid Al-Ahmar, a millionaire businessmen and leader of the Hasid tribe. He is believed to have connections with Al-Qa’ida. Another is General Ali Mohsen who broke publicly with Saleh, his half-brother, sided with the anti-government opposition. Subsequently, he remained aloof from the fighting, but many Yemenis believe it was his forces that hit the presidential mosque, and not those of Al-Ahmar.

In the remote regions of Yemen, other tribes have asserted their authority at the expense of the government. Koch of the Gulf Research Center said he is pretty confident that with Saleh gone they would be prepared to recognize the authority of the central government again.

“None of the tribes want to see the disintegration of the state – it doesn’t serve their interests,” Koch said. “Most of them are interested in trying to find a working arrangement where their interests are respected.”

The political arena, however, won’t be left entirely to domestic players. The U.S. and, more importantly neighboring Saudi Arabia, are determined to ensure that stability returns to Yemen. The Saudis already have a trump card with Saleh and many of his top aides and family now in their sovereign territory.

Saudi Arabia and the other members of the Gulf Cooperation Council (GCC) have been running scared by the Arab Spring and its threat to the region’s long-standing rulers. The GCC was quick to smother the only protests to break out among a member nation, Bahrain, by sending in troops.

Much bigger and more chaotic than Bahrain, a military option isn’t likely in Yemen, Abdelkhaleq Abdalla, professor of political science at Emirates University in Dubai, told The Media Line.

“I don’t think the Saudis will need to send any troops. That’s not really an option, but the Saudis and the GCC will never give up in Yemen,” he said. “It’s in their backyard and its a strategic place. Whatever happens in Yemen is of immediate concern of the GCC capitals. They will do everything possible to restore some kind of normalcy with the help of America, Europe and others.”

Analysts give relatively short shift to the Al-Qa’ida threat, which has been the biggest concern of the Washington policy makers. While the Islamic movement is active in Yemen and has chalked up some notable successes over the years, including the attack on the U.S.S. Cole and the Saudi interior minister, Saleh probably exaggerated its influence in the country in order to win more aid and support from Saudi Arabia and the West, they said.

The real challenge facing Yemen is the economy, which needs to be restarted if the country isn’t going to slide into the ranks of the world’s failed states.

“It’s going to take a lot of work to bring it back to where it was before, to get oil production back up, to get foreign currency reserves back up and bring the devaluation of the riyal and inflation back down,” said Boone of The Yemen Times.

(With reporting by David Rosenberg)

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Israel, India look to high tech as trade ties expand

Posted by on June 1, 2011 Comments Off
The Media Line Staff

Jerusalem, Israel David Rosenberg – Israeli and Indian industry associations signed a memorandum of understating on Wednesday aimed at spurring cross-border innovation and entrepreneurship, as the two countries add high technology to their growing network of trade and economic cooperation.

While bilateral trade has grown exponentially, the agreement between the Confederation of Indian Industry (CII), the country’s biggest trade association, and the Israel High Tech Industries Association, is unusual in that it focuses on technology. The Indian state of Andhra Pradesh, home to the up-and-coming software center of Hyderabad, is close to signing a pact with Israel’s Matimop, a government agency that facilitates multinational research and development ventures.

High tech is important to both countries, but their industries are very different. India is focused on software services — writing code and operating systems for other companies. The National Association of Software & Services Cos (NASSCOM) forecasts will post exports of as much as $70 billion in the year to March 2012. The Israeli industry is much smaller but more diverse, and focuses on developing cutting-edge software, telecommunications and medicine. Exports in 2010 were about $29 billion.

Industry executives see potential to marry Israel’s innovative prowess with India’s huge and talented pool of human resources.

“There’s a complementary software story. Indian firms are entirely process orientated and Israel firms are much more about product,” Naushad Forbes, director of India’s Forbes Marshall and chairman of CII’s Innovation Council, told The Media Line. “If we put those two together, we can be unbeatable worldwide.”

Israel is trying to manage the shifting balance of world economic power. Countries such as China and India post faster growth and present more intriguing markets than the older and slower economies of Europe and the U.S., which have been the biggest markets for Israel’s export-heavy economy. Closer trade and business ties also strengthens Israel’s political standing in the global community.

Starting at $200 million annually when diplomatic relations were established in 1992, trade between Israel and India ballooned to the $4.7 billion mark last year when India vaulted into second place among Israel’s export markets. This does not include defense sales, which are reportedly over $1 billion annually. In the first quarter of this year the level of trade plummeted to just $336 million, the Israel Export Institute reported on Wednesday, but industry figures and government officials are hopeful that growth will resume.

The two countries are negotiating a free-trade-area agreement (FTA) that will remove barriers to trade. In addition to the agreement with Andhra Pradesh, Israel is negotiating bilateral accords with two other Indian states. In March, Israel’s Finance and Industry Ministries allocated 100 million shekels ($29 million) to promote trade with China and India.

Much of the trade until now has been focused on defense, where increased arms spending has created a natural market for Israel military technology like unmanned pilotless vehicles (UPVs) and early airborne radar systems. These ties will likely deepen because of an Indian requirement that local components account for 30 percent of any contract, said Forbes. That will require Israeli companies to outsource or set up manufacturing in India.

Ties between Israeli and Indian technology companies are just starting, but they will likely involve more than sales. Companies will benefit mostly from combining Israeli innovation with India’s vast low-cost manpower.

“Israeli companies are already operating in India. We can learn from each other. There is a tremendous opportunity for collaboration and joint ventures,” Shri Sachin Pilot, the Indian minister of state for communications and information technology, said in Jerusalem.

Andhra Pradesh is already a high tech powerhouse, with software exports last year of $8 billion, equal to half the state’s total. But Ajay Misra, principal secretary to the state’s Information Technology and Communication Department, said India had ambitions to expand out of software into computer and telecommunications hardware. Israeli innovation could help, he said.

“That’s our next step,” he told The Media Line. “We’ve achieved a lot in the software and service sector, but in hardware we haven’t done anything on a big scale.”

In a taste of the kind of tie-ups that may be on the way, Bangalore-based Tejas Networks, India’s largest domestic telecom manufacturing company, is planning to acquire Ethos Networks, an Israel-based high-technology company specializing in carrier Ethernet and network-management products. Tejas now uses the Ethos team as an Israeli R&D center.

Steven Katz, a principal at the Israeli high technology investor,Vertex Venture Capital, said Israeli companies could also benefit from closer ties with India. But, he cautioned, managers will have to be careful about when and how they do it. It is critical that the most innovative parts of any new technology, where Israel’s comparative advantage lies, be developed at home.

“Once you [the company] get to a certain size and you need to build a new software module and you need 20 engineers, that’s when you can perform the development there,” Katz told The Media Line. “But the creativity and ingenuity should stay in Israel.”

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Egypt throws open a border and nobody comes

Posted by on May 30, 2011 Comments Off
The Media Line Staff

Rafah Terminal, Gaza Strip, Palestinian Territory Omar Ghraieb and David Ro – The Rafah terminal on the Gaza-Egypt border is a subdued place these days.

When Egypt made good on its promise and eased controls governing entry and exit from the Gaza Strip on Saturday, the events received worldwide attention. Hatem Awideh, of the Gaza border, called it “a cornerstone for a new era” while The New York Times headlined it: “Egypt Lifts Blockade, Along With the Gazans’ Hopes.” Israel’s opposition Kadima Party declared the opening a “national failure.” The Turkish organizers of a flotilla due to leave for Gaza with aid supplies next month felt compelled to defend their decision to go ahead with the mission.

But on the first day Rafah was open, only 450 of the 1.6 million Gazans packed into the enclave’s 360 square kilometers (139 square miles) opted to cross. The next day it was just over 590 coming. On Monday, the number declined slightly to about 580. No goods or merchandise, except as much as can be stuffed into a large suitcase, can pass through Rafah at all.

Billed as a major event with multiple political ramifications for Israel, Egypt and the Palestinians, the Egyptian move, in fact, marks just a small step in a gradual easing of a four-year-old blockade of Gaza. Imposed by Israel after the Islamic Hamas movement seized control in 2007 and backed by Egypt, the lockhold on Gaza is aimed at preventing weapons from reaching Hamas and encouraging Gazans to rebel against the movement’s rule.

But a year ago, the two countries removed its most onerous terms following a bungled Israeli commando raid on a Turkish attempt to break the blockade. Egypt eased controls further

By one estimate, more than 130,000 Gazans passed through the crossing in 2010 and another 30,000 passed through it since the start of upheaval in Egypt last January. The difference since last Saturday is that Rafah now operates six days a week instead of five and working hours have been extended by two hours daily. Visa requirements have been lifted for women, children under 18 and men over 40.

“It’s revolutionary compared to what was happening in the past year. It was not revolutionary over what has happened over the past (few) years,” Mkhaimar Abusada, who teaches political science at Gaza’s Al-Azhar University, told The Media Line. “Basically, it’s an upgrading of the facility and mechanism for travel.”

Sami Khader, 48, should have been among the first to line up at the exit ramp from Gaza after it opened. His family came to the enclave in early 2010 for a short vacation to see their relatives and then head back to Saudi Arabia, where they have lived for years. But the family ended up trapped in Gaza and they have lost their permits to reside in the kingdom.

With the Israeli blockade eased and more goods arriving, Gaza’s economy has grown strongly over the past year even though it remains poor and reliant on international aid. The International Monetary Fund estimates Gaza’s gross domestic product grew in the double-digits last year and Palestinians investors are building the coastal strip’s second shopping mall.

On Monday, Palestinian officials pledged $200 million for rebuilding Gaza and hope to raise an additional $800 million from private Arab investors.

“I’m happily living in Gaza now with my family and I don’t need to go back to Saudi Arabia,” Khader told The Media Line. “Who could have known that in one year many things could change? Why can’t you quit one life to lead another one in Gaza, your own home?” Khader said.

The Hamas government in Gaza staged a campaign to ensure a big turnout at Rafah on Saturday, hiring buses to transport people to the terminal and sending activists to encourage people to cross. But, in fact, many people who might want to leave can’t because officials for now are limiting exit permits to people who had previously registered to leave under the older, more restrictive terms.

Sarah Ahmed said she never gave up hope. Her cousin Ahmed Ahmed, she said, gave up hope of finishing his studies abroad, threw away his British visa and enrolled in the Islamic university in Gaza. But even though she has been trapped in Gaza for close to a year after coming back for a family visit, she declined to enroll in any local university.

“I’m still waiting for my turn to leave Gaza and renew my British visa and continue my studies at Glasgow University,” Sarah Ahmed, a student studying in Britain, told The Media Line. “I love it there, and I can’t wait to go back”.

Abusada of Al-Azhar said the registration system is a holdover from a 2005 agreement governing border controls at Rafah. They date from just after Israel evacuated Gaza and before Hamas took over Gaza. Egypt required a list of people seeking to cross to prevent people regarded as security risks from entering the country.

But now with the border open to everyone except men between 18 and 40, it is mainly in Hamas interest to keep the pre-registration policy in force, he said.

“If there was no pre-registration the border would be flooded with tens of thousand who want to leave, so they are regulating the movement,” Abusada said. “Once the border is open for three months or six months, and Palestinians have become accustomed to it, they will cancel registration.”

He predicted a crush at Rafah come summer. Gazan school children are taking year-end exams now, which means many families would prefer to wait till the vacation begins. The limited hours at the terminal, which during the 1990s was open 24 hours a day, will exacerbate the problem.

No goods are permitted through Rafah, but the terminal was never designed as a transit point for merchandise and none of the sides involved would want to see that change, analysts said.

Israel allows more goods than ever in the past four years through its border with Gaza – on Monday around 240 truckloads of goods entered, including 60 containing construction materials – and collects customs duties on import wares that is then passed over to the Palestinians Authority. Meanwhile, Hamas collects it own taxes on good smuggled through the many tunnels dug under the border with Egypt.

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Iran weighs wiping zeros off the rial in war on inflation

Posted by on April 6, 2011 Comments Off
The Media Line Staff

Tehran, Iran David Rosenberg – Gasoline prices in Iran will fall sometime in the next few months from 4,000 rials a liter (about $1.46 a gallon) to just four rials – and maybe even as little as 0.4 of a rial – but the country’s motorists won’t have any reason to celebrate.

Iran doesn’t plan to cut fuel prices. Instead, it’s going to lop an as yet undetermined number of zeros off its currency in an attempt to create an atmosphere of lower inflation without actually stabilizing or lowering prices. Today, a dollar buys about 10,000 of the Iranian currency, so even small purchases run into big sums in rial terms.

Shamseddin Hoseini, Iran’s minister of economic affairs and finance, told the IRNA news agency over the weekend that the rial will lose three of its zeros once unspecified “prerequisites” are achieved. He said the change would simplify business transactions, greasing the wheels of the economy. Three days later, Iran’s central bank governor, Mahmoud Bahmani, said he would present a proposal to the government sometime in the next six months to eliminate four zeros from the rial.

Either way, the government will have its work cut out for it. Iranian inflation has been climbing, especially since subsidies were slashed last December, and the history of countries tinkering with their currencies as a palliative doesn’t provide a promising precedent. But faced with an economy hammered by internal inefficiencies and international sanctions, the government’s ability to tackle inflation is limited.

“Inflation has been accelerating in the last few months,” Djavad Salehi-Isfahani, a non-resident senior fellow at the Brookings Institution in Washington, DC, told The Media Line. Consumer prices jumped 3.4 percent in March, about half of that due to holiday spending, he said. “You’re talking about annual inflation of 20 percent minimum. That’s politically unacceptable.”

Iran’s economy should be benefiting from the global economic recovery and higher oil prices. But United Nations-imposed sanctions and political uncertainty have taken a toll on trade and investment, forcing the government to take unpopular measures such as last December’s subsidy cuts. Iran has seen little popular unrest as a result, but high unemployment and rising prices have led to unrest elsewhere in the Middle East.

Indeed, conditions have become so difficult that officials have tried to rally ordinary Iranians by putting the sacrifices required by the subsidiary cuts in terms of warfare. Ayatollah Ali Khamenei, the country’s supreme leader, has dubbed the new Iranian year “The Year of Economic Jihad,” calling for concerted efforts to prepare the grounds for a decade of economic growth.

Last December’s subsidy cuts have done more than boost prices. They have hit consumers in the pocketbook, forcing families to cut back on spending and hurting economic activity, BMI said. Gross domestic product will edge up just 2 percent annually on average between now and the 2014/15 fiscal year (Iran uses a March-to-March fiscal year).

“There’s no question that the most important problem confronting Iranian society, much more than the political issues, has to do with daily bread. The failure of the Ahmadinejad government in this particular area has been quite significant,” Mehrdad Khonsari, secretary-general of the Green Wave, an Iranian opposition group, and an independent scholar, told The Media Line.

“Like the rest of the Middle East the two issues of bread and corruption will motivate the pubic to stand up for their rights,” he said.

Iran doesn’t publish GDP growth figures, but Salehi-Isfahani estimated it was no more than 1 percent in the last fiscal year, meaning per capita growth was negative.

Consumer prices have been rising since the middle of last year and were up 12.4 percent in the 12 months through March, compared with the same time a year earlier, according to official statistics. But most economists say inflation exceeds the official forecast. Business Monitor International (BMI) estimated that consumer price inflation and producer price inflation will average at least 20 percent year-on-year in 2011.

“Although President Mahmoud Ahmadinejad has stated his intention to control the rate of consumer price rises by monitoring and enforcing price ceilings on goods and services, many local businesses have not appeared willing to follow Tehran’s policies,” BMI said.

Bahmani, Iran’s central bank chief, said studies by the central bank indicated that taking four zeros off would have positive effects and dismissed arguments that it will lead to an increase in inflation. But many Iranian experts have argued that revaluing the currency may stoke inflation by giving consumers the feeling that prices are lower, allowing sellers to raise prices more freely.

In any case, the record of currency overhauls is at best mixed. In 2008, Zimbabwe cut 10 zeros off its currency but failed to arrest hyperinflation. Turkey took an ever more dramatic step in 2005, replacing each 1 million lira note with one in a bid to end decades-long hyperinflation. The move was successful.

Israel revalued its currency twice – replacing every 10 of its lira with one shekel in 1980 and repeating the exercise again in 1985 by substituting 1,000 shekels with one new shekel. The first time failed to stem inflation, which accelerated in the following years to triple digits. The second time inflation was tamed, but the step was taken as part of a wide-ranging price-stabilization program.

The idea of a rial revaluation has been raised repeatedly. In 2007, the parliamentary economics committee proposed a revaluation as did the central bank a year later, suggesting the new currency be called the toman. Last year Ahmadinejad declared he would wipe three zeros off the rial as part of a wider economic reform program.

Salehi-Isfahani said Iran has few of the tools economic policy makers in more developed countries use to control inflation. He said officials typically order banks to restrict new borrowing, a step he said would slow economic activity and increase unemployment.

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Car sales race ahead as Palestinian economy purrs

Posted by on March 23, 2011 Comments Off
The Media Line Staff

Gaza City, Palestinian Territory (TML) – “You can see the numbers are escalating tremendously,” says Samech Masri, a Detroit-educated civil engineer and general manager of the United Motor Trade Co., the largest car dealership in Ramallah. “It’s gone from about 1,000 cars to 20,000 cars within about 10 years and that is something to talk about.”

Not nearly as high as the record 216,000 vehicles sold in nearby Israel last year, still, the Palestinian new car sales numbers reflect growing prosperity and are one of the best measures to see how the economy is faring.

Set among swank coffee shops and designer boutiques, Masri’s upscale automobile dealership is the sole importer of Volkswagen, Audi and Skoda vehicles. He accounts for a quarter of all car sales in the West Bank and counts among his clients Palestinian Authority Prime Minister Salam Fayyad.

While peace efforts between the Palestinians and Israelis may be stalled, Fayyad has been pushing ahead with plans to declare a Palestinian state by September. He believes a prospering economy is the best way to wean the Palestinian Authority off international aid, but, as an professional economist and former senior official at the International Monetary Fund (IMF), Fayyad sees a free market system as the best way to achieve this goal.

“We’re not in the business of picking winners when it comes to economic activity and what actually ends up being the locomotive of progress of moving forward. The private sector here is free, there are no restrictions here of any kind,” Fayyad told The Media Line.

The IMF says the Palestinian economy grew a whopping 9% in the first half of last year. The boom is evident wherever one drives in Ramallah, the de facto Palestinian capital and commercial center. It’s easy to get lost amid the construction sites.

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“If you go into Ramallah alone and you can generalize it to other cities in the West Bank, Ramallah is a construction site as you see it. Everybody is building,” Masri says. “Everybody believes in this country. We need to look into our future, and I believe as a Palestinian that we have a bright future because all the Palestinians are very well educated and we have a vision. All we need is just some stability in the political situation and we can do a lot more than other neighboring countries.”

Car sales topped $110 million last year, about half of which went to taxes. Masri’s dealership employs about 150 people. His was the first to go on line with the manufacturer in Germany where computers run diagnostic tests on the cars.

“You can see even the car is being fixed from Germany as we are just sitting and watching,” Masri says. “I believe a mechanic is not a mechanic anymore without an engineering degree.”

Masri says sales could reach over 30,000 cars but complains that he is shackled by Israeli import restrictions. He bemoans the need to get his vehicles through the Israeli ports where they can be held up for weeks due to security checks or by an employee going on vacations.

“One person is handling everything on the Israeli side, our licenses. Last summer, he was on vacation and our life was stopped, completely stopped, until he came back,” he says.

While Israelis slap an exorbitant 113% tax on new cars, the Palestinians were able to reduce their taxes from 75% to 50%, which makes them less than half the price. But Israelis customers are barred from his car lots.

“Actually, we cannot sell in Israel and they cannot sell here,” Masri says, adding that the new vehicles could only be imported through Israel and were subject to the same stringent emission controls. “This means we are getting the clean engines unlike other Arab countries.”

The growth has also been helped by more women getting behind the wheel.

“Women have no restrictions in buying or driving cars in Palestine. I would say something about 25% or 30% even in the market of cars are driven by women,” Masri said. “We are starting to have multiple cars in the drive ways.”

Masri had been the president of the Palestinian importers union for a decade. Even though he was voted unanimously to continue, he decided to step down and give others a chance. He says there are 16 automobile franchises in the Palestinian Authority. And his biggest competitor is … his brother.

“He was my partner actually and we decided to split. He is now representing Kia, our neck to neck competitor,” Masri says.

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Egypt Keeps Its Stock Exchange Shuttered, Fearing Sell-Off, Capital Flight

Posted by on March 15, 2011 Comments Off
The Media Line Staff

Cairo, Egypt (TML) – Husni Mubarak is gone and the mass protests at Tahrir Square are mostly history, but Egypt’s stock exchange remains closed – its trading floors empty and two tanks stationed outside its Cairo headquarters, serving as an all too conspicuous symbol of the country’s struggle to get back to business.

Officials have hinted repeatedly over the last few weeks that the market will open soon, most recently on Monday when Bloomberg News quoted exchange spokesman Hisham Turk and cabinet spokesman Magdy Raby as saying an announcement would come by the evening. As of late Tuesday, no announcement had been made and Turk was unavailable for comment.

“It’s an institution that is very public and visible. For it to be closed isn’t a positive sign. That’s why the opening of the stock market will be important. It provides a sense that the situation is returning to normal,” Angus Blair, head of research at the Cairo-based investment bank Beltone Financial, told The Media Line.

The Egyptian Exchange was shut January 27 as confrontations between the government and protestors unnerved investors and sent shares plummeting 17% in two trading sessions. But the army-led transitional government has since brought order to the country and economic activity has resumed.

Although the decision when to open and under what conditions is up to exchange officials, analysts say the government fears that resuming trading would give people a conduit for sending capital the country badly needs overseas. It could also send a bearish message about the economy if shares tumble in initial trading.

The authorities have taken some measures to address those issues. As of March 14, Egypt’s attorney-general has temporarily barred 52 people plus immediate family members in many cases, from trading shares. The list includes the Mubarak family, as well as top business people and former ministers.

To address concerns about a massive sell-off, Egypt’s Financial Service Supervisory Authority last Saturday eased rules for margin trading, the practice of buying securities with cash borrowed from a broker and using other securities as collateral. Investors now need only repay loans or add collateral when their debt reaches 70% of the shares’ value. That is 10 percentage points higher than previously.

To help small investors, who have been the most nervous about the fall-out of the exchange’s re-opening, a fund worth 250 million Egyptian pounds ($42 million) was formed on Sunday to offer them loans.

“We are getting close to a reopening in the sense that we are trying to ensure sufficient demand so that when the stock exchange opens there won’t be a strong crash. We expect a landing, but we want it to be a soft landing,” Egyptian Finance Minister Samir Radwan told the CNBC business television network on Monday. “I hope by mid week we will be functioning.”

Egypt lost several weeks worth of output during the peak of the unrest. Even today, strikes are frequent and two key sources of foreign income – tourism and the salaries of Egyptians working abroad – remain problem areas. Tourists are trickling back slowly, as travel to the Middle East suffers from unrest in places like Libya and Bahrain. Meanwhile, hundreds of thousands of Egyptians have fled Libya, depriving their families of income.

Radwan said last week that gross domestic product may grow as little as 3% in the year to the end of June if production does not get back on track. The economy grew by 5.1% in the 2009/10 financial year.

Meanwhile, stock markets across the Middle East have dropped in response to regional unrest. Globally, investors have been pulling out of emerging stock markets like Egypt’s. As of March 9, emerging-markets equity funds have suffered net withdrawals of more than $21 billion this year.

But there is some room for optimism. Shares of leading Egyptian stocks traded abroad in the form of global depository receipts have fallen since the exchange was shuttered, but they haven’t tanked. Orascom Construction Industries has shed 4.8%, Orascom Telecom 2.4%, EFG-Hermes 13.2% and Telecom Egypt 12.2%. “It’s not as bad as one would think,” said Beltone’s Blair.

Last Thursday, ratings agency Standard & Poor’s said it removed Egypt’s long-term foreign currency ratings from CreditWatch negative and affirmed its ratings of the country’s unsecured foreign currency sovereign debt.

Whether or not investors will look at the Egyptian cup as half full or half empty, the stock exchange faces something of a deadline from MSCI, whose securities index are used by global investors to benchmark their performance and decide how to apportion their investments.

Under MSCI rules, a market can’t be closed for more than 40 trading days, or it risks being expelled from the index. Frank Nielsen, MSCI’s executive director for equity and applied research, said this deadline was March 24. Expulsion would cause big institutions to divest their Egyptian stocks, although Nielsen declined to speculate on what the impact would be.

“What we are doing right now is talking to investors and other interested parties in Egypt and the rest of the world to get a sense of what investors feel about it, and what the plans are in Egypt,” Nielsen said in an interview on the Index Universe website. “Surely there will be an impact if we ultimately deleted Egypt from the Emerging Markets Index.”

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Mideast tourism takes a tumble amid unrest, rising airfares

Posted by on March 8, 2011 Comments Off
The Media Line Staff

Jerusalem, Israel David Rosenberg – Prince Harry, the third in line to the English throne, last week canceled his trip to the Gulf emirate of Dubai where he was due to play in a weekend charity polo tournament.

“Prince Harry was very much looking forward to the visit but feels that it would be insensitive for him to participate in a sporting event at a time when there are matters of greater priority to focus on in the region,” the palace announced last Friday

Not surprisingly, the regrets were couched diplomatically, with only the slightest hint of the unrest that has shaken the Middle East from Morocco to Iran. But Harry’s concerns aren’t his alone. Tourists are cancelling their sightseeing trips to the pyramids, shunning the beaches of Dubai and business travelers are pulling out of conferences and postponing meetings.

Travel to the Middle East is suffering a double whammy. Images of mass protests and outright war have scared visitors away while oil prices are lifting the cost of jet fuel and airfares. Last year’s fastest-growing travel market and looking forward to another good year in 2011, the Middle East industry is now in trouble, Euromonitor International says in a report.

Prince Harry stayed away from Dubai, which has remained quiet throughout the regional turmoil. But, for now, he is the exception. Sana Toukan, Euromonitor’s research manager for travel and tourism, said visitors were still flying to Middle East destinations that have remained out of the news.

“Tourism is expected to be deterred only in countries which are affected by the turmoil,” he told The Media Line by e-mail, and even those countries have managed to remain a lure for visitors going to destinations distant from the unrest. “In Egypt, places like Sharm El Sheikh [a Sinai resort 250 miles from Cairo] were very slightly affected by the violence.”

Nevertheless, the list of countries Toukan cited is quite long and includes Egypt, Tunisia, Libya, Yemen, Bahrain, Jordan, Lebanon, Oman and Algeria. Six of them number among the region’s top eight destinations by number of arrivals. “If other countries, such as Morocco and Saudi Arabia, are affected by an uprising of the population, their tourism will also suffer,” Toukan said.

As of Tuesday, the U.S. State Department has travel warnings issued for nine Middle Eastern countries and travel alerts for two others. The latest addition to the list was Yemen, which was renewed on Sunday. Britain has advised against any travel to Libya and Yemen and has more limited warnings for Bahrain, Iran and Iraq.

Tourism is a critical industry for the region, which has historic and archeological sites, pristine beaches and cities holy to Islam, Christianity and Judaism, ensuring a steady stream of pilgrims.

Countries such as United Arab Emirates and Qatar have developed glitzy resorts, host high-profile sporting events, built giant hub airports and global-reaching airlines to service them as they try to diversify their economies. Other countries such as Algeria and Libya are following suit.

As a result, the Middle East led the world in tourism growth last year, with the number of international tourist arrivals jumping 14 percent to 60 million people, according to the United Nations World Tourism Organization. That was double the global increase. Tourism brought in $149 billion of income to the region in 2010 and was responsible for 4.5 million jobs, or 8 percent of the region’s workforce.

Last year, the World Travel and Tourism Council forecast the figure would rise by 89 percent over the next decade.

Egypt, with its pyramids and beach resorts being the region’s biggest travel draw, has been the hardest hit. It attracted 12.7 million last year, bringing in $10.2 billion in revenues and employing some 2 million people. But the outbreak of mass demonstrations, which led to hundreds of deaths and the resignation of President Hosni Mubarak, sent tourists packing at the peak of the season.

The government estimates that some 210,000 tourists left Egypt at the end of January, cutting revenue by $178 million in one week. Reservations canceled for February deprived the country of another $825 million in earnings, it said. While Cairo’s Tahrir Square, the center of protests, has become a tourist attraction in its own right, Egypt continues to suffer unrest and uncertainty.

Bahrain had turned itself into a travel draw for business people and Saudis hankering for nightlife and other adventures not available at home. But now it has seen arrivals dry up amid anti-government protests that have left seven dead. The government was forced to postpone indefinitely a Formula One Grand Prix event, which brings in 40,000 visitors every year, and had been scheduled for March 13. Its month-long Spring of Culture extravaganza has been downsized with all musical events canceled, according to the organizer’s website.

Adding to the region’s tourism sector woes is the rising price of oil, a direct consequence of the unrest that has hit energy exporter Libya and prompted fears it will spread to bigger oil producers such as Saudi Arabia and Iran. European jet fuel barge prices reached their highest in more than two years on Friday to $1,060 a metric ton in the Amsterdam-Rotterdam-Antwerp oil hub.

Higher fuel prices may cause “a summer of financial misery” for travelers as airlines and tour operators tack on fuel surcharges to holiday packages, the Bloomberg News quoted the UK-based researcher KBC Energy Economics as saying on Monday.

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Palestinian Woman Serves Up Success With West Bank Café Chain

Posted by on March 7, 2011 Comments Off
The Media Line Staff

Ramallah, Palestinian Territory (TML) – When Huda El-Jack speaks, it’s with more than an American accent. She exudes an American entrepreneurial drive that she has brought to the Palestinian Authority and, in her own energetic way, she’s paving a path for Palestinian women to assume a greater role in the economy.

“There’s definitely a glass ceiling like in the rest of the world,” El-Jack says over a cup of rich coffee served up in her Zman coffee shop in the West Bank city of Ramallah. “First of all, women here are expected to be traditional wives, overall. She still has to cook. You don’t have the support system of daycare centers like you have in the U.S.”

“When I take a look at the environment, there are so many obstacles, overwhelming sometimes. What has kept Palestinians going is inner dynamism. Palestinian women are known for having this inner dynamism,” El-Jack said.

Warm and cozy, red roses on each table, and photos of Arab silver screen celebrities adorning the walls, the Zman coffee shop is a trendy and popular meeting place in the bustling city of Ramallah. Housed in a modern stone building, it serves its own premium brand in a chic Palestinian/Hollywood atmosphere.

“We respect diversity. We thrive by diversity. You’ll see some people here with a bottle of wine that’s open and you’ll see some people who are very conservative,” said El-Jack.

Married to a Palestinian and of part-Palestinian decent herself, El-Jack was born in Sudan and brought up in the U.S. She studied computer science and worked in information technology for big U.S. companies. Setting up home in the West Bank with her husband and two children in 2003, El-Jack enrolled in the Kellogg program, a masters in business administration course run jointly by Israel’s Tel Aviv University and Northwestern of the U.S.

Upon graduation and now ins her forties, she opted to become an entrepreneur.

El-Jack partnered with two prominent Palestinian businessmen to open Zman in December 2008. Since then, she has opened a second shop, making it not only the first coffee chain in the West Bank, but the first business chain of any kind owned by a woman. It’s become a model for business opportunities where Palestinian women can make their mark.

Doha Wadi, the executive director of the Businesswomen’s Forum, said El-Jack was remarkable for her style and dynamism of her enterprise.

This is a change for conservative Palestinian society. According to Wadi, only 2.4% of registered Palestinian businesses are owned by women. Currently, there are some 60 members of the Palestinian Businesswomen’s Forum and their number is growing.

“People can look at Huda and at her style that is different,” Wadi told The Media Line. “They see the young people she has brought into business. It is what sets her off and differentiates her from the others. She’s opened two branches, which hasn’t been done before.”

There is also a huge dichotomy in the Palestinian areas where women in Ramallah, the economic hub of the West Bank, speak about mergers and acquisitions, and outlying villages where women with barely a grammar school education have no access to the Internet. Only about 10% of women in the Palestinian territories participate in the labor force and that is mostly in education. Unemployment for women is between 30% and 40% and even worse among highly educated women.

On the whole, women are socially and culturally allowed to go to school and colleges, but in order to be better wives. It is much more culturally difficult to go into business, let alone becoming a business leader, which is why El-Jack is such an inspiration for her fellow businesswomen.

According to El-Jack, Palestinian businesswomen own advertising, printing shops and marketing firms. There are several women who also own restaurants, work in the telecommunications and pharmaceutical industries and at least one who is the general manager of a stock brokerage firm.

El-Jack said the tumultuous period of the second intifada when Israeli security action against terrorism cracked down hard on the Palestinian society and economy in an ironic way help open opportunities for women.

“Looking at women’s role in micro-businesses, you’ll see they are growing even faster because men, typically, are used to working at companies. Palestinians are entrepreneurs, but there are only so many entrepreneurs you can have. Most of them worked in Israel. When that shut down, it was very difficult for the men to find work so the women started doing things like opening a little concession stand, or baking, or doing catering. Women had to adapt more and they didn’t feel like they had barriers on what they could do that were home-based businesses,” she said.

“Women in hospitality was unheard of before Zman,” El-Jack said. “Half of our management is women. We want women. We will train them, young girls. Most of them are university students and this is a part-time job for them. We want to grow them in management.”

Asked where she got her ideas, El-Jack didn’t have to look far.

“Israeli coffee chains have been able to hold off international brands from flooding their market. What they did is that they took the idea of a coffee shop and they localized it. We did the same thing,” she said. “Somebody asked me, ‘Is this inspired by Starbucks?’ It’s inspired by all of them but really by the neighbors, the Israeli coffee shops really helped me how to figure out how to localize it.”

Just two years into business, Zman employs some 35 people and El-Jack estimated the value of her company at $1.5 million. Now, she is negotiating to extend her Zman franchise to Jerusalem.

“In Jerusalem, we have the same goal—to bring people together. And we’re going to position it in a way where you’ll have Israelis, Palestinians, tourists, internationals, everybody coming in,” she said, adding they also had ambitions to take it to other countries.

“We’ve been approached to open in Haifa, Nazareth and even Tel Aviv,” she added, naming a few Israeli cities.

The name of her chain is Zman, Arabic for time. And it seems her timing was right.

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U.S., European Arms Dealers Generate 90% of Global Sales

Posted by on March 1, 2011 Comments Off
The Media Line Staff

Tel Aviv, Israel (TML) – The top 100 world’s arms-producing companies sold over $400 billion worth of weapons in 2009, an increase of 8% from the previous year even as the world economy was in the midst of a recession, according to data released last week by the Stockholm International Peace Research Institute (SIPRI).

The annual survey said 78 of the companies were based in the United States and Western Europe and generated $368 billion in total sales. This meant that 91.7% of total arms sales were made by U.S. or European firms. The 45 U.S. firms accounted for 61% of all arms sales.

Broken down, 33 of the top 100 companies were based in nine Western European countries (Finland, France, Germany, Italy, Norway, Spain, Sweden, Switzerland and Britain) and their sales amounted to $120 billion, or 30% of the market.

Russia had seven companies in the top 100 list and their combined sales totaled about $10 billion.

Regarding the rest of the world, India had three companies in the top 100, Japan had four, South Korea had two and Singapore one. China was excluded by SIPRI because figures from China’s producers were based on a lack of comparable and difficult to access quality data.

The Middle East had five companies in the top 100, including three in Israel, one in Kuwait and one in Turkey. None of the companies in the top 100 were based in Latin America or Africa, SIPRI said. Arms sales from Asia and the Middle East totaled $24 billion last year.

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New iPhone app makes reporting on bad drivers easier

Posted by on February 21, 2011 Comments Off
The Media Line Staff

Jerusalem, Israel Arieh O’Sullivan – Imagine some driver has just cut you off, passing you illegally, speeding off recklessly, breaking a few traffic laws and generally endangering the public in the process. Many stressful fellow drivers would probably like to pull out their handy bazooka and blow him away.

But a new Israeli-designed iPhone application lets you take a softer response. Its slogan can be roughly translated as “Don’t fume – film.”

The free application allows users to record and report offensive driving. And it’s designed to work autonomously so drivers doesn’t endanger themselves or others by trying to operate a camera while behind the wheel.

Mediterranean countries are notorious for their awful drivers. In Israel, some 500 people are killed a year and about 100,000 injured. So the National Road Safety Committee, a non-profit organization dedicated to reducing accidents, recently turned to an Israeli software company to create an application that would let the public get involved in promoting safer driving.

The firm Zemingo came up with “Traffic Observer,” an application that allows iPhone users to give bad drivers their just desserts.

“The idea is very simple,” Tsiki Naftaly, one of Zemingo’s founders and head of marketing and business development, told The Media Line. “Everyone at least once in their life has seen an accident or severe traffic felony, and wishes they could have taken a photo of that perpetrator to show the police or to publicize it.”

“We created an application, which on one hand helps catch bad drivers on the road and on the other, doesn’t distract the driver from taking the images,” he said.

The program works by placing the iPhone on the dashboard where it videotapes the road. To prevent overloading the hard disk, it saves images in two-minute segments and then records over them.

“Once you see an accident or a felony, all you have to do is pull over and click the black button on the phone and it transmits the recording. You can also add a vocal description. It sends the GPS location automatically,” Naftaly said.

The data are uploaded to a private YouTube account where volunteers from the National Road Safety Committee filter it. The most flagrant cases are sent to police for action. The volunteers track down the violators of the less severe infractions and replay for them their recorded driving behavior as an educational tool, Naftaly said.

For now, the application and volunteer network has only been set up in Israel. But organizations in other countries can easily adapt it for use there. So far, “tens of thousands” have downloaded the program in the short time it has been available.

The application has a double use. Besides recording proof of traffic violations that can deter future infractions; it also serves as catharsis to the victims of bad drivers.

“The saying goes ‘Don’t get angry, get even,’ well this is a way to feel that you got the guy without getting angry or losing your temper,” Naftaly said.

Since the application surfaced, it has led to an Internet kangaroo court for violators. Even some Israeli news shows have exposed and broadcast traffic violators in an effort to deter bad driving.

A popular news show on the Channel 2 television network broadcast a video taken by Traffic Observer of a driver purposely running a red light.

Prosecution, however, may be lagging. An Israel Police spokesman told The Media Line that the public was allowed to submit cases of bad driving, but had to do so in the form of a formal complaint, which requires identifying themselves and giving sworn testimony so that it can be used in a traffic court.

The spokesman added that he was unaware of the application, but welcomed the idea.

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