August 27, 2002 news

August 27, 2002 News

Arab fiscal gap shoots up to $17b
Abu Dhabi |Nadim Kawach | Gulf News, 27-08-2002

Arab states plunged back into a high fiscal gap of more than $17 billion in 2001 after a surge in crude prices in 2000 flushed their coffers and enabled them to slash the deficit to one of its lowest levels, according to official figures.

Gulf Arab countries were the main victims in 2001 as they heavily rely on crude export earnings and they were unable to go further in spending cuts to avert hurting growth.

Figures by the Abu Dhabi-based Arab Monetary Fund (AMF) and other Arab League institutions showed the combined Arab budget deficit stood at around $17.4 billion in 2001 compared with only $3.6 billion in 2000 and a mammoth shortfall of $30.2 billion in 1999.

The deficit was even higher in 1998, when oil prices collapsed to just $12.

Last year's actual deficit was caused by higher spending and lower revenues, mainly oil export earnings in the UAE and the five other GCC countries.

The figures showed total Arab expenditure was hiked by around seven per cent to $211.2 billion in 2001 from $197.4 billion in 2000. Spending was increased despite a decline in revenues to nearly $193.8 billion from $202.3 billion in the same period.

The decline was underscored in the oil income which plummeted nearly $40 billion to $152 billion from a 20-year high of $191.8 billion.

The bulk of the decline was suffered by the GCC, whose income dived from around $130 billion to $106 billion.

"The decline in the oil income had an adverse impact on development, social, health and educational projects in the Arab region," the AMF said in the 2002 Arab economic report, co-prepared by the 10-nation Organisation of Arab Petroleum Exporting Countries and the Kuwait-based Arab Fund for Economic and Social Development.

It said the drop in the oil income was caused by a loss of more than $4 in the price of OPEC's basket to $23.1 from $27.6 and production cuts of nearly 3.5 million barrels per day by the 11-member cartel in its drive to prevent a price collapse.

The deficit was also cut in 2000 after Saudi Arabia and other oil producers reverted to a surplus because of higher oil revenues. In 2001, the bulk of the shortfall was recorded in the Kingdom, Kuwait and other Gulf states due to the oil price fall.

While such deficit-ridden members as Jordan, Bahrain, Tunisia, Algeria, Oman, Lebanon, Egypt and Morocco resorted to domestic borrowing to bridge the gap, the UAE and other countries continued to avoid borrowing by resorting to return from their overseas assets.

As a result, the combined Arab domestic debt grew by 8.1 per cent to $311.8 billion at the end of 2001 to reach 60.4 percent of the gross domestic product. Most of the increase was recorded in Saudi Arabia, Qatar, Bahrain, Syria and Jordan, according to the report.

It gave no debt breakdown but official Saudi figures showed the Kingdom's domestic debt stood at around SR630 billion ($168 billion) at the end of 2001, accounting for nearly 53 per cent of the total Arab domestic debt.

The report made no mention of the UAE in its debt section as it is one of the few Arab nations that are not reeling under heavy debt.

Qatar minister in Iraq to discuss arms inspections
Baghdad |Reuters | Gulf News, 27-08-2002

Qatar's foreign minister arrived in Iraq on Monday for talks to try and persuade Baghdad to resume U.N. weapons inspections.

Sheikh Hamad bin Jassim bin Jaber Al Thani's state visit was the first by a Gulf Arab foreign minister to Iraq in at least four years and would focus on arms inspections as a key to averting a potential U.S. attack on Iraq.

"We will ask Iraq to cooperate and accept resolutions of the United Nations and consider (U.N. weapons) inspectors," Al Thani said. "We are not mediators in this issue, but we are an Arab country and we are trying as best as we can to spare the region new tragedies."

Qatar was the first Gulf Arab country to reopen ties with Iraq after Iraqi forces were expelled from Kuwait by a U.S.-led coalition during the 1991 Gulf War.

Qatar was also the third Gulf Arab state to sign a free-trade agreement with Iraq, which has the second largest oil reserves in the world.

Iraq has made various overtures to the United Nations in recent weeks about allowing U.N. arms inspectors to return for the first time in four years. A key condition for easing U.N. sanctions imposed since Iraq invaded Kuwait in 1990 would be a full accounting of Iraq's weapons of mass destruction.

U.S. President George W. Bush has branded Iraq part of an "axis of evil", accusing it of supporting terrorism and developing weapons of mass destruction. He has vowed to use all tools at his disposal to topple Iraqi President Saddam Hussein.

Iraq has repeatedly denied those accusations and accused Washington of wanting to return the inspectors at all costs to update intelligence information for a possible attack.

Qatar is home to a U.S. military base, which Washington is upgrading, prompting speculation that it could be used as a launch pad for attacks on Iraq, even though Qatar has officially opposed such a U.S. assault.

Iraq has said any talks with the United Nations on the inspectors' return should also focus on lifting 12-year-old sanctions and the U.S.- and British-enforced no-fly zones in southern and northern Iraq, imposed since the 1991 Gulf War.

Mubarak says Iraq attack could bring chaos

CAIRO - Egypt's President Hosni Mubarak said on Tuesday there could be chaos in the Middle East and many innocent civilians could lose their lives if the United States followed through on its vow to attack Iraq.
The comments by Mubarak, leader of one of Washington's major Arab allies, came after the US administration this week signalled it was still intent on a military solution.
"Striking Iraq is something that could have repercussions and post-strike developments. We fear chaos happening in the region," Mubarak told a group of students, adding there was "no need" to attack the sanctions-hit Arab country.
"One looks to a worse future after that. We already have ongoing killing in the Palestinian issue...The issue must be dealt with wisely. There are many innocent citizens who will be killed," he said in the remarks broadcast on television.
Many Arab and European leaders have urged caution on the United States in its stated desire to topple the rule of Iraqi President Saddam Hussein. Many have said outright that they oppose military action. Anti-American feeling is high in the region because of U.S. support for Israel in its attempts to crush the 23-month-old Palestinian uprising against Israel's occupation of the West Bank, East Jerusalem and Gaza Strip.
US Vice-President Dick Cheney made a strongly worded case for U.S. pre-emptive action against Iraq during a speech on Monday, citing what he said was the danger that Iraqi weapons of mass destruction could fall into the hands of terrorists.
He said the United States would, if necessary, fight a war of liberation, not of conquest. - Reuters

Iraq brands UN disarmament chief a 'spy'
BAGHDAD - UN disarmament chief Hans Blix is a "spy" without tact or manners, Iraqi Vice-President Taha Yassin Ramadan charged in an interview published on Tuesday. Ramadan accused Blix of replying "without tact or manners" to Baghdad's proposal to UN Secretary General Kofi Annan to pursue technical discussions about a possible resumption of weapons inspections.
Blix, head of the UN Monitoring, Verification and Inspection Commission (Unmovic), dismissed Iraq's offer as "not very productive" and opposed any conditions on inspections. "We were surprised that Blix replied to us and not Annan and in a way lacking tact and manners," Ramadan told the weekly newspaper Al Rafidain.
"He has no right to answer because he is a bureaucrat appointed by the UN secretary general, and Iraq's letter was addressed to the latter and not to a new spy," the vice president said.
Unmovic, set up in 1999 under Security Council resolution 1284 to re-launch weapons inspections in Iraq, has steadfastly been refused access by Baghdad which insists it is not developing arms of mass destruction. - AFP

Five Kashmiris killed in clashes with security men
Five kashmiris Five Kashmir have been killed in clashes with security men in Indian Kashmir in the past 24 hours, a defence official said on Tuesday.
Violence in the disputed Himalayan region has increased since the government announced it would hold assembly elections in Kashmir in September and October.
And many Kashmiris fear violence will escalate further as separatists have asked people to boycott the polls in Kashmir which lies at the heart of an eight-month military standoff between India and Pakistan.
The defence official said two rebels were killed in the border district of Rajouri on Monday when they were trying to sneak across a military ceasefire line into disputed Kashmir from Pakistan. He said two Pakistanis were killed in a gunbattle near Mahore area in Udhampur district, 65 km east of the state's winter capital, Jammu, on Monday night.
One belonging to a pro-Pakistan group, the Lashkar-e-Taiba, was killed in an encounter with security forces in Kalakote area of Rajouri district late on Monday. New Delhi accuses Pakistan of arming and training militants fighting its rule in Jammu and Kashmir, India's only Muslim-majority state. - Reuters

France hunts for mystery freighter after collision
BREST - French authorities were on Tuesday hunting for a cargo ship believed to have steamed off after sinking a trawler in a collision that left four fishermen missing, feared dead.
It was "practically certain" a collision was responsible for the accident, which occurred early Monday about 120 kilometres off France's Atlantic coast close to a busy shipping lane, a coastguard official said.
Suspicions focused on a Norwegian freighter that was in the area at the time and which radioed late Monday that it had a breach in its hull. Two hundred tonnes of ethyl acetate it was carrying leaked into the sea, where it rapidly dissipated.
After officials noted its details, the Norwegian ship, Bow Eagle, was permitted to continue its journey to Rotterdam. The coastguard official said "it is up to the investigation to confirm" whether the freighter was involved in the collision.
The captain and two sailors from the French-registered trawler were plucked from the water by another trawler hours after the boat, Le Cistude, sent out a distress signal. Their four colleagues -- three Spaniards and a Frenchman -- have not been found despite an intensive air-and-sea search.
The wreck of the trawler was found lying in deep water late on Monday. - AFP

Russian policeman who shot five dies: report
MOSCOW - A Russian policeman who killed five people when he stormed into a bar and opened fire in the far east of the country has himself died from injuries sustained when he shot himself, media reported on Tuesday.
The policeman, who turned his gun on himself after the shooting, had made another attempt on his life after an initial operation, and later died, the Interfax news agency said.
Four people died instantly when the officer, a traffic policeman, stormed into a bar at Yaroslavsky in Primorye territory on Sunday, opening fire for no apparent reason. A fifth person died on Monday, and 10 other people were wounded in the incident. - AFP

Rebel killed in clash on Philippine hostage isle
ZAMBOANGA - Philippine troops clashed with guerrillas holding three Indonesian hostages on a southern island, killing one rebel, but found no sign of the captives, the military said on Tuesday.
Government forces suffered no casualties in the encounter on Monday in a mountain village on Jolo island, 960 km south of Manila, southern military commander Lieutenant-General Ernesto Carolina told reporters.
"There were no sightings of the hostages during the encounter," he said. The three hostages were among four Indonesian crewmen of a Singaporean-owned tugboat who were abducted by pirates on June 17 as their vessel was passing Jolo. One of the Indonesians escaped.
The military said the kidnappers handed their captives over to separatist Abu Sayyaf rebels after negotiations for their release bogged down. The United States has linked the Abu Sayyaf to Osama bin Laden and his Al Qaeda network, blamed for the September 11 attacks on New York and Washington.
US special forces last month ended a six-month exercise with Philippine soldiers on the nearby island of Basilan to help local troops fight the Abu Sayyaf. - Reuters

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