Business

AMMAN — Civil aviation and tourism executives, accompanied by government officials, have expressed their commitment to supporting the travel industry and tourism activity in the Middle East and North Africa (MENA) region. 

Taking part in the Arab Aviation Summit, a regional aviation event which concluded at the Dead Sea on Tuesday, the gathering reflected on the progress achieved so far in this area and new trends, shaping the future of the aviation-tourism industry, according to a statement released by the organisers.

Marking the summit, held this year under the theme, "Linking Cultures, Driving Economies", the Arab Tourism Organisation of the Arab League and the Arab Aviation Summit signed a memorandum of understanding at the event, pledging to boost future cooperation. 

The summit opened with a welcome address by the Arab Aviation Summit Chairperson Adel Al Ali, in which he highlighted the relationship between aviation and tourism while encouraging a collaborative approach to the region’s travel industry to achieve further growth.

Minister of Tourism and Antiquities Lina Annab, who attended the summit, concurred that aviation and tourism cannot be seen in isolation. 

Commenting on growth in the travel and tourism sector, which is outpacing growth in other sectors in national economies, she highlighted airport infrastructure, visa processes, and taxes and other levies as issues that need to be prioritised by governments and approached collectively. 

Bandar Fahad Al Fehaid, president of the Arab Tourism Organisation of the Arab League, said there is no tourism without aviation, and no aviation without tourism. 

Addressing the gathering, Fehaid said 12 per cent of the total work opportunities in the Arab world come from the tourism industry, adding that there is significant potential to increase this.

At the event, CNBC Arabia led an interview panel discussion on "Why Arab travel and tourism is a vital economic and cultural driver”, featuring Abdel Wahab Teffaha, secretary general of the Arab Air Carriers Organisation.

AMMAN — An agreement will be signed on Wednesday on how to maximise benefits from the Jordan-US Free Trade Agreement (FTA), according to Mohammed Bataineh, chairman of the American Chamber of Commerce in Jordan.

Speaking at a meeting with a US private sector trade delegation on Tuesday, he said the FTA helped boost the trade exchange from $350 million 10 years ago to over $3 billion; yet he conceded that there was still much more that could be done to ensure maximum benefits. 

“It is underutilised and still there is more room for potential for increased cooperation,” he told the attendees at the meeting with the visiting delegates, led by the US Department of State’s Special Representative for Commercial and Business Affairs Ziad Haider. 

He indicated that Jordan is a good stepping stone into the region and that many opportunities have not been tapped yet, under the country’s free trade accord with the US, the Kingdom’s top trading partner. 

“Ties between the US and Jordan are strong and strategic at all levels, and the FTA was a game changer… Garment is a major sector under the FTA deal, but there are many other sectors that can benefit from the FTA such as pharmaceuticals and engineering,” he said, indicating that the agreement to make the best use of the FTA will be signed with the USAID.

The delegation’s visit comes on the heels of the White House Call to Action for private sector engagement to support the global refugee crisis. The visiting delegation includes representatives of companies in the areas of food and beverage, energy and financial solutions.

On the sidelines of the meeting, in an interview with The Jordan Times, Haider reiterated that ties between the US and Jordan are strong and strategic, saying there is further room for development.

He underscored the importance of the FTA, saying it is in Jordan’s favour.

“We are here to build on the strong economic foundation,” he said, stressing that there is more potential to expand cooperation and trade in other areas.

Around 82 per cent of Jordan’s imports to the US are from the garment sector, he told The Jordan Times.

As the Kingdom is under pressure from regional crises n Syria and Iraq, coupled with an influx of Syrian refugees, “we are keen to attract more investments into Jordan and boost trade exchange”, he said. 

Highlighting promising sectors, he said those include ICT, pharmaceuticals and renewable energy.

BAGHDAD — Iraq's private banks are pinning hope on the oil-rich government to bring back into the black their balance sheets severely affected by the Daesh terror group take over of parts of the country.

In an interview with Reuters on Monday, Iraqi Private Banks' Association President Ali Tareq said that several lenders would not be able to pass a stress test of international standards at their current level of capitalisation.

“Collectively, banks have lost nearly 100 branches in hot areas with all their assets, funds, buildings, everything without any compensation,” he said. “If a stress test is held currently, it should take into consideration the current situation of the country and the Iraqi banking sector.”

The weakness of the private banks does not affect the banking sector as a whole, dominated by state-owned banks feeding on business from the oil-rich country's government.

But it is a setback for government efforts to develop the private sector and reduce the OPEC nation's reliance on oil.

As a way to reinvigorate private lenders, the central bank may offer them the possibility of setting up a 500 billion Iraqi-dinar fund that will invest in the government's “strategic infrastructure projects” like housing, transport and sewage projects, Tareq said.

The government would thus provide the banks with a steady stream of business that will help restore their balance sheets.

“The central bank is in the final steps, it has sent a letter to the participant banks to determine their shares, all banks are allowed to participate,” Tareq said. “Other than levying interest, the banks will be engaged in long-term, guaranteed projects.”

Other than damage to the assets of the banks and the banks clients, the militants' sweeping advance across northern and western Iraq also caused a rush on liquidity that weakened the leaders. People got worried that they would no longer be able to access their money deposited in banks. Iraq relies almost entirely on cash for day-to-day transactions.

Iraq has been prey to war and insurgency since the overthrow of president Saddam Hussein in 2003. As a result, Iraqis are reluctant to use banks in case violence prevents them accessing their cash or restrictions are placed on withdrawals.

Private banks suffered a lot more than the state owned banks that relied on government liquidity and transactions to stay afloat throughout the 36 years of wars and sanctions that the country went through.

Iraq's state-owned banks — Rafidain, Rasheed, Agriculture, Industrial, Real Estate and the Housing Fund — control together 86 per cent of total deposits or $48 billion, while the 45 private banks share the remaining 14 per cent, or $7 billion, said Tareq.

“There were many withdrawals of deposits by citizens because the circumstances at the time required that they have liquidity,” said Tareq. “Bank transactions were dealt a heavy blow at the same time, as lending and letters of credit” to the private sector “decreased as the government executed fewer projects”, he added.

SAN FRANCISCO — Apple has revealed it is investing heavily in autonomous vehicles in a letter asking the government to make it easier to develop self-driving cars.

The company is “excited about the potential of automated systems in many areas, including transportation,” Apple said in a November 22 letter to the National Highway Traffic Safety Administration (NHTSA) offering Apple’s opinion about draft regulations for the sector.

“Apple looks forward to collaborating with NHTSA and other stakeholders so that the significant societal benefits of automated vehicles can be realised safely, responsibly, and expeditiously,” the company’s director of product integrity Steve Kenner wrote.

Apple issued the letter because it is “investing heavily in machine learning and autonomous systems”, an Apple spokesman said in an e-mail to AFP.

“There are many potential applications for these technologies, including the future of transportation, so we want to work with NHTSA to help define the best practices for the industry.”

Rumours about Apple’s ambitions in the sector have circulated for years.

The company has a separate organisation called “Project Titan” that is developing automotive projects.

Although Apple has never officially confirmed the project, several of CEO Tim Cook’s comments have fuelled speculation.

After a $1 billion investment in a Chinese ride-hailing service called Didi Chuxing, he spoke of “some strategic things that the companies can do together over time”.

However, in early September, The New York Times reported that the group had narrowed its ambitions, laying off dozens of staff as part of the project’s “reboot”. 

Instead of designing and producing a complete self-driving car, the group will now concentrate on developing underlying technologies for autonomous vehicles.

In its letter, Apple urges the NHTSA not to penalise new participants in the sector by restricting the testing of cars under development on public roads, for which established automakers generally have exemptions.

“To maximise the safety benefits of automated vehicles, encourage innovation, and promote fair competition, established manufacturers and new entrants should be treated equally,” it says.

Apple also encourages data sharing, particularly for accidents, saying that would enable the industry to “build a more comprehensive dataset than any one company could create alone”.

Most major auto manufacturers and many technology groups are currently developing autonomous vehicles, considered to be the future of the automobile, along with electric power, with first production models promised for around 2020.

AMMAN — Airport International Group (AIG) has announced that as of the end of October 2016, the Queen Alia International Airport (QAIA) has welcomed 6,383,193 passengers, recording a 4.4 per cent increase compared to the same period in 2015. 

Moreover, year-to-date (YTD) aircraft movements (ACM) increased by 2.9 per cent to settle at 62,553 ACM while YTD cargo traffic figures increased by 2.2 per cent to reach 84,124 tonnes, the AIG, the Jordanian company responsible for the rehabilitation, expansion and operation of the QAIA said in a statement. 

In October this year, 532,542 passengers passed through the QAIA, resulting in an 8 per cent decrease compared to the same period of last year, during which the airport welcomed 578,867 passengers, the statement indicated. Additionally, QAIA registered 5,630 ACM as opposed to 6,129 ACM in 2015, indicating an 8.1 per cent year on year fall. Meanwhile, cargo rose by 0.9 per cent as QAIA handled 8,837 tonnes as opposed to 8,758 tonnes during the same month in 2015.  

“We are now experiencing a lull in airport activity, which is typical of this time of the year. 

Nonetheless, we look forward to witnessing the usual surge that takes place towards the end of the year during the Christmas and New Year holidays, when vacationers choose to travel again,” Airport International Group CEO Kjeld Binger said.

AMMAN — The Arab Air Carriers Organisation (AACO) general assembly elected Royal Jordanian’s (RJ) President/CEO Suleiman Obeidat as a member of the organisation’s executive committee during AACO’s 49th annual general meeting, which convened in Casablanca, Morocco, between November 28 and 30.

The AACO executive committee consists of the chief executive officers of nine elected active AACO member airlines, who hold a three-year renewable term.

It directs and supervises AACO’s work, as well as the performance of AACO’s secretariat general and its institutions. RJ participated in the 49th annual general meeting that brought together CEOs of AACO member airlines, AACO partner airlines and industry partners, according to an RJ statement.  

RAMALLAH — At first glance, Mashvisor is just one of thousands of websites specialising in US real estate.

But it has a unique feature, undetectable to customers: its designers created it in the West Bank and it is run from the Israel-occupied Palestinian territory. 

"The great thing about a start-up is you can work on it anywhere in the world. You can be in Palestine, you can be in Cambodia, Vietnam, China. It doesn't matter," explains Peter Abu Al Zolof, who founded Mashvisor more than a year ago with a friend. 

Last week, Mashvisor became the first Palestinian company to get the support of the influential American 500 Start-ups venture capital fund.

It is one of a number of Palestinian start-ups in the occupied Palestinian territories, long overshadowed by Israel's so-called "Start-up Nation".

The online platform automates and analyses US real estate data nationwide to find investors the best property deals.

As in Silicon Valley, the staff dress casually, drink coffee from state-of-the-art machines in garish colours, and pad through the office wearing US-made headphones around their necks.

But working in the West Bank brings unique challenges.

In October 2015, a wave of violence broke out across Israel and the Palestinian territories.

Abu Al Zolof's friend and founding partner Mohamed Jebrini, who lives in Hebron, found himself stranded in the city as roads were closed, 45 kilometres from their Ramallah offices.

"He was stuck in Hebron and I was stuck in Ramallah and we were still working on our company," explains Abu Al Zolof.

The American-Palestinian says the online nature of what they do means they can avoid many of the frustrations for other companies in the West Bank, where the Israeli army checkpoints often present very physical challenges to commerce.

"There are no walls, there are no challenges, there is nothing that can stop this kind of thing," he says.

"It's a virtual market, so there are no checkpoints where they tell you: 'You can't sell this. You can't take this out of the country’."

The company benefited from the support of the Ramallah-based Leaders, an organisation that helps nurture start-ups.

Shadi Atshan, Leader's director general, told AFP that in the start-up scene there was "no unemployment — unlike almost all other industries and economic sectors in Palestine which have high unemployment".

"Those with good skills can earn a very high income."

The unemployment rate in the occupied Palestinian territories is 27 per cent, according to figures from the Palestinian Central Bureau of Statistics.

The Ibtikar investment fund has invested around $800,000 (750,000 euros) in 10 start-ups so far, according to its Chief Operating Officer Ambar Amleh. She stresses their work is not charity.

"This isn't work that should be funded by donors or grants. The expectations of making money should be there from the beginning because we are creating companies," she told AFP.

Palestinians are still a long way behind Israel, where companies in Tel Aviv's start-up scene regularly sell for tens or hundreds of millions of dollars.

In 2013, Google bought the Israeli traffic app Waze for more than $1 billion, a figure unimaginable in the Palestinian scene.

But Amleh points out the huge government support for Israeli start-ups, which do not exist in the Palestinian territories.

"I think more and more people are starting to see that they really can make something they have been dreaming about come true."

Hussein Nasir Al Din and his partner Laila Aqal have a business inextricably linked to the conflict — monitoring the security situation in Israel and the Palestinian territories.

The Red Crow website, run out of a small office in Ramallah, monitors security developments and sends real-time alerts and maps to clients.

Their customers include UN agencies, diplomats and organisations that operate in the field and adjust their security programmes according to events.

Soon they want to expand to the Egyptian and Iraqi markets.

NEW YORK — Oil prices soared more than 8 per cent on Wednesday as some of the world's largest oil producers agreed to curb oil output for the first time since 2008 in a last-ditch bid to support prices.

Crude prices, however, are unlikely to skyrocket in reaction to the deal, but will instead take measured steps higher, traders and analysts said.

The Organisation of the Petroleum Exporting Countries (OPEC) agreed to cut production to 32.5 million barrels per day (bpd), Kuwait's oil minister said. The cuts include Iraq reducing output by 200,000bpd to 4.351 million bpd beginning in January. The country had previously resisted cuts, providing a hurdle to an agreement.

The cut was at the low end of production of a preliminary agreement struck in Algiers in September, and reduces production from a current 33.64 million bpd.

Non-OPEC member Russia has agreed to cut output by 300,000bpd. OPEC will meet with non-OPEC producers on December 9.

US West Texas Intermediate crude futures for January delivery rose $3.93 to $49.16 a barrel, a 8.7 per cent gain at 12:09pm Eastern (17:09 GMT). The move was the largest one-day gain since February.

Brent crude futures for January delivery rose $3.73 to $50.11 a barrel, an 8 per cent gain. That contract expires Wednesday. Brent futures for February rose 8.8 per cent, or $4.16 to $51.48 a barrel.

"It's going to take time to see whose going to abide by those rules," said Oliver Sloup, director of managed futures at IITrader.com. In the past, not all producers have complied with agreements on supply cuts, Sloup said. As a result, there is scepticism about how closely the production caps will be adhered to.

Kuwait, Venezuela and Algeria have agreed to monitor compliance with the OPEC agreement.

The market will grow in a measured way because traders with short positions have already exited crude futures, according to Dominic Chirichella, senior partner at the Energy Management Institute.

"There's going to be an air of cautiousness and rightfully so," he said. "I think the market is going to move to the upside, but in a metered, cautious manner over a period of time."

The oil rally ricocheted through the market, with stocks and bond prices reaction to the move.

US-listed oil companies including Exxon Mobil Corp., Chevron Corp. and Schlumberger saw shares rise as crude prices climbed. Some US producers saw shares spike more than 10 per cent, including Pioneer Natural Resources, Hess Corp. and Anadarko Petroleum.

Deferred spreads for US and Brent crude futures also rallied on the OPEC deal.

A weekly government report on US crude oil stockpiles had little sway in the market, which remained focused on the OPEC deal. US crude stockpiles unexpectedly fell 884,000 barrels in the week, compared with forecasts of a 636,000-barrel increase.

RIYADH — Saudi Arabia's King Salman approved the allocation of 100 billion riyals ($26.67 billion) from the kingdom's reserves to the Public Investment Fund (PIF) on Wednesday, according to a statement carried by state news agency SPA.

The funds would be used to support both foreign and local investments, particularly opportunities in the local market that would help to build the private sector, the statement said.

It did not elaborate on a timeline for the investments, but said they would be phased.

Under economic reforms announced early this year, the Saudi government said it aims to expand the PIF, founded in 1971 to finance development projects in the country, from $160 billion to about $2 trillion by transferring assets such as ownership of state oil giant Saudi Aramco.

That would make the PIF the world's biggest sovereign fund by far on paper, though not necessarily in terms of the cash it had available for investment.

The fund will increase investments abroad — in June, it bought a stake in US ride-hailing firm Uber for $3.5 billion — but it will still focus much of its attention on local projects designed to reduce Saudi Arabia's reliance on oil exports.

On Monday, the fund announced plans to buy a major stake in Adeptio, the Gulf-based investment firm which controls Kuwait Food Co. (Americana).

It is also set to take over a stalled financial district project in Riyadh and to buy a stake in the King Abdullah Economic City north of Jeddah.

ATHENS — EU Economy Commissioner Pierre Moscovici said Tuesday he is optimistic about concluding an overall deal on Greece’s latest bailout programme by the end of the year including discussions on debt relief.

Moscovici spoke just days before a key meeting of eurozone finance ministers on December 5 to discuss Greece’s massive 86-million-euro bailout, its third since 2010.

“This is doable, feasible,” Moscovici told journalists at the end of a two-day visit to Athens. 

However he said that “the precondition is to have pre-agreement this weekend involving all partners.”

“Greece has made significant progress, the second review is going forward well, I’m convinced to reach a staff agreement before the December fifth Eurogroup” meeting, he said.

During the previous review of Greece’s reform programme in May, the EU and IMF agreed to start discussions on debt relief by the end of the year if Athens keeps its reform pledges.

But influential Germany firmly opposes any new gestures to Athens, especially ahead of German elections later next year in which anti-EU populists could see a significant surge.

Greece’s leftist-led government is desperate to reach agreement with the creditors on the new fiscal measures before the end of the year in order to secure a pledge of debt relief, hoping it will kickstart the ailing economy.

Athens is also hoping that a deal will persuade the European Central Bank to include Greek sovereign debt in its asset purchase programme, known as quantitative easing or QE. 

Without debt relief, the ECB will not grant Greece access to QE, and without this, the country will not be able to return to the debt markets by early 2018, Finance Minister Euclid Tsakalotos said on Monday.

Greece’s debt will grow to 315 billion euros ($334 billion) or around 180 per cent of output this year, according to the Greek finance ministry.

The International Monetary Fund has said it won’t join the latest bailout until it sees a concrete plan from the Europeans to substantially cut the debt burden.

Despite strong opposition by Germany, Eurogroup Chief Jeroen Dijsselbloem said debt measures would be discussed on Monday in the hopes of persuading the IMF to sign on to the bailout.

“I think the IMF is committed because they had already agreed in May to go to the board [for approval] before the end of the year,” Dijsselbloem told MEPs in Brussels. 

In a gesture towards the IMF, Dijsselbloem admitted that the EU’s budget demands of Greece may be too strict, putting himself in opposition to powerful German Finance Minister Wolfgang Schaeuble.

“The IMF has a point that running a primary surplus of 3.5 per cent of GDP for a very long time is a huge thing to ask and we need to be realistic here,” Dijsselbloem said.