Business

CAIRO — Egypt has invited tenders to meet its refined oil products needs for October after Saudi Aramco halted the expected delivery of 700,000 tonnes for this month, the petroleum ministry said on Tuesday.

The move by the Saudi oil giant was a surprise as Riyadh has been one of the main regional backers of President Abdel Fattah Al Sisi and had agreed to finance Egyptian imports from Aramco for five years in a $23 billion deal reached in April.

“The Saudi Aramco company verbally informed the General Petroleum Corporation earlier this month that it would halt its supplies for October, without offering any reasons,” ministry spokesman Hamdy Abdel Aziz told AFP.

Egypt has invited “tenders in international markets to supply the amount needed for October and we have opened credit lines with the central bank and will reach a deal soon”.

Egypt angered its ally on Saturday by voting in favour of a Russian-drafted resolution on the conflict in Syria which Saudi Arabia had strongly opposed.

Riyadh had backed a French text, which was vetoed by Moscow, that would have demanded an end to air strikes on rebel-held areas of Syria’s battleground second city Aleppo.

But Abdel Aziz insisted that Aramco’s decision came before the Security Council vote and was unconnected.

“Aramco told us about the issue before the Security Council meeting. This is a commercial issue and not political. It is normal for some shipments to be late,” he said.

Abdel Aziz did not elaborate on when he expected Aramco to resume shipments, but insisted: “The deal with Saudi is ongoing.”

Saudi Arabia has provided Egypt with billions of dollars in aid and credit since Sisi overthrew Islamist president Mohamed Morsi when army chief in 2013 and King Salman visited Cairo in April.

The two governments have had some differences over the Syrian conflict and over Egypt’s unwillingness to send ground troops to join the Saudi-led coalition fighting rebels in Yemen.

But Saudi Arabia’s ambassador to the United Nations, Abdullah Al Muallimi, expressed hurt at Saturday’s UN vote by Egypt.

“It was painful for the Senegalese and Malaysian positions to be closer to the Arab consensus than that of the Arab representative,” he told Al Jazeera television.

“This obviously was painful. But obviously the question should be directed to Egypt’s ambassador.”

AMMAN — Jordan’s public debt dropped slightly during the first eight months of 2016, as it represented 93.3 per cent of the gross domestic product (GDP), put at JD27.46 billion, compared with 93.4 per cent of the GDP at the end of 2015, the Finance Ministry reported on Tuesday.

The debts of the National Electric Power Company and the Water Authority of Jordan amounted to JD6.7 billion of the overall public debt, totalling JD25.625 billion at the end of August, according to the ministry’s monthly bulletin.

At the end of August, post-aid budget deficit dropped to JD370 million compared to a JD555.4 million deficit in the same period in 2015, according to the Jordan News Agency, Petra. 

SHANGHAI — China's central bank set the yuan's central parity rate weaker than 6.7 to the dollar for the first time in six years on Monday, the first day of trading after it joined the IMF's "special drawing rights" reserve currency basket.

The currency has been declining for months in the face of a globally stronger dollar, slowing growth in the Chinese economy, and capital outflows from the world's second-largest economy.

China's authorities have repeatedly pledged to liberalise trading in the unit, also known as the renminbi, but still keep a tight rein on it, only allowing it to rise or fall 2 per cent on either side of a daily fix on the national foreign exchange market.

On Monday the People's Bank of China lowered the central rate by 230 basis points from the previous trading day to 6.7008, its weakest since 2010.

Chinese markets were closed all last week for national holidays, during which the dollar's performance was "quite strong", Lu Zhengwei, chief economist at Industrial Bank told AFP.

"I believe today's slump is a response to the strong dollar during the holiday." 

Monday was the first trading day in China since the yuan joined the dollar, pound, yen and euro in the IMF's "special drawing rights" reserve currency basket on October 1, after a decision last year.

The move, long pressed for by Beijing as it seeks to increase the yuan's role in global markets, brings with it symbolic prestige but has limited direct impact, analysts say.

Zhang Qun, an analyst at Citic Securities, said the currency's value was increasingly dependent on China's economic fundamentals, adding: "In the medium and long term, the yuan will continue to depreciate at a steady, slow pace."

The Asian giant's economy expanded only 6.9 per cent in 2015 — its weakest rate in a quarter of a century — and has slowed further this year.

In August of last year, Beijing suddenly devalued the yuan, causing investors to dump the currency in volumes not seen since 1994 and sparking an outflow of capital from China. The yuan has fallen 8 per cent against the US dollar over the last two years.

Strong US economic data released in September and heightened market expectations that the US Fed will raise interest rates in December have also caused short-term pressure on the yuan, analysts said.

AMMAN — Amman Chamber of Commerce President Issa Murad on Monday commended the Cabinet’s “positive” response to the chamber’s demands for partial exemptions of fines for late tax payments. On Sunday, the government approved a partial exemption for taxpayers who have not paid their dues on time, a decision Murad described as “positive and excellent”.

Murad, who is also a senator, said the decision would encourage the private sector to submit their tax statements as soon as possible and alleviate the financial burdens borne by investors, and assist taxpayers in paying their dues to the Treasury. This way, tax payment will be more efficient, Murad said, according to a statement of the chamber.  

AMMAN — Amman Chamber of Industry exports during the first nine months of this year exceeded JD3 billion, the Jordan News Agency, Petra, reported on Monday. The chamber’s exports were 1 per cent less than those of the same period last year as they went down to JD3.029 billion from JD3.069 billion, according to the chamber’s monthly report.

Exports in 10 of Jordan’s 20 industrial sectors decreased, most significantly in the plastic and rubber industries which witnessed a 30 per cent drop to JD47 million, according to Petra. The chamber’s exports to Asian and African-Arab countries went down, according to the report, while Iraq topped the list of the countries which imported most Jordanian industrial products over the last nine months.

CAIRO — As Egypt braces for austerity reforms, the military has expanded its economic role, at times helping President Abdel Fattah Al Sisi assuage the impact of rising prices on the country's poor.

For decades, the military — which produced all but one president since 1952 — has played a key though opaque economic role, producing everything from washing machines to pasta, alongside building roads and operating gas stations.

Since the arrival of Sisi, a former army chief who toppled his Islamist predecessor Mohamed Morsi in 2013, its involvement has been more visible amid austerity measures, a dollar shortage and rising prices.

In return for a $12-billion International Monetary Fund (IMF) loan, Egypt is set to devalue the pound, after having already imposed a new-value added tax.

In August, the military intervened to resolve a baby formula shortage that caused prices to spike and led to protests, promising to import it and sell it at half the price.

It accused companies that imported the formula of hoarding it to raise prices.

The same month, the ministry for military production signed an agreement with the health ministry for the country's first plant to produce cancer medication.

Meanwhile, the military has played a part in large scale projects that have been touted as part of the country's economic recovery plan, such as the extension of the Suez Canal.

"The military is seeking to expand its role in new economic sectors," said Amr Adly, a professor of economics at the American University of Cairo.

It is difficult to assess the military's share in the economy and details of its budget are not allowed to be published.

But analysts say it is growing.

"The military's economic role has certainly expanded both quantitatively and qualitatively," said Yezid Sayigh, a senior associate at the Carnegie Middle East Centre in Beirut.

"Interest groups within the army have found an opportunity to take on profitable projects," he said.

"President Sisi tasked the military to take on a leading role in large projects because of the deterioration of civilian institutions that are no longer able to play that role," he said.

Post-Mubarak comeback 

The military's share, however, remains small, according to analysts.

"Aside from road construction, in which the military has a 7 or 8 per cent share — which is a significant part — the military does not have a significant share in other sectors," Adly said.

"Even if they have gas stations, they cannot compete with companies like Total," he said.

And while the military produces bottled water, its share of the market is very low, Adly noted.

The military made a comeback in the business world after the overthrow of president Hosni Mubarak in a 2011 popular uprising, Seyigh said.

Himself a former air force chief, Mubarak was seen as having sidelined the military towards the end of his three-decade rule, with its role overshadowed by a coterie of businessmen heading his party.

"Under Mubarak the army had a distinguished role, but it was not a chief player or decision maker, economically or politically," Sayigh said.

But today, Adly said, the military's economic activities are not merely for profit.

"Its investments are political, being in the interest of its political role, and what it considers a defence of the country from collapse," he said.

Sisi recently defended the military, which has attracted criticism over its expanding role, saying that it was not doing so to enrich itself.

"The military does not take a single pound to place in anyone's pocket," he said.

"No money is spent in the military without orders from me or the defence minister."

AMMAN — The total value of shares that were bought by non-Jordanian investors at the Amman Stock Exchange (ASE) since the beginning of the year until the end of September was JD388.1 million, representing 23.9 per cent of the overall trading value, according to the ASE website.  

The shares sold by the same bracket amounted to JD268.2 million. Subsequently,  non-Jordanians’ net investments rose by JD119.9 million compared to a drop by JD4.4 million during the same period of 2015.

Arab investors’ purchases totalled JD344.4 million, or 88.7 per cent of the overall purchases by non-Jordanian investors, while the value of non-Arab investors’ purchases amounted to JD43.7 million, constituting 11.3 per cent of the total purchases. 

Arab investors’ sales amounted to JD228.9 million, representing 85.3 per cent of non-Jordanian investors total sales while the value of non-Arab investors’ sales amounted to JD39.3 million, representing 14.7 per cent of the total sales by non-Jordanian investors.

Moreover, the total value of shares that were bought by non-Jordanian investors at the ASE during September 2016 was JD15.7 million, representing 11.3 per cent of the overall trading value whereas the value of shares sold by them amounted to JD36.7 million. 

As a result, net non-Jordanian investments dropped during September 2016 by JD21 million, compared with a JD7.4 million drop during the same month of 2015, according to the ASE statement.

AMMAN — The Kingdom’s gross domestic product (GDP) grew during the second quarter by 1.9 per cent, compared with the same period last year, according to the Department of Statistics.

The department said most sectors saw a positive growth, including the water and electricity sectors which recorded the highest growth, the Jordan News Agency, Petra, reported on Sunday.  

AMMAN — Jordan Industrial Estates Company (JIEC) Chief Executive Jalal Al Debei urged Iraq on Sunday to further benefit from Jordan’s experience in the field of developing, managing and marketing industrial estates through a partnership agreement.

At a meeting with Intisar Jaafar, the commercial attaché at the Iraqi embassy in Amman, Debei described Iraq as a strategic partner for the economic, commercial and industrial development process in Jordan.

He underscored the importance of the Iraqi investments at the JIEC and their contribution to the economy.  Jaafar pledged further economic cooperation between the two countries, according to the Jordan News Agency, Petra.

AMMAN — Greater Amman Municipality (GAM) and the Amman Chamber of Commerce signed a memorandum of understanding (MoU) on Saturday on  an “Entrepreneurship House” project, seeking to support IT Jordanian entrepreneurs.

Under the MoU signed by Amman Mayor Aqel Biltaji and Amman Chamber of Commerce President Senator Issa Murad, GAM will issue vocational licences to companies or business entities registered under the names of young entrepreneurs who will be trained at the chamber’s Entrepreneurship House, the Jordan New Agency, Petra, reported.

For his part, Murad thanked GAM for supporting the project and its assistance to the private sector, through supporting economic activities that are vital for the country.