Business

AMMAN — The industrial estate in Maan has received a Chinese investment delegation that wanted to check on incentives and investment opportunities available in the governorate, Maan Development Company (MDC) Chief Executive Officer Hussein Kreishan said Sunday.

The visit, related to processing raw material and solar energy, will achieve a quantum leap in expanding the base of investment in the industrial estate, according to Kreishan.

Speaking at a meeting with the representatives of the large-scale Chinese companies, Kreishan highlighted the competitive advantages of  Maan in terms of strategic locations, infrastructure, and financial incentives of the investment law. 

He also showcased investment opportunities in the governorate, for which the MDC conducted feasibility studies. The opportunities lie in the field of silica sand, renewable energy and construction materials, Kreishan said, adding that the delegation's visit included a tour to several factories in the industrial estate as well as the MDC headquarters.  

BERLIN — Germany doubled its arms exports last year to around 8 billion euros ($8.9 billion), government figures showed on Friday, in contradiction to Berlin's pledge to rein in the amount of weapons Europe's biggest economy sells abroad. 

The increase was driven largely by "special factors", Economy Minister Sigmar Gabriel explained when presenting the data.

The economy ministry is in charge of approving arms exports and Gabriel had promised to limit them when he took up his position at the end of 2013. 

In particular, Berlin wanted to curb exports of light weapons and track them closely once they had left the country. 

Gabrial cited big-ticket contracts for tanker airplanes to Britain and guided missiles to South Korea among the "special factors". 

The volume of exports was also inflated by a delivery of Leopard 2 tanks to Qatar, a contract approved by the previous government in 2013, the minister explained. 

If it had been up to him, "I would not have approved them," he insisted. 

Before Gabriel's Social Democrat SPD Party agreed to share power with Angela Merkel's conservative CDU Party, the CDU had been in a coalition with the liberal FDP. 

Gabriel accused the previous administration of "not applying the rules as they should have been applied". 

Overall, Gabriel insisted the government was making progress in achieving its declared goals and in 2014, the exports of light weapons had dropped sharply. 

Detailed arms exports figures for 2015 are to be released in June. 

Official data also showed that Germany clocked up its highest-ever trade surplus in 2015 as both exports and imports powered ahead to new records.

German exports jumped by 6.4 per cent to 1.196 trillion euros ($1.3 trillion) in the whole of 2015 and imports advanced by 4.2 per cent to 948 billion euros, the federal statistics office calculated.

That meant that the trade surplus, the balance between exports and imports, grew to 247.8 billion euros, its highest-ever level, from 213.6 billion euros a year earlier, the statisticians indicated. 

The trade surplus is a key gauge of an economy's comparative strength and underlines the robustness of Europe's biggest economy amid the current global economic uncertainties.

German-made goods were in strong demand all over the world last year, with exports to the European Union (EU) rising 7 per cent and exports to other countries rising 5.6 per cent, Destatis pointed out.

Within the EU, exports to the eurozone climbed by 5.9 per cent, while exports to European countries outside the single currency area grew by 8.9 per cent.

In December alone, however, both exports and imports declined by 1.6 per cent in calendar- and seasonally-adjusted terms, meaning that the trade surplus contracted slightly to 19.4 billion euros, Destatis said.

Separately, German businesses are expecting to see a further drop in exports to Russia this year to their lowest level in 10 years, even if companies continue to regard it as a market with enormous potential, a specialist trade organisation found on Friday.

German exports to Russia plummeted by 25.5 per cent last year, weighed down by the plunging ruble and the economic crisis in Russia, according to data published by the Committee on Eastern European Economic Relations. 

"Compared with the record year in 2012, German exports to Russia have fallen by nearly half in the past three years from 38 billion euros [$42 billion] to 21 billion euros," indicated Wolfgang Buechele, who heads the committee and is chief executive of industrial gases group Linde.

"And according to our estimates, exports will drop by around 10 per cent this year and fall below the 20-billion-euro mark for the first time since 2006," Buechele said.

"At the moment, Germany's foreign trade is booming, helping to offset" the difficulties in Russia, said Rainer Seele, president of the German-Russian chamber of commerce and head of the Austrian oil and gas group, OMV. 

But that might not always be the case, as the outlook for a number of emerging economies clouds over, he warned. 

German businesses have been highly critical with regard to the economic sanctions slapped on Russia by the EU. But they believe the wind will change and the outlook for the country will brighten this year. 

"Our Russian partners insist that cooperation with Europe has a different quality and reliability than with other partners," Seele added. 

Buechele and Seele were part of a delegation of German business leaders who met Russian Prime Minister Dmitry Medvedev on the sidelines of the Munich Security Conference this month.

At that conference, Medvedev said tensions between Russia and the West had sent the world into a "new Cold War". 

But the fact that Medvedev attended the Munich conference alone was a good sign, Buechele suggested, saying Russia was "holding out a hand" to Europe. 

"Everywhere in Russia, we seeing and hearing the same signal: we're re-opening ourselves again to Europe, to cooperation with German companies in particular," said Seele. 

"The German economy is ready and continues to see enormous potential" in Russia, he added. 

TUNIS — A Jordanian delegation held several meetings with Tunisian officials last week, during which they discussed challenges facing the flow of Jordanian products, delays at Tunisian harbours and difficulties to register cosmetics.

They also looked at establishing joint investment projects in the medical equipment and other industries, in addition to enhancing investment partnerships in the tourism sector. 

The delegation, headed by Amman Chamber of Commerce President Issa Murad, tackled ways to benefit from agreements signed between the two countries, exchange expertise in the fields of industrial estates and free zones, and increase exports.

Murad said Tunisian President Beji Caid Essebsi's visit to the Kingdom in October encouraged the Jordanian private sector to penetrate the Tunisian market and search for new markets as alternatives for Jordan's traditional markets.

He added that the Kingdom seeks to benefit from the Tunisian expertise in reaching European and African markets, especially due to the closure of traditional markets because of the security and political events in the region.

Jordan European Business Association's (JEBA) board of directors on Saturday discussed with Confederation of Tunisian Citizen Enterprises' (CONECT) executive office means to enhance bilateral cooperation and drawing up a joint programme to help Jordan penetrate European markets.

JEBA President Jamal Fariz commended the Jordanian-Tunisian relations, stressing the importance for these ties to reflect on the commercial and investment sectors. 

Transportation was among the biggest obstacles for exports between the two countries, which requires considering the establishment of a maritime route and increasing cooperation in air transport, calling for enhancing collaboration in the tourist sector. 

CONECT President Tareq Sharif said there is great potential to enhance bilateral economic cooperation and establish partnerships between both countries' private sectors to contribute to boosting commercial exchange.

RIYADH — The growing pain of plunging oil prices has galvanised Saudi Arabia to look beyond its rivalry with Russia and Iran over regional conflicts and pursue cooperation on production, analysts say.

But there are doubts about whether it will last because mutual suspicions remain deep and the Sunni-ruled Gulf kingdoms are loath to cede market share to Shiite Iran as it emerges from years of sanctions.

The determination of Saudi Arabia, the world's top oil exporter and de facto leader of the Organisation of Petroleum Exporting Countries (OPEC) oil group, to protect its market share has contributed to a slump in oil prices to 13-year lows.

However, in the first sign of OPEC and non-group producers working together since the rout began, Saudi Arabia and Russia said on Tuesday they would freeze output, if other major producers do the same.

The move may be a signal from Riyadh that the fall in oil prices has gone too far, said Jason Tuvey, an analyst at research firm Capital Economics.

"They are obviously feeling the pain, particularly with a fiscal squeeze now well under way," Tuvey told AFP.

Qatar, Venezuela and Kuwait also agreed to the output freeze. Iraq, OPEC's second-largest producer, said it was prepared to cooperate while the United Arab Emirates (UAE) gave its backing.

Iran, which is returning to world markets as sanctions are lifted under a nuclear deal, said after talks in Tehran that it too supported the move, but stopped short of committing itself to any production curbs.

Even so, the rare show of cooperation between the Middle East's foremost Sunni and Shiite powers, which back opposing sides in Syria and other conflicts, sent oil prices soaring on world markets.

Political and military rivalries will not kill the output deal since both sides need money, said oil expert Jean-Francois Seznec of Georgetown University.

They "can cut production, increase income and still fight each other", he added. "A valid [oil] deal would make it easier to talk about a settlement in Syria."

No output cut 

Saudi Arabia said Thursday that the freeze plan did not mean it was considering reducing output.

"If other producers want to limit or agree to a freeze in terms of additional production that may have an impact on the market but Saudi Arabia is not prepared to cut production," Foreign Minister Adel Al Jubeir told AFP in an interview.

"The oil issue will be determined by supply and demand and by market forces. The kingdom of Saudi Arabia will protect its market share and we have said so," he said.

Saudi Arabia, which is also leading a costly military campaign against Iran-backed rebels in Yemen, posted a record $98 billion budget deficit last year.

Riyadh expects a deficit of $87 billion in 2016, forcing it to introduce a series of austerity measures including cuts to subsidies on fuels, electricity and others.

The International Monetary Fund has cut its forecast for Saudi economic growth to just 1.2 per cent in 2016, the lowest in seven years.

On Wednesday, Standard and Poor's downgraded Saudi Arabia's credit rating for the second time since October.

"Saudi Arabia and other Gulf states are certainly suffering from low oil prices although they have strong fiscal buffers," Saudi economist Abdulwahab Abu Dahesh said.

"They need higher oil revenues to reduce pressures on their currencies, domestic consumers and public spending," Abu-Dahesh adde.

Mistrust lingers 

Saudi Oil Minister Ali Al Naimi insisted after announcing the output deal in Doha that low oil prices were not a problem for the kingdom.

Riyadh has fiscal reserves of more than $600 billion. Fellow Gulf countries within OPEC also have large cushions, but other members such as Venezuela, Algeria and Nigeria are not so fortunate.

Iran has suffered huge losses because of sanctions that shut off its access to much of the world oil market, while Russia has seen its recession-hit economy severely damaged by the price slump.

"The fact that Russia and Saudi Arabia are talking is a big plus" for oil prices, Seznec said.

Mistrust and the battle for market share remain the most serious obstacles to a lasting and effective deal, according to analysts.

While Saudi Arabia is willing to cut production if it sees that others will follow, it doubts Russia will do so, Abu-Dahesh remarked.

"Saudi Arabia simply does not trust Russia or Iran because of political and economic rivalries," he said. "I don't think Gulf states want to lose their market shares to Iran. I believe that the fight for market share will only intensify."

DUBAI — Saudi Arabia's financial markets barely blinked on Thursday after its debt was downgraded, a sign that a charm offensive by Saudi economic officials and determined action against speculators, have bought it time in the eyes of many investors.

In the last few weeks, officials of the central bank and ministries of finance, economy and oil have met privately with groups of foreign bankers, and analysts to discuss the kingdom's plans to cope with low oil prices.

The officials have reiterated their commitment to the Saudi riyal's peg of 3.75 to the US dollar and described efforts to diversify the economy beyond oil, participants at the meetings told Reuters, speaking on condition of anonymity.

In contrast to past practice, the Saudis have been willing to provide lengthy answers to questions on the vulnerability of their economy. 

They have also stressed that they are prepared to deploy the central bank's huge foreign assets, which totalled $609 billion at the end of 2015, to withstand economic shocks.

"The core message was that the Saudis are much better prepared to handle low oil prices — reserves are high and debt is low," said one participant. 

"At the same time they are keen to show it's not business as usual and they are making serious reforms to re-energise growth," he added.

The meetings did not eliminate doubts about Riyadh's ability to push through complex and difficult reforms that would boost non-oil revenues, foster new industries and make the government more efficient. 

Saudi Arabia has been drawing down its foreign assets at an annual rate of over $100 billion, suggesting it has a window of only a few years to get the reforms right.

Nevertheless, the meetings have helped to persuade some investors that a devaluation of the riyal is not on the cards, and that the world's top oil exporter faces no imminent economic crisis, participants said.

Late on Wednesday, Standard & Poor's (S&P) cited the damage to state finances from cheap oil when it cut Saudi Arabia's long-term sovereign credit rating by two notches to A-minus, with a stable outlook, from A-plus.

"The decline in oil prices will have a marked and lasting impact on Saudi Arabia's fiscal and economic indicators given its high dependence on oil," S&P said.

But the Saudi riyal firmed against the dollar in the forwards market on Thursday, while prices of Saudi firms' international bonds barely moved and the cost of insuring Saudi sovereign debt against default ticked up only marginally.

The Saudi stock market headed for its fourth straight day of gains, in sharp contrast to S&P's last downgrade of the kingdom in October, when investors sold stocks.

Speculators

Financial markets are firm partly because the Saudi central bank has acted aggressively to deter speculation against the riyal in the forwards market.

The riyal dropped to record lows in that market in January as banks hedged against the risk that authorities might devalue the currency to inflate the value of their dollar oil revenues and reduce capital outflows.

As it fell, investors in other markets became nervous, creating a cycle of worsening sentiment towards Saudi Arabia.

The central bank responded by warning banks not to speculate and urging them not to conduct derivatives trades that would pressure the riyal. 

The threat of getting on the wrong side of the central bank and its huge reserves has worked for now; the riyal is stable at higher levels and forwards trade has slowed.

The officials' charm offensive has also helped because a main message in their meetings with bankers and analysts was that they saw no need to change the currency peg.

Saudi authorities explored the idea of changing the peg in a broad review of economic policy, but concluded this would be counter-productive except perhaps in the distant future, when the economy is much more diversified and could cope better with a surge of import prices, the participant said.

In contrast to the S&P downgrade in October, when the finance ministry quickly issued an indignant statement criticising the agency's action, there was no official Saudi response on Thursday.

However, the markets are aware that the other two major credit agencies have much higher ratings for Saudi Arabia. 

Moody's Investors Service has it at Aa3, three notches above S&P, with a stable outlook; Fitch Ratings has it at AA, four notches above S&P, with a negative outlook.

Inside Saudi Arabia, jitters over the economy have not disappeared. At a store selling watches in the city of Khobar this week, a shopkeeper said he feared a riyal devaluation would ravage his business. 

A Saudi banker said he thought officials might consider devaluation late this year if oil didn't rebound.

But for some months at least, authorities seem to have convinced markets to give them the benefit of the doubt.

"Despite perennial rumours, I believe the government will not depeg or devalue its currency," said John Sfakianakis, a Riyadh-based economist. 

"For the sake of stability, predictability and wealth preservation of the middle class, they haven't done so in previous difficult times in the 1990s and late 2000s, and they won't do it now," he added.

PARIS — The Organisation for Economic Cooperation and Development (OECD) on Thursday lowered its expectations for global growth, saying it was disappointed with the world's economic performance, and urging governments to do better.

Global growth of gross domestic product (GDP) for 2016 is now projected at 3 per cent, down from a previous forecast of 3.3 per cent, as financial instability, sluggish demand and weak investment take their toll, the 34-member OECD indicated in its latest interim outlook.

If confirmed, this would be no better than last year's growth, "itself the slowest pace in the past five years", the OECD quipped, adding that economic actors had failed to make good use of cheap oil and easy credit.

"Global growth prospects have practically flat-lined, recent data have disappointed and indicators point to slower growth in major economies, despite the boost from low oil prices and low interest rates," OECD Chief Economist Catherine Mann told a news conference.

The forecast came in well below a long-run average of around 3.75 per cent, the OECD said, expressing disappointment that advanced economies "in recovery" and emerging economies in "convergence mode" were still failing to produce better results.

The OECD urged governments to adopt a strong collective response to revive sagging global growth by implementing fiscal policies favouring investment-led spending in a climate of austerity.

"Monetary policy cannot work alone," it added, in reference to high-profile action by leading central banks to cut interest rates and inject money into the banking system.

Instead, fiscal policy also needed to become expansionary and structural economic reform accelerated "to strengthen growth and reduce financial risks".

In its November outlook, the OECD had already downgraded its initial 2016 estimate, citing stagnating trade amid a slowdown in China.

But it said it felt compelled to do so again, while also revising downward an initial November projection for 2017 to 3.3 per cent from 3.6 per cent in an environment likely to impact most severely on the United States, the eurozone and economies reliant on commodity exports.

Tackle collectively

"A stronger collective policy response is needed to strengthen demand," indicated the organisation a week before Group of 20 finance ministers and central bank governors meet in Shanghai.

The downgrade reflects "a broad range of disappointing incoming data for the fourth quarter of 2015 and the weakness and volatility in global financial markets", trends "apparent in both advanced and emerging economies", said the OECD, identifying as further risks emerging market currency volatility and debt, notably in Russia, Turkey and Brazil.

It added poor growth prospects were pushing down equity prices, helping to spark recent market volatility.

"Structural reform momentum has slowed," continued the OECD, identifying a combination of negatives affecting the global outlook, with fuel and commodity prices in a trough amid sluggish demand while China stays stuck in third gear.

The body, which repeatedly cut its 2015 outlook from an initial 3.7 per cent, noted that relatively healthy growth in emerging countries had in previous years partially compensated for a slowdown in advanced nations, but this was no longer the case.

"Sluggish growth is reflected in weak trade and has contributed to recent falls in commodity prices," it said.

One means of reviving growth would be to commit to greater public investment, recommended the OECD, which provides policy analysis and advice to its member states.

Although global trade flows are edging back from last year's stormy waters, they "remain subdued" with lower export demand for advanced economies flattening growth last year by around five percentage points.   

On a country by country basis, the OECD reduced its 2016 GDP growth forecast for the United States by 0.5 points to 2 per cent.

For sputtering European Union locomotive Germany, it cut its 2016 prediction also by 0.5 points to 1.3 per cent, compared to Berlin's own forecast of 1.7 per cent.

The forecast for China was unchanged on the November assessment of 6.5 per cent, Japan was revised down 0.2 points to just 0.8 per cent while India got a small upward revision of 0.1 points to 7.4 per cent.

But Brazil, in freefall after being hit severely by plunging commodity prices and falling Chinese-led demand, was downgraded by 2.8 percentage points to a 4 per cent contraction.

ANKARA/DUBAI — Iran on Wednesday stopped short of offering to restrain oil output as part of a global pact to freeze production to prop up prices, making clear it wants to recapture the market share it lost during years of sanctions.

Iran's stance will complicate talks on output levels after a surprise compromise this week between two of the world's top exporters, Russia and the group's leader Saudi Arabia, to freeze output at January levels, near their historic highs.

The first mooted global oil pact in 15 years has so far failed to impress the market, which had expected a production cut instead of a freeze that could even turn into an increase if Iran wins special terms from fellow members of the Organisation of Petroleum Exporting Countries (OPEC).

"This is the first step and other steps should also be taken. This cooperation between OPEC and non-OPEC members to stabalise the market is good news. We support any effort to stabilise the market and prices," Iranian Oil Minister Bijan Zanganeh said, according to the Shana news agency.

Zanganeh spent around two hours with oil ministers from Iraq, Qatar and Venezuela in Tehran on Wednesday. The visitors, who flew from Doha, where the output deal was clinched on Tuesday, left the Tehran meeting without comment.

Zanganeh spoke to Iranian media afterwards and chose his words carefully to avoid mentioning Iran's position on freezing its own output.

"We had a good meeting today and the report of yesterday's meeting was given to us. We support cooperation between OPEC and non-OPEC members," he said.

"I was told that Russia as the world's biggest oil producer, Oman and other countries are ready to join. This is a positive step, we have a positive approach to it, this is a good start," the minister added.

Illogical demands

OPEC Gulf producers Qatar, Kuwait and the United Arab Emirates, as well as Venezuela said they would join the Russian-Saudi pact, aimed at tackling a growing oversupply and helping prices recover from their lowest in over a decade.

But Iran is the major obstacle to the first joint OPEC and non-OPEC deal since 2001, having pledged to increase output sharply to regain market share lost during sanctions.

"Asking Iran to freeze its oil production level is illogical... when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices," Iran's OPEC envoy, Mehdi Asali, told the Shargh daily newspaper before the talks on Wednesday.

The sanctions, imposed over Iran's nuclear programme, were lifted last month after an agreement with world powers, allowing Tehran to resume selling oil freely in international markets.

Iran exported around 2.5 million barrels per day (bpd) of crude before 2012, but sanctions cut that to around 1.1 million bpd.

Tehran has pledged to raise supply by around 1 million bpd in the next 6-12 months and on Wednesday some Iranian banks were reconnected to the SWIFT global transaction network, which will allow it to facilitate banking business.

Special terms

Iranian barrels would only add to the global glut, which has been fuelled by US shale output and a decision by Saudi Arabia to pump at full capacity to drive higher-cost producers out of business.

The world is already producing more than 1 million bpd than it consumes, with oil stockpiles at record levels. OPEC member Libya, whose output was cut to a fraction by a civil war, said on Wednesday it was keen to produce more.

Oil prices fell below $30 per barrel in January from as high as $115 in mid-2014, hammering the finances of Russia, Saudi Arabia and other producers.

Brent oil futures rose almost 7 per cent on Wednesday after losing 4 per cent the day before to trade near $35 per barrel.

AMMAN — Jordan has "distinguished" relations with India, especially at the economic level as India is the third biggest economic partner for Jordan after the US and China, Jordan Investment Commission (JIC) President Thabet Al Wir said Wednesday.

Wir made these remarks at a meeting with Indian Ambassador to Jordan Anil Trigunayat to discuss means to enhance investment and commercial ties between the two countries, in addition to boosting local exports to the Asian country, according to a JIC statement.

Phosphate tops Jordanian exports to India, the JIC president noted, calling on Indian companies to benefit from the entrepreneur economic and investment sectors such as renewable energy, ICT, services and infrastructure.

He also expressed JIC's readiness to provide all types of support to Indian investments in the Kingdom for their added value to the national economy.

For his part, Trigunayat said India supports Jordan's development and is among the biggest investors in the Kingdom's fertilisers and textile fields, noting that the bilateral commercial exchange volume stands at around $2.2 billion.

In this regard, he added that India aspires to increase the value of commercial exchange to $5 billion by 2025, noting that his country has recently allocated $100 million as soft loans to help Jordan implement some projects, and to enhance bilateral economic and development cooperation.

Also on Wednesday, Wir met with Italian Ambassador to Jordan Giovanni Brauzzi over bilateral economic and investment ties, and praised the Jordanian-Italian partnership and highlighted the importance of supporting it at all levels, according to an another JIC statement.

Wir also reviewed the outcomes of London conference, especially those related to rules of origin and their role in increasing Jordanian exports to the European market.

The meeting also discussed the possibility of holding a Jordanian-Italian investment forum this year with the participation of both countries' public and private sectors to acquaint Italian businesspeople with investment opportunities in the Kingdom.

Brauzzi expressed his country's keenness to increase Jordanian exports to Italy and raise Italian investments in the Kingdom, noting that exchanging visits and holding business forums are effective tools to stimulate commercial exchange, the statement added.

TUNIS — Jordanian and Tunisian economic business representatives on Tuesday night agreed to organise comprehensive joint activities (Jordanian-Tunisian Week) regularly in both countries. 

According to a recommendation endorsed by the Jordanian-Tunisian business forum, both countries' chambers of commerce and industry will organise the week each May in Jordan, and during September in Tunisia.

The forum also recommended organising the mechanism of exchanging information through an electronic gate that would contribute to enhancing economic information on both countries via Amman Chamber of Commerce and Tunis Chamber of Commerce and Industry. 

The forum also recommended discussing the possibility of establishing one regular maritime route and another air route via each country's national carrier or a maritime route between the countries of Aghadir agreement, which includes Egypt and Morocco in addition to Jordan and Tunisia.

The four countries signed the agreement in 2004 to increase commercial exchange among them from one side, and with the European Union (EU) from the other.

The Aghadir agreement went into effect in 2006 following the completion of the certification procedures in the four countries, and it was first implemented in March 2007 after customs departments received notices of its implementation.

The forum also recommended exempting Tunisian businesspeople from visas to Jordan, especially that Tunisia exempted Jordanians from visas last year.

AMMAN — Jordan will host the 2016 INTERCEM conference for the Middle East and North Africa (MENA) in March, with the participation of major regional and international cement companies. The event, to be held between March 14 and 16 in Amman, will also include logistics and supporting companies related to the industry.

INTERCEM Chief Executive Malcolm Shelbourne said Amman will host the conference for the first time after it gained great attention from the Kingdom's cement industry. The gathering is aimed at discussing the latest developments in the industry and its applications at the technical and commercial levels, in addition to reviewing grand infrastructure and constructions projects in the region.