Business

CAIRO — The successful roll-out so far of a new "smart card" system to distribute subsidised bread has been a major achievement for Egypt's government, saving money while earning praise from families who no longer have to wake early to fight for loaves.

President Abdul Fattah Al Sisi appears to be succeeding where predecessors Hosni Mubarak and Mohamed Morsi both failed in the delicate task of reforming a system that has drained the state's finances while angering the population.

While the government still has a long way to go to roll out the new system countrywide, success so far marks an important civilian achievement for the president, a former army chief mainly known for security issues, including a harsh crackdown against Morsi's Muslim Brotherhood followers.

"In the time of Mubarak and Morsi, there was no organisation at bakeries. People fought each other. Now we all take what we need and there's bread for all," said Bakhita Ibrahim, a Cairo resident at a bakery in the Sayyeda Zeinab district.

For generations, Egypt's government has fed the public by distributing subsidised flour to bakeries, which sell bread for as little as 5 piastres a loaf, less than one US cent.

The system turned Egypt into the world's biggest importer of wheat, draining the government's foreign currency reserves: Cairo spends $3 billion a year on imports for it.

Nor has it pleased the public. Bread has been sold on a "first come, first served" basis, forcing people to queue up for hours in the morning to get it before it runs out, and sometimes leading to violence.

Those who arrive at the bakery early sometimes buy extra bread to feed to their livestock. Meanwhile, those who arrive too late can get nothing. And bakers are widely accused of siphoning off flour to sell on the black market, profiting while running up the government's bills.

Under the new system, families are issued plastic cards allowing them to buy five loaves per family member per day. Buyers no longer have to queue. Bakeries are paid for the subsidised loaves they sell, rather than being given a fixed allotment of cheap flour, making it harder to siphon off subsidies.

‘More accountable’

The cards have so far been introduced in 17 of Egypt's 29 provinces and consumption in those areas is already down between 15 to 35 per cent, Supplies Minister Khaled Hanafi, who has led the reforms, told Reuters.

Hanafi forecasts that once rolled out nationwide, the reforms will eliminate enough waste to enable Egypt to cut imports by 20 to 30 per cent, without depriving needy citizens.

While those figures could not be independently confirmed, they seemed to be born out at bakeries using smart cards in four provinces visited by Reuters, where bakers confirmed that they were making less bread due to the reforms.

The reforms have made him "more accountable", says Hamdy Eid, a baker in Suez City, scene of some of the most violent demonstrations protests during the 2011 revolt that brought down Mubarak. Customers were lined up peacefully, presenting their cards to an employee who swiped them through a card reader.

"In the past they have accused us bakers of stealing and working in the black market for flour," Eid said.

In areas where the reforms have yet to be implemented, discontent  with the old system still simmers.

"I have to wake up at dawn to get bread to avoid big crowds," said Ibrahim Osman, a grocer in the southern city of Aswan. In Fayoum, just south of Cairo, housewife Samira Moustafa said she views bakers as "cheaters".

Potent mix

Bread and politics have been a potent mix for decades in Egypt, a nation that now has 90 million people, mostly poor.

Mubarak's predecessor Anwar Sadat faced protests in 1977 after he tried to cut bread subsidies. Unrest broke out under Mubarak, notably in 2008 when the rising price of wheat caused shortages, and three years later, bread was a rallying cry for the protests that finally toppled him.

Morsi never managed to implement his plan for smart cards, blaming the bureaucracy for sabotaging reforms. Frustration and anxiety over the failure to fix subsidies helped fuel the protests that led to Sisi removing him from power.

Even now, government officials tasked with implementing it worry whether the new smart card system is air-tight enough to squeeze out middlemen working the black market.

"Those who depend on corruption are not easily going to go along with reforms," said a supplies ministry official on condition of anonymity.

Hanafi, the minister, acknowledges that the old system had its "beneficiaries". He said he had held hundreds of meetings with bakers to win over their cooperation with the changes.

"I had to convince them, I had to make compromises to reach this point," he said. "For 40 or 50 years this was a nightmare for Egyptians."

LONDON — Britain's opposition Labour Party said it would try to introduce a law to give the energy regulator the power to force firms to cut prices in response to falls in wholesale costs, a move it hopes will boost it four months before a national election.

The plan, announced on Sunday by Ed Miliband, the party's leader, will see Labour bring forward a vote on a motion to fast-track such legislation before parliament on Wednesday.

Miliband called on the governing Conservatives and Liberal Democrats to support the new law. Prime Minister David Cameron has balked at similar ideas before, portraying them as meddling in the free market.

"We've seen wholesale costs go down 20 per cent in gas prices over the last year and no reduction in bills," Miliband said.

"We'll give the regulator the power to cut prices to bring immediate relief," Miliband told BBC TV's Andrew Marr Show, referring to Ofgem.

Labour's move is meant to appeal to voters, many of whom have felt their living standards squeezed by inflation outstripping wages until recently, before what is shaping up to be one of the closest elections in decades.

A sharp drop in oil prices has led to a fall in petrol prices in Britain and politicians are seeking to court voters by competing to sound tougher on firms perceived to be not cutting their prices fast enough.

A 2013 proposal by Miliband to freeze gas and electricity prices for 20 months gave his party a temporary lift in opinion polls. It was criticised by the country's big six energy suppliers and business groups.

Energy UK, a group representing the industry, said on Sunday firms were already passing on savings to consumers and that pricing was a commercial matter for individual companies.

"No new powers are needed," Lawrence Slade, chief executive of Energy UK, said in a statement.

"When people shop around they can easily find deals that are over a hundred pounds cheaper than this time last year and in line with falls in the wholesale energy price part of energy bills," he added.

Conservative finance minister, George Osborne, last week said it was vital that the lower oil price be passed onto families "at petrol pumps, through utility bills and air fares". 

Danny Alexander, the Liberal Democrats' most senior figure in the same ministry, has made similar comments.

While Cameron's Conservatives want to fight the election on their record of presiding over an economic recovery, Labour want to use the energy question, among others, to highlight what they say has been a cost of living crisis, a charge they hope will blunt the Conservatives' economic boasts.

Miliband on Sunday called for the introduction of a new benchmark, an "independent Living Standards Index", to measure people's well being.

An opinion poll released by YouGov on Sunday had Labour and the Conservatives tied on 32 per cent, the Liberal Democrats on 7 per cent, the United Kingdom Independence Party on 18 per cent, and the Greens on 6 per cent.

Separately, British Prime Minister David Cameron's Conservatives on Sunday pledged to cut inheritance tax so it became a levy only for "the rich" as they sought to woo pensioners and property-owners before a close national election in four months.

George Osborne, the Conservative finance minister, gave his strongest signal yet he would reduce the tax, also known as death duties, saying he would set out plans before the May 7 election to make the system fairer.

"I have taken steps to help with inheritance, making sure that people can pass on their pension to their children," Osborne told The Sunday Times newspaper in an interview.

"David Cameron has made it clear, as have I, that we believe inheritance tax is a tax that should be paid by the rich and we will set out our further approach closer to the election," he said.

Inheritance tax has become increasingly unpopular with many Britons as rising property prices, particularly in London, mean a greater proportion of people are liable to pay it.

The Conservatives are keen to portray themselves as tax cutters and the rival opposition Labour Party as big borrowers and spenders, a charge the left-wing party, which is narrowly ahead in most opinion polls, rejects.

TEHRAN — Iran's President Hassan Rouhani, flanked by Venezuelan counterpart Nicolas Maduro, vowed Saturday to "neutralise" the threat posed to both countries by plummeting oil prices, in a barely veiled broadside at Saudi Arabia.

Iran and Venezuela, founding members of the Organisation of Petroleum Exporting Countries (OPEC) are reeling from a slide in the cost of crude to around $50 per barrel from $100 just six months ago, a precipitous fall that is straining their budgets.

Losses accelerated after OPEC chose late last year not to cut output despite lower prices and oversupply.

Rouhani, his oil minister and other top officials in Tehran have criticised fellow OPEC member Saudi Arabia for not supporting steps to support higher crude prices.

Rouhani was meeting with Maduro when he again appeared to point the finger at Riyadh, in remarks carried on the Iranian government's website.

"Without doubt, cooperation of countries that are on the same line in OPEC can neutralise the plans of some powers who are against OPEC, stabilising a reasonable price for oil in 2015," Rouhani said.

Maduro arrived in Tehran late Friday, accompanied by his ministers for oil, foreign affairs, finance and industry, plus Venezuela's central bank chief, on what Iranian state media said would be a 24-hour trip.

According to the official remarks, Maduro echoed Rouhani, "calling for the cooperation of oil exporting countries to bring back stability."

Iran's supreme leader, Ayatollah Ali Khamenei, also met Maduro and denounced what he called "the bizarre decrease of oil prices in such a short time”.

"This can only be a political act... Our enemies use petrol as a political lever and have certainly a role to play in the lowering of prices," he said in reference to Saudi Arabia and the United States.

Iran's present budget was based on an oil price of $100, leaving a big shortfall in recent months. In December, Tehran unveiled a draft budget for next year based predicated on $70 per barrel.

Iran and Venezuela pledged to reach agreements during Maduro's trip that would "expand trade and investment, export of technical and engineering services and collaboration in pharmaceuticals”.

"Venezuela can be a suitable base for the export of Iran's goods and services to Latin American countries," said Rouhani, who is seeking to reduce Iran's reliance on oil sales by boosting non-oil exports.

Venezuela has the world's largest proven oil reserves but its economy, 96 per cent of the government's foreign currency comes from crude, has been gutted by inflation and basic goods shortages.

In late December, recession-hit Venezuela reported that inflation for the 12 months to November topped 63 per cent, one of the highest rates in the world.

Maduro travelled to China this week in search of investment and said he secured $20 billion.

"Iran can cooperate to remove Venezuela's needs in housing, road construction, food products and medicine," Rouhani added Saturday.

STOCKHOLM/OSLO — Nordic countries are leading a shift by rich nations towards cashless societies, providing a test case for whether the lower cost and convenience of using cards and smartphones for payments outweigh the risks of fraud and some people being left behind.

Helped by wide use of computers even among the elderly, broad trust in the state and big business and only small black economies, people in Sweden and neighbouring countries are fast embracing cards, the Internet and apps for financial transactions, and forsaking notes and coins.

"We are headed more and more for a cashless society," said Jan Digranes, a director at Finance Norway, which represents banks and other financial institutions.

Sweden, home of music streaming firm Spotify and the Candy Crush mobile phone game, ranks top in the European Union (EU) for card payments, with 230 transactions per inhabitant in 2012, just above Denmark and Finland and well ahead of Britain on 167, Germany 39 and Italy 28, according to the European Central Bank.

Non-EU members Norway and Iceland are also among top users of cards worldwide, their central banks say.

For banks and businesses, the big benefit is lower costs.

A report by the Norwegian central bank last month said the total cost of each cash transaction, including handling notes and coins in banks, was estimated at 7.1 crowns ($0.92) against only 4.1 crowns per card transaction.

For consumers, abandoning cash is often about convenience, though some are worried the poor, elderly and disabled can lack access to technology and credit, or just prefer notes and coins.

Swedes often make the smallest purchases, such as for chewing gum, with a credit card and can use the Swedish banks' jointly developed smartphone app Swish to repay a small debt to a friend. Another app allow drinkers to buy beers in a bar without queuing.

In the Stockholm subway, it is impossible to buy a ticket with cash, while some unemployed people selling street magazines now also accept electronic payments.

Mike Shabwan, selling flowers on a Stockholm square, said sales had risen by 10 per cent since he started to use the Swedish service iZettle in his smartphone to accept card payments.

"And it is also cheaper and easier for me because the money comes directly into the bank," he added.

Mobilepay 

In Denmark, "MobilePay", an app launched by Danske Bank  to allow payments via a smartphone, was judged by public radio as the best new word of the year for 2014. It now has 1.8 million users in a nation of 5.6 million people.

But Jarl Dahlfors, chief executive of cash handling firm Loomis, says the cashless trend may have gone too far for "un-banked people" such as many elderly.

And "do we really want everything we buy to be registered?" he asked, touching on the loss of privacy involved in switching from cash purchases to card and online payments.

Then there are the risks of electronic fraud.

According to Swedish justice ministry data, electronic fraud has doubled in the country in the past decade to about 140,000 cases in 2013. The boom is partly because a successful Internet-based computer scam can quickly generate thousands of cases.

To limit risks with MobilePay, Danske Bank advises clients to keep their phones locked when not in use and guard them as they would a credit card or cash.

In Norway, Mastercard is experimenting with a fingerprint identification system developed by Norway's Zwipe, embedded into credit cards, hoping to make them more secure.

Anna Eriksson, spokeswoman of the Swedish Association of Senior Citizens, said elderly people need guarantees that cash can be used freely everywhere.

"Maybe we need incentives for older people to get an iPad to learn what's positive about paying bills through a computer," she added.

Still, there are silver linings, even in the rise of electronic fraud. Bank robberies, which can involve violence, fell in Sweden to a record low of five in 2012 from 16 the year before.

The Swedish central bank is far from phasing out cash; it will launch new notes and coins this year.

But it predicts the amount of cash in Sweden will fall by between 20 and 50 per cent by 2020 compared with 2012.

And as the first generation of Internet users grows older, it seems likely that attachments to notes and coins will fade.

"It is an ongoing evolution," said Peter Fredell, chief executive officer of Swedish Seamless, which developed the payment app Seqr that handles around 3 billion transactions in stores, restaurants and e-trade annually.

LONDON — Some of the world's largest oil traders last week hired supertankers to store crude at sea, marking a milestone in the buildup of the global glut.

Trading firms including Vitol, Trafigura  and energy major Shell have all booked crude tankers for up to 12 months, freight brokers and shipping sources told Reuters.

They said the flurry of long-term bookings was unusual and suggested traders could use the vessels to store excess crude at sea until prices rebound, repeating a popular 2009 trading gambit when prices last crashed.

The more than 50 per cent fall in spot prices now allows traders to make money by storing the crude for delivery months down the line, when prices are expected to recover.

The price of Brent crude is now around $8 a barrel higher for delivery at the end of 2015, with its premium rising sharply over spot prices last week due to forecasts for a large surplus in the first half of this year, in a market structure known as contango.

Brent hit a 5 1/2-year low of $49.66 a barrel on Wednesday. It was trading around $51 a barrel on Thursday.

While major energy traders will often hire vessels for long periods as part of their day-to-day operations, industry sources said the fixtures booked in the earlier this month had the option to hold oil in storage. Some could still be used for conventional oil transportation.

Vitol, the world's largest independent oil trader, has booked the TI Oceania Ultra Large Crude Carrier, a 3 million barrel capacity mega-ship that is one of the biggest ocean going vessels in the world by dead weight tonnage (DWT).

The fixture lists, provided to Reuters by tanker brokers and oil traders, also showed Vitol has booked the 2 million barrel Maran Corona Very Large Crude Carrier (VLCC), while Swiss-based trader Trafigura has hired at least one VLCC, the Nave Synergy. Shell has taken two VLCCs, the Xin Run Yang and Xin Tong Yang, the lists showed.

Vitol, Trafigura and Shell all declined to comment.

Longer bookings, cheaper rates

The shipping lists indicate the trading firms have been able to hire the VLCCs for less than $40,000 a day, well below spot rates closer to $97,000 a day, the highest in years, which had so far put off many oil traders.

The lower rate has been possible to arrange, brokers said, by agreeing to take some older and less fuel-efficient vessels for up to 12 months.

"In 2009, freight rates were extremely low and owners were willing to put their ships out on charter in order to mitigate weak spot rates," said Christian Waldegrave at leading tanker owner Teekay.

"In a rising freight market, such as we are in now, I would think that owners would be more hesitant to fix out their ships on time charter unless they felt strongly that rates were about to decline," he added.

Initial indications are around 12-15 million barrels of floating storage have been booked so far. In 2009, at least 100 million barrels of oil ended up being stored at sea.

Shipping sources said more oil traders have also been making enquiries in early 2015 and late 2014.

Analysts at JBC Energy in Vienna said floating storage, while a sign of an oversupplied market, may provide some temporary support for oil prices in the coming weeks now that traders were able to move crude on to tankers.

"This will not only release some pressure on front-end prices, but also allow for the physical market to clear somewhat," JBC Energy indicated in a note. "The physical market could also turn temporarily supportive over the coming months thanks to the balancing effect of floating storage."

DETROIT — Automakers reported strong December US sales on Monday, boosted by falling gasoline prices, but industry executives and analysts cautioned that growth would slow in 2015 after five years of rapid recovery from the recession.

General Motors Co. easily beat analysts' expectations, logging a 19 per cent gain to 274,483 vehicles, the best December for the No. 1 US automaker in seven years. Ford Motor Co.'s December sales of 220,671 were up just 1.2 per cent, missing expectations.

"US auto sales are dancing to a very different [and we believe unsustainable] beat," Morgan Stanley analyst Adam Jonas said in a research note.

He suggested US auto demand has outpaced economic, wage and housing growth rates, thanks largely to easy credit access for consumers.

Even as the pace of sales growth is expected to slow this year, modest growth to the 16.7 million to 17 million vehicles seen by analysts is still encouraging, several company executives have recently said. Any deceleration in US growth could be damaging at a time when other global markets are slowing.

On Monday, Jeff Bracken, head of Toyota Motor Corp.'s  Lexus brand in the United States, said of 2015: "Any way you slice it, whether it's 16.7 (million vehicles) or slightly below or above, it's still a very healthy industry."

Toyota executives said they conservatively expect 2015 sales of 16.7 million vehicles, while others, including LMC Automotive, expect this year's sales to hit 17 million.

In December, sales of pickup trucks and large SUVs surged, spurred by low gasoline prices.

Sales of General Motors  pickup trucks Chevrolet Silverado and GMC Sierra surged 35 per cent to 81,273, outpacing the F-Series pickups from Ford, which were flat at 74,355 vehicles. Ford's F-150 pickup truck sales remain limited due to the rollout of a new version.

Fiat Chrysler Automobiles' (FCA) Ram Truck brand pickup sales soared 32 per cent to 44,222 vehicles.

Auto sales are an early indicator each month of consumer spending. Sales in December rose almost 11 per cent to more than 1.5 million vehicles, according to research firm Autodata, finishing in line with analysts' expectations.

US average gasoline prices are 34 per cent lower than a year ago, and in much of the country are less than $2 per gallon.

Full-year sales for 2014 finished just above 16.5 million vehicles, matching the tally in 2006. Rising demand has allowed automakers to boost prices for their vehicles, however.

Kelley Blue Book (KBB), an industry source for vehicle valuations, said Monday the average transaction price for a new vehicle sold in the US market in December was a record $34,367, up 2.5 per cent from a year ago.

General Motors's December transaction prices grew 4 per cent from a year earlier to $38,816, KBB said.

Fiat Chrysler's US sales jumped 20 per cent in December on strong Jeep SUV and pickup truck sales, but still missed analysts' expectations. FCA's sales of 193,261 for the month were the highest since 2006 for the company once known as Chrysler.

Nissan Motor Co. said on Monday its December US sales grew 7 per cent, stronger than expected, while Honda Motor Co.'s 1.5 per cent increase fell short of expectations.

In addition, Germany's BMW reclaimed the US luxury crown last year, topping Daimler's Mercedes brand by more than 9,000 vehicles.

AMMAN – Prices of residential apartments are likely to go up by at least 15 per cent this year as demand is projected to outweigh supply,  Jordan Housing Developers Association (JHDA) President Kamal Awamleh said Tuesday. 

Awamleh's comments came a day after an official report revealed that trading in the Kingdom's property market reached unprecedented figures. Real estate trading exceeded JD7.7 billion in 2014, a 22 per cent rise over the JD6.3 billion registered in 2013, and a 38 per cent increase over the JD5.6 billion in 2012. 

According to the JHDA chief, the value of the 36,208 housing units sold last year was around JD5 billion. Sales of residential apartments increased in 2014 by 19 per cent, as a total of 30,380 units were sold in 2013. 

The leading housing investor said the trading figures in the real estate market came in line with the association's forecast, adding that trading is set to continue an upward trend, but at a slower pace because developers would carry out less housing projects. 

The uptrend would be driven by higher value of properties and not a greater number of residential apartments, he explained, attributing the projected slowdown in building homes to limited land plots available in the capital. 

He cited figures from the Department of Land and Survey, which showed that sales of land only grew by 2 per cent, as an indicator for the projected slower building activity. 

"Usually housing developers buy around 80 per cent of the land, but the slight increase in land sales shows that home builders are not buying land for their projects," he said, adding that demand for apartments is set to be greater than supplier, which he said would push prices up.

"We expect at least a 15 per cent increase in the prices this year," Awamleh noted. 

Jordanian expats effect

Awamleh told The Jordan Times that, in 2014, Jordanians bought 90 per cent of the housing apartments valued at JD4.68 billion. DLS data showed that non-Jordanians purchased only 3,604 apartments valued at JD315 million. 

He described Jordanian expatriates as the main driver for the sector's growth, noting that nearly 50 per cent of the apartments sold every year are usually bought by Jordanian professionals working in the Gulf region.

Expats find the property market as a safe investment, he said, explaining that some expats buy apartments and put them for rent. 

Official figures estimate the number of Jordanians who work in the Gulf at nearly 750,000. They work there as engineers, doctors, bankers, accountants and consultants among other professions. 

Shift to Amman outskirts

The JHDA president indicated that purchasing options inside the capital are becoming more limited due to higher prices caused by expensive land prices, noting that buyers have started to prefer the outskirts of Amman in areas such as Shafa Badran, north, and near the Airport Road, south of Amman. 

The price of a square metre of land in Shafa Badran is around JD250, while in the western part of the city it reaches over JD800 per square metre, he said. 

In some areas in western Amman, according to him, a square metre could be priced at JD1,500.

‘Investors not happy’

Awamleh said Jordanian housing developers are seeking investments outside the Kingdom due to restrictions imposed by the Greater Amman Municipality (GAM) on the number of floors allowed and due to banning projects in certain areas of the city such as Luweibdeh and Naour. 

GAM officials were not available to comment. 

He said that 150 housing companies have reduced their business in Jordan and are currently investing in other countries such as Egypt, Dubai, Turkey and even Kyrgyzstan. 

"The sector is no longer attractive to major investors," he said, calling on authorities to give more incentives to the sector which supplies the state treasury with  hundreds of millions in taxes and fees. 

AMMAN — Air Arabia, the first and largest low-cost carrier in the Middle East and North Africa, announced Monday in a press statement that it will open a new international hub at the Queen Alia International Airport in Jordan, its fifth fixed-based operation globally, following the acquisition of a 49 per cent stake in Petra Airlines.

The deal will see the existing principle shareholder of Perta Airlines, RUM Group, maintain a 51 per cent stake.

"The new partnership will also lead to the creation of Air Arabia Jordan and will reinforce the airline's leadership of the low-cost aviation market in the MENA and Levant region," the press statement said.

Following the acquisition and the establishment of the new  Air Arabia Jordan, operations' is expected to commence in the first quarter of 2015. The newly established carrier, managed by Air Arabia, will follow the carrier's business model serving as Air Arabia's fifth hub in the Arab world.

Air Arabia Jordan will provide direct service to a range of destinations across the Europe, Middle East and North Africa region from Queen Alia International Airport. 

AMMAN — Real estate trading last year registered a record JD7.76 billion, 22 per cent higher than the amount  in 2013 when it stood at JD6.34 billion, the Department of Land and Survey (DLS) said on  Monday.

In its annual report e-mailed to The Jordan Times, the DLS revealed an overall 105,643 real estate transactions were registered in 2014, an increase of 7 per cent compared with 2013.

Of the total, 43,386 were registered in Amman (41 per cent), and 62,257 were registered in the other 11 governorates (59 per cent).

In Amman, 24,871 transactions were for apartments and 18,515 for land while in other governorates  11,337 were for apartments and 50,920 for lands. 

The DLS pointed out that its revenues in 2014 reached JD425.6 million, a 20 per cent increase over the figure collected in the previous year.

The amount would become JD507.1 million if JD81.5 million in apartment exemptions are taken into consideration, 22 per cent higher than the figure in 2013

The JD81.5 million in apartment exemptions last year were 37 per cent higher than the amount in the previous year.

According to the report, non-Jordanians last year accounted for 5,170 purchase transactions, 3,604 of which were for buying apartments and 1,566 for buying lands, at an estimated value of JD492 million, a 21 per cent increase compared with 2013.

The value of apartment purchases by non-Jordanians amounted to JD315.3 million, constituting 64 per cent of the total, with the value of land purchases amounted to JD176.7 million representing the remaining 36 per cent.

Iraqis topped the list of non-Jordanian investors with 2,224 real estate deals, followed by Saudis at 822. Kuwaitis came in third place with 471 deals and Syrians  with 445. 

In terms of the value, Iraqis were atop as they invested JD266.3 million, accounting for 54 per cent of non-Jordanian real estate trading.

Saudis ranked second with purchases valuing JD64.1 million that constituted 13 per cent of non-Jordanian purchases; Syrians came in third place with JD28.5 million, constituting 6 per cent; with Emiratis buying real estates worth JD17.4 million constituting 3.5 per cent.

Of the overall 105,643 real estate transactions that were registered in 2014, an increase of 7 per cent compared with 2013, 43,386 were registered in Amman (41 per cent), and 62,257 were registered in the other 11 governorates, (59 per cent).

In Amman, 24,871 transactions were for apartments and 18,515 for lands, in other governorates  11,337 were for apartments and 50,920 for lands.

AMMAN – The commercial sector expects 2015 to be a challenging year due to "disappointing" government policies. 

At a press conference on Sunday, Amman Chamber of Commerce (ACC) President Isa Murad and board members said the government decision to increase electricity prices as of January 1 and the new income tax law would not only cause slowdown in demand for goods this year but also would reduce tax revenues from the sector. 

Murad listed a number of issues which he said would hurt the performance of economic and commercial activity this year. 

The biggest concern for traders, according to Murad, was raising income tax rate on commercial and service companies from 14 per cent to 20 per cent. 

This could force many investors to leave the Kingdom to other regional markets, he said, warning that raising taxes could also encourage tax evasion. 

Murad added that the commercial sector is the largest employer of Jordanians as it employs over 380,000 workers, representing 38.5 per cent of the overall labour force in the Kingdom. 

Noting that the sector is also the biggest source of tax revenues to the treasury, he indicated that commercial activities generated around JD1.9 billion in sales tax in 2013, around 76 per cent of the sales tax revenues. 

The ACC president described the 15 per cent increase in electricity tariffs, which went into effect on Thursday, as a challenge for the sector. 

Over five years, Murad said electricity prices went up by 92 per cent, warning that the recent increase would reduce demand for goods as the rise in operational costs of merchants would automatically be reflected on consumers who, according to him, suffer from fading purchasing power due to rising living costs while their incomes remain fixed. 

The ACC chief called on the government to reconsider its decision regarding power tariffs as global oil prices have been going down sharply. 

"Instead of raising electricity tariffs, the government should solve the issue of waste in electricity that costs over JD300 million a year," he said, adding that the five-year government plan to end the losses of the state-owned National Electric Power Company by 2017 should be revised in light of the decline in oil prices.  

ACC Vice Chairman Ghassan Kherfan said a number of companies have left the Jordanian market and settled in other regional countries, which he said are more competitive in terms of taxes and energy costs. 

"Many IT, real estate and construction firms left Jordan when the income tax rate was 14 per cent. With the new rate of 20 per cent, we are afraid that many others would leave, "Kherfan noted.