Business

AMMAN — Prime Minister Abdullah Ensour on Tuesday was briefed on the programmes of the Overseas Private Investment Corporation (OPIC) in Jordan and its support of smal- and medium-sized enterprises (SMEs).  At a meeting with the corporation’s Chief Executive Officer Elizabeth L. Littlefield, attended by Energy Minister Mohammad Hamed, the premier thanked OPIC for its cooperation with the Kingdom, noting that energy renewable energy, and SMEs top the list of the government’s priority projects, to achieve development and create new jobs. Littlefield said that OPIC helped finance the fourth electricity generating project with $125 million. Ensour highlighted the economic challenges facing the Kingdom and the pressures that have weighed heavily on the economy as a result of hosting large numbers of Syrian refugees, according to the Jordan News Agency, Petra. OPIC is the US government’s development finance institution. It mobilises private capital to help solve critical development challenges, according to OPIC’s website. Because OPIC works with the private sector, it helps US businesses gain footholds in emerging markets, catalysing revenues, jobs and growth opportunities both at home and abroad. 

AMMAN — Justice Minister Bassam Talhouni on Monday welcomed a request by the Amman Chamber of Commerce (ACC) to establish specialised economic judicial chambers in Jordanian courts. At a meeting with president and members of ACC at the ministry, Talhouni said establishing such a chamber at this time is urgent, especially after the increasing number of economic and financial cases. Such a measure is an important step to examine many commercial cases that have been in courts for long times, in addition to the fact that it would enhance justice principles, Talhouni added. The Jordanian commercial sector, the minister indicated, has several legal tools through which it can solve commercial disputes without referring to courts, such as dispute-settling by-law, arbitration and commercial mediation. ACC President Issa Murad praised government cooperation with the private sector, noting that ACC is the biggest commercial chamber in the Kingdom which includes 46,000 companies, constituting 80 per cent of the overall commercial and service activity in the country. 

KUWAIT CITY — Kuwait has played down a row with Saudi Arabia over its decision to halt production at an offshore oil field jointly operated by the two Gulf neighbours.

Oil Minister Ali Al Omair said the dispute over operations at the Khafji field would not affect strong ties.

"We hope to resolve this matter through dialogue, contacts and the open-door policy existing between the two nations," Omair said, cited by the official KUNA news agency overnight.

A Kuwaiti oil trade union and Kuwaiti media have accused Saudi Arabia of unilaterally halting the field's production of 311,000 barrels per day (bpd), which had been shared equally between the two Arab states.

Foreign ministry undersecretary Khaled Al Jarallah said the decision to halt output at the field was taken on technical and not political grounds.

"Relations between the two sisterly countries are too strong to be undermined by a difference in viewpoints," over oil production in the neutral zone, Jarallah said, speaking on the sidelines of a Gulf foreign ministers' meeting in the Saudi capital.

"The stoppage of production at Khafji in the divided zone with Saudi Arabia was for purely technical reasons and not political," he indicated, cited by KUNA late Sunday.

"Brothers in Saudi Arabia want to carry out maintenance work and deal with environmental issues which are understood by the Kuwaiti side," Jarallah added. "Production will resume to its normal level when these technical matters are sorted out."

Khafji is part of the neutral zone between Kuwait and Saudi Arabia which is jointly operated by the two nations and had produced around 700,000 bpd of shared crude.

Both countries have excess production capacity and are likely to make up any loss in output if the problem is not quickly resolved.

Saudi Arabia, the world's largest oil exporter, is pumping around 9.6 million bpd and has just under 3 million bpd of spare capacity.

Kuwait has production capacity of more than 3.2 million bpd and is pumping an average of 3 million bpd.

The two governments signed the neutral zone agreement almost 50 years ago.

DUBAI — Iraq's economy is likely to shrink 2.7 per cent this year, the first contraction since the US-led invasion in 2003, after Islamic State militants occupied swathes of the major oil exporter, the International Monetary Fund (IMF) said on Monday.

The current economic downturn comes after a 4.2 per cent of the gross domestic product (GDP) growth in 2013, which was the weakest rate since 2007, the IMF's regional economic outlook shows.

It still pales, however, in comparison with a 41.4 per cent output plunge in 2003 when the US-led coalition invaded the country to topple the government of its former strongman Saddam Hussein.

The conflict has halted the expansion of Iraq's oil production, which is expected to decline slightly to 2.9 million barrels per day (mbpd), while exports of 2.4 mbpd should remain close to last year's level, the IMF said.

"Non-oil GDP growth will also likely move to negative territory, compared to growth of over 7 per cent in 2013, as fighting undermines confidence, disrupts the supply of fuel and electricity, increases trade and distribution costs, and depresses investment," it said.

However, growth should pick up again to a modest 1.5 per cent in 2015 mainly driven by a rise in oil output, the IMF expects, although it cut its longer-term crude output projection to 4.4 mbpd in 2019 from 5.6 mbpd seen in May.

"The near-term impact of the conflict on oil production and exports appears for the moment contained," the fund said.

"However, the deterioration of security will harm the technical and administrative ability to expand oil production and exports over the medium term," it added.

According to the IMF, the government's budget was coming under pressure from rising security spending and relieving the humanitarian crisis.

The fund estimates a budget break-even oil price of $111.2 per barrel in 2014, up from $106.1 last year. Brent crude oil fell towards $85 a barrel on Monday amid abundant supply and global economic growth concerns.

However, the IMF expects higher oil output of 3 mbpd in 2015 verses 2.9 million in 2014, and forecasts a fiscal gap of just 0.6 per cent of GDP in 2015.

If the fighting was to engulf Baghdad and the south, Iraq's oil exports could fall by half, roughly 1.5 per cent of global consumption, from current levels, with only half of that offset by higher production from global spare capacity, the IMF warned.

KUWAIT CITY — Oil-dependent Gulf Arab states will face budget shortfalls if the recent decline in oil prices persists, International Monetary Fund (IMF) chief Christine Lagarde warned Saturday.

A sustained decline of $25 a barrel in the oil price would reduce the revenues of most Gulf countries by 8 per cent of gross domestic product (GDP), "and put many of them into a fiscal deficit situation", Lagarde told reporters.

But the six nations of the Gulf Cooperation Council (GCC) have built up fiscal buffers to cope with the immediate impact of the reduction in revenues, she said after a meeting with regional finance ministers and central bank chiefs.

The combined GDP of the GCC last year reached $1.64 trillion, so in this scenario the annual revenue of the six nations could plunge by roughly $130 billion.

The total revenue of the GCC states — 90 per cent of which come from oil — more than doubled from $317 billion in 2008 to $756 billion in 2012. 

It declined slightly to $729 billion last year, according to IMF estimates.

The GCC groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, which together pump 17 million barrels of crude oil per day and depend on oil for about 90 per cent of public revenues.

Oil prices have slumped by about 25 per cent since June because of a production glut, weaker demand and a gloomy world economic outlook.

The US benchmark West Texas Intermediate declined to about $81 a barrel on Friday on the New York Mercantile Exchange.

Lagarde called on GCC states to implement reforms and stressed the urgent need for fiscal consolidation — an appeal echoed by Kuwait's finance minister.

Anas Al Saleh urged steps to tackle rising public spending, mainly on wages and subsidies, as well as efforts to boost the role of the private sector.

"Comprehensive economic reforms, including reforming distortions in the public finances, should be enforced," he said.

Saleh stressed that the Gulf states must diversify their economies and "reduce dependence on oil".

Forecasts indicate a healthy economic growth for the six GCC nations averaging 4.5 per cent in 2014-2015, Saleh added.

"But these forecasts should be treated with caution in light of fast-paced regional and international developments, particularly the drop in oil prices which has started to impact the public finances of GCC states," the Kuwaiti minister continued.

Benefiting from high oil prices for more than a decade, the GCC states have built fiscal reserves estimated at $2.45 trillion by the International Institute of Finance.

AMMAN — Rationalising energy consumption in Jordan will contribute to defining the best route for economic development, Amman Chamber of Commerce President Issa Murad said Saturday.

He added that such an approach would help to secure the natural resources needed to boost the national economy’s productivity, reduce budget deficit and increase economic competitiveness.

In a worksheet presented at the 2nd Arab British Economic Forum held in London Tuesday, he indicated that the Jordanian economy was affected by the developments in the international energy market, with the Kingdom importing energy resources worth JD4 billion.

He said the government has issued the Renewable Energy Law, which exempts renewable energy projects from customs fees and sales tax.

Murad added that the government has facilitated public-private partnerships aimed at achieving financial revenues through generating electricity from renewable energy and selling it to the National Electric Power Company.

AMMAN — The Housing Bank announced Saturday in a press statement that it generated JD90.2 million net profit after tax during the first 9 months of this year, 14.5 per cent higher than the JD78.8 million it recorded during the same period of last year.

According to the statement, the January-September 2014 pre-tax profit amounted to JD122.2 million, an 11 per cent increase over the JD110.2 million posted during the first 9 months  of 2013.

“Total assets at the end of the 3rd quarter of 2014 rose by 4 per cent from the end of 2013 to JD7.5 billion, and customer deposit balances increased by 6.1 per cent to JD5.4 billion,” Michel Marto, chairman of the board of directors, indicated in the statement.

“Net balance of credit facilities portfolio reached JD2.8 billion, 6.4 per cent higher than the amount at the end of last year,”  he said.

These results reflected positively on various performance indicators as the capital adequacy ratio stood at 17.6 per cent, higher than the 12 per cent minimum required by the Central Bank of Jordan (CBJ), and liquidity ratio came at 166 per cent, which is also higher than the CBJ’s 100 per cent required minimum.

Other indicators showed a 1.6 per cent return on assets ratio, an 11.2 per cent return on equity ratio, and a 57.5 per cent loans-to-customer deposits ratio 

Marto stressed in the statement that the bank always seeks to develop products, improve the level of service to customers and promote various distribution channels.

The chairman indicated that the number of bank branches operating in Jordan reached 123 supported by 209 ATMs. 

“Accordingly, the bank remains the leader of the banking sector in Jordan in terms of number of branches and ATMs,” the statement said. 

The Housing Bank has local and international branch network of (173) branches in Jordan, Syria, Algeria, London, Palestine and Bahrain, as well as representative offices in Iraq, the United Arab Emirates and Libya. 

Marto underlined the bank’s financial strength and soundness besides the safety and quality of its credit and investment portfolios.  

WASHINGTON — Large manufacturers are increasingly moving production back to the United States from China, according to a new report by The Boston Consulting Group (BCG) released Thursday.

In the third annual survey of US-based senior executives at manufacturing companies with annual sales of at least $1 billion, the number of respondents who said their companies were currently re-shoring to the US from China increased 20 per cent from a year ago.

"Given the fact that China's wage costs are expected to grow, do you expect your company will move manufacturing to the United States?" the August survey asked executives at an unspecified number of companies that currently manufacture in China.

The executives who said "yes, we are already actively doing this" rose to roughly 16 per cent in the "Made in America, Again" survey in August from 13 per cent a year earlier and 7 per cent in the first survey in the series, in February 2012.

After watching the US bleed jobs for years as manufacturers off-shored production to China, "now we're watching a switchback", Harold Sirkin, a co-author of the BCG research, told AFP.

The Boston-based global management consulting firm said the online survey was conducted across a wide range of industries, from electronic and computer equipment to transportation machinery, petroleum refining, apparel and food products.

Almost all of the decision makers work for companies that manufacture in the US and overseas and make products for both US and non-US consumption, BCG said, without identifying the companies. The overall survey drew 252 responses.

The number of executives who said their companies would "consider" moving production back to the US from overseas in the near future climbed by about 24 per cent.

More than half — 54 per cent — of the respondents said they were interested in re-shoring production to the US, roughly the same percentage as a year ago.

More than 70 per cent cited better access to skilled labour as a reason to move production to the US, more than four times as many who cited it for moving production away from the US.

For goods that would be sold in the US, nearly 80 per cent gave shorter supply chains and reduced shipping costs as a motive for re-shoring.

In addition, 71 per cent said it was easier to do business in the world's largest economy and about 75 per cent indicated that the move provided local control over manufacturing processes and improved quality and yield.

"These findings show that not only does interest in repatriating production to the US and creating American jobs remain strong but also that companies are acting on those intentions," Sirkin said in a statement.

China's waning share predicted 

Looking at plans for shifting production in five years, respondents said that an average 47 per cent of total production would be in the US, a 7 per cent increase from last year's responses.

Cutbacks in China were projected to be sharp, down to 11 per cent of total production capacity, a decrease of 21 per cent from the 2013 survey.

Declines were also predicted for Mexico (-5.0 per cent), Western Europe (-19 per cent) and the rest of Asia (-22 per cent), whereas a 23 per cent increase was seen for the rest of the world.

The survey found the United States has topped neighbouring Mexico as the most likely destination for new capacity to serve the US market.

Tied roughly even last year, at 26 per cent each, this year 27 per cent of executives cited the US, while 24 per cent favoured Mexico.

A strong majority of respondents — 72 per cent — plan to invest in additional automation or advanced manufacturing technologies in the next five years, saying that would allow them to cut costs, boost competitiveness and allow the to benefit from being closer to suppliers and customers.

"The US is strongly positioned to benefit from manufacturers that seek to increase regionalisation, especially as automation costs decline," BCG said.

The future looked brighter for employment, too. Fifty per cent of the executives expected US manufacturing jobs growth of at least 5 per cent in the next five years, compared with 17 per cent who anticipated net job losses.

DUBAI, United Arab Emirates — Dubai, the emirate known for its celebration of over-the-top glamour and luxury, is racing ahead to dominate the Middle East's plastic surgery market with plans to attract half a million medical tourists in six years.

Where cosmopolitan Beirut was once the region's best known city for going under the knife, turmoil in Syria and violence often spilling into Lebanon is driving away wealthy Arab tourists. 

After splashing out on medical infrastructure over the past years, Dubai already ranks globally and aims to move up the list of top international destinations for medical tourism.

It plans to attract 20 million tourists by 2020 — with half a million medical tourists bringing in revenues of 2.6 billion dirhams ($710 million). 

The Dubai Health Authority says that around 120,000 medical tourists came last year, generating revenue of around $200 million — a 12 per cent boost from the previous year.

That already puts it ahead of Turkey, with 110,000 medical travellers, and Costa Rica, with 40,000 to 65,000, according to 2013 figures from Patients Beyond Borders, a US group that collects data on the industry. 

Lebanon does not rank among top countries for medical travel, but Beirut was once the region's premier spot for nips and tucks, notably drawing many Arab celebrities.

Globally, medical tourism is big business. It is estimated to generate $50 billion to $60 billion a year and grow to an annual $100 billion in the next decade.

To cash in on the boom, Dubai has rolled out three-month renewable visas for medical tourists and their companions and launched a campaign to brand itself as the Middle East's top destination for wellness and plastic surgery.

Vasilica Baltateanu, who started up the United Arab Emirates' (UAE) first plastic surgery consultancy, Vasilica Aesthetics, said Dubai's glamour factor is driving the trend among the region's well-heeled tourists who want to shop, indulge in spas and relax in opulent hotels.

"You don't find them going anymore to Beirut and [they] are coming to Dubai. Why? It's much safer in Dubai," she said. "I think they also choose Dubai because there are the best restaurants here, the best hotels. So you do a surgery and at the same time you can have a nice holiday."

The World Travel & Tourism Council said in its annual 2014 report that the UAE was expected to attract 12.2 million international tourists this year, with Lebanon welcoming just 1.3 million.

A company specialised in laser treatments, Silkor, says it brought its business to Dubai instead of waiting for Gulf clients to come to Lebanon, where it has opened eight branches since its founding 15 years ago. 

In less than half that time, the company established six branches in the UAE and has plans to open two more.

"Gulf clients would come to Lebanon in the past," said owner representative Sylva Wayzany, adding that now "unfortunately the situation in Lebanon doesn't help" to make it attractive for medical tourists.

To cater to the Gulf's demand for cosmetic procedures, Luiz Toledo, one of the world's most famous plastic surgeons in liposuction and the "Brazilian butt lift”, closed his practice in Brazil and moved to Dubai in 2006 because he saw less competition in the Gulf and an opportunity to keep quality and prices up.

"If you think about 20 years ago, nobody in the world heard about Dubai. And today there is not a person in the world that hasn't heard about it," said Toledo.

Last year, he saw patients from 73 different countries. His new practice has a private wing for high-rolling Arab clientele.

Dubai has rapidly become home to one of the world's highest saturations of plastic surgeons. Toledo says that in the US there are 20 plastic surgeons for every 1 million people, compared to 52 per million in Dubai. 

The Emirates Plastic Surgery Society, a professional group where he is a board member, says its membership has more than doubled to 150 in the past eight years.

The Dubai Health Authority says there are around 150 licensed plastic surgeons in Dubai alone.

Emma Jordan, a 33 year-old British resident of Dubai and mother of three, chose to undergo breast augmentation and stretch mark removal here instead of in London, because while the price was similar at around $9,200, waiting times were shorter and the procedure more personal.

"I think possibly back home, it's more clinical. You have a consultation; you don't always see the surgeon before and after. Sometimes you see a nurse [instead]," she said. "It's a huge difference."

AMMAN — The Aqaba Special Economic Zone Authority (ASEZA) and the Aqaba Development Corporation (ADC) are premium sponsors of the 2nd Arab British Economic Forum held in London Tuesday. 

The Aqaba delegation was headed by ASEZA Chief Commissioner and ADC Chairman Kamel Mahadin and Sharhabeel Madi, ASEZA’s commissioner for economic development and investment affairs, along with ADC’s vice president, Bashar Abu Rumman, according to an ASEZA statement. 

Organised by the Arab-British Chamber of Commerce, the 2nd Arab British Economic Forum brings together senior government officials, diplomats, business executives, investors and decision makers from the UK and the Arab World to discuss new opportunities for business and investment cooperation in partnership with Jordan Chamber of Commerce, League of Arab States, the General Union of Chambers of Commerce, Industry and Agriculture, and United Kingdom Trade & Investment (UKTI).

Mahadin was quoted  as saying that his team seeks to have “strong and effective presence for Aqaba in this important event as it very much serves our marketing efforts and goals on both the tourism and investment levels ”.

In his remarks at the event, the chief commissioner  described Jordan as “an oasis of security and safety. With its competitive investment climate, infrastructure, and world-class transport system, the Aqaba Special Economic Zone represents a strategic choice for investment in sectors that serve the region as a whole."

He stressed Jordan’s ability to attract investment from the Arabian Gulf, Europe, Asia, and from countries in the Middle East and North Africa (MENA) that are facing political instability.

Highlighting some of the major developments taking place in Aqaba, Mahadin said $700 million has recently been invested in Jordan's ports development , noting that the goal was to attract $6 billion in investment in ASEZA over two decades, he said, but it has already surpassed the $20 billion mark. He added that 85 per cent of what Jordan imports comes through Aqaba, 65 per cent of what Jordan exports goes through Aqaba, and half of what passes through the port ends up in Iraq, he pointed out.

He listed the sectors Aqaba is currently promoting, namely, tourism and real-estate development, trade, logistics, services, health, education and industry. He invited British investors to visit Aqaba and explore what the zone offers in terms of its competitive investment climate, streamlined procedures, decentralised governance model, modern
multimodel transportation network and tourism attributes.