The Palestinian boycott of settlement products is starting to have an impact -- but not just on settlers.
Salam Fayyad, the Palestinian prime minister, went to a Ramallah supermarket yesterday to launch the PA's new inspection campaign. 66,000 shops across the West Bank will be checked for settlement goods. Those in compliance with the boycott will get a certificate; those in violation will receive a fine, potentially worth several thousands of dollars.
Dubai World and its largest creditors have agreed in principle to a deal to restructure the Emirati company's $23.5 billion in debt.
The deal would reduce Dubai World's debts to $14.4 billion, divided into two tranches. The first, worth $4.4 billion, would be repaid over five years with 1 percent interest; the second would have an eight-year maturity.
Lenders would receive a mix of both tranches, and they'll be allowed to choose from several interest rate options for the second tranche, which offer varying degrees of protection against a complete Dubai World bankruptcy (in exchange for a lower payout).
Details of the agreement are posted on Dubai World's web site. It's similar to the general terms announced in March.
The deal is between Dubai World and the "coordinating committee" of its creditors; firms on the committee hold about 60 percent of the company's debts.
Volunteers have begun going door-to-door in the West Bank handing out lists of 500 recently-banned products manufactured on illegal Israeli settlements.
The boycott campaign was organized earlier this year by Palestinian prime minister Salam Fayyad. A new law signed last month makes it illegal to sell products from the settlements; violators face a $14,000 fine. PA officials also confiscated and destroyed some $5 million worth of settlement products.
Egyptian president Hosni Mubarak's (slightly belated) labor day speech yesterday was billed as his office as a "major address." Aides said the president would address all of Egypt's major political issues -- though, given the timing, the speech mostly focused on the economy.
The stagnant economy has been a major flashpoint for years; the boisterous labor protests of the last few weeks are merely the latest in a series of more than 3,000 demonstrations since 2004.
President Obama's Summit on Entrepreneurship - featuring more than 250 delegates from more than 50 countries (and Chamillionaire!) kicked off on Monday. It's being billed as the fulfillment of a pledge he made during last year's Cairo speech to host such a summit in Washington, so while there are delegates from Europe and India and South America, most are from majority-Muslim countries, and they're who the administration is really targeting.
Egyptian president Hosni Mubarak went back to work today, holding his first cabinet meeting (عربي) since his gallbladder surgery in Germany last month, and promptly ordered 10 percent raises for state employees and a larger budget for farm subsidies.
Hamas has started taxing street vendors and imposed a number of other new taxes in an effort to shore up its sagging finances.
Jamal Nassar, a Hamas MP, says the government is facing a financial crisis (عربي) because of international sanctions and the blockade. Nassar blames the Egyptian government for the current crisis: He says the new underground wall along the Gaza-Egypt border has choked off commerce into the Gaza Strip. Al-Arabiya reports that the wall has shut down most of the tunnels used to smuggle goods into Gaza. Hamas taxes those tunnels, so less smuggling means lower revenues.
A striking statistic from a new study (عربي) by the Egyptian Investment Authority, reported by Al-Masry Al-Youm: The average income of a government employee is just LE394 (US$71), well below the official poverty line, which is LE656 (US$119) for a family of four.
Minimum wage has become a hot topic in Egypt recently, both because of frequent demonstrations by activists and because country's Administrative Court ruled last week that the government needs to set a realistic minimum wage (it's currently set at LE35, and hasn't changed since 1984). Labor groups want it raised to LE1,200.
We've remarked before on the disconnect between Egypt's macroeconomic growth and microeconomic stagnation. You can view the Investment Authority's report as another symptom of that dynamic: Public sector employees are falling behind, even as the Egyptian economy grows at an impressive clip.
But low government salaries are also a cause of that problem. If average wages are 40 percent below the poverty line, then hundreds of thousands of families are barely scraping by. No disposable income means less money to spend in their neighborhoods, which means a weaker bottom line for many Egyptian business owners. Higher government wages (even modestly higher ones) could have a substantial ripple effect throughout the Egyptian economy.
Ayatollah Ali Khamenei waded into Iran's controversial subsidy reform debate this week -- but it's unclear exactly whose side he's taking.
A little backstory, first (regular readers can skip this paragraph). Iranian president Mahmoud Ahmadinejad wants to slash $40 billion -- mostly food and fuel subsidies -- from Iran's $100 billion subsidy program. Parliament initially agreed to the plan in January, but reversed that decision last month; lawmakers approved a 2011 budget which contains just $20 billion in cuts, instead of the $40 billion Ahmadinejad requested.
When Dubai World, the huge emirate-owned investment company, announced a plan to restructure some $26 billion in debt on Wednesday, markets welcomed the news.
Now, less than a week later, disagreements between Dubai World and some of its 97 creditor banks are becoming public. A handful of banks on the committee that's coordinating Dubai World's debt restructuring are angry that other creditors look set to receive preferential repayment.
Representatives from nearly 100 banks met with executives from Dubai World to discuss a restructuring plan for the troubled company's $26 billion in debt -- but the five-hour meeting ended without any public announcements.
The talks were led by bankers from Dubai World's senior creditors, which include HSBC, Royal Bank of Scotland, Lloyds, and other international firms. Media reports say the banks will asked to accept either slow repayment terms or substantial losses -- perhaps up to 40 percent of their debts. In exchange, the Dubai government would guarantee Dubai World's debt.
The emirate already announced this week that it will use a financial support fund to help Dubai World pay off short-term loans.
Dubai World's 97 creditors need to reach an agreement in the next few weeks. In November, the company asked its creditors for a six-month delay on payments; that term will expire this spring.
In other bad news for the firm, DP World -- a major operator of international ports -- said its year-over-year profits fell by 46 percent, largely due to slow international shipping. Dubai World owns a majority stake in DP World.
Forget all the doom and gloom, the United Arab Emirates are going up, up, up! At least, that's what Rupert Murdoch, the conservative media baron and owner of News Corporation believes.
From the National>:
Fox International Channels, a subsidiary of News Corp, is making Abu Dhabi its regional hub for online advertising sales, documentary production and satellite television broadcast.
Murdoch and Fox are betting that the booming wealth of the Gulf states, combined with the enormous Middle Eastern youth population that consume media products produced in the Gulf, will spell big profits for online advertising in the region.
Another sign the Iranian government doesn't really expect Russia to ever finalize the S-300 surface-to-air missile sale: The Iranian government has ordered all Russian pilots working in Iran to leave the country within two months.
Iran says it's a safety measure, because several Russian-made planes -- with Russian pilots -- have crashed in the country in recent years. That's not untrue: A Taban Air Tupolev 154 crashed in January, killing more than 45 people; a Caspian Airlines Tupolev 154 crashed in July, killing 168 people; and at least two other Tu-154 planes have crashed in the last decade.
The Jordanian government on Thursday arrested two former executives of the only petroleum refinery in the country -- one of them a former finance minister -- as well as a current economic adviser to the prime minister and a wealthy businessman, levying bribery and abuse of public office charges against the four men.
Adel Qudah, the ex-finance minister and former chairman of the Jordan Petroleum Refinery Company, is the first former minister to face corruption charges in Jordan's history. The arrests represent the first real push by new Prime Minister Samir Rifai, who promised after being appointed in December that he would tackle corruption, wrote Naseem Tarawnah of the Black Iris of Jordan blog.
According to the New York Times, the U.S. government has awarded more than $107 billion in contracts over the last decade to companies with significant business interests in Iran.
The article's basic thesis -- sanctions aren't foolproof! -- should be neither surprising nor controversial. They're difficult to enforce in a world of multinational corporations: The Clinton administration decided in 1998 not to punish European companies that did business in Iran, and they went on to sign billions of dollars in contracts.
Somalia's Shabab rebel group says it will no longer allow the World Food Programme to operate in Somalia -- and will retaliate against any local contractors who work with the WFP.
"The contractors working with WFP must avoid collaborating ... anyone working with the agency will be seen serving the interest of WFP," the group said in a statement.
Shabab says the WFP delivered food that made people sick (probably not true); that WFP aid causes market distortions (probably true, but also unavoidable); and that the group's work in Somalia is "political."
Egypt's Supreme Administrative Court ruled today that the privately-owned East Mediterranean Gas (EMG) company can, in fact, sell natural gas to Israel.
EMG started selling gas to Israel in May of 2008; it has a contract to provide 1.7 billion cubic meters of gas annually for the next 20 years. A court ruled in November 2008 that the contract was illegal. The government has largely ignored that ruling -- natural gas sales to Israel continued -- but today's vote officially overrules the previous decision.
Cooking gas riots -- or, as Al-Masry Al-Youm has dubbed them (عربي), "the butane war" -- have killed at least one person in Egypt and sent the mayor of Tanta to prison.
Cylinders of butane gas are ubiquitous in Egypt: they're used in homes, in restaurants, and by street vendors hawking fuul and roasted nuts. But the country is going through a severe butane shortage right now, brought on by last month's deadly flooding, which disrupted supply lines from major ports on the Mediterranean coast. (Government officials say illegal businesses are also contributing to the shortage by using large amounts of subsidized butane.)
BAE Systems, a multibillion-dollar defense contractor based in England, announced on Friday that it would settle a long-running corruption investigation brought by the U.S. Department of Justice, which had been looking into allegations of corruption and bribery connected to several arms deals, including the roughly $67 billion "Al-Yamamah" contracts with Saudi Arabia initiated during the mid-1980s.
BAE will pay a $400 million fine to the DOJ and around $46.8 million to the British Serious Fraud Office, which was the first to investigate the deals but controversially dropped the case in 2006, after Saudi Arabia reportedly used its intelligence on Al-Qaida as leverage to force a halt.
The Golden Arches are a little less golden, at least in the United Arab Emirates: McDonalds sales grew by just 4 percent in the UAE last year, compared to 14 percent in 2008. Growth is expected to pick up a bit in 2010.
The McArabia is better than anything you'll find in a stateside McDonalds, by the way.
