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The Buzz

Morning briefing: 28 Sep 2012

by Executive Staff September 28, 2012
written by Executive Staff

Oman plans to boost its 2013 budget spending by 10 percent compared to this year's plan to fund new infrastructure projects, an official source familiar with the government's financial planning has told Arabian Business.

"A 10 percent hike in spending will take care of our growth to fund development projects such as airports, ports, roads, hospitals and in the energy sector," said the source, who declined to be identified.

The 2013 budget plan would be based on an oil price of US$85 per barrel and assume a deficit of about the same size as the shortfall originally projected for this year, he said.

More from Arabian Business

Iraq said on Wednesday that Royal Dutch Shell has denied starting talks with Iraqi Kurdistan to sign energy deals with the semi-autonomous region.

Sources told Reuters last week that Shell was exploring possibilities in Iraqi Kurdistan, encouraged by the example of rivals who were risking Baghdad's anger by moving into the northern region while developing oilfields in the south.

"We don't have any discussions with the Kurdish regional government about working in the region," Shell's vice-president Hans Nijkamp told Iraq's Deputy Prime Minister for Energy Hussain al-Shahristani, according to a statement from Shahristani's office.

More from Reuters

North Lebanon has an array of untapped investment opportunities, the head of the Investment Development Authority of Lebanon has said, vowing to extend the support needed to attract investors to the region’s lucrative agricultural sector.

“North Lebanon is full of promising investment opportunities, particularly in agriculture. But there are barriers that we are working to resolve,” Nabil Itani added.

He said the relatively low prices of agricultural land, affordable labor costs and the availability of raw materials were among very favorable factors that could encourage a substantial increase in agricultural investments.

More from The Daily Star

The United States has said it has signed a framework agreement with Saudi Arabia and other members of the Gulf Cooperation Council to explore ways to boost trade and investment with the oil-rich region.

The GCC also includes Bahrain, Kuwait, Oman, Qatar and the UAE. Total two-way trade between the United States and the GCC totalled almost $100bn last year, with the US running about a $24bn trade deficit.

"This important trade and investment agreement will help to grow and strengthen our economic ties with the Gulf Cooperation Council, which is a key strategic US partner in the Middle East and North Africa region," US Trade Representative Ron Kirk said in a statement.

More from Arabian Business

Iraqi Prime Minister Nouri al-Maliki has turned down an invitation by his Turkish counterpart Recep Tayyip Erdogan to pay a visit to Turkey to attend Erdogan's ruling Justice and Development Party's (AK Party) congress this weekend Today`s Zaman reported

Speaking during an interview with Iraq's semi-official al-Iraqiya television, Maliki cited another planned foreign visit in his rejection of the invitation, adding that he had penned "a letter of thanks" to the Turkish premier.

Turkish diplomatic officials confirmed on Wednesday that Maliki had been invited to attend the upcoming party congress of the AK Party, scheduled for Sept. 30.

More from Trend

A man linked to an anti-Islam video that sparked riots across the Muslim world has been held without bond after a hearing in Los Angeles, California.

A judge said Nakoula Basseley Nakoula, 55, was a flight risk and cited a pattern of deception when making his ruling, Reuters news agency reported.

Nakoula was investigated for violating probation terms after he was released from prison in 2011 for bank fraud.

He has not been detained over the contents of the inflammatory video.

More from the BBC

The United States is temporarily withdrawing more staff from its embassy in Libya's capital for security reasons, but hopes to send them back early next week, the State Department has  said.

"This is a temporary further drawdown of staff for security reasons. We will review our posture again early next week with the goal of restoring staff as soon as conditions allow," a State Department official said in New York, where Secretary of State Hillary Clinton is attending the U.N. General Assembly.

U.S. Ambassador to Libya Christopher Stevens and three other Americans were killed during what Washington has called a terrorist attack on the U.S. Consulate in Benghazi on September 11.

More from Reuters

Kuwait's parliament will not try to convene but will turn to the emir for the next move in a political standoff between legislators and the government, the assembly speaker said, which could lead to parliament's dissolution and fresh elections.

The oil producer and OPEC member has been grappling with long-running political tensions between an elected parliament and the government, led by a prime minister chosen by the ruler and by a cabinet with ruling family members holding the major portfolios.

Kuwait has been unable to hold a parliamentary session for several months after its top court effectively dissolved the opposition-dominated parliament, which was elected in February, basing its decision on a technicality.

More from Arabian Business

September 28, 2012 0 comments
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Real Estate

Dubai back on its feet?

by Thomas Schellen & Nicole Walter September 28, 2012
written by Thomas Schellen & Nicole Walter

The regional property market is eagerly anticipating the Cityscape Global (formerly Cityscape Dubai) real estate fair, due to take place from 2-4 October.

The real issue at stake is whether recent promises of resurging real estate values in Dubai will allow the trade show to reconnect to the vibrant mood that saw the fair expand rapidly from its inception in 2002 until the 2008 financial crash.

After disappointing during the 2009 and 2010 crisis years and showing cautious optimism in 2011, Cityscape Global this year has been preceded by a flurry of project deliveries in Dubai and Abu Dhabi as well as new project announcements by major UAE-based developers.

The fair this year features Turkey as the “2012 Country of Honor,” meaning panel discussions and investor roundtables will focus on real estate development in the country, and it also has the largest international pavilion at this year’s show.

Other focal points of Cityscape Global 2012 are real estate opportunities across the Middle East and North Africa, in particular Iraq and even in East Africa. The conference program features the logistics sector as one of its themes.

Executive asked three experts to give us their opinions on what to look out for this year.

Ahmet Kayhan, Chief Executive Officer, REIDIN.com – the Dubai-based real estate information provider specialized in emerging markets

“Cityscape announced this year as Turkey year. Having opened its real estate markets to Gulf nationals – through freehold and individual title deeds, etc. – Turkey is the hottest topic for a while. That Cityscape has [the focus on Turkey] also proves that there is not much going in this part of the world; it’s a more settled market in Dubai. Other markets such as Abu Dhabi, Doha, etc. unfortunately have their own negative issues.”

Matthew Green, Head of Research & Consultancy UAE, at CBRE Middle East, a unit in global commercial real estate services firm CBRE

“In recent years Cityscape has returned closer to its roots as a business to business event rather than simply an opportunity for developers and agents to sell off-plan property. This year, Cityscape will offer a forum for established developers to showcase their wares, promote their successes and potentially launch some new projects.”

“It is important to remember that the event now has a global focus so this is really an opportunity for Dubai to promote its status as a global commercial hub and for the international community to see the significant progress that [the emirate] has made in establishing this.”

Craig Plumb, Head of Research – MENA at global real estate services company Jones Lang LaSalle

“The market certainly does not need speculative new schemes right now and I suspect that many announcements are just that – announcements that will go no further. I would expect the mood at Cityscape to be marginally more buoyant than last year (which was totally moribund), but far from exuberant.  [It will be] more of the same really – with a focus on B2B [business to business] networking, with few new launches or project sales.”

September 28, 2012 0 comments
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The Buzz

Morning briefing: 27 Sep 2012

by Executive Staff September 27, 2012
written by Executive Staff

Saudi Arabia’s health officials have stressed that there is no threat to Haj pilgrims from the possible outbreak of a new virus in the Kingdom.

“There have been two cases of flu over a period of time. This is normal,” health ministry spokesman Khaled Al-Mirghalani told AFP.

“There are no changes to the conditions put by the Health Ministry to pilgrims,” he said.

However, authorities will remain alert to the situation, he added.

Ziyad Memish, the undersecretary for preventive medicine at the ministry, said the “new virus has been in the Kingdom for three months.” But he added that the situation was “stable and no new cases have been recorded.”

More from Gulf Business

More than $250 billion of investments in Middle Eastern rail projects is expected in the next three years, as the region undergoes major changes to its transport infrastructure.

The region has one of the lowest density rail networks in the world, with just under 34,000 km of track over a landmass of 15 million square km.

The boom in the construction of railway infrastructure is expected to double the track network to 67,000 km and create huge opportunities for local and international businesses.

This year, there are currently $156bn worth of rail projects planned or under way in the region, according to projects tracker MEED Projects.

More from AME Info

Governments in the Mediterranean need to get creative if they want major oil firms to help them tap the full potential of recent undersea gas finds, a leading industry expert told a conference in Beirut.

Speaking at the European Mediterranean Oil & Gas Exploration & Production Summit in this Cypriot resort town, Doha-based energy economist Roudi Baroudi cited two key hurdles to the launch of full-scale exploration and development in the near future.

Europe’s financial crisis, he explained, would lead to decreased energy demand, necessarily making investment in Mediterranean gas less attractive until conditions change.

More importantly, however, he warned that political risk heightened by the so-called “Arab Spring and political feuding in the East-Med” would dissuade international oil companies from diving into new projects in the region.

More from the Daily Star

Etihad Airways, the national airline of the United Arab Emirates, has announced it will fly daily between Abu Dhabi and Istanbul from January 1, 2013.

The Abu Dhabi-based airline launched services to Istanbul, the largest city in Turkey, with four non-stop flights a week in June 2009, increasing to five services per week later that same year.

The daily service will support traffic growth between Abu Dhabi and Turkey and connecting traffic to onward destinations across the GCC, Indian Subcontinent, North Asia and Australia.

More from AME Info

September 27, 2012 0 comments
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The Buzz

Morning briefing: 26 Sep 2012

by Executive Staff September 26, 2012
written by Executive Staff

The Arab Monetary Fund has arranged a $127 million credit facility for Morocco to help the North African nation deal with rising food prices.

"The amount of the loan contributes to helping the Kingdom of Morocco confront urgent economic conditions, including the increasing value of imported agricultural products," the fund, a regional Arab body with 22 member states, said in a statement.

It did not give details of the loan, but said it would bring its total lending to Morocco so far to $1.46 billion.

More from Arabian Business

US President Barack Obama has urged global leaders to rally against extremism in an address to the UN General Assembly in New York.

Mr Obama said it was the obligation of all leaders to speak out forcefully against violence and extremism, as he framed his speech with references to the US ambassador murdered in Libya.

Unrest across the Middle East is set to dominate discussion at the summit.

More from the BBC

Two large explosions shook the centre of Syria's capital Damascus, near the military general staff headquarters, on Wednesday.

The blasts happened just before 07:00 local time (04:00 GMT) in an area dominated by government buildings.

Information Minister Omran Zoabi said two roadside bombs caused the blasts, and said one might have been inside the main military compound.

More from the BBC

Safahuddin al-Safi will join Iraqiya's Adnan Janabi and the Kurdistan Alliance's Farhad al-Atrushi on a five-member special committee charged with drafting a new oil law, after six years of political deadlock on the issue.

The committee will "negotiate the oil and gas draft law to be referred to the Cabinet, and come out with one formula, under the supervision of the Presidency (of Parliament)," according to a September 17 order signed by Speaker of Parliament Usama Nujaifi.

More from Iraq Oil Report

Iran's Revolutionary Guards unveiled a home-built long-range drone capable of reaching most of the Middle East, including the Islamic state's arch-foe Israel, state television reported.

The reconnaissance drone named Shahed 129 has a range of 2,000 km and is capable of carrying bombs and missiles, state television said. It gave no further details.

Israel has threatened action against Iran's nuclear sites, raising speculation about a possible military strike ahead of the US presidential election in November.

More from Arabian Business

A gas pipeline feeding Yemen's only liquefied natural gas (LNG) export terminal was blown up again in the early hours of Tuesday morning, the operating company said.

Yemen's oil and gas pipelines have been repeatedly sabotaged since anti-government protests created a power vacuum in 2011 that armed groups have exploited to cause fuel shortages and slash export earnings for the impoverished country.

The 320-km pipeline that supplies the $4.5-billion plant has been attacked several times by suspected al Qaeda-linked gunmen after military strikes on Islamist militants.

More from Arabian Business

September 26, 2012 0 comments
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The Buzz

Morning briefing: 25 Sep 2012

by Executive Staff September 25, 2012
written by Executive Staff

Secretary of State Hillary Clinton has reassured Egypt's new Islamist president that the United States would continue with plans to expand economic assistance despite anti-American protests that cast new shadows over US engagement with the region.

Clinton met Egyptian President Mohamed Mursi in New York, where both are attending this week's UN General Assembly meeting, and reinforced the Obama administration's continued commitment to provide both military and economic aid for Cairo, a senior State Department official said.

"What he heard from the secretary is that she is committed to following through on what she has said we will do," the official said following the 45-minute meeting.

More from Reuters

Brent crude climbed above $110 a barrel on Tuesday, recovering from a more than 1 percent drop in the previous session, as escalating tensions surrounding Iran offset concerns about weak demand in a still-fragile global economy.

Washington on Monday tightened sanctions against Iran to curb its nuclear ambitions, while Tehran increased its rhetoric against Israel, intensifying worries about the conflict between the two and the impact on crude supplies from the region.

"The markets have been flipflopping between worries over weak demand and tight supplies, so I'm not surprised to see some volatility in prices," said Natalie Rampono, commodity strategist with ANZ in Melbourne.

More from Arabian Business

Lebanon's gross public debt reached $55.4 billion at the end of July 2012, an increase of 3.3 percent from the end of 2011 and 5 percent from July 2011, according to figures released by the Association of Banks in Lebanon.

“When measured against the size of the economy, gross public debt accounted for 136.4 percent of GDP at end-July 2012, reporting a relative standstill since year-end 2011,” said the report, which was published by Bank Audi’s Lebanon Weekly Monitor.

It added that domestic debt decreased by 0.9 percent from the end of 2011 and was up by 1.3 percent from the end of July 2011 to reach a total of $32.4 billion at the end of July 2012.

More from The Daily Star

The International Monetary Fund is set to cut its forecast for global growth next month when it updates its projections for the world economy, the head of the IMF said on Monday.

"We continue to project a gradual recovery, but global growth will likely be a bit weaker than we had anticipated even in July, and our forecast has trended downward over the last 12 months," IMF managing director Christine Lagarde said in a speech previewing the IMF/World Bank meetings in Tokyo on October 12-14.

The biggest factor weighing on the world economy was uncertainty among investors over whether policymakers in advanced economies will deliver on promises, Lagarde added.

More from Arabian Business

Morocco has awarded a Saudi-led consortium a $1 billion contract to build a 160 megawatt solar power plant, the first in a series of vast solar energy projects planned in the North African kingdom.

A consortium made up of Saudi developer ACWA Power International (95 percent) and the Spanish firms ARIES and TSC (five percent between them), beat off bids from three other groups, one of them led by Italian energy giant Enel.

The bids were evaluated on the basis of price per kilowatt/hour proposed by the competing firms, with the ACWA group offering 1.60 dirhams (0.14 euros), some 27 percent less than the nearest bidder.

More from The Daily Star

Royal Dutch Shell expects to resume production at its Majnoon oilfield in Iraq in the first quarter of 2013, a senior company official said on September 18, as a pipeline construction delay means it is likely to miss a year-end production target.

Shell then expects to lift output to 175,000 barrels per day (bpd) – the level of production required for it to start recovering costs under its contract with Baghdad – by March or April, Arne de Kock, commercial general manager for Iraq, told Reuters in an interview at an energy conference in Istanbul.

Asked when operations at Majnoon would begin again, de Kock said: "It will be some time next year. Our plans are to have mechanical completion by the end of the year. Then we will enter hydrocarbons into the system sometime in Q1."

More from BRecorder.com

September 25, 2012 0 comments
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The Buzz

Morning briefing: 24 Sep 2012

by Executive Staff September 24, 2012
written by Executive Staff

Israel will eventually go beyond threats and will attack Iran, the commander of Iran's Revolutionary Guards was quoted as saying.

As speculation mounts that Israel could launch air strikes on Iran before US elections in November, Mohammad Ali Jafari told a news conference that the Jewish state would be destroyed if it took such a step.

"Their threats only prove that their enmity with Islam and the revolution is serious, and eventually this enmity will lead to physical conflict," Jafari said when asked about Israeli threats to strike Iran's nuclear facilities.

More from Arabian Business

Google has agreed to block all links to an anti-Islamic film inside Jordan, the country's communications and information technology minister has announced.

Atef Tel said a deal had been reached with the US internet giant – which owns YouTube – to block the video which has led to protests across much of the Muslim world.

"We asked Google to block all links to this film in the kingdom and we have had a favourable response," Tel said.

More from AME Info

Lebanese Finance Minister Mohammad Safadi has said the government is still committed to paying for a public sector wage increase that became effective in February.

The minister added that $400 million would be paid by the end of September on top of $600 million that has been settled in arrears to contractors since the beginning of the month.

Safadi rebuffed reports that his ministry was delaying payments, saying the reports were "utterly incorrect."

But he warned that if suggested tax hikes to fund the salary scale were rejected, the government would not be able to pay for the wage hike.

More from The Daily Star

Iran plans to switch its citizens onto a domestic Internet network in what officials say is a bid to improve cyber security but which many Iranians fear is the latest way to control their access to the web.

The announcement, made by a government deputy minister on Sunday, came as state television announced Google Inc's search engine and its email service would be blocked "within a few hours".

"Google and Gmail will be filtered throughout the country until further notice," an official identified only by his last name, Khoramabadi, said, without giving further details.

More from Reuters

Over 1.3 million unemployed nationals in Saudi Arabia are now receiving the unemployment allowance introduced by the country last year, labor minister Adel Faqeeh has said.

In comments published by the official Saudi Press Agency (SPA), Faqeeh praised the efforts taken by Saudi’s King Abdullah to increase employment in the country.

He also said that the country’s Nitaqat programme has helped in employing more than 300,000 Saudis including 54,000 women in less than a year.

King Abdullah had announced the Hafiz (unemployment allowance) program last year to help the increasing number of unemployed youth in the country. The program, which started in December 2011, pays unemployed Saudis SAR2,000 riyals a month for a maximum of one year. The majority of the recipients, up to 80 per cent, are women.

More from Gulf Business

September 24, 2012 0 comments
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Comment

Little cause for optimism

by Thomas Schellen September 24, 2012
written by Thomas Schellen

American politicians have long been unpopular in the Middle East. Even before the release of the hugely offensive anti-Islamic film and Republican presidential candidate Mitt Romney’s unfortunate promise to kick the Palestinian issue “down the field”, people in North Africa and the Levant were disenchanted with the world’s only superpower.

A new poll released by Gallup on Monday – using data taken in the first half of 2012 – shows support for American leadership this year lower than at any point under US President Barack Obama. Only one in five persons in the Middle East approve of the United States’ leadership but almost three times that number disapprove, the poll finds.

The drop in average approval ratings was both continuous and quite steep, with the positive image of the first two Obama years, reflected in approval rates of 25 percent in 2009 and 2010, falling to just 20 percent in 2012.

The only country among 12 Middle Eastern nations where a majority voiced a positive view of the US leadership in the spring of 2012 was Libya. There is, therefore, more than a hint of irony that it was in the country’s second city Benghazi where the anti-film protests were most vociferous – with the US Ambassador being killed as the embassy was stormed.

The Iranians were least appreciative of America in their stated opinions, with just an 8 percent approval rate. Palestinians were the most outspoken in their opposition – while 18 percent said they approved of the US job on leadership, roughly three in four Palestinians disapproved. In Egypt, where President Obama tried to open a new chapter on Arab-American relations with his June 2009 “New Beginning” speech, two out of three respondents disapproved of his leadership.

Approval ratings of American leaders in the Middle East are lower than those in Asia, Europe, and Africa and in 2011 came out 24 percentage points below global medians for that question in Gallup research. The low intensity of trade between the US and the region (no Gulf countries were shown in the poll) and the friend-of-my-enemy problem in the Palestinian issue go some way toward explaining why the US struggles for support in the region.

But, as we approach the end of Obama’s first term, it is worth comparing Arab views on the US today with previous administrations. The George W. Bush presidency, its fiasco in Iraq and its parallel inability to deal with the Palestinian plight meant Obama had an easy act to follow. It is little surprise that the year 2008 was a low point in Arab approval rates of US leadership, with just 15 percent support.

So Obama’s relative rise in popularity is hardly to be celebrated, and may simply be because opinions could hardly have gotten worse. They spiked after the 2008 election because Obama back then spelt change and promise to people worldwide. 

How much the fluctuations in Arab perceptions of the US between 2010 and 2012 were correlated to the developments that erupted into the Arab Spring from January 2011 is a question that is hard to answer, given that the uprisings surprised its many fathers and partisans as much it did the world. Therefore no reliable polling research into the exact opinions and attitudes expressed in the Arab Spring could have been conducted freely prior to the uprisings.

The current negative outlook for Arab-US relations and a possible worsening of communication is reinforced by the slide in approval rates since that expectation-driven high in 2008. But it appears from the significant fluctuations in views of Arab populations that the disapproval of Arab populations toward American leadership is more related to divergent interests than an expression of a conflict of identities and clash of civilizations.

Unlike in 2008, when Obama came to power amid a storm of international good will, this year’s expectations for a post-election improvement in Arab-American relationships will probably be best kept very modest for the incumbent and even more so for the challenger.

September 24, 2012 0 comments
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The Buzz

Morning briefing: 21 Sep 2012

by Executive Staff September 21, 2012
written by Executive Staff

Russia overtook Saudi Arabia as the world’s largest crude producer in July, just one month after the kingdom took the top spot for the first time in six years.

Production in Saudi Arabia, OPEC’s largest producer, fell to 9.8 million barrels a day (bpd) in July, down from 10.1 million bpd the previous month, according to data from the Joint Organization Data Initiative.

Russia pumped 9.92 million bpd in July, up by 20,000 barrels from June, said the website.

Saudi Arabia production reached a 31-year high in March as the Gulf state moved to compensate for declining Iranian exports.

More from Arabian Business

The World Bank is willing to provide Lebanon with financial and technical assistance to help offset the impact the volatile situation in the region could have on the country’s economy, it has said.

This strong message of support came from the Bank’s vice president for the Middle East and North Africa, Inger Andersen, as she wrapped up a two-day official visit to Beirut on Thursday.

“Lebanon is going through difficult times, some of this driven by factors beyond its control,” Andersen said.

“In all my meetings with senior officials, with the private sector and with representatives of civil society, we discussed these multiple challenges but we also talked about opportunities in Lebanon which can be exploited to spur growth and create inclusive job opportunities,” Andersen said.

More from Daily Star

Iraq has denied a Western intelligence report which said Iranian aircraft had flown weapons and military personnel over Iraqi airspace to Syria to help President Bashar al-Assad battle an 18-month-old uprising.

The allegation, reported by Reuters on Wednesday, said arms transfers were organized by the Islamic Revolutionary Guard Corps.

Although charges that Iraq has allowed Iran to send arms to Syria are not new, the report said the extent of such shipments is far greater and more systematic than has been publicly acknowledged, thanks to a deal between senior Iraqi and Iranian officials.

More from Reuters

Iraq's autonomous Kurdistan region has said it will receive 147,000 barrels of oil products per day, as part of a deal concluded with Baghdad to end a dispute over oil payments.

The deal, which was first outlined last week, will solve only few points of a broader feud between Baghdad and Kurdistan over oil exports, energy policy and territory which have become increasingly contentious topics.

"This deal cannot solve all the problems currently but it is considered a good step," Kurdish Prime Minister Nechirvan Barzani said in a statement posted on the Kurdistan Regional Government (KRG) website on Thursday.

More from Chicago Tribune

Muslims angered by cartoons mocking the Prophet Mohammad should follow his example of enduring insults without retaliating, Egypt's highest Islamic legal official said.

Western embassies tightened security in Sanaa, fearing the cartoons published in a French magazine on Wednesday could lead to more unrest in the Yemeni capital where crowds attacked the U.S. mission last week over an anti-Islam film made in America.

In the latest of a wave of protests against that video in the Islamic world, several thousand Shi'ite Muslims demonstrated in the northern Nigerian town of Zaria, burning an effigy of U.S. President Barack Obama and crying "Death to America".

More from Yahoo

September 21, 2012 0 comments
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Economics & Policy

Syria’s workhorse dies with Aleppo

by Zak Brophy September 20, 2012
written by Zak Brophy

A dozen men stand in silence watching as others brick up the shattered storefront of an industrial hardware shop. A mortar strike blew apart its façade only hours ago in this northeastern section of Aleppo, and three hundred meters down the street fighting continues to rage between government forces and opposition fighters of the Free Syria Army (FSA). No words are shared between the disgruntled merchants and a pair of rebel fighters standing nearby — there is clearly little love lost.

The wrecked shop is in a district called Aaqoora, in the middle of what used to be one of the city’s thriving industrial quarters. Now the hundreds, if not thousands, of small and medium sized factories here are empty. “Not a single one of the businesses in this area is working now… none,” snaps one of the bystanders.

Further down the block a door swings ajar on a textiles factory. Thread still lays taut across the looms and reels of cloth are stacked in the corner of the abandoned room, now strewn with broken glass and smashed plaster. The factory feels suspended in time until a thunderous explosion bellows out nearby — another small part of Aleppo laid to waste. (Click here for a photo tour of the city)

Until the Holy Month of Ramadan began in late July, Aleppo and its more than 2 million inhabitants had, for the most part, been insulated from the violence wracking the country elsewhere. However, when the battle shifted mid-summer from the surrounding countryside into the heart of this city, which is Syria’s industrial and economic workhorse, it unleashed a torrent of destruction that continues unabated.

The plethora of fighting units that make up the opposition FSA have taken control of more than half of the urban area, but the virtually unchallenged air and artillery power of the government’s forces allows them to launch attacks into every corner of Aleppo and the surrounding countryside. The bombardments from above are often indiscriminate and devastating. Whole districts lay abandoned with thousands of shops, businesses and homes shuttered, their owners and residents having fled.

Flight from havoc

“People are taking their whole operations to other countries,” says Syrian businessman Abdul Karim-Sayyed. “We can say there is an industrial migration going on now from Syria to Iraq or Egypt or Turkey or elsewhere. The majority are going to Egypt.”

Sitting in his office in Bourj Hammoud on the outskirts of Beirut, Lebanon, he laments the demise of his home. Aleppo used to employ as much as 40 percent of Syria’s industrial workforce, with manufacturing alone accounting for 150,000 jobs; the city produced 35 percent of all the country’s non-oil exports, and in sub sectors such as textiles and pharmaceuticals, this share rose to some 70 percent, according to Madinatuna, (the municipal program also know as the Aleppo City Development Strategy). All this has now ground to a violent halt.

Karim-Sayyed is from the generation of businessmen who successfully emerged from Syria’s first round of economic liberalization under then-President Hafez al-Assad, which began in the early 1990s, when the government started to encourage private investment and the export of Syrian products by private enterprises. Karim-Sayyed’s portfolio of companies were involved in such things as clothing, textiles and furniture exports, haulage and a private bus company in Aleppo. In recent months, however, along with most of Aleppo’s industrialists, he has extricated what capital he can from the violent quagmire.

In the past the Syrian regime kept a lid on the levels of capital individuals and businesses could transfer outside the nation. While there have always been circuitous routes around these restrictions, Karim-Sayyed argues that in the current state of lawlessness whatever barriers there were simply no longer apply.

“There are many ways to get your money out of Syria,” he says. “The border with Turkey is wide open — you take your money there without anyone asking any questions. There are no laws anymore.” 

Ransom as financing

Back in Aleppo, the absence of law pervading the city has given rise to widespread kidnapping, extortion and theft targeting Aleppo’s middle and upper classes and their businesses, spurring many to flee to safer climes. While fighters and leaders within the FSA concede this occurs, they often contend that it is beyond their control.

Abdul Fader is a softly spoken and well-educated man with an affable and polite disposition. He used to work as an Islamic scholar for Aleppo’s Department of Islamic Jurisdiction but now commands some 150 rebel fighters in the city. Fader’s transition from religious scholar to military leader started in August 2011, through leading operations to assassinate Shabiha — a term used to describe the paramilitary supporters of the regime. “Our weapon of choice was the silencer,” he calmly reveals. 

When elements of the opposition started preparing to move the armed conflict from the Aleppo countryside into the city, Fader says the Shabiha were increasingly targeted for ransom kidnappings to fund the procurement of weapons and vehicles. Though the price tag varied due to the “economic condition” of the hostage, the standard rate was anywhere between $5,000 and $20,000. “I believe that in the early days around 50 percent of the funding for the armed uprising came from kidnapping those mercenaries,” says Fader. He claims his men would covertly gather evidence on every potential target for him to review, and that he called off operations against roughly half the cases brought before him on the basis that he could not justify the action under Islamic law.

Other armed groups are less concerned with determining whether potential kidnapping victims are Shabiha or not. The title ‘FSA’ suggests one united fighting force, but the reality is the opposition is comprised of a wide variety of different outfits, including armed criminal gangs who are indulging in kidnapping and extortion for blatant monetary gain.

 

Industrial amputation

Perched on the northeastern high ground overlooking Aleppo is the Sheikh Najjar Industrial Park. As of early 2011, the Syrian Arab News Agency was reporting that the park had accumulated $3.4 billion worth of investments, housed 75 foreign companies and provided employment for some 35,500 people. Only months ago a flourishing hub for Syrian textiles, chemicals, pharmaceuticals and agro-foods, it is now a 44-square-kilometer ghost town. There is no traffic, and it seems the only people around are the guards at the gates of the factories, on the lookout for potential looters or refugees looking for a safe place to squat.

One of the few plants operating, although at a significantly reduced capacity, is the Sultan Carpet Company. A floor manager at the plant, who refuses to give his name, says less than 10 percent of the industrial city is still in operation. Within minutes of beginning to speak, however, a car full of stern-faced men in suits arrives and makes it clear that neither the questions, nor Executive’s escort of two armed guides in battle fatigues, are welcome. The gates to the factory close and the workers are ushered back inside.

While many of Aleppo’s businessmen and industrialists have either fled the country or kept a cold and hostile distance to the armed uprising, some have thrown their lot in with the revolution. Mustapha Chebaan is a large and portly man who wears an army waistcoat over his brown jalibiyeh while hosting guests at the barracks where he leads a brigade of around 200 FSA fighters. The camouflage attire and newly adopted military role veil his previous identity as a major business figure in Aleppo and a member of the city’s chamber of commerce; founded it 1885 it is one of the oldest chambers of commerce in the Middle East and Arab world. 

“When they started to attack the peaceful demonstrations we left the chamber of commerce and we left our businesses to join the ranks of the FSA to support our people in Deraa and Homs and now in Aleppo,” he says. Chebaan made his money by building a contracting company and importing household appliances from China, and he talks of how regime loyalists and Shabiha targeted him and other likeminded businessmen with sabotage, kidnappings of family members and sometimes assassinations for empathizing with the anti-regime protestors. Once Chebaan closed his business, his attention and money was turned towards the financing and arming of the rebels.

His brigade’s barracks is replete with examples of the involuntary redistribution of wealth occurring in Aleppo; the building itself used to house military officers Chebaan accuses of leading the sabotage against him and other businessmen; while it is not possible for his fighters to buy new SIM cards for their mobile phones — as they need to be officially registered — rebels still attain them from kidnapped or killed regime loyalists and soldiers. Even some of the cars Chebaan’s fighters use have been “liberated” from their foes.

Fuel’s dirty business

Running those cars however, has become an expensive and cumbersome ordeal. There are no functioning petrol stations in the parts of Aleppo that the rebels hold or in any of the countryside to the north under their control. “The distribution at petrol stations stopped around a year ago now,” says petrol dealer Abu Farouq. “The owners were kidnapped and held to ransom. They paid up, were released and after that they left.”

Now street vendors sell fuel full of impurities from 120 liter barrels, and the unsteady supply causes prices to fluctuate between $2 to $4 per liter; it used to be less than $1. The dirty petrol also wreaks havoc on car engines, causing frequent stalling and forcing drivers to limit their speed, which can be of critical importance to the fighters in the heat of battle. “Damn this car,” curses an FSA fighter en route to the front line as his vehicle jolts to a stop once again. “I’d be better off trying to escape on a donkey.”

Ali Aleto, a 26 year-old FSA fighter, was among the many men from his village to the north of Aleppo who joined the armed opposition in the city. Shrapnel has shred his back and the wounds are still raw. Aleto’s injuries are a direct result of the fight for fuel that the rebels are waging. In an audacious FSA operation in early August, rebel fighters attacked a convoy of 17 government trucks near the Aleppo International Airport, each carrying up to 40,000 liters of diesel. Aleto was in the cab of one of the stolen tankers when it was struck by a rocket. “It was a close shave for sure, but we made off we six trucks in the end,” he says.

The Bedouin tribes from the east of Syria ensure a regular flow of fuel into the areas under FSA control. “Neither the government nor the FSA control the clans. They are more Iraqi than they are Syrian,” explains Abou Farouq. The Bedouin buy the fuel from areas under government control, such as Raqaa in central Syria, and then transport it to Sfeera, east of Aleppo, from where it is distributed to Aleppo and the FSA-controlled countryside. 

“Everyone involved benefits from this trade. Everyone gets around five Syrian pounds per liter, which amounts to around $6 per barrel,” explains Abou Farouq before adding with an ironic smirk, “Even the regime wants to sell it so they can earn money to buy weapons to use against us. It is business after all.”

 

A withering harvest

The fluctuating availability of fuel and its poor quality is felt heavily in the agricultural districts of Aleppo’s countryside to the north. Standing in his 10-hectare farmstead, Abu Beraa shakes his head as he holds out several small and shriveled potatoes. “I can’t sell these. They should be five times bigger. They will go to waste along with so much more of this crop,” he complains.

The reason for Abu Beraa’s failing crop is his inability to pay for the inflated fuel, fertilizer and labor costs. Fertilizer has risen approximately five-fold over the past two years, fuel has at least doubled this past year and the day rate of laborers is more than twice as much as it was last season. Pointing to one of the men pulling emaciated potatoes from the ground, Abu Beraa says, “One of these workers will work a month now just to be able to bring a canister of gas to his house. They now cost 5,000 Syrian pounds (SYP), and they used to be 410 SYP. That is an increase of more than 10 fold.”

Abu Beraa is not alone with his grievances. “I am scared of a real food crisis in the country this coming winter,” frets agricultural engineer Abu Abdullah, speaking in the Aleppo countryside. The spiraling costs are paralyzing agricultural production, which is compounded by the dangers involved in transporting the goods to market. “There used to be a large trade between us and our neighbors such as Turkey and Iraq, and considerable integration of the markets within Syria but this has all but been cut because of the dangers and costs of transportation,” explains Abu Abdullah.

Dry credit markets are further hobbling agricultural producers. Normally, they would take out a loan at the beginning of each season to cover expenses, and pay off this debt after they sold their harvest. This year, however, with the chronic lack of security and a dearth of confidence in the Syrian pound, lenders are sitting tight on their money; “There is fear of a collapse so no one will lend anymore,” explains Abu Abdullah. “Now people only work in hard cash.”

The woes of the countryside are being passed down the supply chain to fruit and vegetable vendors on the streets of Aleppo — among the few traders still in business besides the corner stalls selling cigarettes and fuel dealers with their roadside barrels.

“Hardly any vegetables are entering into the city,” says a vegetable seller whose shop sits only yards from a recent rocket strike that leveled a family home. “Tomatoes have reached 25 SYP; they used to be 10 SYP, even 5 SYP. The same with potatoes, they used to be seven and now they too are around 25 SYP. People can’t afford these prices.”

Shortages and empty shelves

In the neighboring district of Tariq El Bab, dozens of people stand in a queue at the local bakery for bread that is three to four times more expensive than before the uprising began impacting Aleppo. No one looks comfortable and eyes regularly flicker to the sky. “We come and stand here every day for our bread but we are scared of the planes,” says an elderly man as he waits in line. “They have targeted the bread queues before and only the other day 11 people were killed in such a strike.”

Many other essentials are also running short. In a small village several kilometers north of Aleppo a pharmacist leans on the counter with the shelves behind him all but empty, spare a few packets of the most basic of medicines. A customer walks in asking for tablets for diarrhea and even before he finishes his sentence the pharmacist awkwardly grimaces and apologizes. “The whole trade has pretty much disappeared,” he says. “We see shortages for a number of reasons; the factories have stopped producing, the warehouses have run dry, pharmacies have been hit and transportation is very dangerous.”

Not only has the stock dried up but the government support for medication for the poor has also evaporated. In the summer months diarrhea and nausea are the most common ailments but treatments are running thin. “There used to be support for people in need or the poor from the government, so we could give medications for free to people who really needed it,” says the pharmacist. “Unfortunately now there is no support so we can’t help people who are poor and destitute. They have to go without. Now it is the opposite. It is me that needs the support.”

A dying city

Streets that were once bustling arteries for commerce — trade that sustained the livelihood and wellbeing of hundreds of thousands of Syrian families — are now emptied by fear or choked in rubble. Aleppo’s main tourist attraction, the citadel in the center of the old city, is a sniper’s den for regime forces. The boom of artillery has replaced the banter of marketplaces. The city shakes from the warplanes’ rain of death.

In place of normal life there is war, which reaches far behind the front lines and impacts most painfully the noncombatants — those who have fired no bullets and yet pay for this innocence with the torn fabric of their lives.

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The Buzz

Morning briefing: 20 Sep 2012

by Executive Staff September 20, 2012
written by Executive Staff

Saudi Arabia has denied allegations that Syrians will not be able to perform the annual Muslim pilgrimage of Hajj this year because of a conflict with Damascus.

The Saudi Hajj Ministry said in a statement on Wednesday that preparations to receive Syrian pilgrims are being processed and are highly considered because of the "difficult circumstances" Syrians currently face.

The statement follows a report on Monday by Syria's state-run news agency that Syrians would not be able to perform the Hajj because Saudi authorities had failed to agree on details in time.

Countries normally agree on numbers of worshippers to make the pilgrimage ahead of time.

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A leading Islamic organization signalled on Wednesday that it will revive long-standing attempts to make insults against religions an international criminal offence.

The bid follows uproar across the Muslim world over a crude Internet video clip filmed in the United States and cartoons in a French satirical magazine that lampoon the Prophet Mohammad.

Ekmeleddin Ihsanoglu, secretary-general of the Organisation of Islamic Cooperation (OIC), said the international community should “come out of hiding from behind the excuse of freedom of expression”, a reference to Western arguments against a universal blasphemy law that the OIC has sought for over a decade.

He said the “deliberate, motivated and systematic abuse of this freedom” were a danger to global security and stability.

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Iran's oil minister said on Wednesday that crude exports were rebounding after being hit by a European embargo in July, describing for parliament the strategies by which the Islamic Republic says it is countering punitive measures imposed by the West over Tehran's nuclear program.

Rostam Qassemi did not provide figures. But some analysts say that exports have fallen in July by as much as 40 percent, hitting a sector that counts for four-fifths of the country's foreign revenue.

His comments carried by the semiofficial Mehr news agency appear part of wider efforts by Iranian officials to show that the country can ride out the sanctions.

"We have no problem selling our oil," Qassemi said. "Iran's crude oil exports are increasing. With the increase in exports, the way has been paved for more currency income."

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Turkey is talking to Libya, Saudi Arabia and Russia about buying more of their oil to make up for a shortfall in crude imports from Iran due to a Western embargo, Turkish Energy Minister Taner Yildiz told Reuters on Wednesday.

Yildiz said Turkey had started buying oil from Saudi Arabia on the spot market in addition to purchases from Libya, and that its sole refiner Tupras hoped to reach an agreement with Riyadh on long-term import contracts later this year.

"One of our core strategies is to increase the number of supplier countries and alternative routes. We buy oil from 11 countries and natural gas from five. We aim to increase that to 13, or 15 if possible," Yildiz said.

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Iraq reopened its main Al Qaim crossing with Syria to refugees on Tuesday, after closing it for several weeks, but continued to deny entry to single men under 50, an Iraqi official said.

Amr Al Khafaji, a spokesman for the displacement and migration ministry, which oversees the refugee camp at Al Qaim, told AFP that 150 people had crossed from Syria on Tuesday.

But unmarried male Syrians under the age of 50 remain barred from entering Iraq, Khafaji said, a policy apparently aimed at keeping out military-age men who may pose a security threat.

The crossing had been closed since August 15 for “security reasons,” Khafaji said.

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The US State Department has updated its travel warning to Lebanon amid a number of anti-American protests in the Middle East, and suspended grants to Americans wishing to study in the country, AFP has reported.

The travel advisory highlighted a spate of recent kidnappings of foreigners in the country by different groups and clans, and the tensions caused by the conflict in Syria.

"US citizens living and working in Lebanon should understand that they accept risks in remaining and should carefully consider those risks," the advisory said.

"US citizens travelling or residing in Lebanon despite this travel warning should keep a low profile, assess their personal security, and vary times and routes for all required travel," it added.

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