MEED
Issue No 01 4 - 10 January 2008
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2008 agenda: A turning point for the Middle East
The year to come could have an impact as significant as the events of 1979, which started with the Iranian revolution and ended in an intensification of the Cold War as Soviet troops flooded into Afghanistan. In between, the oil price nearly tripled to a level that is higher in inflation-adjusted terms than it is today. -
A year of opportunity: Egypt
Cairo is promising continued and impressive economic growth in 2008. But as it presses ahead with its economic reform programme, it risks leaving its most vulnerable citizens by the wayside. If it is to put an end to growing worker discontent, it must fulfil its promises of greater socio-economic inclusion. -
A year of opportunity: Gaza/ West Bank
Washington is pushing a tight timetable for a comprehensive peace settlement to the Middle East, following the Annapolis conference in late 2007. But ambitions to reach a ‘final status’ deal within a year will be frustrated. None of the key actors involved enjoy sufficient authority to push through such an agreement. -
A year of opportunity: Iran
Iran is not working on a nuclear weapons programme, but its enemies know for the first time that it had a programme up until the autumn of 2003 when work was suspended. -
A year of opportunity: Iraq
The surge of US troops launched by President Bush at the start of 2007 caused huge controversy at the time, but by the end of the year the policy was showing tangible signs of success. -
A year of opportunity: Lebanon/ Syria
Lebanon’s fractious political chieftains may be close to electing the next president - former army chief Michel Suleiman is the clear front runner when parliament votes on 12 January. However, they could be frustrated in early efforts to form a unity government. -
Abraaj Capital to launch fund investing in listed companies
Dubai-based private equity firm Abraaj Capital is preparing to launch its third fund to invest primarily in publicly listed companies in the Middle East and South Asia. -
Borse Dubai closes in on global network with Nasdaq
Borse Dubai expects to complete a series of deals with Nasdaq by the end of the first quarter to establish a network of stock exchanges stretching from the US to Dubai and Europe. -
Contractors face labour challenge
Despite the biggest construction boom ever seen in the Middle East, the region's builders seem to have been in a perpetual state of crisis throughout the past five years of the economic boom. -
Dubai caps residential rental hikes
Dubai has tightened control over rental prices, placing a 5 per cent limit on rent increases for 2008. Rents that were increased last year will be frozen at current levels. -
Fresh trade talks to pave way for broader agreement with US
The UAE is to hold trade talks with the US in January, despite the postponement of long-running negotiations over a wider free-trade agreement. -
Fresh US trade talks to pave way for broader agreement
The UAE is to hold trade talks with the US in January, despite the postponement of long-running negotiations over a wider free-trade agreement. -
GCC common market to offer arbitration
The GCC secretariat launched its common market policy on 1 January, and quickly followed it with plans for a judicial tribunal to arbitrate on disputes between members. -
Generous budget will fuel inflation
With Muscat preparing to use a 20 per cent increase in revenues to invest in much-needed infrastructure, it is unsurprising that the sultanate's contractors have welcomed the latest budget. -
Gulf project market delivers record growth
The Gulf project market grew by more than one third in 2007, the biggest year-on-year expansion of the sector since the start of the oil boom in 2003. GCC states account for 90 per cent of the $1.8 trillion worth of projects planned or under way in the Gulf. -
Market makes common sense
A single currency in the Gulf is widely seen as the lynchpin to GCC economic integration. But it is a red herring. -
MEED business calendar 2008
A full diary of all events this year including MEED's own events, elections, government meetings and public holidays across the region. -
Muscat plans 20 per cent increase in public spending
Muscat will boost spending by almost a fifth this year, backed by an expected continuation of high oil prices. -
Oman to invest in infrastructure
The Omani government is preparing to invest heavily in infrastructure projects across the sultanate under its 2008 budget. -
People to watch in 2008
MEED lists the 12 key figures in the Middle East economy in the coming year: Sheikh Ahmad bin Zayed al-Nahyan, managing director of Abu Dhabi sovereign wealth fund manager Adia; Mohammed al-Gergawi, executive chairman and chief executive officer of Dubai government company Dubai Holding; Khalid al-Falih, executive vice-president of operations at Saudi Aramco; Hamad Kasasbeh, Finance Minister of Jordan; Mohammed al-Mady, chief executive officer and vice-chairman, Saudi Basic Industries Corporatio -
Reasons for optimism
The leading industrialised nations may look increasingly vulnerable to an economic downturn, but the Middle East has more cause for optimism in 2008, and for many of the same reasons. -
Region needs gas to drive projects
In 2006 and 2007, real estate was the major driver of the Gulf project market, but in 2008 priorities will change. The need for more water and power supplies - and, above all, gas supplies - to fuel the power plants means real estate is no longer the key project driver. -
Sector outlook 2008: Banking & Finance
Central banks in the region are expected to follow the US in cutting interest rates.The first quarter of 2008 will be instrumental in shaping the outlook for the entire year. With further interest rate cuts expected in the US, Middle East central banks will be forced to follow suit to avoid currency speculation. -
Sector outlook 2008: Capital Markets
As Saudi Arabia's Tadawul begins to recovery, plans to reformulate the market and introduce new products such as exchange-traded funds, and the increasing sophistication of market players, will help to modernise the region's largest stock exchange. -
Sector outlook 2008: Construction
As the market overheats, developers face challengers in securing labour and keeping down costs.Construction costs in the Gulf have risen by about 30 per cent over the past 12 months and new companies are entering regional markets, making the sector more competitive. But with a project mountain that keeps on growing, controlling costs and securing work will not be the main problem in 2008 - it will be finding manpower. -
Sector outlook 2008: Defence
A series of major defence deals are set to be finalised as states reinforce their security measures.Middle East security in 2008 will be dominated by familiar issues. The conflict in Iraq, Iran, the Israeli-Palestinian peace process and political instability in Lebanon will top the agendas of leaders in the region and worldwide. -
Sector outlook 2008: Energy
The drive to push through previously uneconomic projects will continue while oil prices remain high.With oil prices averaging about $72 a barrel in 2007, national oil companies (NOCs) in the region are flush with cash. From oil powerhouses, such as Saudi Aramco, through to emerging gas-focused exploration giants, such as Algeria's Sonatrach and Libya's National Oil Corporation, the drive to push through previously uneconomic projects while prices remain high will continue in 2008. -
Sector outlook 2008: Industry
Huge developments have defined the sector's impressive growth, with more to come this year.High-profile, large-scale industrial projects, particularly in the aluminium and fertiliser sectors, are key to the energy-rich Gulf states' economic diversification strategies. All the states are continuing with ambitious major industrial schemes. But with so many large-scale projects under way, signs of strain are beginning to show. -
Sector outlook 2008: Petrochemicals
With costs expected to rise further, the slowdown in project activity looks set to continue.Rising engineering, procurement and construction (EPC) costs, combined with a lack of cheap gas feedstock, has led to the number of new projects announced tailing off sharply since the regional industry's 2006 peak. -
Sector outlook 2008: Power & Water
A shortage of resources will force clients to reassess project timetables and investment plans.In December, Saudi Arabia's Water & Elec-tricity Company (WEC) announced it was delaying the deadline for bids for the Ras al-Zour independent water and power project (IWPP) by 12 weeks, from 10 February to 4 May. -
Sector outlook 2008: Transport
Whether travelling by train, plane or car, transport in the Gulf will be taking a huge step forward this year.Many of the GCC's most prestigious transport projects are approaching the end of their tender process and work is set to begin in earnest. In terms of rail links, Saudi Arabia is set to make the most progress. Work will begin on the $5bn Saudi Landbridge - arguably the most significant rail project under way anywhere in the world. -
South Korean firms bid low for Al-Zour
South Korean contractors are in prime position for all four of the main process packages on the $14bn refinery project at Al-Zour, after technical and commercial offers were submitted on 26 December. -
Special report: Sector outlook 2008
The urgent need to install the infrastructure required to support the region’s economic development means government-backed power, water, transport and energy projects will become the principal drivers of the region’s project sector in 2008. -
Special Report: Telecoms sector outlook 2008
Telecoms operators in the Middle East have been spoiled for choice over the past 12 months, with auctions for licences in Iraq, Kuwait, Qatar and Saudi Arabia. However, in 2008, the best opportunities for companies in the region to expand will be the two licences on offer as part of the privatisation of Lebanon's two mobile phone companies. Iran and Syria may set up competitions for a third licence, but both are uncertain. -
State invites interest in Al-Shaheen
Qatar Petroleum (QP) is inviting expressions of interest from international contractors for the main package on its estimated $5bn Al-Shaheen grassroots refinery. -
Suez Canal revenues reach record high as oil price soars
Revenues from the Suez Canal reached $4.6bn in 2007 - the highest in the waterway's history. The figure is a 21 per cent increase on the $3.8bn gathered in 2006, which was also a record. -
Tehran rethinks high-speed rail plans
Tehran is scaling back plans for two high-speed rail links in the country because of difficulties in financing major infrastructure projects. -
The Gulf's growing labour crisis
Spiralling costs remain the key issue for contractors in 2008, but unlike in previous years, the rising price and dwindling supply of manpower, not materials, is the primary concern -
Three firms bid to build parallel roads
Dubai's Roads & Transport Authority has received three bids to build one of the most controversial sections of its parallel roads scheme. -
Work starts on $11bn Arabian Canal
Contractors have started work on two preliminary contracts for the $11bn Arabian Canal project, after they were awarded in late 2007. The 80-kilometre canal is the largest civil engineering project undertaken in Dubai.
