Trump starts global scramble on Iran nuclear deal and offers to mediate Qatar crisis; Riyadh redrafts reform programme; Doha buys 24 fighter jets from UK
The impact on the region of unpredictable rhetoric from the White House was underlined in September, when comments by US President Donald Trump first triggered a war of words between Saudi Arabia and Qatar on the ongoing GCC diplomatic dispute, and then opened up a schism between Washington and Europe over their approach to continuing with the nuclear deal with Iran.
September also revealed that Riyadh was rewriting its National Transformation Programme, which was launched in June 2016, and which will play a significant part in defining the recovery of the kingdom’s huge economy over the next three years.
Trump sparks global push to keep Iran nuclear deal intact
A schism has emerged between Washington and Europe over the future of the nuclear agreement with Iran. Following a UN meeting on 20 September on the deal’s implementation, US Secretary of State Rex Tillerson said Tehran was abiding by the letter of the 2015 deal, but was not meeting the “expectations” of the agreement.
The meeting came the day after US President Donald Trump told the UN General Assembly that Iran was building up its missile capability and was guilty of exporting violence to Yemen, Syria and across the Middle East.
US President Donald Trump has offered to mediate the dispute between Qatar and its neighbours.
Following a meeting on 7 September with Kuwait’s Emir Sheikh Sabah al-Ahmad al-Jaber al-Sabah at the White House, Trump said: “If we don’t solve it, I will be a mediator right here in the White House.
“If I can help mediate between Qatar and, in particular, the UAE and Saudi Arabia, I would be willing to do so.”
Kuwait has been playing a mediation role in the dispute between Qatar and the group of Arab states.
Saudi Arabia, the UAE, Egypt and Bahrain have severed diplomatic ties with Doha and closed transport links on accusations that it is a sponsor of regional terrorism. On 8 September, it looked like the crisis could be reaching a resolution when Qatar’s emir phoned Saudi Arabia’s Crown Prince Mohammed bin Salman. Two hours later however, Riyadh said it was discontinuing talks due to Doha’s “misleading” public statements.
Qatar has agreed to buy 24 Eurofighter Typhoon aircraft from the UK’s BAE Systems. A statement of intent was signed in Doha on 17 September by Qatar’s Defence Minister Khalid bin Mohammed al-Attiyah and UK Defence Minister Michael Fallon.
The deal is the second to be signed by Doha since the trade embargo was imposed on the country by four Arab states in early June.
In mid-June, Qatar and the US signed a deal worth $12bn for the supply of F-15 fighter jets.
Riyadh is revising its National Transformation Programme (NTP), which was launched in June 2016 to implement the kingdom’s Vision 2030 economic reform strategy.
Sources in Riyadh say the revised plan, dubbed ‘NTP 2.0’, will see some of the reforms removed and the timelines for others extended to 2025 and 2030. Some of the reforms have now been moved to other programmes. The government is said to have been working on amendments since July.
The decision to revise the objectives of the NTP follows concerns that the goals of the programme could not be achieved by 2020, and risked damaging its credibility.
The changes are not expected to affect the planned initial public offering of a stake in Saudi Aramco.
UAE President Sheikh Khalifa bin Zayed al-Nahyan has reappointed Sheikh Mohammed bin Zayed al-Nahyan, crown prince of Abu Dhabi and deputy supreme commander of the UAE Armed Forces, as chairman of the Abu Dhabi Executive Council (Adec), the executive authority of the emirate of Abu Dhabi.
Sheikh Hazza bin Zayed al-Nahyan has been reappointed as Adec’s vice-chairman.
New members of the council include Sheikh Diab bin Mohammed bin Zayed al-Nahyan, chairman of the Department of Transport; Jassem Mohammed al-Zaabi, chairman of Abu Dhabi Executive Office; and Saif Mohammed al-Hajiri, chairman of the Department of Economic Development.
Oman’s nominal GDP contracted by 5.1 per cent in 2016 as a result of a sharp decline in oil revenues, according to preliminary national accounts data released by the Central Bank of Oman. This follows a 13.8 per cent decline in 2015.
Revenues from the oil sector declined by 23.7 per cent in 2016, while the non-oil sector witnessed tepid growth of 0.6 per cent, with manufacturing, wholesale and retail trade adversely affected. Non-oil growth came from construction, agriculture, fishing and real estate services.
Inflation in the sultanate rose to 1.9 per cent for the first half of the year due to increases in transport, education and energy prices.
Egypt plans to return to international debt markets in November with a $1.8bn bond issuance. It is also reported to be planning a $10bn eurobond programme next year, with notes worth $3bn-$4bn to be sold in the first quarter. The government has not yet appointed any banks or advisers to manage the transactions.
In May, Cairo launched a $3bn tap of its existing $4bn triple-tranche eurobond, raising $1bn more in new funds than the previously indicated amount in its second aggressive borrowing foray this year. The move came after the government approved raising the maximum amount of dollar bonds the country could issue on international markets by $2bn.
The IMF has called on Beirut to halt the rise in public debt by increasing tax compliance, lifting fuel taxation and rebalancing spending, including reducing costly electricity transfers. The statement was made following the visit of an IMF delegation to the country.
The fund commended the political progress made in recent months, including the ratification of a new electoral law that paves the way for the first parliamentary elections in eight years to be held in May 2018. But it said the wide budget deficit remains a source of vulnerability and has led to public debt climbing to 148 per cent of GDP in 2016.
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