The recovery in oil prices in early 1995 contributed to an easing of commercial debt repayment problems in the Middle East during the first six months of 1995, the latest report issued by the Basle-based Bank for International Settlements (BIS) says. Figures released by the bank also show that the profile of Middle East commercial debt stocks was little changed during the period.

The report says a reduction in the claims by BIS reporting banks on Saudi Arabia and Kuwait, was offset by increases in claims on Iran, Qatar and the UAE. The decline in Saudi Arabian borrowing was due to repayment of the last tranche of a $4,500 million syndicated loan taken out by the kingdom after the Gulf war, the report says.

Short-term debt, that is borrowing with a maturity of one year or less, rose as a proportion of total commercial debt in several countries during the six-month period. In Iran, short-term debt accounted for 46 per cent of the total commercial debt stocks of $11,845 million at the end of June 1995. In North Africa, Algeria and Morocco both reported a rise in short-term debt stocks.

However, this was mostly offset by a lengthening of the debt profile in other states in the region. In Tunisia, short-term debt fell to 35 per cent of the total worth $1,546 million. Other states where short-term debt fell as a proportion of the total included Saudi Arabia, Qatar and Bahrain.