LEBANON 

Government resigns after Beirut Port explosion

Lebanese Prime Minister Hassan Diab confirmed on 10 August that his government had resigned following the 4 August explosions at Beirut Port. The resignation followed mass protests calling for political change in the country.

The blast at Beirut Port is understood to have killed at least 200 people and left 300,000 people without shelter. 

President Michel Aoun refused to resign on 15 August, stating that it would lead to a “power vacuum” in light of Diab’s exit and the lack of resources to hold immediate elections. 

OIL 

Opec+ urges compliance with production cuts

Compliance with the Opec+ alliance’s oil output cut agreement stood at 97 per cent in July. 

The output cut deal initially comprised reductions of 9.7 million barrels a day (b/d) in April, but was revised in July to cuts of 7.7 million b/d from August.

Joint efforts by Opec and non-Opec producers helped cut inventory in July, but the pace of market recovery remains slow.

Global oil demand could recover to pre-pandemic levels in the fourth quarter of 2020, according to Prince Abdulaziz bin Salman, Saudi Arabia’s energy minister.

UAE

UAE and Israel agree to normalisation of relations

The UAE and Israel agreed to the full normalisation of relations on 13 August. 

As part of the agreement, Israel will suspend declaring sovereignty over Palestinian areas outlined in US President Donald Trump’s Vision for Peace, which was presented in January this year. 

The move makes the UAE only the third Arab country after Jordan and Egypt to acknowledge Israel as a sovereign state. 

Israeli ministry estimates suggest the normalisation of ties could increase exports to the UAE to $300-500m each year, accounting for about 0.4 per cent of Israel’s exports. Abu Dhabi’s investments in Israel could reach $350m.

KUWAIT 

Salary payments at risk for government employees

The Kuwaiti government might not pay salaries to civil servants in November as it expects to face a budget deficit of about KD14bn ($46bn) for the 2020/21 fiscal year. 

Local media reported that Finance Minister Barrak al-Shaitan told parliament the treasury’s assets are valued at KD2bn and government expenses – being withdrawn from the General Reserve Fund – total KD1.7bn each month. 

Wages and subsidies comprise 76 per cent of all spending.

Kuwaiti lawmakers approved a bill on 19 August to temporarily halt the transfer of 10 per cent of revenue to the Future Generations Reserve Fund in years when the government runs a deficit. 

A separate bill that would allow the government to issue bonds, however, was referred back to the finance panel, with one member of parliament saying it was difficult to approve the debt law without budget reform.

OMAN 

Sultan Haitham restructures government to boost economy

Oman has undergone a major government restructuring as part of a wider reform programme initiated by Sultan Haitham bin Tariq al-Said to prop up the debt-ridden economy.

Among the changes to the Omani cabinet was the appointment of Sultan al-Habsi as minister of finance, replacing Darwish al-Balushi.

Badr bin Hamad bin Hamoud al-Busaidi was named foreign minister, replacing Yousef bin Alawi, who is widely considered to have been the driving force behind Oman’s decades-long moderate diplomatic policy. 

Their appointments came one day after Oman’s sovereign rating was further downgraded by the US’ Fitch Ratings.

The sultanate’s new BB- rating, accompanied by a negative outlook, is three levels below investment grade. This places the sultanate at the same level as Brazil and Bangladesh.

TURKEY

Tensions rise as Ankara defies EU over oil and gas research

Turkey has defied the EU and resumed its search for oil and gas in contested Mediterranean waters. It sent a drilling ship to an area off southwest Cyprus after German-mediated negotiations with Greece broke down. Negotiations collapsed after Athens announced a maritime delimitation agreement with Egypt on 6 August. 

Ankara accused France, Armenia and the UAE of forming an alliance against Turkey. France temporarily increased its military presence in the region to guard against Turkey’s moves. 

Turkey signed an agreement on maritime boundaries with Libya’s Government of National Accord in December 2019 to conduct joint exploration operations in the eastern Mediterranean.

IRAQ  

Budget sharing fixed with Kurdistan Regional Government

Iraq’s federal government in Baghdad will send the Kurdistan Regional Government (KRG) in Erbil part of its share of the national budget, Kurdish Prime Minister Masrour Barzani has said.

Baghdad has agreed to ID320bn ($270m) in monthly payments to partially restore the KRG’s share in the federal budget. 

Over the year, the payments will amount to $3.24bn – less than half of what Baghdad pledged to pay the region in the 2019 budget. 

The KRG has not received its share of the state budget since 2014, when it began exporting oil independently of Baghdad.

US

Democratic party nominates presidential candidate 

Former vice-president of the US, Joe Biden, has accepted the Democratic Party’s nomination
to run for president in the US’ 3 November election. His selection for vice-president, Kamala Harris, was nominated on 19 August.

Previous presidents Jimmy Carter, Bill Clinton and Barack Obama are backing Biden’s candidacy in the election.

His appointment could mark a change in US policy in the Middle East, with some analysts expecting Biden to return US diplomacy to the Obama years. He is also expected to play a key role in the Israel-Palestine struggle.

LEBANON

Guilty verdict over assassination of former prime minister

The Special Tribunal for Lebanon (STL) has found Salim Jamil Ayyash guilty of involvement in the 2005 assassination of former Lebanese Prime Minister Rafic Hariri.

Three other men who were also accused of involvement were acquitted during the trial in August. 

“There is no evidence that the Hezbollah leadership had any involvement in Hariri’s murder and there is no direct evidence of Syrian involvement in it,” said judge David Re, citing a summary of the court’s 2,600-page decision.

In a statement, Rafic Hariri’s son and former prime minister Saad Hariri said: “Perhaps everyone’s expectations were much greater than what the tribunal came out with, but I think that the tribunal came out with satisfactory results, and we accepted them.” 

Rafic Hariri was killed in an explosion on 14 February 2005 outside the St Georges Hotel in Beirut. He was travelling in a convoy between the Lebanese parliament and his home.

FURTHER READING

> A request for qualification has been issued by Saudi Arabia’s National Centre for Privatisation & Public-Private Partnerships to 37 investment firms, developers and operators that expressed interest in bidding for the planned privatisation of the $3.9bn Ras al-Khair integrated desalination and power plant.

> The first power generation and water desalination company and public-private partnership project has listed on the Kuwait bourse. Shamal Az-Zour al-Oula Power & Water Company, the entity that owns and operates Kuwait’s first independent water and power project, Al-Zour North 1, started trading on 16 August.

> The energy ministers of Saudi Arabia and Jordan have signed a memorandum of understanding leading to an electricity cooperation agreement. The interconnection of the two countries’ electricity grids follows a similar project being planned between Saudi Arabia, Iraq and the GCC Interconnection link. 

> The first unit of the Barakah nuclear power plant in Abu Dhabi has been connected to the UAE’s electricity grid. Operators will raise the power levels in preparation for full electricity production, following which the unit will, at its full capacity of 1.4GW, deliver baseload electricity to the country’s grid. The unit was switched on on 1 August, three years later than planned.