Economy

Qatar to host 2012 global entrepreneurs week

Qatar will join over 100 other countries in participating in Global Entrepreneurship Week, a worldwide initiative that celebrates the innovators and job creators who launch startup businesses and drive economic growth. The 2012 Global Entrepreneurship Week will be held in Doha from November 12 to 18. This will be the first year in which Qatar has had a formal Global Entrepreneurship Week campaign. First held in 2007, Global Entrepreneurship Week (GEW) is led by the Kauffman Foundation, a nonprofit organization that works to promote job creation, innovation, and economic advancement through entrepreneurship. Within Qatar, Global Entrepreneurship Week is being organized by the GEW Qatar Board, a group of local organizations involved in the promotion of entrepreneurship and economic development within the country. Participating organizations include Bedaya Center, Enterprise Qatar (EQ), Entrepreneurs’ Organization (EO), ICT Qatar, Ministry of Business and Trade, Qatar Chamber of Commerce & Industry, Qatar Development Bank (QDB), Qatar Science & Technology Park (QSTP) and The Youth Company. Silatech, a social enterprise established to create jobs for the youth in Mena, is the official host organization for Qatar, and chairs the GEW Qatar Board. Silatech CEO Dr. Tarik Yousef said: “By combining our efforts together, we can create a far greater effect than our individual organizations would have by promoting entrepreneurship individually. “ Participating in Global Entrepreneurship Week gives us the opportunity to link with an established worldwide network to advance skills such as problem solving, creativity, and resourcefulness that are valuable to everyone, not just aspiring entrepreneurs.” In 2011, over 24,000 participating organizations hosted a broad range of over 30,000 events, activities, and competitions, reaching over 7.4 million people worldwide. During the event, the GEW-Qatar Board will be working with a wide range of organizations, in both the private and commercial sector, to provide a program of activities, workshops, and seminars promoting entrepreneurship in Qatar. Source: TradeArabia

Morocco struggles to withstand Eurozone crisis

After a decade of prosperity, Morocco is suffering the knock-on effects of the debt crisis in Europe, its largest trade partner, cutting growth forecasts as prices rise and social discontent simmers. Depressed revenues from the key tourism sector, a slowdown in foreign investment and remittances from Moroccans working abroad, and a widening trade deficit are among the mounting economic woes facing the North African country. A harsh drought has also badly affected agricultural output this year, which along with a 20 percent rise in petrol prices has driven up the cost of food. Reflecting the lingering discontent, thousands took to the streets of Rabat on Sunday, after months of relative calm, chanting slogans criticizing the Islamist-led government and protesting against unemployment, high prices, and corruption. Similar demonstrations were held in Casablanca, Morocco's largest city and economic capital. The World Bank, in a report published in June, said around 30 percent of Moroccans aged between 15 and 29 -- who account for 44 percent of the working age population -- were unemployed. And central bank Governor Abdellatif al-Jouahri last month lowered the growth forecast for 2012, to less than three percent from the 4.2 percent forecast in the budget. But on Monday, Finance Minister Nizar Baraka downplayed the worrying economic figures, pointing instead to a five percent growth rate over the past 10 years and insisting Morocco's competitiveness and stability made it part of the solution to Europe's problems. Normally "when Europe sneezes, Morocco gets a cold. But now Europe has a cold and Morocco is far from being sick," Baraka told a conference in Casablanca. Morocco's per capita income, he said, rose between 2001 and 2011 from 15,700 dirhams (1,430 euros) to 26,151 dirhams (2,382 euros), accompanied by a fall in the rate of unemployment to 8.9 percent in 2011 from 12.5 percent in 2001. The country has also mostly been spared the unrest that swept North Africa last year, toppling the leaders of Tunisia, Egypt, and Libya. King Mohammed VI managed to contain the protest movement by introducing significant reforms to curb his near-absolute powers, culminating in November elections that saw a moderate Islamist party win most seats and head a coalition government. The finance minister acknowledged that fluctuating global commodity prices were a threat to the Moroccan economy, which lacks hydrocarbon reserves of its own and depends heavily on oil and grain imports. "Above all, Morocco must deal with the vulnerability of its economy ... to the strong volatility in the price of raw materials," he said. The central bank, in a report earlier this month, said the trade deficit in the first half of 2012 rose 7.1 percent on the same period last year, to hit 100 billion dirhams (9.1 billion euros). It blamed the high price of energy and raw materials for rising import costs, while Europe's economic malaise has weighed heavily on exports and remittances from Moroccans working abroad, according to the bank. Meanwhile, the budget deficit could remain as high as six percent of GDP this year, the central bank noted, after reaching that level last year, a record caused in part by growing subsidies, notably on food. The government splurged on subsidies in 2011 as it sought to defuse the growing protest movement, but was forced to reduce fuel subsidies last month to lower the deficit. Much-needed foreign help is in short supply. Foreign direct investment has fallen in the past two years, although the kingdom will continue to benefit from previous investments, such as the giant low-cost car factory near Tangiers that Renault inaugurated in February. The tourism industry, which previously generated around 15 percent of GDP, has also suffered heavily. But the state has forged ahead with major infrastructure projects, of the kind capable of transforming emerging economies, including the Arab world's first high-speed railway, urban tramways and a massive port project. And the phosphate industry, which accounts for nearly a third of exports, is proving resilient. Salah Haroun, an economist, voiced cautious optimism that Morocco would remain largely unscathed. "The crisis in Europe has impacted on us and its deterioration risks further affecting economic activity in Morocco. But for several years the country has implemented reforms, which are helping it to withstand the fallout," he told AFP. Source: Zawya

Riyadh has highest job chances among MENA cities

Riyadh provides the best job opportunities in the Middle East and North Africa (MENA), according to a study. Doha came second, followed by Jeddah, said the YouGov study carried out with Middle East jobsite Bayt.com. Almost half of respondents said the availability of jobs in Riyadh and Doha is either good or excellent. Doha is considered to have the most competitive salaries, according to 44% of respondents. Respondents said Abu Dhabi, Dubai, Sharjah, Manama, and Muscat were the top Middle East cities to live in, according to the survey. Residents of Dubai (19%), Manama (15%), and Sharjah (13%) appear to be positive about the ease of setting up a new business. However, residents of other cities like Amman, Marrakech, and Cairo have a more negative outlook. The majority of residents in the MENA region consider finding money to set up a new business a challenge. Residents of Abu Dhabi (25%), Dubai (20%), and Sharjah (18%) claim their cities are excellent when it comes to the willingness to accept new ideas and concepts. End of service benefits are seen as being the best in Gulf Cooperation Council (GCC) cities, especially Sharjah (44%), Abu Dhabi (42%), Manama (42%), and Kuwait City (41%), the survey said. The city believed to have the lowest air pollution is Muscat, according to 70% of the city's residents, followed by Abu Dhabi (6%). Residents ranked Dubai the highest in terms of quality of life, with 73% ranking their lifestyle as either good or excellent, followed by Abu Dhabi. Forty-four percent of respondents from Doha claimed their city provides good or excellent salaries, followed by Abu Dhabi (4%), Riyadh (4%), and Dubai (38%). Availability of affordable housing is a region-wide issue, especially in Algiers where 73% think it is bad or poor. Source: Zawya

Gulf 2012 growth, budget outlooks improve

The immediate economic outlook for most of the Gulf's wealthy Arab oil exporters has improved in the last several months despite a sharp drop in global oil prices over the period, a Reuters poll of analysts showed. Since the previous poll was conducted in March, the price of Brent crude has plunged by $40 to as low as $88 per barrel because of signs that the global economy is slowing. But oil has since recovered to around $99, and analysts believe that level, combined with heavy government spending and healthy consumer demand, will be enough for the Gulf States to continue growing strongly this year and next. The latest Reuters poll of 17 analysts, conducted this month, found them raising their 2012 gross domestic product growth forecasts for three of the six members of the Gulf Cooperation Council. Saudi Arabia, the biggest Arab economy and the world's top oil exporter, is now expected to expand at a median rate of 5.2 per cent this year, instead of the 4.5 per cent forecast in the March poll. Last year, the Saudi economy grew 6.8 per cent. In the United Arab Emirates, GDP growth is now forecast to slow to 3.2 per cent this year from 4.2 per cent in 2011. The latest forecast is slightly more optimistic than 3.1 per cent predicted in the March poll. Qatar remained the top projected 2012 performer with a 6.3 per cent growth forecast, although that was down from the March poll's prediction of 6.6 per cent. 'Downside risks exist from Europe and the world economy. But this aside, growth in the GCC should hold up reasonably well,' said Daniel Kaye, senior economist at National Bank of Kuwait. 'Despite the recent fall in oil prices, fiscal and external balances will remain very solid.' For most Gulf economies, however, forecasts for growth in 2013 fell from the last poll in March. Saudi Arabia's outlook for next year was cut to 4.0 per cent from 4.3 per cent, while the UAE was lowered to 3.4 per cent from 3.6 per cent. Oil and gas revenue provides most of the budget income of Gulf States, which boosted spending on pensions and wages last year to ease social tensions such as those that simmer in Bahrain. Nevertheless, most countries are expected to enjoy large fiscal surpluses this year and next, the poll showed. Saudi Arabia is expected to book a surplus of 13.2 per cent of GDP in 2012, up from 12.4 per cent predicted in March's poll, with the UAE unchanged at 5.9 per cent. 'We expect Saudi oil production to increase a little bit this year and we think the government spending will be trimmed a little bit by around 5 per cent, but that really reflects last year's outsized spending,' said James Reeve, senior economist at Samba Financial Group in London. 'In the short term, they can easily cope with significantly lower oil prices as they did in 2009. But they need to get a handle on domestic oil consumption in the medium- to long term.' Kuwait is projected to post the largest surplus of 22.3 per cent of GDP for its fiscal year, which started in April - partly because a political standoff between the cabinet and opposition members of parliament is delaying expenditure on big infrastructure projects. Bahrain, which analysts believe needs an oil price averaging about $115 to balance its budget - by far the highest price in the Gulf - is forecast to be the only GCC country in the red in 2012, with a budget deficit of 2.0 per cent of GDP. However, that would be a smaller deficit than the 3.7 per cent gap forecast by the last poll in March. Source: Reuters

UAE 3rd most competitive economy in Middle East

The UAE ranks as the third most competitive economy in the region after Qatar and Saudi Arabia, according to the latest study by the Dubai Chamber of Commerce and Industry. Globally, the UAE ranks 27th out of 142 countries, below Switzerland (in first place), the United States (fifth), Qatar (14th) and Saudi Arabia (17th), but higher than other regional peers, such as Oman (32nd), Kuwait (34th), Bahrain (37th) and Egypt (94th), according to the Global Competitiveness Report of the World Economic Forum, or WEF. The World Bank's "Doing Business" 2012 report said the UAE advanced two places to 33 out of 183 countries compared to the rankings of the previous year, while the country ranks fifth in the world for trading across borders, sixth for registering property and seventh for paying taxes. The UAE was in first place globally in efficiency of governmental fiscal policy issued by the International Institute of Management Development in Switzerland. A recent Global Innovation Index 2012 released by Insead, an international business school, said Qatar and the UAE were leading the Middle East in overall innovation performance. Also, in the Global Enabling Trade Report 2012 released by the WEF, the UAE was ranked first regionally and 11th globally in terms of in terms of the availability and quality of transport infrastructure. With this ranking, the UAE outperforms countries such as the US, Finland and Belgium. According to the Dubai Chamber, the UAE's legal and regulatory environment is more than adequate based on the World Bank's 2011 World Governance Indicators. The UAE scored reasonably well compared to other countries in the region for its rule of law. The study states that though general legal standards across the region have intensely improved during the last few years, the UAE's regulatory quality is improving and showing an advancing trend in recent years. The Dubai Chamber’s study said that the UAE government's effectiveness is high and the overall freedom to conduct business is well-protected under the existing regulatory environment as the country's tax regime, which is a major attraction for foreign investors, strengthens foreign direct investment inflows, as both income and sales taxes are non-existent. The study points out that the UAE has long been an attractive investment destination. However, there are a number of challenges that need to be addressed. According to the World Bank's Doing Business 2012 report, there are aspects of the business regulatory environment that needs immediate attention, including resolving insolvency (ranked 155), contract enforcement (134), protecting investors (122) and getting credit (78). The inadequacies of the bankruptcy legislation remain a major challenge for the UAE. According to the same report, the time taken to resolve bankruptcy is around 5.1 years, well above the regional average of 3.4 years and the average Organization for Economic Cooperation and Development, or OECD, member countries' experience of 1.7 years. The recovery rate (at 11¢ in the US dollar) is low in comparison with the regional average of 29.7¢ and 68.2¢ for the average OECD countries, the study concluded. Source: Khaleej Times

GCC hit by high youth unemployment

Gulf oil producers have one of the lowest joblessness rates in the world but unemployment among nationals, mainly the youth, remain a problem because of their heavy reliance on expatriates, according to Saudi bank study. Unemployment among native citizens in the six-nation Gulf Cooperation Council (GCC), the richest in the Arab world, has remained far higher than the rate among the expatriates, who come to the region for work and leave once they lose their job, Saudi Arabia's largest bank, National Commercial Bank ( NCB ) said in the study sent to Emirates 24/7. "Even though the headline rates of unemployment in the GCC countries may not be exceptional by global standards, unemployment is a persistent problem in parts of the region, especially among nationals," it said. "Of course resident expatriates usually come to the region on work visas and their unemployment tends to be largely transitional." The study said the joblessness problem among the young generations is "more acute" than the rate among other groups. "Quite beyond the headline unemployment rates, the problem of joblessness is particularly acute among certain sub-segments of the population. In particular, it tends to disproportionately afflict the region's rapidly growing young population." Citing Saudi Arabia, NCB said unemployment among the 15-19 age group according to the latest government data (2012) is 27.3%. Among the 20-24 category, it has reached some 28.0%, it said, adding that the proportion among 25-29-year-olds is also as high as 14.3%. In the UAE, youth unemployment is three times the overall unemployment rate, standing at around 12.1% vs. 4.0%, the report showed. In Kuwait, 36.3% of all the unemployed were 20-24 years old in April 2011. Nearly 17.4% of them were 25-29 and 10.1% 30-34 years of age. "Similarly, female unemployment in the region is consistently higher than that of men. The 2010 figure for Saudi women was 28.4% against 6.9% for Saudi men. Women constitute at least 75% of job seekers in the Kingdom," NCB said. "This problem represents significant underutilization of human capital. According to one recent estimate, around 78.3% of unemployed women in Saudi Arabia have university degrees while the same is true for only 24% of men." The report showed that among UAE nationals, female unemployment of 28.1% compares to male unemployment of 7.8%. Among Qatari women, unemployment in 2011 reached 8.0% as compared to 1.7% for men. In Kuwait, women made up 77.0% of the total number of unemployed in April 2011. "In spite of the considerable communalities across the region, Bahrain and Qatar appear to have made significant headway in containing their unemployment problem in recent years," NCB said. The report said a significant proportion of joblessness in the GCC is "structural" as highlighted by the fact that the overall rate has in many cases not meaningfully responded to economic growth. For instance in the UAE, NCB said, although the economy went through a spectacular boom in the years preceding the global crisis, unemployment among Emirati nationals in 2009 still remained a relatively high 14%. Saudi national unemployment in 2009 stood at 10.5%, while the total number of the unemployed reached 615,249 in 2012. "The economic cost of unemployment was recently put by the Saudi Ministry of Labor at SR5.5 billion a year. Consistent with the labor market mismatches, available data on unemployment duration suggests that much of the joblessness is relatively long term." Source: Emirates 24/7

Oman budget surplus surges, inflation at new low

Oman's budget surplus rose to RO1.6 billion ($4.2 billion) in the first five months of this year as oil revenue soared, while inflation slowed sharply, data showed on Wednesday. The budget surplus is equivalent to about 5.7 per cent of the sultanate's 2011 nominal gross domestic product, according to a Reuters calculation. Oman, which faces a challenge to create tens of thousands of jobs every year for its fast-growing population, has raised its budget by 23 per cent to RO10 billion this year compared to its original projection for 2011. In January-May, the sultanate's revenue jumped 34 per cent year-on-year to RO6.1 billion, or 69 per cent of the initial full-year projection, the data showed. In May, large-scale strikes hit oil facilities in Oman, which flanks a key oil shipping lane. But the data showed output increased to 25.3 million barrels from 23.6 million in April. Spending was up 38 per cent from a year earlier at 4.5 billion rials in the first five months of the year. Higher oil prices helped public finances improve significantly compared to a year ago when the government posted a mere 184 million-rial surplus for January-May. A Reuters poll this week forecast the non-Opec oil producer would post a fiscal surplus of 6.5 per cent of GDP in 2012, up from a forecast of 5 per cent by analysts in March, and rising from 3.5 per cent last year. Prices of crude, which accounts for 77 per cent of Oman's income, fell $40 to as low as $88 per barrel for Brent between March and June but have since stabilized at above $98. Oman sold its crude at an average $113.5 per barrel in January-May, up 20 percent from a year ago. As a result, net oil revenue jumped 33 percent to 4.5 billion rials. The sultanate would still post a surplus in 2012 if oil prices stay at current levels, as the poll forecast Oman's budget break-even oil price at $83 per barrel. But that level is expected to rise to $105 by 2016, the IMF said in December. The central bank has said it and the government have scope to keep pursuing expansionary policies without threatening economic stability, adding the budget may turn out to be in surplus in 2012 given still-robust oil prices. Social unrest last year prompted Sultan Qaboos bin Said, a U.S. ally who has ruled Oman for 42 years, to pledge an extra $2.6 billion of spending in April 2011. Oman, which obtained pledges in March 2011 for $10 billion in aid over 10 years from its wealthier Gulf neighbors, forecasts a budget deficit of 1.2 billion rials for 2012, or 4.3 percent of 2011 GDP. The projected oil price is $75 per barrel. The data also showed that annual consumer price growth in Oman slowed sharply to 2.2 percent in May, the lowest level since February 2010, from 3 percent in April. On the month, prices in the country, which pegs its rial to the U.S. dollar, fell 0.3 percent helped by a fall in costs of personal care and services, after a 0.1 percent rise in April. Main index components, food, rents and transport, were flat. The Reuters July poll forecast average inflation in Oman at 3.2 percent in 2012, down from a three-year high of 4 percent last year. Source: Reuters