War Business Boom

(New building to change Dubai skyline) Dubai's phenomenal building boom has been given a further boost with the announcement of new projects worth $21.7 billion in just the last ten days … as the emirate seeks to capitalize on the oil wealth it knows won't last forever, Dubai has become a building site, and not even the sea has escaped, with the building of the luxury Palm and World manmade island developments on reclaimed land. Many new initiatives were announced at the three-day Cityscape property exhibition in Dubai, which ended on Monday, including a two billion dirham golf development, which investors said they hope will turn Dubai into the "world golf capital". The two golf course development features 1,000 homes and themed Fire, Earth, Water and Wind courses designed by golfing champion Greg Norman. The announcement of the new ventures comes as many projects announced in 2001 and 2002 reach completion. According to Gulf News, more than 12,000 families have moved into new homes as freehold owners, which it describes as being unimaginable four years ago. The emirate is expected to experience a housing supply excess by 2010.

Jordan's Royal Metropolis Underscoring its commitment to contribute to the infrastructure development of Jordan, Gulf Finance House B.S.C. (GFH), one of the leading Islamic investment banks in the region, Monday said that Jordan Gate, the first phase of the US$1 billion Royal Metropolis, was a beginning and the bank would like to enhance its investments in the Hashemite Kingdom of Jordan. Simultaneously, preparations are also on to commence work on Royal Village – a luxury gated residential community on 470,000 square metres in Marj Al-Hammam along the main highway to the Dead Sea, which is a salient component of the second phase of Royal Metropolis.

The Middle East’s premier international property investment and development event, Cityscape 2005, has been inaugurated by General Sheikh Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and Minister of Defence, UAE. First day visitors included political delegations, business leaders and VIP guests from North America, Europe and the Far East, confirming Cityscape’s emergence as a major international event for industry professionals. Former US Presidential candidate and President and CEO of Forbes Inc, Steve Forbes, was a VIP guest of Saudi Arabia’s Dar Al Arkan Real Estate Development Company at Cityscape 2005. “Dubai has now joined the ranks of Hong Kong, Shanghai and other rapidly growing areas. It is demonstrating enormous growth. The changes take one’s breath away,” said Forbes.

Employee compensation across all Gulf Cooperation Council (GCC) countries is rising at a rapid pace, fueled by the increased cost of living, limited supply of available talent, and GCC citizens’ growing expectation of a share in their countries’ windfall oil revenues, according to a study just released by GulfTalent.com, one of the region’s leading online recruiting agencies.

Emaar Malls announced. The Company has decided to incorporate a fully owned subsidiary, Emaar Malls, which will develop world class shopping malls in the UAE, Saudi Arabia, Jordan, Syria, Lebanon, Algeria, Morocco, India and Pakistan. The Company is already fast developing the world's largest shopping destination - the 12 million square feet Dubai Mall - in the Burj Dubai Development in the heart of Downtown Dubai. In addition to good quality housing, people are increasingly looking for a fantastic shopping experience, rivaling that of developed countries. We aim to create this for them. "The GDP of the countries in the catchments are in excess of $1.7 trillion and the retail sector will be one of the key drivers of growth and development in this region. International studies by renowned consultants such as McKinsey have clearly demonstrated that the retail industry is one of the largest worldwide and growing at a rate of 15 per cent annually. Over 45 per cent of the GDP of any economy is driven by the retail sector," Mr. Alabbar said.

Falcon City of Wonders, a mega project to be set up within Dubailand, has signed an agreement with leading German design firm Kling Consult to carry out the concept design for 345 villas that form part of the first phase of the project. The agreement was signed between Salem Al Moosa, Chairman and CEO of Falcon City of Wonders, and Falah Al Salman, Associate Director, Kling Consult, in the presence of Mahmoud Rayyan, Project General Manager, Falcon City of Wonders at Cityscape 2005, being held at the Dubai International Exhibition Centre.

Manama, Bahrain has decided to drop its ban on the import of Israeli goods, as part of the free trade agreement it has signed with the United States. The move was confirmed, following media reports, by the kingdom's foreign minister Sheikh Mohammad bin Mubarak al-Khalifa, who told the Kuwaiti newspaper Al-Rai al-Aam in New York: "A free-trade agreement has been signed by Bahrain and the United States, and the free-trade agreements do not allow the implementation of boycotts."

Damascus, Syria - In the wake of last week's fall in the value of the Syrian pound, President Bashar al-Assad has scrapped restrictions on the amount of hard currency money the country's private banks are allowed to sell. The president's decision ends more than 35 years of strict state control on the amount of hard currency Syrians are allowed to purchase. While the decision has been officially motivated as necessary to halt the pound's fall, some analyst believe it marks the beginning of the removal of foreign exchange controls in Syria as part of the government's move towards the introduction of a market economy.

Arcapita Bank B.S.C., a leading Bahrain-based investment firm, announced today that it and its co-investors have acquired a majority equity interest in Falcon Gas Storage Company Inc., (“Falcon”), one of the largest independent owners of natural gas storage capacity in the United States. The total value of the transaction was approximately $100 million.

Alsunut Development Company, Sudan’s leading real estate development company, announced at Cityscape the international launch for their US$4 billion business and residential community in the centre of Khartoum, Sudan. The ‘Almogran’ master planned development is set to be a hub for activity in East Africa’s modern business market and a catalyst for further enterprise in this oil rich, dynamic region of Africa. Located where the Blue Nile meets with the White Nile, Almogran, has two phases being developed in parallel, the first is a 160 acre, state-of-the-art, Central Business District and the second is a 1,420 acre, residential and leisure estate featuring an 18 hole golf course. Construction on stage one has already commenced and is estimated to be complete within 5 years.

Kuwait Projects Company (KIPCO), the major diversified investment holding group of the Middle East and North Africa region, sealed the successful closure of its recent US$ 175 million syndicated term loan facility in a ceremony with leading European banks mandated as lead managers. The ceremony in Dubai concluded formalities with mandated lead managers Dresdner Kleinwort Wasserstein of Germany, HSBC Bank plc of the UK, and Austria’s Raiffeisen Zentralbank Österreich Aktiengesellschaft. Also present were representatives of prominent international and regional banks involved as arrangers in the syndication, including Emirates Bank, National Bank of Dubai, BNP Paribas, and the State Bank of India.

The Western press is full of tales of economic doom and gloom, and yet the GCC (Gulf Cooperation Council) is experiencing an economic boom despite the shadow of a looming war in Iraq. What are the forces driving this boom? The level of investment now pouring into new projects in the Gulf is an astonishing contrast to the downturn in investment evident in the West where collapsing stock markets and business confidence have taken their toll. And remarkably, the GCC boom has only just started to roll.

October 2003 - A staggering US$4 billion in oil revenues and other Iraqi funds earmarked for the reconstruction of the country has disappeared into opaque bank accounts administered by the Coalition Provisional Authority (CPA), the US-controlled body that rules Iraq. By the end of the year, if nothing changes in the way this cash is accounted for, that figure will double.

August 2004 - At least $8.8 billion in Iraqi funds that was given to Iraqi ministries by the former U.S.-led authority there cannot be accounted for, according to a draft U.S. audit set for release soon. The audit by the Coalition Provisional Authority’s own inspector general blasts the CPA for “not providing adequate stewardship” of at least $8.8 billion from the Development Fund for Iraq that was given to Iraqi ministries. The audit was first reported on a Web site earlier this month by David Hackworth, a journalist and retired colonel. A U.S. official confirmed that the contents of the leaked audit cited by Hackworth were accurate.

February 2005 - Dennis Kucinich : "Was the $9 billion stolen? Did it go to pay bribes? Do we have another Iran-Contra on our hands? We will not know until top U.S. officials under penalty of perjury are called before the grand jury to answer questions about the missing $9 billion. The administration's response has been, Hey, it's Iraq, it's chaos, it's war. I say, Hey, you can't account for $9 billion spent over 9 months. That is $30 million a day. And you want Congress to appropriate another $80 billion for Iraq? I do not think so. Investigate Iraq-gate and the unaccounted- for $9 billion."

September 2005 - At least $1 billion has been plundered from the coffers of Iraq's defense ministry, seriously affecting the government's ability to combat the insurgency, the Independent newspaper reported Monday, citing the Iraqi finance minister. "It is possibly one of the largest thefts in history," the center-left paper quoted finance minister Ali Allawi as saying.

"You smell that? Do you smell that? Napalm, son. Nothing else in the world smells like that. I love the smell of napalm in the morning. You know, one time we had a hill bombed, for twelve hours. When it was all over I walked up. We didn't find one of 'em, not one stinkin' dink body. The smell, you know that gasoline smell, the whole hill. Smelled like... victory. Someday this war's gonna end ..."