Aldar profits up 77%

Aldar Properties, the largest developer in Abu Dhabi, saw annual profits increase by 77.5 per cent last year, despite sales in the fourth quarter grinding to a halt.
Shafqat Malik, the Aldar chief financial officer, said the company decided in September to “basically stop selling” for the last three months of the year because of a dramatic change in market conditions.

“We did it intentionally because of the market state,” he said. “The thing is that you need to be alert and cautious in your approach to make sure you adjust yourself to market conditions.” Annual profit jumped 77.5 per cent to Dh3.4 billion (US$926 million), while earnings in the last quarter fell by 89 per cent to Dh84m.

Ahmed Ali al Sayegh, the chairman of Aldar, said last year was successful for the company but warned that this year would see the impact of the global credit crisis and slowdown in the domestic property sector.

“2009 will be a challenging year, but Aldar is well positioned to meet these challenges and we are responding to the current environment in a prudent and appropriate manner,” he said.

The company saw a modest rise in its share price in anticipation of the earnings report yesterday, increasing by Dh0.10, or 4.15 per cent, to Dh2.51. The company’s shares, along with others in the industry, have suffered from negative sentiment that started with the US mortgage crisis and spread across the globe. Aldar has lost 79.5 per cent of its share value since Jan 1 last year.

Unlike many developers in Dubai, Aldar has yet to announce changes in its payment plans or construction schedules.

But Aldar Laing O’Rourke, a joint venture with a UK construction company, said earlier this month that it was laying off between 200 and 250 skilled employees out of 1,900 to “realign” the company to the changing economic environment. It also said recently that it was looking to increase its rental holdings to guarantee income in the months ahead.

Last year there was a major evolution of the five-year-old company, with sales for most of its projects beginning for the first time and Abu Dhabi highlighted by investors as a rising property market.

Proof of this came in the figures. Net operating income was Dh2.2bn compared with Dh120.1m in 2007. Gross revenues last year rose 335.7 per cent to Dh5.34bn and net asset value increased by 108.5 per cent to Dh16.03bn. Employee numbers rose to about 800, from 378 in the year before.

bhope@thenational.ae Bradley Hope The National

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Morgan Stanley to hunt bargains

Morgan Stanley plans to bargain hunt distressed assets around the world, including in the Middle East, where markets have been hard hit in recent months.

The investment bank will establish up to five global funds this to seek out fire-sale assets that present good fundamental value.

“After considering what has happened [during the financial crisis] and the impact it has had on portfolios, sophisticated investors and institutions are starting to pick up quality assets sold off by distressed investors at attractive prices,” said James Dilworth, head of Morgan Stanley Investment Management (MSIM) operations in the Europe, Middle East and Africa.

The funds will focus on private equity, property opportunities, levered loans, credit and infrastructure. The firm continuously reviews investment options in the Middle East for these funds as well, according to Mr Dilworth.

“We don’t focus on any specific region, so if we find good opportunities in the Middle East, by all means we will consider them,” he said.

In August 2008, the firm launched the Morgan Stanley Saudi Equity Fund to offer GCC investors exposure to the kingdom’s market through investment in Saudi shares.

“This area is very much a hot spot on the emerging markets map; we want to see how the Saudi equity fund performs,” said Mr Dilworth. “If it is successful, we’ll take a look at the rest of the region.”

Morgan Stanley manages two funds with a focus on the Gulf. The Frontier Fund and the Emerging Europe, Middle East and Africa Fund. The Frontier Fund, which is an exchange traded fund that listed on the New York Stock Exchange last year, reached a 52 week low in mid-November at a price of $7.51. The fund, which closed at $7.57, was down 1.56 per cent earlier this week. According to data from Morgan Stanley, the Emerging Europe, MENA Fund was down 59 per cent last year. However, now was the time to look for bargains.

“International investors are increasingly interested in the GCC, which is seen as a way to diversify portfolios,” said Michael Samaha, the head of sales and business development for Morgan Stanley Investment Management in the MENA region. “This is one of the reasons why we launched the Saudi equity fund.”

As of the end of last year, approximately 16 per cent of Morgan Stanley’s US$400 billion (Dh1.5 trillion) assets under management came from the Europe, Middle East and Africa region, according to Mr Dilworth.

“Some of our first mandates in the [EMEA] region came from this area [the GCC]; we’ve been present for a long time so it’s not about building our business, but continuing to invest in it,” he said.

By Sara Hamdan The National shamdan@thenational.ae

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Solar revolution draws royals to the barricades

Solar power can have a funny effect on people.

Take the Prince of Orange, for example, who was a keynote speaker at last week’s future energy summit in Abu Dhabi.

He used his leading spot under the limelight in the presence of Sheikh Mohammed bin Zayed, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, to announce that he was plotting a revolution.

Had he taken leave of his senses? It was, after all, Prince Willem-Alexander’s direct ancestor, William of Orange, who in 1586 started an 80-year war against the Spanish that led to the creation of an independent Dutch republic.

But the Crown Prince of the Netherlands was not referring to a political revolt, of course. It was the scale of the change afoot in the solar energy field that prompted him to unleash such a powerful metaphor.

The approaching peak of the world’s supplies of finite fuels, including oil, gas, uranium and coal, constitutes a threat that could lead to a collapse of modern civilisation, he said, drawing a parallel with the exhaustion of wood as one factor that helped bring down the Roman empire.

Every 30 minutes, the earth absorbs enough light to meet the planet’s energy needs for a year.

The energy is free, and almost infinite. It is just a question of harnessing it.

“The circle of deserts embracing the globe present us with wonderful opportunities for both generating and transmitting solar energy,” he said.

He referred to a long-standing scheme, once dismissed as a crackpot theory, that the solar power of North Africa and the Middle East could not only supply these regions with all the power they need, but also, with wind from northern latitudes, most of Europe.

The idea of creating a network of solar power stations across the Arabian desert is drawing an increasing number of serious sponsors.

Prince Willem-Alexander has been joined by several German members of the European parliament, and even Nicolas Sarkozy, the French president who has emerged as a proponent of the Union for the Mediterranean which includes a major push for solar power.

What was fascinating about the exhibition that accompanied the Abu Dhabi summit was to see just how many new technologies are springing up.

Solar panels have been around for decades, but a flood of investment is generating so many new solar technologies that are bringing down the cost and improving the efficiency much faster than many thought.

Companies are building mirror troughs to concentrate the sun on to liquid in tubes, generating power from thermal sources. Others use mirrors to concentrate the sun’s rays 500 times before converting it to electricity through photovoltaic cells.

Old-fashioned crystalline silicon panels, which long failed to compete with power from fossil fuels, are falling in cost and rising in efficiency thanks to nanotechnology.

And thin-film solar panels will soon be manufactured on a scale large enough to make them a realistic alternative to fossil fuels, particularly in countries such as Spain and Germany which offer preferential “feed-in” tariffs to encourage power from these sources.

The Emirates may lag behind Germany, Spain and California in terms of implementing solar power, but it is working fast to catch up.

Abu Dhabi’s decision to pump US$15 billion (Dh55.09bn) into the Masdar initiative has thrust the company into the forefront of this fascinating research.

And the speed of progress has defied expectations.

The International Energy Agency, an arm of the Organisation for Economic Co-operation and Development (OECD), had forecast global energy production from solar to achieve an annual growth rate of 10 gigawatts by 2020. But experts at the Abu Dhabi summit said this growth rate would probably be achieved this year, a decade early.

Yesterday, the renewables industry even got its own international agency, called the International Renewables Energy Agency, and the Emirates is a founder signatory.

It will be interesting to see how this institution interacts with a group known as Desertec, which has until now acted as a gathering point for solar enthusiasts on a grand scale.

Deserts, known as places where a lack of water and excess of heat make human life difficult, could attract large populations in the future thanks to their solar potential, which could generate huge amounts of water and cooling power.

Solar enthusiasts have also got to work on the demand side of the energy equation.

Instead of seeing the traditional power demand curve as an immovable target, research into insulation, small-scale solar panels and cold storage offers amazing potential to reduce energy needs, particularly in hot climates such as the Emirates.

I hate to say it, but this solar thing could make a revolutionary of anyone. Even a royal.

By Tom AshbyThe National

tashby@thenational.ae

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Gulf economies to spend their way out of recession

The blueprint for Gulf countries is clear – spend your way out of potential recession.
Temporary budget deficits are a small price to pay in the short term.

The Dubai Government has followed Saudi Arabia and Oman in announcing increased government spending, leading to planned deficits in their 2009 budgets. The sizes of the official deficits range from Dh4.2 billion (US$1.14bn) for Dubai to 65bn riyals (Dh63.66bn) for Saudi Arabia, assuming both expenditures and expected revenues are on target.

Herein rests the dilemma for the Gulf. Major world economies are falling into deeper-than-expected recessionary trends, and their expected recovery dates are being extended to 2012 and beyond. The new US president, Barack Obama, must have seen the inside figures of US finances and economic prospects before he pronounced that the nation was “sick”. To avoid the American economy falling into a long-term coma, Mr Obama will need all his political skills to push through his proposed $800bn – but most probably $1 trillion – expansionary expenditure programme.

This is the US though, and it is at liberty, again in the short term, to print whatever deficit billions of dollars it thinks it needs to spend its way out of a recession that is fast turning into an economic depression.

For the Gulf countries it is another matter. A small deficit here and there in the overall national accounts for the sake of maintaining public confidence and getting the regional economies moving again might seem a light price to pay. It is the continuing deficits and pace of a regional recession that is more worrying.

The main issue is that small deficits could again balloon, as it was not too long ago that economic giants such as Saudi Arabia registered accumulated domestic debts of close to 90 per cent of GDP, putting strain on bank non-government lending.

This time around, it is argued that Gulf economies are in a better financial shape, thanks to accumulated foreign exchange reserves and oil surpluses, to withstand a few years of budget deficit spending.

The worry is that in reality there could be divergence between planned and actual deficits. In analysing the projected deficits for the coming year in some Gulf countries, one is struck by the fact that there is an implicit assumption that some expenditure has to be curtailed, compared with the actual expenditure levels of 2008, if the forecast 2009 deficits are to make sense. This might be easier to realise during more “normal” global economic and financial market conditions, but seems unsustainable given the public announcements by Gulf countries that most projects are on track and expenditure patterns will be sustained on par with the previous year, if not even increased.

And so we are faced with two scenarios – either actual expenditure will be larger for many Gulf countries, and hence their planned deficits will be larger, or that planned expenditures will be stretched over longer periods to reduce public deficits. In these extraordinary times, the latter strategy will only cause more economic anxiety and erosion of public confidence, given that government economic stimulus is still the main engine of growth, despite brave efforts at diversifying the Gulf economies away from oil and government expenditure dependency. The brutal fact is that economies such as Dubai’s, hailed as the most diversified Gulf economy, have also suffered in the global financial turmoil and the emirate’s decision to run its first budget deficit indicates the limits of private-sector diversification.

Should Gulf citizens be worried? The answer is that despite some bumpy roads ahead, they are in better shape than many economies around the world. Some Gulf countries, especially Saudi Arabia, are aggressively pursuing their ambitious capital expenditure programmes, as evidenced by the 225bn riyals outlay planned by the Saudis for the coming year, compared with an actual expenditure of 144bn riyals for the past year. The kingdom seems to have followed the “golden rule” of the UK prime minister, Gordon Brown, on budget deficits when he was the “iron chancellor”, which was to borrow for investments and capital expenditure rather than for current expenditure.

Let us hope that the majority of Gulf countries keep to this rule and continue to spend on long-term development projects that will increase their GDPs and national wealth. Foreign banks still like what they see for some Gulf economies, especially those with substantial accumulated international reserves and comparative advantage in products such as petrochemicals and energy.

The onus on Gulf governments is to curtail expenditures that do not add value in the long term, and to remember the wise saying reminding us to beware of little expenses, as a small leak will sink a great ship.

By Mohamed A Ramady

Dr Mohamed A Ramady, a former banker, is a visiting associate professor in the finance and economics department at King Fahd University of Petroleum and Minerals in Dharhan, Saudi Arabia.

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EDWIN CAMERON - South Africa

EDWIN CAMERON, appointed a High Court judge by Nelson Mandela soon after apartheid ended in 1994, pulled to the side of the road, leaned his head on the steering wheel and was overcome by deep, shattering sobs, he recently recalled. It was 1999 and he had just decided to publicly disclose he was H.I.V.-positive at the very moment he sought to fulfill his life’s ambition: to serve on South Africa’s highest tribunal, the Constitutional Court.

“I am not dying of AIDS,” he told the stunned judicial commission that was deciding whether to recommend his elevation. “I am living with AIDS.”

On that day a decade ago, he became the first — and still remains the only — senior office holder anywhere in southern Africa, and perhaps in all of Africa, to announce he was infected with H.I.V.

Mr. Cameron, hale and hearty at age 55, finally ascended to the Constitutional Court this month.

In the years that have yawned between his original act of revelation and his current triumph lies the story of a gay, white South African wrestling with the divisive politics of AIDS here at the heart of the world’s pandemic.

Not long after he divulged that he was H.I.V.-positive, Mr. Cameron made another fateful decision, one that was extremely rare among public officials here: he openly challenged President Thabo Mbeki — who held the power to decide whether to name him to the Constitutional Court — on his ideas about AIDS.

Mr. Mbeki had begun questioning the scientific consensus that AIDS is a sexually transmitted disease caused by H.I.V., suggesting that those who held such views were motivated by racist ideas about sexually promiscuous black men.

Mr. Mbeki’s government also delayed giving antiretroviral drugs to treat and prevent the disease for years — a decision that led to 365,000 premature deaths, Harvard researchers recently concluded.

So why did Mr. Cameron, who believes judges should generally stay out of the political fracases of the day, take on Mr. Mbeki, most likely delaying his promotion to the Constitutional Court for years, if not scuttling it entirely?

“I suppose it was a sense of dismayed outrage that this man with so much intellectual promise, who held out such high ideals for the African continent, should betray it so profoundly on its major moral question,” Mr. Cameron said in a recent interview.

Mr. Cameron, the first judge named to the Constitutional Court since Mr. Mbeki was deposed as president by his own party four months ago, seems an unlikely rebel. A Rhodes scholar described by some colleagues as his generation’s finest legal intellectual in South Africa, he is a courtly, judicious man who serves tea with impeccable gentility.

One of his closest friends, Zackie Achmat, an advocate for AIDS patients, described him affectionately as “a tetchy old spinster.”

Mr. Achmat recalled that the day he started working for Mr. Cameron as a paralegal at the AIDS Law Project, which Mr. Cameron founded in the early 1990s, Mr. Cameron looked him over — Mr. Achmat was wearing jeans and a T-shirt — and acerbically asked when he was starting the job.

“You don’t come to work dressed like that,” Mr. Cameron told him severely. “This is a legal firm. Wear a tie and jacket,” then later laughed when Mr. Achmat turned up in a tie emblazoned with condoms.

Mr. Cameron’s sense of right and wrong has its roots in a difficult childhood. His father, an electrician of Scottish descent, was what Mr. Cameron called “a catastrophic alcoholic.” His mother, an Afrikaner, was unable to cope. At age 7, he was sent away to a home for orphans and destitute children until he was 11.

HIS mother was not the most competent parent, he said, but he credited her with one transformative gift. She set her mind to getting him into one of the nation’s elite public schools. She moved to Pretoria, got a job as a receptionist at a seedy hotel and helped him win admission to the whites-only Pretoria Boy’s High School.

“In my second year there, one of the school masters said to me, ‘You’ve got to apply for a Rhodes scholarship,’ ” Mr. Cameron said. “The idea of Oxford was embedded in my mind at age 15.”

At Stellenbosch University, where he studied in his native Afrikaans, Mr. Cameron said he had remained “a quiescent white conformist.” But in 1977, the year after he arrived at Oxford as a Rhodes scholar, Steve Biko, the black student activist and thinker, was murdered by the South African police. Mr. Cameron read Mr. Biko’s writings, which were banned in South Africa, and got involved in the antiapartheid movement.

Upon his return to South Africa in 1982 after earning a law degree at Oxford, he joined the fight against apartheid, representing township youths arrested for throwing stones at the police and white students who refused to serve in the military on political grounds.

And when Mr. Mandela became president of a democratic South Africa in 1994, Mr. Cameron was one of the first people he named to the High Court. After disclosing he was H.I.V.-positive and taking on President Mbeki, Mr. Cameron was promoted to the appellate court, but never sought again to win appointment to the Constitutional Court until last year, assuming until then that his clash with Mr. Mbeki over AIDS would ruin his chances — an assumption fellow judges and lawyers say was almost certainly accurate.

This year, a lawyer, Vuyani Ngalwana, argued in a 20-page brief to the judicial service commission that Mr. Cameron did not yet have “the pith and substance” to be on the nation’s highest court, and raised the question of whether a white man should replace a departing black judge, without giving a definitive answer.

“Justice Cameron will have another opportunity to throw his name in the hat for consideration,” Mr. Ngalwana wrote. “It is hoped that by then he will have demonstrated the requisite standard for elevation.”

Mr. Ngalwana’s critique did not have much impact — the commission recommended Mr. Cameron’s promotion — but Mr. Cameron’s reaction to it was telling. For a man whose friends describe as possessing an exquisite sensitivity to others, he can also be a sharp-tongued advocate capable of demolishing a critic’s argument, even as he defends that critic’s right to speak out.

“I think the first 15 pages really are a coded way of raising the racial issue while denying it,” Mr. Cameron said in an interview in his new Constitutional Court office. “It’s conceptually incoherent. And what he’s really saying is that ‘there are two white vacancies available next year. Why don’t you wait till then?’ ”

MR. CAMERON makes no secret of his delight in finally having reached the Constitutional Court, but he may ultimately be most remembered for speaking with intimate candor about his personal experiences with H.I.V. — the fear and sense of contamination in a society where AIDS bears a crushing stigma — in interviews and in his memoir, “Witness to AIDS” (Tafelberg Publishers, 2005).

In it, he writes about how the antiretroviral drugs he began taking in 1997 chased away the physical symptoms of sickness and the specter of death — a reality he described as “fetid, frightening, intrusive.”

Much of the burden of AIDS then fell away for him, he said, as he realized it was, after all, caused by “just a virus.” And so in the years that followed, when the government denied his countrymen and women the medicines that had saved him, he decided to act.

“Here I was, blessed with renewed vigor and life and health and energy and joy,” he said. “I mean, it’s an extraordinary experience. I think some cancer survivors also experience it. Here I had my life given back to me. How could I keep quiet?”

By Celia Dugger New York Times

http://www.nytimes.com/2009/01/24/world/africa/24cameron.html?_r=1&em

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ZIMBABWE: WHAT NEEDS TO BE DONE

Most people have expressed frustration and sense of anger at the course of events in Zimbabwe over the last eight months. But there seems to be some light at the end of the tunnel. So we have drafted a Programme of Reconstruction for that country.

Since the March 2008 election in Zimbabwe, various people have been involved in trying to reach some sort of political agreement between the major parties – whether as a “government of national unity” as proposed by former President Thabo Mbeki or more generally a shared power arrangement. Mbeki, acting as a negotiator on behalf of the SADC grouping of countries, understandably chose to describe the political accommodation which he hoped to achieve as a “government of national unity”. This obviously is based on South Africa’s transformation experience, which worked: between 1990 and 1994 the main political parties served in what was described as a “government of national unity” (GNU). The agreed purpose of the GNU was to defuse the political situation and create space and time for the constitutional, structural and legal changes which would transform South Africa from a white-minority dominated state to a full non-racial democratic one. And M beki was right in thinking that something like the South African transition was needed also in Zimbabwe. However, it is important to highlight a specifically relevant difference between the two situations. As it happened, the ANC in the election of 1994 took control of a fully functioning state. By contrast, the parties who take control in Harare in terms of their political agreement of September 2008 take control of a failed state.

The point is that, however well-intentioned Zimbabweans may be, they are simply not in a position to turn that country around. They are going to need massive international assistance, and that is the purpose of the Reconstruction Programme which we have formulated. While I personally take responsibility for it, I listened to the views of a great many people in formulating it. An electronic copy is available for download here: The Reconstruction of Zimbabwe: A Proposed Strategy for Africa. If you agree with it, we would be happy for you to pass it on to any political or business decision-makers you think should see it.

Denis Worrall is Chairman of Omega Investment Research, a South African based investment advisory and strategic marketing consultancy. He is a graduate of the University Cape Town (M.A.), University of South Africa (LLB) and Cornell University (Ph.D) where he was a Fulbright Scholar He started his career as an academic lecturing at universities in the US, Nigeria and South Africa . His last post was as research Professor at Rhodes University. He practised as an advocate for seven years in Cape Town, before going into public life. He has been a Member of Parliament, chairman of the Constitutional committee of the Presidents’ council, South African Ambassador to Australia and the Court of St James (London).

Email: kamreyac@omegainvest.co.za

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Private bankers are on the prowl in the Gulf looking to sell their advice

Dubai: For the rich, there is plenty of money to be made even in these times of financial chaos. Only if the moneyed know how and where to park their cash.

However, many of them may not know how to grow their wealth. This is where a private banker comes in. These bankers are on the prowl in the Gulf, looking for the wealthy willing to listen to their advice.

With the impact of the global recession increasingly being felt in the region, and an era of 'cash is king' in full swing globally, opportunities for investors are inevitably perceived as scarce.

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Nonetheless, one of Switzerland's largest private banks is rather optimistic about expansion plans in the Gulf, where private wealth is estimated to be Dh5.5 trillion, according to the International Monetary Fund (IMF). The privately-owned Pictet and Cie has been servicing private banking clients in the region for over 30 years, from its European base, but now considers it a key part of its strategy to open an office at the Dubai International Financial Centre.

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With massive current account surpluses, the Gulf states are better placed than most to counter the effects of the global economic crisis. Last year, a report by McKinsey Global Institute estimated that in its base case scenario, the GCC would have $3.5 trillion of new funds to invest in global capital markets through 2020, taking the region's total overseas wealth to $8.3 trillion.

Changing global economic conditions will of course take their toll on the region's wealth reserves, but according to the McKinsey report, even if the GCC states did not invest abroad at all again, the returns on their existing foreign assets would produce $1.6 trillion by 2022. Of course, a reorientation of the GCC's foreign investments - particularly hard hit in North America and Western Europe - towards the domestic economy is now more likely, but the dilemma of how best to manage this amassed, and largely petro-fuelled, wealth remains.

The new and continuing opportunities such a situation presents for private banks such as Pictet and Cie to tap into are thus apparent. "On the institutional side, we decided to be present in the region to better cover sovereign wealth funds, central banks, pension funds, local banks and international banks and asset management companies," said Francesco Genovese, Regional Head of Institutional Business Development for Pictet and Cie in the Middle East.

"On the private banking side it's older families and more private clients that are out here in the region," he continued. As the reputation of major international investment banks in the UAE begins to decline, the opportunities that niche banks such as Pictet and Cie detect will increase.

By Rachna Uppal, Staff Reporter Gulf News

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Total $3.6T Projected Loans and Securities Losses, $1.8T Of Which At U.S. Banks/Brokers: The Specter of Technical Insolvency

Nouriel Roubini and Elisa Parisi-Capone of RGE Monitor release new estimates for expected loan losses and writedowns on U.S. originated securitizations:

• Loan losses on a total of $12.37 trillion unsecuritized loans are expected to reach $1.6 trillion. Of these, U.S. banks and brokers are expected to incur $1.1 trillion.

Libya considering nationalisation of firms

Washington: Libyan leader Muammar Gaddafi said on Wednesday his country and other oil exporters were looking into nationalising foreign firms due to low oil prices and suggested Tripoli might not stick to production quotas set by the Organisation of Petroleum Exporting Countries (Opec).

Speaking via a satellite link from Libya to students at Georgetown University in Washington, he called the current price of oil "unbearable".

Oil was around $44 a barrel on Wednesday, less than a third of the price in July of $147.

"We would not adhere to Opec's regulations because our livelihood depends on oil," Gaddafi said, without providing any details of how Libya might not stick to the oil-producing organisation's quotas.

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Last month, Libya told oil firms to cut output by 270,000 barrels per day from January 1, more than the curb it needs to make under an Opec deal to pump less.

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Gaddafi, who decides Libya's oil policy, referred to recent Libyan newspaper reports over nationalisation because of the dipping oil prices.

The reports, including in the main state paper widely seen as the mouthpiece of Gaddafi, said this week the Basic People Congresses, Libya's top executive and legislative bodies, should vote to nationalise oil firms when they meet in the next few days.

"Oil-exporting countries may move towards nationalisation because of the rapidly declining prices. This is put on the table and is being discussed seriously," Gaddafi said through an interpreter. "Oil maybe should be owned by national companies or the public sector at this point, in order to control the oil prices, the oil production or maybe to stop it," he told the students. "We may refuse to sell it at this very low price."

Petro-Canada, one of Libya's largest foreign oil producers, said it has heard no talk of nationalising its interests in the North African country.

"We continue to have a co-operative relationship with the government of Libya, both signing agreements last summer and implementing contracts," said Andrea Ranson, spokeswoman for the company.

In June, Petro-Canada signed six long-term exploration and production deals with Libya's state oil company that it said would lead to a doubling of production there.

US companies ConocoPhillips, Hess Corp and Marathon Oil are active in Libya under a consortium called Oasis Group with Libyan National Oil Corp. Other US firms involved there are ExxonMobil, Chevron and Occidental.

Gaddafi said he hoped nationalisation could be avoided by a price rise.

"We hope that the prices will go up again, say $100 a barrel, so that this idea would be discarded, to stop this idea of calling for nationalisation," he said. "However, with the decline, this would remain on the table."

Reports of nationalisation come after Libyan National Oil Corp released a report for 2008 suggesting officials want to modify policy based mainly on production sharing agreements.

Some diplomats argue such reports are aimed at putting more pressure on oil firms in upcoming negotiations.

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Abu Dhabi sets 7% renewable energy target

ABU DHABI // At least seven per cent of the energy consumed in the emirate will come from renewable sources by 2020, the Government pledged last night.

The commitment came on the eve of the World Future Energy Summit, a three-day forum that starts today in the capital.

The UAE’s goal of boosting its renewable energy capacity is an important part of the Government’s comprehensive energy policy, which is expected to be published within the next few months.

Mohammed al Bowardi, the secretary general of the Abu Dhabi Executive Council, said in a written statement: “The establishment of a long-term renewable energy target for Abu Dhabi builds on the emirate’s leadership in energy and sustainability.”

The decision to make renewable energy sources more prominent in the capital’s future reflected “the environmental legacy” of the late Sheikh Zayed, founder of the UAE, Mr al Bowardi said.

Considering the size and population of Abu Dhabi, the seven per cent renewable energy target is considered high. In comparison, eight per cent of the energy consumed in China in 2006 came from renewable sources. The EU’s goal is to have 20 per cent of its energy from such sources by 2020.

More reliance on renewable sources such as wind and solar power is seen as a way to slow climate change, which is believed to be caused in large part by the burning of fossil fuels such as oil and coal.

Abu Dhabi’s decision is expected to stimulate the local renewable-energy sector. Almost none of the emirate’s energy currently comes from renewable sources.

Yesterday’s announcement was approved by Sheikh Khalifa bin Zayed, President of the UAE and Ruler of Abu Dhabi, and Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. It was pushed ahead to coincide with the World Future Energy Summit and was made on the same day that Masdar and the Abu Dhabi National Oil Company signed a deal to collaborate on reducing carbon emissions from the production and processing of the emirate’s oil and gas.

The summit brings together scientists, educators, experts in alternative energy sources, high-level government officials and business representatives. Its purpose is to discuss ways to solve energy demand and environmental challenges.

The Masdar Initiative was launched to position the capital as a research hub for sustainability issues and energy technology.

mkwong@thenational.ae

http://thenational.ae/article/20090119/NATIONAL/620086892/1133

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Drop in U.S. Trade Gap ‘Slim Comfort’ as Exports Keep Plunging

U.S. exports fell in November, capping the biggest four-month decline in more than a decade and signaling trade will contribute little to economic recovery, even as the recession depresses imports.

Exports decreased 15.2 percent from August to November, the most since at least 1992, according to Commerce Department figures released today in Washington. The trade deficit narrowed to $40.4 billion, the smallest since November 2003, as imports fell to the lowest level in three years.

“The key message from this report is bad news,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. “It is slim comfort that the U.S. cut its demand for imports more rapidly than the rest of the world cut its demand for U.S. exports. That might cushion the U.S. downturn a little, but it is not a route to recovery.”

American exports and imports are both contracting as the global economy faces the first simultaneous recession in the U.S., Japan and the euro region in the postwar era. While plummeting demand helps trim the nation’s purchases of foreign goods, falling exports of U.S.-made products will hobble American factories and jobs.

Trade has contributed to growth in the U.S., the world’s largest economy, since the first three months of 2007.

Americans bought 12 percent fewer goods and services from abroad, reducing imports to $183.2 billion as demand for foreign crude oil, automobiles, computers and televisions sagged. Exports dropped 5.8 percent to $142.8 billion in November, today’s figures showed. Foreign purchases of automobiles were the lowest since October 2006.

Decline in Trade

“The real story is the contraction in important export volumes that underscores the decline in world trade,” John Ryding, chief economist at RDQ Economics LLC in New York, wrote in a note to clients. “An economy cannot grow its way out of a recession by reducing imports, especially one the size of the U.S.”

Slumping demand for American-made computers and semiconductors contributed to the drop in November exports. Intel Corp., the world’s largest chipmaker, said this month that fourth-quarter sales dropped 23 percent, more than it projected in November, as the global recession intensified.

Intel Chief Executive Officer Paul Otellini, 58, has said he expects the current U.S. recession will be the worst of his lifetime. The Santa Clara, California-based company’s chips run about 80 percent of the world’s PCs, making it a bellwether for technology spending.

To contact the reporters on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

With U.S. economy stuck, economists look abroad for growth

As U.S. consumers stop spending and investors keep their money to themselves, government and business leaders hoping to get the country's ailing economy moving again are playing one of their few remaining cards.

They're trying to sell more U.S. goods overseas despite the decline of both global demand and U.S. competitiveness.

Exports currently make up about 13 percent of the country's total economic activity, far less than the 70 percent taken up by production for domestic consumption. But that's where economic growth can still happen, analysts say, especially as the domestic housing and credit crises promise to freeze spending at home for at least another year.

Economists and business leaders suggest the incoming Obama administration implement export-friendly measures such as streamlining U.S. customs operations, negotiating more free trade agreements and developing industries such as alternative energy that can become the next generation of U.S. economic powerhouses.

"The role of exports is colossal," said John Murphy, vice president of international affairs at the U.S. Chamber of Commerce. "Over the past two years, exports were one of the few bright spots for the U.S. economy. We're going to need strength there in any recovery."

That's been the strategy of St. Charles, Ill.-based motor manufacturer Bison Gear & Engineering, which has seen its international sales jump by 50 percent over the past three years despite an overall decline of 10 percent since 2004 in the general motor market.

The company, like other exporters, benefited from the U.S. dollar falling by 22 percent between 2002 and 2008, which made many of its products cheaper overseas. The dollar's recent rebound, however, has erased some of that advantage.

"I see (exports) as an important component to our future," said the company's owner, Ron Bullock. "We're investing in that area and adding people to support it."

While the rest of the economy suffered, U.S. exporters had their best year ever in 2008, when they fueled an all-time high 12.8 percent of total U.S. economic activity, Murphy said.

The top U.S. exports were aircraft, entertainment products, machinery and transport equipment. Manufactured goods made up 60 percent of all U.S. exports.

Export growth was crucial to keeping the U.S. economy expanding, albeit at a meager pace, rather than falling into an early recession over 2006 and 2007, Murphy said.

Spurring more U.S. exports, however, will prove tough as global economies cool this year.

The National Association of Manufacturers expects new data to show "a dramatic slowdown" in export growth over the last three months of 2008 as a result of the economic crisis, said the association's chief economist David Huether.

With one in five manufacturing jobs dependent on exports, U.S. manufacturing had already sunk to its lowest level in nearly three decades, according to a recent study by the trade group the Institute for Supply Management.

U.S. companies have long been fighting a losing battle against some foreign competitors, who can pay workers less and avoid often costly U.S. regulations.

The Congressional Budget Office found that while U.S. manufactured exports rose by 58 percent between 1999 and 2007, manufactured imports grew by 78 percent and the U.S. trade deficit doubled

By Jack Chang McClatchy Newspapers

http://www.miamiherald.com/news/politics/AP/story/848277.html

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/

Detailed Event Information For Trade and Investment Mission to Dubai and Abu Dhabi

http://www.export.gov/eac/show_detail_trade_events.asp?EventID=15791

Detailed Event Information For Trade & Investment Mission to Dubai & Abu Dhabi

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Trade & Investment Mission to Dubai & Abu Dhabi -- Accounting Services, Airport/Ground Support Eq., Aviation Services, Building Products, Construction Eq., Computer Software, Financial Services, Information Services, Investment Services, Water Resources Eq./Services

Location/Date: Los Angeles, CA, United States 03/17/2009 - 03/19/2009

Event Summary:

Contacts:

Bobby Hines, Los Angeles (Downtown) International Trade Specialist Phone: 213-894-4231 bobby.hines@mail.doc.gov

Johnny Brown, U.S. Export Council Phone: 404-300-9303 jebrown@usexportcouncil.com

Michael Elterman, U.S. Export Council Phone: 310-691-2419 michael@usexportcouncil.com

U.S. Factories Contracted at Fastest Pace Since 1980

Jan. 2 (Bloomberg) -- Manufacturing in the U.S. shrank in December at the fastest pace in almost three decades as the recession deepened and spread overseas.

The Institute for Supply Management’s factory index fell to 32.4, below forecasts and the lowest level since 1980, from 36.2 the prior month, the Tempe, Arizona-based private group said today. Readings less than 50 signal contraction. The group’s price measure fell to the lowest level in almost six decades.

Clogged credit markets, the collapse in housing and mounting job losses have hurt demand for everything from furniture and appliances to automobiles, driving General Motors Corp. and Chrysler LLC to the brink of bankruptcy. The slump will extend into 2009 as downturns in Europe and Japan also depress exports.

“It’s a breathtaking plunge in manufacturing,” said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, whose estimate tied for lowest among economists surveyed. “The exports numbers are reflecting recessions abroad. The world is very much coupled.”

The group’s gauge, which covers about 12 percent of the economy, was projected to drop to 35.4, according to the median estimate of 57 economists surveyed by Bloomberg News. Forecasts ranged from 34 to 40 and the measure averaged 51.1 in 2007.

Stimulus Plan

The manufacturing slump underscores why President-elect Barack Obama, who takes office Jan. 20, has said his first priority will be to pass an economic stimulus plan that will invest in public works and create or save 3 million jobs. The package may be worth as much as $850 billion.

Stocks advanced on the first day of trading in 2009, following the biggest annual drop for the Standard & Poor’s 500 Index in 71 years, on expectations government stimulus efforts will curtail the recession. The S&P index rose 1.1 percent to 913.47 at 10:40 a.m. in New York. Treasury securities were little changed.

Manufacturing deteriorated around the world in December, signaling a worsening global recession, other reports today showed. The euro-area’s gauge fell to a record low, while industry in China contracted for a fifth month. Indicators for the U.K., Sweden, Hong Kong and Australia also showed factories in decline.

Such data “confirm a sharp contraction in global investment, output and trade activity, consistent with the deepest global recession since at least the early 1980s,” said Lena Komileva, head of market economics in London at Tullet Prebon Plc.

Orders Collapse

The ISM’s gauge of new orders dropped to the lowest level since records began in 1948, while export demand was also the weakest since those records started in 1988. The group’s employment index decreased to 29.9 from 34.2 in November.

The gauge of prices paid fell to 18, the lowest level since 1949, reflecting the drop in commodity costs. Economists had projected that the measure, which averaged 65 in 2007, would drop to 20.

All 18 industries tracked by the group contracted last month, the first time that’s happened since Norbert Ore took over as chairman of the ISM’s factory report in 1996.

“We’ve seen a tremendous amount of demand destruction,” Ore said during a conference call with reporters. “There is a significant inventory correction taking place,” he said, and added he couldn’t predict when manufacturing would recover.

Auto Decline

Automakers have been among the hardest hit as November sales plunged to the lowest level in a quarter century, according to industry figures. President George W. Bush announced Dec. 19 that General Motors and Chrysler will get $13.4 billion in initial government loans to keep operating while they restructure operations to return to profitability.

The carmakers last month expanded their traditional holiday shutdowns to clear out unwanted stock. Chrysler idled all 30 of its assembly plants on Dec. 17 for at least a month, while GM announced output cuts Dec. 12 that affected 20 plants.

The closings will extend into this month. Ford Motor Co. said 9 of 15 North American factories would shut for the first week in January.

The U.S. Treasury this week issued broad guidelines for aid to the auto industry, opening the door to using taxpayer money to finance a wider array of companies, such as GM’s bankrupt former parts unit Delphi Corp.

Spreading Slump

The factory slump has spread well beyond autos as demand from abroad also weakens. Ingersoll-Rand Co., the maker of Thermo King and Hussmann refrigeration equipment, said last month that profit will fall short of fourth-quarter and full-year estimates after demand declined “sharply” in North America and Western Europe.

“Probably the U.S. and developed world are in recession,” General Electric Co. Chief Executive Officer Jeffrey Immelt said in his annual outlook address on Dec. 16. “The environment is still the toughest, for people of my generation, that we’ve ever seen.”

U.S. exports dropped in October for a third straight month, leading to an unexpected widening in the trade gap, figures from the Commerce Department last month showed. The drop indicated the economy was sinking even faster than previously estimated.

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/