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MEEF - Middle East Engineering Projects News & Releases
 

MANAMA: A Bahrain Islamic investment bank yesterday sealed a $1.4 billion deal with the Moroccan government for two development projects.The two agreements were signed between the Gulf Finance House (GFH) and representatives of the Moroccan government to develop the Gateway to Morocco project.

King Mohammed VI of Morocco was present at the event, which marked the entry of GFH into the North African kingdom.

 
The first phase of Gateway to Morocco will comprise two distinctive elements - the Marrakech Equestrian City in Marrakech and the Cap Malabata Resort in Tangiers.

The project supports the vision of King Mohammed VI to strengthen and diversify his country's rapidly growing economy and the government's efforts to attract foreign investment into Morocco.

The project will also have a positive impact on the social and economic framework of Morocco.

The investment also highlights the strong partnership between the government and GFH, said the bank's chief executive and board member Esam Janahi.

Morocco has in recent years made great headway in opening the economy to foreign investment and trade, as well as introducing economic reforms that will encourage the continued growth of the economy.

A direct result of these reforms has been the Free Trade Agreements signed by Morocco with the European Union and the US.

"Morocco's pro-business environment, trade agreements with the European Union and the US, and its closeness to Europe, were key factors in our decision to invest in the kingdom," said Mr Janahi.

"Gateway to Morocco not only marks the bank's entry into Morocco but is our first stepping stone in partnering with the government and contributing to infrastructure development initiatives in the kingdom.

"Furthermore, Morocco offers GFH an ideal gateway into the North African market, a key component of our regional expansion strategy, and we are delighted to be the lead promoters and developers of this unique project, the Gateway to Morocco.

"By capitalising on the rapid economic development in Morocco, this project will provide our clients and strategic partners with new attractive investment opportunities."

The Marrakech Equestrian City will be a mixed-use sporting, leisure and residential complex.

Spread over a total area of 380 hectares at Marrakech, it will boast of a world-class horseracing track that will be supported by state-of-the-art stabling, veterinary facilities, and grandstands.

Villas and apartments will be provided amidst spectacular landscaping and superlative waterways in the form of rivers and lakes.

Designed as a one-of-a-kind mixed-use tourism, commercial and residential destination on the Mediterranean coast, the Cap Malabatta Resort, located at Tangiers, will cover a total area of 129 hectares.

It will feature cafes, galleries, exclusive shopping areas, marina, beach house, golf course, equestrian club and convention centre, as well as a range of residential and commercial accommodation.

The resort will also provide the international business community with an exclusive destination for corporate meetings, conventions and exhibitions.

MZ & Partners from Qatar are the Architecture Consultants and Master Planners for the Gateway to Morocco project.

The first phase, estimated at $1.4bn, adds to GFH's existing investment and project portfolio in Bahrain, Saudi Arabia, the UAE, Qatar, Kuwait, Jordan, Germany, Spain and France.

 

Middle East Enjoying Oil Boom--With RestraintOil Producers'
High Growth Rates Boost Region

 
June 28, 2006 - The Middle East is in the midst of an oil boom reminiscent of the 1970s and ‘80s, but this time, instead of spending most of their profits, oil producing countries are managing the windfall with restraint, according to a new World Bank report on the Middle East and North Africa region.

MENA Economic Developments and Prospects 2006: Financial Markets in a New Age of Oil finds that oil producers are increasingly turning finite oil wealth into longer-term revenue streams.

They’re also showing fiscal restraint by building up savings, paying down debt, and setting up oil stabilization funds, says the report, the second in a new series of annual reports on economic developments in the Middle East region.

The oil producers’ behavior differs from that of previous oil booms, when they built up debt and banked on continued high oil prices to fuel their expansion. When the oil price declined, many were caught with large debts.

This time, "there’s a realization that they can’t do things as before," says Jennifer Keller, Senior Economist in the Office of the Chief Economist for the Middle East and North Africa Region and principal author of the report.

Saudi Arabia, for instance, has reduced domestic debt from 97 percent of GDP in 2002 to 41 percent by the end of 2005. Over the same period, it turned a fiscal deficit of almost 6 percent of GDP to a fiscal surplus of 8.4 percent of GDP by 2005, according to the report.

The report notes increasingly close ties between the price of oil and the growth outcomes among the oil-rich, labor importing countries, a fact that was not always the case in prior oil booms. Because countries are adopting largely similar development strategies, they are now experiencing a "common growth effect."

Oil exports of oil-rich, labor-importing nations—Saudi Arabia, United Arab Emirates (UAE), Kuwait, Qatar, Libya, Oman, and Bahrain—more than doubled in the last three years, growing from $186 billion in 2002 to $440 billion by 2005.

At the same time, their economies grew by an average 7 percent in 2005, boosting the region’s growth rate to 6 percent, up from 5.6 percent in 2004, and 3.5 percent in the late 1990s, says the report. The economies of oil-rich, labor abundant countries—Algeria, Iran, Syria and Yemen—also had healthy growth rates of between 5 and 6 percent.

But the boon to oil producers did not fully translate to resource-poor economies in the region, says the report

Egypt, Djibouti, Jordan, Lebanon, Morocco, and Tunisia averaged 4 percent growth, with Morocco's growth rate falling from 6.3 percent in 2004 to 1.5 percent in 2005, and Lebanon's economic growth collapsing to 1 percent from 6 percent in 2004.

Compared with past oil booms, the resource-poor economies are not enjoying as many spillover effects from the high price of oil. In fact, the report finds that the relationship between economic growth of these countries and the price of oil has weakened substantially.

The reasons include less aid from oil-rich countries, fewer job opportunities for Arab laborers in the Gulf, and less money flowing from oil rich countries to resource-poor countries.

In addition, the resource-poor countries are using more energy than they did 20 or 30 years ago, and must import greater amounts of more costly oil. And like all countries in the region, they maintain oil subsidies that keep the price of gas and diesel well below market prices.

The cost of oil subsidies in Jordan, for example, doubled between 2004 and 2005—from 3.1 percent of GDP and 11.3 percent of total expenditures, to 5.8 percent of GDP and 19 percent of current expenditures, according to the report.

"Oil subsidies are a drain on all the economies of the Middle East region, but are often politically difficult to abandon," says Mustapha Nabli, Chief Economist for the Middle East and North Africa Region. "And rising oil revenues seem to be delaying plans to reform subsidy systems in several countries," he notes, including Saudi Arabia, which recently cut the price of gas and diesel by 30 percent to offset the effect of equity market declines.

Reform in other areas, however, is progressing throughout the region, the report says.

The resource-poor countries reformed their business and regulatory environments and now rank in the 63rd percentile in those areas worldwide. These countries also took steps to liberalize trade, notes the report.

  The region as a whole is making progress in reforming governance structures to be more accountable and inclusive. In fact, over the 2000-2005 period, it ranked in the 64th percentile in terms of progress, though the region remains at the bottom internationally in this area, the report says.

Bahrain, Oman and Qatar, in particular, have taken steps to allow greater participation in public policy, notes the report.

Progress on the governance front is important, says Keller, "because it has implications for the overall reform effort."

"Reforms that are implemented through top-down management may work initially, but it is difficult to enact reforms at a deep level, unless you have the compliance and participation of those groups whose well-being is affected by reforms."

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