‘Extraordinary optimism’ in Arab world
Arab executives showed ‘extraordinary optimism’ about business prospects despite concerns about terrorism, political risk and retaining talented staff, according to a survey.

Of 140 senior executives interviewed in 14 countries by PriceWaterhouseCoopers and the Dubai-based Moutamarat group, 83 per cent saw conditions improving further over the next year. The survey gave the Arab world a confidence score of 75.5 from a maximum 100, 35 per cent more than scored by the US in the Conference Board measure of CEO confidence.
It deliberately focused on three non-oil sectors – financial services, healthcare, and travel and tourism – while acknowledging that high oil prices and resulting excess liquidity had contributed to the ‘feel good factor’.
“The general level of confidence in the Arab world in the non-oil sectors is very, very high,” Michael Stevenson, Middle East senior partner with PriceWaterhouse Coopers, said at the World Economic Forum in Davos, Switzerland.
More than 40 per cent of the companies surveyed had experienced average annual revenue growth above 20 per cent in the last three years. About 60 per cent expected to exceed revenue targets over the next 12 months, and half of these believed they would beat the targets ‘significantly’.
Half of the leading companies were aiming to achieve growth through alliances and joint ventures. The leading growth markets seen across all three business areas were the UAE and Saudi Arabia, while other countries were cited in particular niches – Algeria and Jordan in finance, Libya in healthcare and Egypt in tourism.
The survey was conducted between September and November last year.
Saeed Al Muntafiq, chief executive of Moutamarat’s co-owner Tatweer, said the findings showed Arab companies were willing to open up their markets, at a time when global corporations are looking for new opportunities.
The countries surveyed in the report, billed as the fullest and most in-depth of its kind, were Bahrain, Kuwait, Oman, Qatar, Saudia Arabia, UAE, Yemen, Jordan, Lebanon, Syria, Algeria, Egypt, Morocco and Tunisia.

Inflation below global levels
Bahrain’s Commerce and Industry Ministry has said that the country’s inflation rate is well below international levels for both developed and developing countries.
Its Consumer Protection Affairs department said overall inflation averaged 2.2 per cent in advanced economies between 2000 and last year and 3.6 per cent in emerging and developing economies. It said that Bahrain’s inflation rate over this period averaged 0.5 per cent. While there was a slightly higher rate rise last year, it said the rate was 2.1 per cent year-on-year – below the 5 per cent average in other developing countries.
However, it argued that price fluctuations were inevitable in a free market. “It is true that the government could theoretically impose controls on producers and retailers to limit prices, but yet again we have a complication since Bahrain is a net importer of foodstuffs as well as manufactured products,” it said.
“We can have little or no influence on the prices of imported products, other than in terms of import duties, which the government has already practically eliminated.
“Restricting retail prices is not only contrary to free market principles, but would also result in economic disturbance as importers/retailers respond by not supplying or laying-off workers to reduced overheads.” The statement said that subsidising products is also contrary to free market principles and would eventually result in the government having to compensate by imposing taxes or cutting expenditure in other key areas.

UAE women’s surplus funds
UAE businesswomen have about Dh27.3 billion ($7.43 billion) of surplus money which is not being invested, according to Raja Eisa Al Gurg, board member of the Dubai Chamber of Commerce and Industry and president of the UAE Businesswomen’s Council.
There are 10,271 local businesswomen in the country. About 45 per cent of the deposits in GCC banks were held by businesswomen and are simply sitting there and not performing, a published report said.
Al Gurg said Saudi businesswomen have deposits in the local banks worth 100 billion riyals and Qatari businesswomen have 10 billion riyals. Thuraya Al Arrayed, consultant and planning adviser of Saudi Aramco affairs, said GCC businesswomen owned 10 to 29 per cent of the region’s wealth.

Sama foreign assets up
The Saudi central bank’s net foreign assets rose by 4.8 per cent in December to SR563.5 billion ($150.3 billion), while money supply growth slowed considerably in 2005, official figures showed.
The oil-exporting giant is earning record revenues from its crude oil exports, which have swelled state coffers and boosted business confidence in the kingdom. Figures released by the Saudi Arabian Monetary Agency (Sama), or central bank, showed Sama’s net foreign assets at the end of last year rose by 74 per cent from their level in 2004.
Net foreign assets in December rose to SR563.55 billion from SR537.67 billion in November and SR324.1 billion in December 2004.
Sama’s foreign securities investments reached SR369.97 billion in December, up 12.6 per cent from the previous month and 87.5 per cent, up from 2004. Deposits with banks abroad, however, reached SR113.9 billion in December, down 13.2 per cent from November maintaining a seesaw trend since September.
Deposits with banks abroad totalled SR48.4 billion in 2004. December’s M3 money supply grew 1.1 per cent from November to SR546.3 billion, and up by 11.4 per cent from a year ago. Money supply in 2004 rose by 19.1 per cent from 2003. Bank claims on the private sector – an indicator of booming business and investor confidence – rose by 2.7 per cent in December against 2.5 per cent in November to SR435.9 billion, and 38.5 per cent compared to 2004.
Bank loans to the public sector continued their decline of recent years, reaching in December SR159.5 billion against SR163 billion in November and SR175.8 billion at the end of 2004.