World Bank anticipates increased growth in the Middle East for 2010

By Ribal Dayikh in Dubai
For Al-Shorfa.com
2010-01-22

[ESSAM AL-SUDANI/AFP/Getty Images] Crude oil and gas production will help region's economy rebound in 2010.

The World Bank expects the Middle East and North Africa, the world's largest oil exporting region, will experience an economic recovery in the near future, forecasting growth of 3.7% during 2010 and 4.4% in 2011.

The bank stated in its report on the global economy that it published Wednesday (January 20th) that growth may increase from its estimated 2009 rate, which reached 2.9% after a reduction in oil prices resulting from the global credit crunch. The bank indicated that growth for 2008 was 4.3%.

"Stronger global activity should allow for crude oil and gas production to return to positive growth, implying moderate revenue gains," the World Bank said.

Mergermarket, a financial research company, said in a report published this week that the number of merger and acquisitions in the Middle East dropped 39% to 107 deals in 2009, but predicted this number would increase in 2010.

The company indicated that while the total value of merger and acquisition deals rose by 13% compared with 2008 to $17.9 billion, foreign investment in these operations dipped to its lowest levels since 2005.

A new report published this week by the United Nations World Tourism Organisation stated that the number of foreign visitors to the Middle East dropped by 6% last year. The report added that the statistics began to improve in the second half of 2009. A return to positive growth is expected in 2010.

In the UAE, a report published by EFG-Hermes regional investment bank last Tuesday (January 19th) stated that the total debts of the Dubai government and its subsidiary companies reached $170 billion, higher than anticipated. The report said that Dubai's total debts range between $130 billion and $170 billion. Last November, Dubai announced that it requested the freezing of interest on debts of its largest investment group, Dubai World, causing a shock in the financial markets.

Dubai's government said Tuesday that the financial support it received from Abu Dhabi last month to save the Dubai World Group from failure was in reality half of the $10 billion previously announced, as it included subscription for bonds which had already been announced by two Abu Dhabi banks.

Al Hilal Bank and the National Bank of Abu Dhabi had subscribed on November 25th for bonds issued by Dubai worth $5 billion, just hours before the Dubai government's announcement of the request for the freezing of interest on its largest investment group, Dubai World.

In Jordan, Al Mazaya Holding Company published a report on January 12th in which it said that the Jordanian property market was stagnant. No large real estate projects were announced. Contractors and real estate investors have attempted to overcome the difficulties connected with slow demand and a lack of financing from the banks.

The Al Mazaya report expressed caution regarding expectations for 2010 given the continuation of current macroeconomic factors, in particular the banks' hesitancy to provide financing. However, the report indicated the Jordanian government's desire to review the national housing project, "decent housing for decent living", which has been faced numerous difficult challenges since its inception in 2007.

In Lebanon, the Egyptian EFG-Hermes Group this week ended a long series of negotiations with the Audi Saradar Group and finally decided to sell all of its shares in Bank Audi, a total of 7,554,148 shares and 2,483,034 global depository receipts, priced at $91 per share, a total value of $913.4 million.

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