Interpreting Middle East Economic News and Analyzing Market Trends

Category: Saudi Arabia

Germany looks to cancel Saudi mega tank deal

German tanks to Saudi

Source: DefenceNews

Saudi Arabia’s plans to buy up to 800 German tanks is in jeopardy.  Germany’s Economy Minister, Sigmar Gabriel, is against the deal and without his approval it will not go through, according to German newspaper Bild.

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Tensions heat up in the Gulf as UAE, Saudi Arabia and Bahrain recall their ambassadors from Qatar

GCC Meeting in Riyadh March 2014

The smiles are for the camera only!

Tensions are once again heating up in the Gulf.  This time Bahrain, Saudi Arabia and the UAE are ganging up on the Qatar.  Rising tension is not new, what is new is the fact that other GCC members are tired of Qatar stepping out of line and not following the prescribed protocol.

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China is hooked on Mideast oil, which helps build a good case for a Petroyaun

China Oil Transit Routes 2013Source: Zerohedge (click on map to view larger size)

Last year China became the world’s largest oil importer, surpassing the U.S. for the first time.  The U.S. reliance on imported oil has been declining ever since shale oil production began to rise in 2008.  We remain skeptical on the long-term viability of U.S. shale production, but that’s a different story.  You can see our posts on the subject here and here.  Going back to China, what does this mean for Middle East exporters?

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Saudi Arabia establishes unemployment insurance to tackle persistent unemployment problem

Crown-Prince-UnemploymentPhoto courtesy of Arab News

In an attempt to start the new year running, Saudi Arabia decided to introduce unemployment insurance to help address the stubbornly high unemployment problem in the country.  The plan calls for both workers and employers to contribute to the scheme, which will payout a percentage of salary in the event workers become unemployed.  The plan has a lot of similarities to unemployment insurance in the US.  Proponents of the plan say that it will provide job security to over a million Saudis.  Opponents don’t see how this will solve the key issues of unemployment, which are structural.

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Ambitious Gulf investors to launch Islamic bank in Luxembourg with goal of serving wider European market

 

Islamic Bank in Lux

Gulf investors are again attempting to launch an Islamic bank in mainland Europe, this time in Luxembourg.  There have been previous attempts at launching Islamic banks in France and Germany, but they were never launched siting an unaccommodating banking regulator as the reason.  Other Islamic banks were launched in Switzerland over the years, but their objectives were very narrow in scope.  The UK, on the other hand, has been the most successful in this regard since it was the first Western country to adopt Islamic banking regulation.  Today, there are four Islamic banks operating in the UK, one retail and three investment banks.  Will an Islamic bank in Luxembourg be successful?

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