Emerging Markets: Middle East

Roundup

 

By Gordon Platt

 

While the world's attention was focused on the post-election violence in Iran last month, political developments in neighboring Iraq took a happier turn. Iraqi Kurds and the Iraqi central government worked out an agreement to allow oil from the Kurdish self-ruled region to be exported by pipeline through Turkey for the first time. The Kurds and Baghdad have long been at odds over management of the oil fields and sharing of the national wealth. The northern Kurdish region has up to 45 billion barrels of Iraq's 118 billion barrels of oil reserves. Oil from the Tawke and Taq Taq fields of the north will be exported through the Kirkuk-Yumurtalik pipeline to Turkey's Mediterranean port of Ceyhan for export to world markets.

 

In Lebanon, Saad Hariri, the son of assassinated former prime minister Rafik Hariri, was selected as the new prime minister by the newly elected parliament on June 27. With a stable new government, Lebanon's economy is likely to grow by about 3% in 2009, as reforms and privatizations resume and tourists feel more comfortable traveling to the country, according to a report by Standard Chartered. The UK-based bank adds, however, that lasting stability will depend on a rapprochement between Saudi Arabia, which supports Hariri, and Syria, which is a big proponent of the opposition. The United States announced on June 24 that it would send its ambassador back to Syria after a four-year absence.

 

In Dubai, Emaar Properties says its proposed merger with Dubai Properties, Sama Dubai and Tatweer would create a real estate conglomerate with combined assets of about $53 billion. The three property companies with which Emaar plans to merge are all owned by Dubai Holdings, an investment arm of the government. Emaar, which is building Burj Dubai, the world's tallest building, already was the largest property developer in the Middle East. The merger announcement was greeted by a 10% fall in Emaar's stock price, as investors worried about a potential dilution in the value of their shares. The transaction is expected to be completed in about four months and could trigger further consolidation in Dubai's property sector.

 

Saad Hariri, Lebanon's new prime minister
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