ROUNDUP: MIDDLE EAST
By Gordon Platt
Saudi Arabia announced a record budget for 2011, which includes $155 billion in spending, an increase of 7.4% from a year earlier.
Sunny outlook: Qatar's soccer stadiums will use solar power
Although the rate of increase in state spending is slower than in recent years, economists say the budget is stimulatory and that fiscal policy will be the key driver of economic growth in the kingdom again this year.
The world's largest oil exporter plans to spend heavily on schools, hospitals, transportation infrastructure, electric power and desalination plants. The budget, which projects a deficit, is based on a conservative oil-price estimate of about $55 a barrel, and likely will result in another big surplus for the government if the oil price holds near current levels.
Meanwhile, neighboring Qatar says it will not have to issue bonds to fund construction work for the 2022 soccer World Cup. Hamad bin Jassem bin Jabor al Thani, prime minister and foreign minister, says $100 billion of infrastructure spending was already planned for the next seven years on a new airport, port and railway, which will cover as much as 80% of what is needed to host the World Cup. Qatar will need to build or upgrade a dozen stadiums, however, which will be mainly solar-powered.
A major bank merger in Qatar appeared to be entering its final stages of negotiations last month. Al Khaliji Commercial Bank and International Bank of Qatar (IBQ) reported progress in proposed merger discussions. IBQ is 30% owned by National Bank of Kuwait.
Bahrain-based Arab Banking Corporation (ABC) agreed to acquire a 49% stake in Mediterranean Bank, based in Benghazi, Libya. ABC will also manage the bank, which has branches in Tripoli and Misurata. ABC has maintained a representative office in Tripoli since 1988.
In Dubai, Abraaj Capital, the largest private equity group in the region, acquired a 49% interest in Network International, which serves the electronic payments industry in the Middle East and North Africa. Abraaj agreed to pay some $539 million for the stake in the subsidiary of Emirates NBD.