Brent crude oil soared more than 4 percent towards $59 a barrel on Thursday after Saudi Arabia and its Gulf Arab allies began a military operation in Yemen. The air strikes against Houthi rebels, who have driven President Abdrabbo Mansour Hadi from Yemen's capital of Sana’a, could stoke concerns about the security of Middle East oil shipments if the conflict widens. In order to export to Europe, Arab producers have to ship oil past Yemen's coastlines via the Gulf of Aden to get to the Suez Canal.
The governor of Morocco’s central bank has announced that the country’s first financial institution fully compliant with the principles of sharia will open in 2016. The launching of the Islamic finance industry is part of efforts to stimulate the Moroccan economy and attract more foreign investment. Morocco has already approved plans to create a committee of experts and sharia scholars, officially called the Sharia Committee, to monitor Islamic banking products and transactions and to decide on whether the bank’s transactions are in conformity with Islamic legislations.
Egypt's president has issued a decree to offer new bonds to the public to generate revenue to develop the Suez Canal area, where authorities aim to create new infrastructure and industries and draw foreign investment. The canal is currently undergoing expansion aimed at allowing two-way traffic starting in August. That project was also funded by a bond issue, which collected $8.5 billion in just eight days by selling non-tradable certificates with a maturity of five years at 12 percent interest to Egyptian nationals.
According to the International Monetary Fund (IMF), while the share of non-hydrocarbon output in GDP has increased steadily in many Gulf Cooperation Council (GCC) countries, the export diversification of these countries has been limited. The GCC countries have implemented policies to support economic diversification, including reforms to strengthen the business environment, develop infrastructure, and increase financing for companies and SMEs. But the IMF underscored that these countries need to further accentuate their diversification program to make their economies less reliant on volatile hydrocarbon revenues. Further diversification would create high-value-added private sector jobs for GCC nationals and would establish the non-oil economy that will be needed when oil reserves are eventually exhausted.