Baghdad and KRG agree to cooperate on economic reform
A delegation from the Kurdistan Regional Government (KRG) met Sunday with the Iraqi government and agreed to cooperate on reforms aimed at addressing an acute economic crisis. The Kurdish delegation, led by KRG Prime Minister Nechirvan Barzani, met with Iraqi Prime Minister Haider al-Abadi and other senior government officials. Abadi’s spokesman Saad al-Hadithi said further meetings with the KRG will be held on a regular basis. Iraqi Finance Minister Hoshiyar Zebari said last week that the economic crisis is forcing the KRG to consider reviving a deal with Baghdad to reinstate the region’s budget share in return for exporting oil under state auspices. Iraq on Saturday expressed willingness to accept a decision by the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC members to cut crude production. Meanwhile, the KRG said Monday that it will pay international oil companies according to their contractual entitlements in 2016. [Reuters, 1/31/2016]

Saudi Arabia willing to cooperate to support oil
Saudi Arabia wants to cooperate with other oil producers to support the oil market, Saudi-owned Al Arabiya television reported on Sunday, quoting an unnamed Saudi source. The source also said that the kingdom was not the source of a proposal to cut oil production. Russia said on Thursday that OPEC had proposed oil production cuts of up to 5 percent. The Saudi source said that the proposal was not new. Saudi Arabia has said it is willing to act to stabilize prices, but that other higher-cost producers must also reduce their output. [Al Arabiya, Reuters, 1/31/2016]

IMF says Bahrain should cut deficit as oil prices fall
The International Monetary Fund (IMF) on Friday urged Bahrain to take “sizable” steps to reduce its growing budget deficit as falling oil prices have sharply reduced exports and government revenues. The warning followed the IMF’s annual consultation with Bahrain. The IMF said it forecasts Bahrain’s gross domestic product (GDP) growth will fall to 2.2 percent in 2016 from 3.2 percent in 2015 and 4.5 percent in 2014. The country’s budget deficit will remain high at 15 percent of GDP. “With the oil price decline expected to persist over the medium term, external and fiscal vulnerabilities have intensified, and consumer and investor sentiment has weakened,” the IMF said in its review. Finance Minister Sheikh Ahmed bin Mohammed al-Khalifa said Bahrain is planning austerity steps to cut its budget deficit in line with IMF recommendations. “Bahrain’s Government Action Plan, currently underway, includes wide-ranging measures that will ensure the sustainability of Bahrain’s financial resources and development, benefiting the entire country,” he said. [Reuters, 1/29/2016]

Egypt raises customs levy on imported goods
Egypt has placed new import duties on luxury goods, applying a presidential decree published in the official Gazette on Sunday aimed at steering demand toward local products. The affected goods include household appliances, consumer electronics, clothing, perfumes, pens, lighters, watches, and nuts. Customs tariffs were raised by as much as 100 percent on items like some fruits and nuts, while duties on other goods were increased between 25 percent and 50 percent. Head of Egypt’s Customs Authority Magdy Abdel Aziz said the new tariffs would help local industry and “lessen pressure on foreign currency” demand. “The decision to raise tariffs on 500-600 imported commodities will up the customs toll by EGP 1 billion ($128 million) during the second half of fiscal year 2015/16,” he said. [AP, Bloomberg, Ahram Online, 1/31/2016]

Egypt to launch agricultural commodities bourse by year-end
Egypt plans to launch an agriculturally focused commodities trading exchange, the first of its kind in the Middle East, by the end of 2016, Supplies Minister Khaled Hanafi said Monday. Hanafi said its will protect small farmers from volatile price swings and help to connect their output to supply chains. “Egypt is the biggest importer of grains, and it will benefit from this, turning this from a point of weakness into a strength as Egypt becomes a point of exchange for the whole region,” he said. The next step is to draw up regulations and establish the electronic infrastructure that will connect traders with farmers, he added. Egypt announced plans to set up a global commodities center in 2014, but gave few details at the time. [Reuters, 2/1/2016]

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