International Monetary Fund (IMF) Chief Christine Lagarde urged Gulf Arab oil states on Sunday to introduce radical tax and spending reforms in light of the drop in global oil prices. At a meeting with Gulf Cooperation Council (GCC) finance ministers in Doha, Lagarde said GCC governments needed to do more to control their budget deficits. Lagarde urged Gulf countries to institute “firm control” on spending, particularly on public sector wages, and encourage private sector growth. “Given the new fiscal realities, there is not room for public wage bills to grow further. We have to face that reality,” she said, emphasizing that “well-planned fiscal consolidation strategies need to be put in place as soon as possible.” She also urged GCC countries to introduce a regional value-added tax. On Monday, oil ministers from Saudi Arabia and the United Arab Emirates rebuffed the IMF’s concerns. Saudi Vice Oil Minister Prince Abdulaziz bin Salman said long-term oil market fundamentals remain robust. Emirati Energy Minister Suhail Mohamed al-Mazrouei said he expects oil prices to rebound in 2016. Meanwhile, on Sunday, Chairman of Saudi’s state-owned Aramco Khalid al-Falih said the company has no plans to cut oil production. However on Monday, Oman’s Oil Minister Mohammed Bin Hamad al-Rumhy called current oil production levels “irresponsible.” [Reuters, AFP, 11/8/2015]

Focus at Dubai Airshow shifts to military needs
A number of military purchases were announced on Monday at the Dubai Airshow. The United Arab Emirates announced a $1.27 billion deal for upgraded Saab surveillance systems aboard newly acquired Bombardier aircraft. Lockheed Martin announced it has been awarded a $262.8 million contract from the US Air Force to service Saudi Arabia’s F-15 sniper targeting system, search and track sensors and radars that allow for day and night low-level navigation. Embraer Defense and Security said Lebanon would acquire six A-29 Super Tucano turboprop aircraft. Meanwhile, Dubai-based carrier Emirates announced the signing of another twelve-year services contract worth $36 million with General Electric (GE) Aviation. The deal means GE Aviation will be tasked with maintenance, repair, and overhaul of the GE9X engines that power the airline’s fleet of 150 Boeing 777X aircraft. [AP, 11/9/2015]

Libya’s Tripoli NOC sees full backing for state oil company unity
Libya’s oil partners and the international community fully back keeping the National Oil Corporation (NOC) united and reject attempts by Libya’s internationally recognized government in Tobruk to institute a parallel oil revenue system, according to NOC Tripoli Chief Mustafa Sanalla. “The international community, the international companies, and also governments are supporting the NOC to be united and to be one body,” he said. Despite moves taken by the Tobruk government, Sanalla said the way oil transactions are handled has not changed. “The system still works properly and is functioning well for NOC trading and the central bank. All the money is in the same procedure. It is very clear and transparent,” he said. Sanalla said current national oil production is around 415,000 barrels per day (bpd) with exports at 320,000-330,000 bpd. He said negotiations to reopen El Sharara oilfield, which has been closed for a year, and the El Feel oilfield are in their “last stages.” Reopening those oilfields would boost national oil output to 450,000 bpd. [Reuters, Libya Monitor (subscription), 11/8/2015]

Egypt state banks launch products with 12.5 percent interest rate to support pound
Egypt’s two largest state banks have launched savings certificates for the Egyptian pound with an interest rate of 12.5 percent in order to support the currency, local media and bankers said on Sunday. A Cairo-based banker said the increase is significant as the average interest rate at Egyptian banks is currently about 10 percent. He said the decision aims to “support the pound and take pressure off foreign currencies.” He noted that the central bank will have to hike interest rates in its next meeting, “otherwise these banks will be under pressure with very low margins.” An official from Banque Misr also said that the launch of the certificate is a preemptive step before raising interest rates. He said he expects other banks to follow suit and raise their interest rates. Meanwhile, yields on five-year and ten-year Egyptian treasury bonds rose marginally at an auction on Monday. [Reuters, 11/8/2015]

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