The Islamic State (ISIS or ISIL) has announced plans to halve the monthly salaries of its members in Syria and Iraq. The Syrian Observatory for Human Rights (SOHR) published what it said was an official statement from ISIS announcing the cuts. “Because of the exceptional circumstances that the Islamic State is passing through, a decision was taken to cut the salaries of the mujahedeen in half,” the statement said. “No one will be exempt from this decision no matter his position, but the distribution of food assistance will continue twice a month as usual,” it added. According to SOHR, the salary cuts meant Syrian ISIS fighters would see their salaries drop to about $200 a month. Foreign fighters, who are paid double compared to Syrian militants, would have their monthly income reduced to $400. The financial strain could be a result of intensified air strikes on its oil infrastructure in Syria and Iraq. [The Guardian, CNN, Daily Mail, 1/19/2016]

IMF backs Saudi Arabia, Gulf spending cuts amid slow growth
Cutting government spending and reducing subsidies are necessary steps for Gulf countries to adjust to the “new reality” of lower crude prices, although economic growth will be squeezed in the short-term, according to the International Monetary Fund (IMF). The IMF warned in October that Saudi Arabia, Oman, and Bahrain risked draining financial assets within five years if governments maintained their existing spending. Saudi Arabia’s fiscal consolidation has been more ambitious and speedier “than what had been anticipated earlier and one of the consequences will be to see dampening effect on non-oil growth,” the IMF’s Middle East Chief Masood Ahmed said. Non-oil economic growth in the kingdom is expected to slow to about 1 percent this year and just over 2 percent next year, compared with 3.5 percent in 2015, he said. “This consolidation, along with the other measures that have been signaled on privatization and restructuring of the economy, should also lay the basis for stronger growth,” Ahmed said. [Bloomberg, 1/20/2016]

Turkey’s central bank shelves monetary policy shift despite soaring inflation
Turkey’s central bank kept interest rates steady on Tuesday, delaying a long-promised policy shift for a second consecutive month as the lira hits record lows and inflation remains high. The bank’s Monetary Policy Committee said in a statement that kept the benchmark one-week repo rate at 7.5 percent and left unchanged its interest-rate corridor, ranging from the overnight borrowing rate of 7.25 percent to the 10.75 percent overnight lending rate. “Taking into account inflation expectations, pricing behavior and the course of other factors affecting inflation, the tight monetary policy stance will be maintained,” the bank said. After defying market expectations in December, the bank said it would embark on gradually scrapping the broad interest-rate corridor for a single benchmark rate when financial volatility decline. However, they omitted that clause from their statement on Tuesday. “The simplification process is shelved for now,” Chief Economist at Türk Ekonomi Bankası in Istanbul Selim Cakir said. “We maintain our assumption that the bank will hold the rates steady going forward.” [WSJ, 1/19/2016]

BP remains ambitious on gas in Egypt, despite weak oil prices
British Petroleum (BP) aims to double natural gas production in Egypt over the next four years despite weak oil prices. Egypt is attempting to ramp up oil and gas production by signing exploration contracts, renegotiating production prices, and lobbying companies to speed up projects scale back. Through joint ventures with Italy’s Eni and the Egyptian government, BP currently produces 10 percent of Egypt’s oil production and 30 percent of its gas. The company says it has no intention of backtracking on its pledge to speed up production at recent discoveries. “BP’s plan is to double our gas production in Egypt, before the end of this decade,” said BP North Africa Regional President Hesham Mekawi. BP currently produces around 1.4-1.5 billion cubic feet of gas per day in Egypt. Mekawi said Egypt’s energy sector growth could allow the country to become a regional hub. Egypt “has all the fundamentals – infrastructure, facilities, location … to be used both for the domestic market, which is huge, and for export,” he said. [Reuters, 1/29/2016]

Tunisia launches EU-funded mechanism to promote tourism sector
Tunisia launched on Tuesday a EUR 1.4 million mechanism funded by the European Union (EU) to promote the quality of the country’s tourism sector. The project, which provides for the exchange of expertise between Tunisia, France, and Austria, will help upgrade 20 tourism companies between now and September 2017. The project will later be expanded to other companies and will include hotels, travel agencies, restaurants, and information offices in airports and transit points. EU Ambassador to Tunisia Laura Baeza said, “Quality has become vital to resolve the crisis faced by the [tourism] sector after the tragic events that hit Tunisia in 2015.” Tunisian Minister of Tourism and Handicrafts Selma Elloumi said quality is central part of Tunisia’s tourism restructuring strategy. [TAP, 1/19/2016]

Also of interest
Saudi stocks plunge as Mideast markets retreat amid oil slump | Bloomberg
Saudi Arabia said to plan first debt sale of 2016 next week | Bloomberg
Sources say Saudi spare oil capacity complicates any Aramco listing | Reuters
Saudi cuts advance payments to firms for state contracts | Reuters
Gulf looks to renewables to avoid water crisis | Bloomberg
Iraq proposes deferred payment for CNPC oilfield development | Reuters
Egypt tourism receipts down 15 percent in 2015 | Ahram Online
Tunisia to set of borrowing from international financial market this week | TAP
Tunisian parliament approves MTD 115 million loan from AfDB | TAP
Tunisian parliament passes loan agreement with AFESD | TAP
Turkey to offer fuel subsidies for flights to bring back tourists | Reuters