EconSource: Qatar to Spend Cautiously, Avoid Big Budget Deficit

Qatar will put together a state budget for 2016 that avoids a large deficit despite lower revenues resulting from low oil and gas prices, Emir Sheikh Tamim bin Hamad al-Thani said on Tuesday in a speech to the government’s Advisory Council. He suggested that government spending would become more cautious, saying that the budget “will take the fall in oil prices into consideration, so as to avoid a big budget deficit that may cause harm.” While Sheikh Tamim did not provide any specific figures, his speech suggested Qatar is moving away from double-digit spending increases that characterized the past decade. He said the government will continue to diversify the economy and spend on building infrastructure and social welfare projects. However, he also noted that Qatar will rely more on the private sector in the future and will provide it more room to operate without competition from state firms. He noted that a comprehensive review of all state-owned companies has been carried out and that he had directed the termination of subsidies for a number of those companies and the privatization of others. [Reuters, 11/3/2015]

Libya oil guard halts Zueitina port exports amid political rift
Libya’s Petroleum Facilities Guard has halted crude shipments from the Zueitina port indefinitely amid an escalating conflict between the country’s rival governments. Tankers seeking to load crude there must register with the National Oil Corporation (NOC) loyal to the internationally recognized government in Tobruk. Vessels registered with a rival NOC in Tripoli are “illegitimate” and will not be permitted to load at the eastern port, according to Petroleum Guard Spokesman Ali al-Hasy. The Tripoli-based NOC, which has been in charge at Zueitina, declared force majeure and said in a statement that the port was closed for all exports due to a “deteriorated security situation.” Meanwhile, the Tripoli government said it has given the Central Bank of Libya permission to pay a universal direct cash benefit to replace subsidies on basic goods such as fuel. [Bloomberg, 11/3/2015]

Egypt’s Banque Misr, NBE provide $800 million to cover imports
Egypt’s top state banks recently provided clients with over $800 million to release goods held up at ports due to a dollar crisis that is hindering imports, Banque Misr’s Chairman Mohamed Eletreby said Tuesday. “Over Thursday, Sunday, and Monday, Banque Misr and NBE have covered all the letters of credit and collection documents at the two banks, with a value over $800 million,” he said, adding that the two banks would continue to meet ongoing demand. Egypt has been facing a foreign currency crisis and, with more demand for hard currency than supply, many goods have been piling up at ports as importers wait for banks to supply them with the dollars they need to open letters of credit. Eletreby also said that Bank Misr plans to obtain a loan of up to $300 million in December to strengthen its dollar resources. A recent report shows that the Central Bank of Egypt’s foreign currency debt surpassed the value of its assets in September for the first time since 1992 by $560 million. [Reuters, 11/3/2015]

World Bank agrees to raise Egypt’s portfolio to $6 billion
The World Bank has agreed to raise its Egypt’s portfolio from $5.5 billion to $6 billion expected in a three year period (from 2015 to 2017), according to Egyptian Minister of International Cooperation Sahar Nasr. Part of that funding would go to a $3 billion loan for budget support currently in negotiation. The rest of the funding would be used as “investment loans based on national projects” focused on housing, industry, and sanitation. Nasr said the bank is willing to support Egypt’s budget because the government has developed a reform program and begun addressing development issues. “Since the 25 January Revolution in 2011, Egypt has not been able to receive budget support from the World Bank. Now the bank is highly considering securing the amount,” she said. Nasr said the loan is expected to have an interest rate of 1.68 percent, a five year grace period, and will be paid over thirty-five years. [DNE, 11/3/2015]

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