Is Iraq war fueling the GCC's economic boom?

[SmoothRide]

http://english.aljazeera.net/NR/exeres/9B0F951E-65D2-4C22-80B3-5A477E8659B4.htm

"Since the US-led invasion and occupation of Iraq, the price of oil has steadily climbed upwards. A barrel of oil today costs twice as much as it did on the eve of combat, back in March 2003.


At the same time all six Gulf Cooperation Council (GCC) states - Bahrain, Kuwait, Oman, Qatar, the United Arab Emirates, and Saudi Arabia - have experienced levels of economic growth not witnessed since the 1970’s. (MORE READ)"

[Tinydancer]

http://english.aljazeera.net/NR/exeres/9B0F951E-65D2-4C22-80B3-5A477E8659B4.htm

"Since the US-led invasion and occupation of Iraq, the price of oil has steadily climbed upwards. A barrel of oil today costs twice as much as it did on the eve of combat, back in March 2003.


At the same time all six Gulf Cooperation Council (GCC) states - Bahrain, Kuwait, Oman, Qatar, the United Arab Emirates, and Saudi Arabia - have experienced levels of economic growth not witnessed since the 1970’s. (MORE READ)"


http://english.aljazeera.net/NR/exeres/350FB8C0-11C5-41A1-BC13-C493E891050B.htm?GUID={9B0F951E-65D2-4C22-80B3-5A477E8659B4}

A prolonged US occupation accompanied by present levels of violence may adversely affect foreign direct investment flows, lead to capital flight and make diversification away from dependence on hydrocarbons more difficult.

The sooner peace and stability return to the long-suffering Iraqi people the better it will be for the economies of the GCC and the world.

[Emilie Rutledge is an economist who is currently based at the Gulf Research Center in Dubai].

[JASONTL]

http://www.thebanker.com/news/fullstory.php/aid/3176/Broader_horizons.html


Foreign banks are gradually being allowed to enter Kuwait, a market where economic reforms have moved more slowly than many would like.

According to the governor of the Central Bank of Kuwait (CBK), Sheikh Salem Abdul Aziz al-Sabah, the move to allow a limited number of international banks and five Gulf Co-operation Council (GCC) banks to open branches is at the stage of approvals. Each of the GCC states’ national banks will be authorised to open “a single branch”, Sheikh Salem says.

First to enter are HSBC Bank Middle East, BNP Paribas (BNPP) and National Bank of Abu Dhabi. A few others are expected to follow, including Citibank and Standard Chartered. BNPP has started operations, and reports interest from local corporates keen to reduce their pricing.

The country’s major banks are not unduly concerned about this, as their traditional business is booming. Chief executive of the Bank of Kuwait & the Middle East (BKME), Michael Fuller, says the sector “is having a fairly buoyant time, based on a locally flourishing economy and the hopes of gaining an opening of trade with Iraq – though that is on the back burner right now”. He told The Banker he saw signs of movement in various sectors, “primarily [driven by] the oil price that gives the government a considerable surplus. A lot of economic activity stems from government expenditure in one sense or another, and things are looking fairly comfortable.”

While western forces remain mired in a difficult security situation, the Iraqi economy is slowly rebuilding, and Kuwait is a significant hub for this business. Trade Bank of Iraq is the institution established to kick-start trade finance after the US-led invasion in 2003. Run by a consortium of international banks, led by JPMorgan and including NBK, Trade Bank largely operates out of Kuwait City.