Egypt’s Historic Vote is Underway!

At long last, voting is underway in Egypt!!! Citizens queued from early hours to vote for the first president since overthrowing Hosni Mubarak in February 2011. It’s been a tumultuous road to get to this day, but even from thousands of miles away I can sense the excitement of my Egyptian friends and family, many of whom voted today for the first time in their lives. I happen to be a junkie of political cartoons and have been collecting many along the way to Election Day.

Here are a couple I wanted to share. (I will be writing an editorial on the election in a few days when we have a better indication of how the people voted).

Which one is your favorite?!! (I think the one of Obama is my favorite!)

 

Al Jazeera’s (R)Evolution?

Here’s a study I was pleased to contribute to a new-ish e-zine called Jadaliyya which focuses on Arab affairs.

by Vivian Salama

Jadaliyya (click here for original link)

In March of 2011, an unusually forthright editorial by an anonymous writer made its way into The Peninsula Qatar, an English language daily bankrolled by a member of the emirate’s ruling family. At the time of publication, protesters had already toppled the presidents of Tunisia and Egypt, uprisings were in full swing in Libya and Yemen, and in the Persian Gulf, Bahrainis were gearing up for what would prove to be a bloody battle, only days after the op-ed ran.

“Businesses and institutions are treated as ‘holy cows,’” the author wrote in the editorial, entitled “Why are we so timid?”

“What essentially ails the Qatari media (English and Arabic-language newspapers) is the absence of a comprehensive law that specifies its role in a clear-cut way and seeks to protect it against the people and interests opposed to free expression or those who cannot appreciate criticism,” the op-ed read.

It was at about the same time that this editorial ran that Al-Jazeera Arabic, the renowned television network that essentially put Qatar on the map, started facing a dilemma. The network has found it increasingly difficult to distance itself from the growing political ambitions of its patron, Qatar, particularly as it is kept alive by the one hundred million dollars it receives annually from the Qatari government. Moreover, the wave of information now available to the masses via the Internet and satellite television has exposed the gaps in its reporting of issues that do not fall in line with the government’s agenda, while also highlighting its biases in the various uprisings. (more…)

Egypt’s Muslim Brotherhood Woos Washington

Look who’s visiting Washington!!

Egypt’s Muslim Brotherhood Woos Washington

By Vivian Salama

The Daily Beast

Click here for original story

There was once a time when U.S. officials shunned Arab Islamist parties, frowned on their election victories, and denied them U.S. visas. But times are changing.

Delegates from Egypt’s Freedom and Justice Party, a group affiliated to the Muslim Brotherhood, are in   Washington for their first official visit since Hosni Mubarak was toppled last year. Only days after announcing their party’s candidate in the first presidential election since the revolution, the visiting delegates have met with members of Congress and White House officials and held public discussions at Georgetown University and Carnegie Endowment for International Peace.

Outlawed under the Mubarak regime, members of the Muslim Brotherhood and more hard-line Salafist parties have emerged, not surprisingly, as a powerful force in the Egyptian elections, thwarting the secular groups that are believed to have been the drivers of last year’s revolution. As a group that founded itself on the principles of grassroots activism, the Muslim Brotherhood has long resonated with the people of Egypt, where at many as 30 percent of the population lives below the poverty line, according to the United Nations.

The delegates sent to Washington were all articulate English speakers, two of whom hold doctorates from U.S. institutions. They were non-evasive, answering impassioned questions from the Georgetown audience about religious persecution and Sharia law. The message was not specifically linked to Islam. They did not criticize—or even mention—Israel. They stressed that Egypt is open for business and encouraged free trade and foreign direct investment. (more…)

“The Protester”: A Photo Journal of the Egyptian Revolution

Thanks to TIME Magazine for recognizing the revolutionaries all over the world… I’ve been meaning to write this for quite some time but only finding the chance to do it now.

A year ago when Mohammed Bouazizi, a fruit vendor in Tunisia, burned himself out of frustration from a political system that neglected him, I was en route to Beirut ahead of the Christmas holiday and writing, mainly, about the credit crunch in the Arab Gulf states and mounting concerns that the banking system would not soon recover from the blow. Days after I returned from Beirut, my host, Rania Abouzeid, came to stay with me in Dubai in a desperate attempt to fly to Tunisia, where flights were almost entirely grounded amid an uprising across the country. It was hard to imagine then that the desperate act of this young man not only set in motion a revolution in his country, but around across the region.

Jan. 27, 2011: me and Rania Abouzeid heading to Cairo (at 3am -- ughhh!!!)

On January 14, 2011, following a month of violent protests against his rule, Zine El Abidine Ben Ali – Tunisia’s president since 1987 — was forced to flee to Saudi Arabia along with his wife and their three children.  A week later, Rania and I were on a flight to Cairo where calls for a revolution had begun to circulate on social media websites. They were days I will never forget, and with TIME Magazine’s 2011 Person of the Year issue being dedicated this year to The Protester, I want to share with you all a few memories and photos of the protesters I met in Cairo this year. (Click here to read some of my stories on the Arab Spring)

On January 27, two days after the protests officially begun, Internet and mobile phone service was completely cut off in Egypt and we were left guessing where crowds were gathering. After trying a few spots around town, Rania and I decided to go toward the Mohendiseen neighborhood near the Moustafa Mahmoud mosque. It was a good guess! About 500 protesters had gathered after Friday prayers where they came face to face with riot police chanting slogans like “The people want the end of the regime” and “Hosni Mubarak: illegitimate.”

We began to march, with the intention of going toward Tahrir Square. (Rania and I were quickly separated in the crowd and were each forced to continue reporting on our own). Weaving through side streets and alleys in the Cairo neighborhood, people watched us from balconies, throwing bottles of water, garlic and onions, and bottles of vinegar – all simply remedies for tear gas inhalation, because everyone knew what lie ahead.  The longer we marched, the more the crowd swelled, with protesters called on those people in their homes not to be afraid.

Cairo, January 27, 2011/Photo by Vivian Salama

Cairo, January 27, 2011/Photo by Vivian Salama

Jan 27: Protesters Near Moustafa Mahmoud Mosque/Photo by Vivian SalamaS

Sure enough, we were quickly confronted by tanks and soldiers firing tear gas at the crowd. I’ve never seen so much camaraderie in my life. Soldiers at a nearby military hospital threw medical masks at the protesters and pharmacists handed them out to the crowds. At one point I felt quite ill from the tear gas. A man approached from behind me and pressed a vinegar-covered mask against my mouth and nose. A nearby vendor (who probably struggles to feed his own family with the pennies he earns) emptied his refrigerator, handing out water bottles and cans of soda to the fatigued protesters.

Every where I looked, people were helping each other, helping strangers tie their masks, sharing water bottles, aiding those who were most affected by the gas.

There was one point, marching with the crowd from Mohendiseen, when we approached a major intersection and I heard roaring cheers. I jumped up on a car to see what had happened and was personally overcome by emotion. From three different directions, massive groups of protesters were approaching the intersection – the other groups coming from as far as Giza and the Nasr City. They did this without Internet or mobile phones.

Cairo, January 27, 2011/Photo by Vivian Salama

Groups of young men pushed to the front of the crowd and began to battle riot police, taking over their vehicles and chasing them away. Our group, now numbered in the hundreds of thousands, pushed slowly across the historic Qasr El Nil bridge in an attempt to move into Tahrir. There were moments when I worried that an attack by the military would trigger a stampede – we were stuffed tightly onto the bridge. But every time protesters began to push back, the young men in the crowd would grab the women in the crowd and push them against the bridge railing so to protect them from being knocked down.

Some were more prepared than others!! Cairo Jan. 27, 2011/Photo by Vivian Salama

It was a long night with protesters burning the ruling National Democratic Party headquarters and battling with soldiers in Tahrir. Riot police trucks were set on fire (and the Semiramis Hotel, where many journalists took refuge) was partially on fire for part of the evening. I was trapped in Tahrir for the night and forced to take a last minute room at the Semiramis. I woke up early the next morning to a different Cairo, where charred military tanks stood in the middle of Tahrir Square and smoke billowed from the NDP headquarters and, sadly, from the adjacent National Museum. It would take another two weeks (only!) to overthrow Hosni Mubarak but that first Friday was by far the most memorable. There is an Arabic expression that often refers to the Egyptian people as being “light blooded” (light hearted/good senses of humor). They definitely showed their spirit throughout the frustrating 19 days (and 30 years) it took to shake up their political system.

Tahrir Square, January 28, 2011/Photo by Vivian Salama

Tahrir Square, January 28, 2011/Photo by Vivian Salama

me in Tahrir (late January 2011)

I visited Bahrain in the weeks that followed and I spent a lot of time covering the uprisings in Yemen and, less so, the ongoing crisis in Syria. After years of battling misguided stereotypes of terrorism and violence, these protesters have showed the world that they desire freedom and a decent standard of living and they have the right to demand it just as those in Europe and the US demand of their governments.

The Tunisians, Egyptians and all the other citizens around the world fighting for democracy have a very long and bumpy road ahead.  The TIME Magazine Person of the Year issue questions whether there is a global tipping point for frustration. I believe what happened this year is, in large part, because of overpopulation and because of the global economic slowdown touched societies rich and poor – but toppled those that were already on the brink before markets crash. The world is smaller than ever thanks to the Internet and various technologies that allow us to share experiences with people on opposite corners of the world. As we continue to get closer, and the world, smaller, it will become impossible to distance ourselves from even the most seemingly remote events.

Cairo, January 27, 2011/Photo by Vivian Salama

The U.A.E.: 40 and Fabulous?

Abu Dhabi at 40 //Photo by Tala Al Ramahi (@journalist_tala)

 As some of you may know I just moved back to New York last week after living in the Middle East for much of the last 10 years, most recently in the United Arab Emirates, which is today celebrating its 40th anniversary. There is no doubt that the UAE has accomplished pretty spectacular things in 40 years, fueled greatly by the abundant oil wealth of Abu Dhabi, which holds more than 90 percent of the crude in the country, and about 7 percent of the world’s proven oil reserves, according to BP data.

Burj Khalifa // Photo by Vivian Salama

The country is home to the world’s tallest building, the Burj Khalifa in Dubai, one of the world’s biggest malls, the world’s largest dancing fountains (I must confess, the fountain is rather amazing), the only manmade island visible from space and one of two gold vending machines in the world!

Dubai dancing fountain // Photo by Vivian Salama

It is, undeniably, a remarkable accomplishment given that just 40 years ago the emirates, prior to unification and the discovery of oil, earned much of their income from pearl diving and exporting dates.

The pride of its citizens is something to be admired, and for weeks (even before I departed for the US), skycrapers were covered from top to bottom in lights of white, green, red and black, the colors of the UAE flag. Emiratis, the citizens of the UAE, wore scarves and jewelry with the colors of the flag, and cars were covered, literally, in photos of leaders past and present.

But a challenging road lies ahead for the UAE, particularly after this year’s events in the Middle East, where longtime dictators were forced out by popular uprisings. There is one clear advantage the UAE has over countries like Egypt, Syria, Libya and Yemen: it’s citizens are not poor. There are parts of the country that are in great need for updated infrastructure – roads, power lines, etc – but citizens are, at worst, comfortable thanks to lifetime handouts by the government. (Click here for my story Abu Dhabi’s Spending on Soccer and Skyscrapers Masks Slower Times at Home)

But citizens of the UAE are hungry for one thing: opportunities. Currently, foreigners make up about 85 percent of the country’s population – the majority hailing from countries on the Indian subcontinent. British/Western European, Canadian, Australian and South African expats hold many of the high paying white-collar positions, in SOME cases because they are better trained to do so, leaving few high profile jobs for the locals.

Emiratization, a policy now enforced by the government in many workplaces, seeks to boost Emirati employment whether by providing training and education for Emiratis, or setting quotas in certain sectors for Emirati employment. Ultimately the government is trying to prevent their own talented citizens from being lured to the West. But many critics believe that the UAE cannot afford to lose its foreign workers as they may have been the driving force for the country’s speedy success in the first place. In the meantime there is growing resentment among foreigners who, despite making up the majority of the population,  have few rights. There is no legal protection on property rights, and police, in practice, do not need a reason to stop, question or even detain people.

Another challenge is maintaining the “vision” set by the country’s founders some 40 years ago. Seldom was there a day in the UAE that I did not hear someone refer to the “vision.” Abu Dhabi and Dubai have set urban planning roadmaps for diversifying their economies away from oil and expanding certain sectors (services, real estate, alternative energy, etc). However, the global economic crisis dealt a massive blow to the once seemingly invincible UAE and its seemingly invincible real estate market. Slowly we’ve seen the country scale back, but its officials still maintain that the overall “vision” is intact and on track. We shall see.

Photo by Vivian Salama

Finally, a problem facing many of the Gulf sheikhdoms: succession. The country’s founder Sheikh Zayed bin Sultan Al Nahyan has been dead for 7 years now but his legacy undeniably lives on. The question is whether his sons, the current President Sheikh Khalifa and Abu Dhabi’s Crown Prince Sheikh Mohammed, can continue the vision he laid out for the country 40 years ago. Many experts I’ve spoken with believe that the vision of the two brothers has grown less cohesive, and the two have developed mini “kingdoms” – investing money in projects that are too different, both from each other and from that envisioned by their father.

The government is so private in nature (painfully so) that it’s always hard to know exactly what is going on behind the scenes. But given Dubai’s economic disaster and, more recently, Abu Dhabi’s problems, it raises a lot of questions as to who is calling the shots. The country enjoys making a splash, and it’s served them well, but if it genuinely wants to keep out of the spotlight during tougher times, it may want to adopt a more humbled approach over the next 40 years. (ie, no more $20 million hotel debut parties, ok?)

Dubai Atlantis Hotel Opening Show - December 2008

Good luck UAE. I am excited and eager to see what you have up your sleeve for the next 40 years!!

Oil-Rich Libyans Won’t Need Foreign Financial Backing in Post-Qaddafi Era

Alaa Shahine and Vivian Salama

click here to view original

(Bloomberg) — Libyan rebels needed NATO’S military might to bring Muammar Qaddafi’s rule to the brink of collapse. About $50 billion in cash abroad means they can do without foreign aid to rebuild the country after a six-month conflict.

Airstrikes and logistical support from North Atlantic Treaty Organization forces helped reverse the tide in Libya, stopping the advance of Qaddafi’s troops on rebel strongholds and allowing the opposition to score military victories that culminated in a sweep into Tripoli this week.

As the rebels hunt Qaddafi and his remaining followers in the capital, world leaders such as German Chancellor Angela Merkel are urging the release of frozen Libyan assets abroad to help in the transition to democracy. Those assets and Africa’s largest oil reserves set Libya apart from neighboring Tunisia and Egypt, which sought outside financial aid after popular revolts ousted their leaders this year.

“We don’t need loans,” former Libyan Central Bank Governor Farhat Bengdara, who broke with Qaddafi’s regime in February, said in an interview in Dubai. “Libya has huge financial resources and oil reserves. What it needs is the cooperation of the international community to lift the freeze on Libya’s assets aboard.”

The Libyan economy suffered as much as $15 billion in damage during the conflict, according to Bengdara’s estimates. An economic recovery and the release of frozen assets will depend on how fast the rebels can stabilize the country and establish a government, say analysts including Paul Sullivan, a professor at the National Defense University in Washington.

Bank Deposits

The central bank and the Libyan Investment Authority, the country’s sovereign-wealth fund, have about $168 billion in assets abroad. About $50 billion of that is in bank deposits in European countries including Germany, the U.K., France, Italy, Portugal, Spain, Sweden, Belgium and the Netherlands, Bengdara said. The two institutions also hold about $40 billion in U.S. and European government bonds, he added.

France is working on a United Nations Security Council resolution to release funds to the rebels’ National Transitional Council, a Foreign Ministry spokesman, Bernard Valero, told reporters in Paris today.

“For France, as for all our partners, the priority is to help Libyans to take back their destiny in their hands,” he said. “The Transitional Council must have access to the necessary financial resources.”

Frozen Assets

The U.S. government is working to release between $1 billion and $1.5 billion in frozen assets to the rebels for humanitarian purposes, State Department spokeswoman Victoria Nuland said yesterday. The rebels are in talks with the U.K. to release Libyan banknotes frozen since the crisis began, Aref Nayed, a spokesman for the NTC and envoy to the United Arab Emirates, told reporters in Dubai late yesterday.

The resources will offset the losses that the economy has incurred, according to Suliman Al Shahomy, chairman of the Libyan Stock Market, who broke with Qaddafi’s regime in February.

“The infrastructure hasn’t been destroyed,” he said in a telephone interview from Cairo.

Oil and equity investors rejoiced after the rebels entered Tripoli. The prospects of Qaddafi’s four-decade rule ending helped shares of Eni SpA, the biggest foreign investor in Libya, Ansaldo STS SpA and Total SA gain. Brent oil fell, narrowing its record premium to the main U.S. grade, on bets Libya’s output will recover.

No Debt

Libya doesn’t have outstanding debt. The conflict prompted Fitch Ratings to withdraw all of its credit ratings on Libya on April 13, citing “extreme political instability” and the loss of oil production.

Libya’s oil output, at about 1.58 million barrels a day before the revolt according to Bloomberg data, slumped to a trickle after fighting broke out, according to the International Energy Agency. Output may reach as much as 350,000 barrels a day within three months “if we’re lucky,” said Samuel Ciszuk, the London-based senior Middle East and North Africa energy analyst at IHS Global Insight.

“Until we see stability, it will be hard for the oil industry to recover,” Ciszuk said by telephone. “It’s all about bringing what is there back on stream as soon as possible. Some will be a bit hard to bring back on stream. There’s been some long-term damage to some of the older oil fields because they were shut down in a rushed and disorganized manner.”

‘Sudden Takeover’

Even so, oil production will recover more quickly than forecast after the “sudden takeover” of fields and export facilities by rebels, Goldman Sachs Group Inc. said in a report this week. Libya will probably boost supply to 585,000 barrels a day in the next 12 to 18 months, Goldman said.

Libyan rebels will restart the Zawiya refinery “in the coming weeks” because its infrastructure was preserved during fighting, Ahmed Jehani, chairman of the rebels’ stabilization team, said in an interview. Next, work will resume at the Tubruk refinery, followed by the facility at Ras Lanuf, Nayed said.

Qaddafi came to power in 1969 after he toppled Libya’s monarchy in a military coup. His attempts to export his self- styled revolution to other countries put Libya under U.S. and UN sanctions in the 1980s and 1990s. Qaddafi’s government was also accused of sponsoring terrorism, and a Libyan man, Abdel Basset Al-Megrahi, was convicted of the bombing of a Pan Am airliner over Lockerbie, Scotland in 1988.

After 2000, Qaddafi renounced terrorism and gave up a nuclear-weapons program. That led to international sanctions being lifted and boosted the economy, which expanded 4.2 percent in 2010, according to the International Monetary Fund.

Tourism Opportunities

Oil aside, the economy offers investment opportunities in industries including tourism, mining, agriculture financial services, according to Bengdara, 45.

International and Arab banks including HSBC Holdings Plc, Standard Chartered Plc, Unicredit SpA and Mashreqbank PSC had applied to set up units in the North African country. Unicredit, Italy’s biggest lender, said in August last year it had won a license.

“Libya can become the star of the region,” Bengdara said. “Libya’s economic output, which was about $80 billion before the revolution, can easily double in no longer than 10 years.”

Even so, lingering protests, labor strikes and political bickering in Tunisia and Egypt show that the transition toward democracy in Libya may not be easy, Raza Agha, a London-based economist at Royal Bank of Scotland Group Plc, said in a report on Aug. 22. In fact, Libya may have a harder time, according to Sullivan of the National Defense University.

‘Gutted the Government’

“Libya may have the toughest transition of all of them in North Africa,” Sullivan said by e-mail. “Qaddafi gutted the government and there really seems to be almost no understanding amongst many there about how to transition to a vibrant economy and democracy. Platitudes and hopes are not policies that can be implemented.”

Uncertainty about the nature of the post-Qaddafi government may also delay the release of frozen funds, Stuart Levey, a former U.S. Treasury undersecretary, told Bloomberg Television’s “In Business with Margaret Brennan.”

Having the assets still frozen can be used “as a point of leverage for the United States and its allies to ensure that they have a legitimate government they can trust in Libya they can give this money to,” Levey said.

Beltone Financial Holding (BTFH), an Egyptian investment bank that suspended its brokerage services in Libya after the fighting broke out, still regards the North African country as a lucrative business opportunity, Chief Executive Officer Aladdin Saba said today.

“The picture is not yet clear,” he said in a telephone interview from Cairo. “But of course Libya is on our map and we hope stability is achieved quickly so that we can contribute to the rebuilding of the country.”

Yemen Shortages Worsen as Street Violence Leaves Locals Searching for Food

By Vivian Salama and Mohammed Hatem

Bloomberg

Click here to see original

Safiah Hussein al-Raimi stood for hours outside a store in Yemen’s capital, Sana’a, for five straight days to buy a tank of cooking gas to prepare food for her husband and four children. She left empty handed each time.

“Life is becoming hell here and we can’t afford it,” al- Raimi, 43, said as she lined up during her fifth attempt. “We have no gas, no power, not enough food.”

As President Ali Abdullah Saleh clings to power and Yemen edges closer to civil war, the country has become paralyzed by shortages of fuel, bread, sugar and milk. Power cuts, which were the source of riots in the south last year, are now commonplace across the country, already the Arab world’s poorest and a base for al-Qaeda terrorist activity.

With the wave of popular uprisings in the Middle East in its fifth month, the issue of how long Saleh’s regime will last in Yemen is being compounded by the question of what would be left of the country should he be ousted.

“Yemen’s economy is already at a crisis point,” said Will Picard, director of the Yemen Peace Project, a U.S.-based group. “No one is earning money, save the gasoline sellers, arms dealers, and foreign journalists.”

More Violence

Gunmen from Yemen’s most influential tribe clashed on May 24 with security forces loyal to Saleh, 68, in Sana’a, a day after he refused to sign an accord to give up power.

Dozens were killed or wounded in an assault on the home of tribal chief Sheikh Sadeq al-Ahmar, said Sheikh Saleh al- Mihjani, a member of the tribe. The Interior Ministry said that 14 policemen were killed, 29 others wounded and two are missing.

Shortages of cooking gas and petrol are being reported across the country, and cars are often turned away as they try to refuel. The shelves at local supermarkets are increasingly barren, with basic food items marketed up amid low stock.

The price of a 50 kilogram (110 pound) sack of sugar jumped 22 percent to 11,000 rials ($51.50) at al-Raimi’s local grocery store since the protests escalated in February.

Yemen already faces a severe water shortage, with the World Bank forecasting that Sana’a will be the first capital city to run out of water by 2025. More than half the country’s population of 23 million is under 20 years old and about 40 percent of the people live on the equivalent of less than $2 a day, according to the United Nations.

Bad Shape

Oil accounts for 60 percent of government revenue and 90 percent of exports, the International Monetary Fund said in a report on April 8. Oil reserves are expected to be depleted within a decade, the Washington-based organization said.

Saleh said yesterday that the economy is “not in good shape.” Industry and Trade Minister Hisham Sharaf said the protests cost Yemen $4 billion and a growing budget deficit, now expected to reach $3 billion, threatens to destroy the country.

“The government is running out of money,” Abdul Ghani Aryani, an independent political analyst, said in a telephone interview from Sana’a. “The deficit is now close to half the national budget and as a consequence there isn’t enough foreign exchange to import food stuffs.”

The country postponed the sale of a 25 billion-rial Islamic bond indefinitely as a result of the political unrest, Kamal Al- Rabie, general manager of the central bank’s Islamic unit, said in an interview on May 17.

Black Markets

Black markets are burgeoning across Yemen as people look to profit from the shortages. Khalid Saleh, a supermarket owner in Sana’a, said he’s losing business by the day and revenue has fallen 30 percent since the uprisings began. Al-Raimi said she can’t afford the marked up prices.

“I bought a cooking machine that works on electricity but it’s impossible since power goes off four times a day, each time for three or four hours,” she said.

Yemenis struggled to make ends meet before anti-government protests seeking to topple Saleh deepened the economic crisis. Demonstrators, like their counterparts in Libya and Syria, are demanding an end to corruption, and more jobs and freedom.

The difference in Yemen is that Saleh’s opposition is fragmented along tribal lines, posing the biggest challenge to the country since north and south were unified in 1990. Saleh said yesterday that recent violent threatened civil war and accused al-Qaeda of inciting protests.

“Every day Saleh stays on the throne is another day that Yemen’s already non-existent wealth is divvied up among his allies-for-hire,” Picard said by e-mail on May 23. “Economic recovery of any kind would be impossible given that fact.”

Bin Laden

A U.S. ally and the ancestral home of Osama bin Laden, Saleh also struggled to quell the threat of terrorists. Al-Qaeda in the Arabian Peninsula, the Yemen-based branch of the group, said in a May 10 statement that it would avenge bin Laden’s death in a Pakistan raid on his hideout by U.S. forces.

This week, prospects for peace grew dimmer after the six- nation Gulf Cooperation Council abandoned efforts to broker an agreement between the country’s political parties that would pave the way for a transition of power in Yemen.

Saleh, who reiterated yesterday that he would be willing to sign the agreement, earlier called the deal a “coup on constitutional legitimacy.” Anti-government protesters maintain the only acceptable solution is for Saleh to leave immediately.

“Outside investors and foreign donors will not put a penny into this country if things continue to looks so unstable,” Mustafa Alani, director of security and terrorism research at the Gulf Research Center, said by telephone from Dubai. “These problems will not go away with a magic stick.”

Arab Grievances

The grievances of Yemenis are similar to those of young people across the Arab world, though regional and sectarian.

Separatists claim the government discriminates against southerners, claiming the north seizes the proceeds of Yemen’s southern oil reserves for its own purposes. Shiite Houthi rebels have also been battling the government, claiming discrimination.

Saudi Arabia sends about $1 billion a year to Yemen in an attempt to keep the country “contained” and buy tribal support, according to Alani. The U.S. gives Yemen $300 million a year mainly in military aid.

“The Yemeni government has been mismanaged for more than three decades so there is no shortage of things that have to be done and quite quickly,” Gregory Johnsen, a Yemen expert at Princeton University, said by telephone from Cairo. “One of the main things is job creation but that can’t be done over night.”

The IMF said on April 27 that aid talks with the government of Yemen are on hold until there is greater stability. While unemployment in Yemen stood at 15 percent in 2008, the rate for youths between 15 and 24 years old climbed to 52.9 percent that year, UN figures show.

In the line for cooking fuel in Sana’a, al-Raimi is itching to get back to her kids at home, though she is unsure what kind of meal she’ll be able to prepare.

“I’m not able to cook for them,” al-Raimi said. “We just need the basics to live and we are not able to get them.”

Gulf Rulers Welcoming Arab Democracy Anywhere But Home May Store Up Unrest

By Alaa Shahine and Vivian Salama

Bloomberg (click here to view original)

Persian Gulf rulers say they understand that this year’s wave of pro-democracy uprisings has changed the Middle East. So far, they haven’t allowed it to change their own countries.

(l to r) Bin Ali, Saleh, Qaddafi, Mubarak

None of the region’s monarchies has taken steps to broaden political participation that match the spending pledges they have offered since the start of the unrest that toppled Tunisia’s Zine El Abidine Ben Ali andEgypt’s Hosni Mubarak. Instead, the rhetoric about a new era in the Arab world, and the cash handouts for homes and social security, have been accompanied by police repression.Protests have already reached Bahrain, Oman, Kuwait and the eastern province of Saudi Arabia this year. The reluctance of the Gulf Arab leaders, who control about two-fifths of the world’s oil, to loosen their grip on power may leave more of them vulnerable to the wave of unrest that has already pushed crude prices up more than 20 percent.“What we have learned from the uprisings in general, and from Tunisia and Egypt in particular, is that it’s really a matter of when,” said Shadi Hamid, director of research at Brookings Institution’s Doha Center, in a telephone interview. “Autocracies don’t last forever.”Oman’s Foreign Minister Yusuf Bin Alawi Bin Abdullah told Arab counterparts in Cairo last month that regional leaders need “new thinking” to deal with the “Arab renaissance.” In Abu Dhabi, then-GCC Secretary-General Abdul Rahman Al-Attiyah said that “political participation has become a key demand for development.”

‘Hydrocarbon Dictatorships’

Qatar’s ruler, Sheikh Hamad Bin Khalifa Al Thani, said in February that change was coming to the region and that Europe shouldn’t support “hydrocarbon dictatorships” in return for economic benefits, according to Al Sharq newspaper. He didn’t say which countries fall into that category.Qatar, Oman, Saudi Arabia and the other three Gulf Cooperation Council members are listed as authoritarian regimes in the 2010 Democracy Index of the Economist Intelligence Unit.The region’s leaders must convert ideas about change into concrete steps that will “improve the relationship between the state and the people,” said Prince Turki Al-Faisal, former Saudi ambassador to the U.S. “We have to change words into actions, actions that are arduous,” he said in a lecture in Abu Dhabi March 21.Some countries have begun to act. Sultan Qaboos of Oman agreed last month to boost the powers of the nation’s consultative council; the United Arab Emirates announced Sept. 24 elections to the Federal National Council, an advisory body; Saudi Arabia said it will hold municipal elections in September, while backtracking from earlier signals that women would be allowed to vote.

Saudi ‘Counter-Revolution’

Those measures, though, don’t involve real transfers of power, Hamid said. Repression has been a more typical response, with Saudi Arabia as “the leader of the Arab counter- revolution,” he said. “They are fighting change tooth and nail.”Saudi Arabia’s Information Ministry declined to comment and no one was available to comment at the Saudi Foreign Ministry or the U.A.E.’s federal government or Federal National Council, in response to repeated phone calls over two days.The prospect of unrest spreading to the world’s biggest oil exporter drove the benchmark Saudi stock index into a 13-day losing streak through March 5, the longest since 1996. Crude for May delivery rose above $112 a barrel last week, the highest since September 2008.

‘Not Very Worried’

The political upheaval in the Middle East has left markets “pricing in an element of uncertainty,” said Arthur Hanna, an industry managing director at Accenture Plc.Saudi oil wealth will help it escape the wave of unrest even though unemployment is high and civil rights limited, said Kai Stukenbrock of Standard & Poor’s. “We are not very worried about that scenario,” Stukenbrock, S&P’s director of sovereign ratings for Europe, the Middle East and Africa, said March 7.Simon Henry, chief financial officer at Royal Dutch Shell Plc (RDSA), also backed the kingdom to navigate through the political tensions. “It has the resources, it has the established capability to handle some of the unrest it may face,” Henry said on March 8.One risk to Saudi stability is the succession to King Abdullah, who turns 87 this year, Henry said. Crown Prince Sultan is also in his 80s. Next in line is Prince Nayef, the septuagenarian interior minister who filled central Riyadh with police to block a planned demonstration March 11, after rallies by Shiite Muslims in the oil-producing eastern provinces.

Bahrain Crackdown

Saudi rulers offered asylum to Ben Ali, backed Mubarak before his ouster, and sent troops to Bahrain to support a crackdown by Sunni royals that has left more than 20 protesters dead, mostly from the country’s Shiite majority.The violence in Bahrain showed unrest can be expensive even when it doesn’t lead to regime change. It pushed borrowing costs more than 150 basis points higher and Bahrain’s credit rating at Standard & Poor’s three steps lower, and dented efforts to compete with Dubai as the region’s business hub.Qatar and the U.A.E. both sent troops to Bahrain to help the government quell protests. InLibya, they are on the opposition’s side, backing a U.S.-led military campaign to help the rebels fighting Muammar Qaddafi. Qatar will “look at” the possibility of providing defense equipment to the insurgents, Prime Minister Hamad bin Jasim Al-Thani said yesterday.

‘Digging In Heels’

Dubai police on April 8 arrested Ahmed Mansour, a human rights campaigner, promptingHuman Rights Watch to criticize the U.A.E. for “digging in its heels” against democratic reforms. Two more activists, including an economics professor at the Abu Dhabi branch of France’s Sorbonne university, were arrested in the next two days. In Oman, two people have been killed as police broke up protest rallies.Saudi Arabia has also led the spending spree. King Abdullah ordered $128 billion of measures, including $90 billion on house-building and home loans, that will help the economy grow 6.6 percent this year, Standard Chartered Plc estimates.“The enormity of the stimulus package will help the region overall,” as it’s too much for the Saudi economy to absorb alone, and reduce the risk of civil unrest, Said Hirsh at London-based Capital Economics said in a March 21 report.GCC spending is another reason to expect high oil prices, according to John Sfakianakis, chief economist at Bank Saudi Fransi. Saudi Arabia needs a price of at least $80 per barrel, higher than previous breakeven figures, to finance its budget, he calculated.

‘Money Lying Around’

The GCC has promised $10 billion apiece to Bahrain and Oman to help assuage protesters. The U.A.E. allocated $1.6 billion for water and infrastructure projects in northern emirates that lag behind Dubai and Abu Dhabi.Spending conceived as a way of avoiding political change may end up fuelling popular demands, said Christopher Davidson, author of “Power and Politics in the Persian Gulf Monarchies.”

“You have the people in Saudi Arabia, for example, now asking: ‘If all that money was lying around all this time, why wasn’t it used on us earlier?’,” Davidson said. “These rulers are just reacting to the events around them, and their citizens know it.”

Egypt Calls on Nations to Provide Economic Assistance

By Vivian Salama and Mariam Fam

Click here for original story

Feb. 15 (Bloomberg) — Egyptian Foreign Minister Ahmed Aboul Gheit called on the international community to offer support for the economy, saying it “has been greatly affected by the political crisis that has rocked the country.”

The protests that culminated in the Feb. 11 ouster of the former president, Hosni Mubarak, have led businesses to shut down, scared off tourists and pushed up Egypt’s borrowing costs. The Mubarak-appointed government, now running the country under military oversight pending elections, is forecasting slower growth. It has promised a stimulus plan to address the economic complaints of the demonstrators, such as high unemployment.

Egypt’s finance minister, Samir Radwan, said yesterday the country’s budget deficit will widen to about 8.4 percent — less than some analysts forecast — as spending increases and economic growth slows after Mubarak’s fall. The Institute of International Finance in Washington predicts the budget gap will be 9.5 percent of gross domestic product, rather than the 7.9 percent previously forecast by the government.

The turmoil has cost the nation about $1.5 billion of tourism revenue, according to Central Bank Governor Farouk El- Okdah. It has also forced companies to close and sent the currency skidding to a six-year low. Before Mubarak’s resignation, the benchmark EGX30 Index tumbled 16 percent in one week. The bourse has been closed since Jan. 27.

Economic Growth

Aboul Gheit said U.S. Secretary of State Hillary Clinton, as well as British Foreign Secretary William Hague and Saudi Foreign Minister Faisal bin Abdulaziz bin Faisal al-Saud were among the officials who have called him to discuss support and developments in the country, according to a statement posted on the ministry’s website late yesterday. (click here to read more…)

U.S. Joins Egyptian Protesters in Criticizing Suleiman’s Offers

By Alaa Shahine, Vivian Salama and Maram Mazen

Feb. 9 (Bloomberg) — Egyptian Vice President Omar Suleiman said negotiations he has opened with opposition movements are the only alternative to the “chaos” of regime change, as the government’s limited concessions drew criticism from protesters and the Obama administration.

Omar Suleiman

“There will be no overthrow of the regime because this will lead to chaos, which will take the country into the unknown,” Suleiman told local media chiefs yesterday, the official Middle East News Agency reported. The talks that began this week, involving the Muslim Brotherhood and other groups, “are the first way to achieve stability in the country and to get out of the current crisis peacefully.”

In Washington, the Obama administration echoed the criticism of the protesters that Suleiman isn’t responding quickly enough. The Egyptian government has yet to reach the “minimum threshold” of accomodating demands of the country’s citizens, White House press secretary Robert Gibbs said. Egyptian authorities must make “immediate and irreversible progress” toward a transition of power and expand the scope of negotiations, Gibbs said at today’s briefing.

Tens of thousands filled Cairo’s Tahrir Square yesterday in what may have been the largest turnout in two weeks of protests. Today’s was smaller. Another major gathering is scheduled for Feb. 11, dubbed by protesters as a “Friday of Defiance.” (click here to read more….)

–With assistance from Mariam Fam in Cairo, Gregory Viscusi in Paris and Thomas Penny in London. Editors: Terry Atlas, Steven Komarow