Washington Report on Middle East Affairs, April 29, 1985, Page 10
Trade and Finance
Mideast Economic Notes
By John Haldane
Good Oil News for Jordan and Syria
Two of the "have-not" oil countries in the Middle East, Jordan and Syria, have reason for a bit of rejoicing these days. Prime Minister Obeidat of Jordan announced earlier this year that the largest petroleum strike yet had been made at a well in the eastern desert, about 50 miles east of Amman. The potential reserves are estimated to be five times larger than either of Jordan's first two proven wells, although their commercial potential has not been established. The find can only be good news for Jordan, which has few natural resources, besides phosphate and potash, and is facing a slowdown in its economy.
The Syrian oil find, in a remote corner of its eastern province, was made in late January by the American Pecten International Company, a Shell Oil Company subsidiary. It will eventually produce between 100,000 and 150,000 barrels of oil per day, according to unofficial estimates, and could be worth between $1 billion and $1.5 billion in revenues per year, at current prices. According to a Syrian official, the government expects to begin commercial production of about 35,000 barrels per day by early next year, rising to 150,000 a day by 1990.
Upcoming Trade Missions
The Department of Commerce's Export Calendar for 1985 shows that U.S. trade missions will go to ten Arab countries later this year. Some of the more important scheduled trade missions are: ❑
October: Renewable energy resources mission: Saudi Arabia, United Arab Emirates, and Yemen ❑
November: Water resources mission: Algeria and Egypt ❑
December: Petroleum exploration mission: Algeria, Egypt, Oman, and Saudi Arabia
Also, the U.S. will have pavilions at the Sfax International Fair (Tunisia) in June and the Baghdad International Fair (Iraq) in November.
U.S. Hosting Meeting with Moroccans
Secretary of Commerce Malcolm Baldrige will cochair the fourth meeting of the U.S.-Moroccan Joint Committee for Economic Relations to be held in Washington, D.C., in May. The two countries are now negotiating a Bilateral Investment Treaty and a Bilateral Tourism Agreement, both of which are expected to be signed later this year.
U.S. Exports Continue to Slide
Recently-released trade figures from the Department of Commerce indicate that the slowdown in U.S. exports to the Near East and North Africa, which began in 1983, continued into 1984. From a record high of $20.6 billion in 1982, U.S. exports fell to $18 billion in 1983 and to $15.5 billion in 1984. Lower oil revenues have resulted in a general economic slowdown throughout most of the area, with governments exercising increased fiscal austerity. Even so, in 1984 the U.S. exported goods worth $5.6 billion to Saudi Arabia and $2.7 billion to Egypt. Other markets exceeding $500 million were: Algeria, Iraq, Kuwait, Morocco, and the United Arab Emirates.
Even though economic retrenchment and reduced imports are expected to be the order of the day for 1985, trade experts are optimistic that the Arab world will remain a significant market for a wide range of goods and technical services. Despite scaled-down development plans and budget allocations, most of the countries plan to continue to spend billions of dollars in such priority sectors as petroleum, agriculture and water development, technical training, and communications.
World Bank Loans to Arab Countries
The World Bank continues its active assistance to Arab countries in North Africa and the Middle East. The following loans have been made since January 1:
Jordan: $30 million to expand water supply and sewer services in greater Amman.
Morocco: $27 million to modernize coal production facilities. $25.1 million to develop electrical and mechanical industries.
Tunisia: $15 million to improve rain-fed agriculture and establish an extension service.
Yemen Arab Republic (North Yemen): $8 million for technical and financial assistance to private industries. $4.7 million for improvements in national economic planning and public investment programming.
People's Democratic Republic of Yemen (South Yemen): $5 million to help strengthen agricultural research and extension services. ❑
John Haldane is a specialist in Middle East affairs who has served as a foreign service officer in Baghdad, Beirut and Cairo, and as an international economist in the Departments of Commerce and Treasury.