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Friday, 26 August 2011

ARAB WORLD: The absent debate on progressive taxation -

With the revolts in many Arab countries, the subject of taxation in the Arab world should be urgently tackled. Taxation is not a financial issue in advanced democracies but rather a socio-political matter with various implications. Those same implications apply to the future economies and societies of Arab countries undergoing political revolutions.

In developed countries, taxation shapes the contours of the social contract that governs the relationship between the state on the one hand and all components of society on the other, whether individual citizens, businesses or social interest groups. As a result, it is a fundamental pillar of democracy and accountability. Taxation determines the size of state revenue, and thus its ability to spend on vital matters—that is, the basis of states’ competency, legitimacy and its ability to achieve.

In the Arab world, there are two groups of states. The first group, the Gulf states—which take in oil revenues—redistribute part of these revenues to citizens and do not impose taxes. The second group, the non-oil Arab states—which have much lower per-capita incomes, depend on foreign markets or some foreign sources of income such as aid and workers’ remittances (Tunisia, Lebanon and Jordan, for example) or a mixture of aid and rent sources, such as in Egypt, which contains natural sources and the Suez Canal.

gulfnews : Sellers short on ideas in Dubai property market

Dubai's property industry is now a buyer's market. It's a far cry from the heady days of the property boom when sellers were calling the shots and getting a premium price.

Buyers are now after the most attractive projects. There is a reasonable demand for residential units in areas that have finished roads and basic facilities, such as shops and schools, according to property agents and consultants.

While some properties in prime locations such as the Arabian Ranches, Emirates Living, the Palm, Downtown Burj Khalifa and Dubai Marina are selling better, it can still be challenging to complete a sale.

Middle East Crude-Oman, Basrah, condensates rise | Energy & Oil | Reuters

October trade drew to a close on Friday with strength across the Middle East crude complex, after Oman, Basrah and Qatari condensates traded at their peaks for the month.

ExxonMobil was heard to have bought an Oman crude cargo at a premium of 75 cents to Dubai quotes, up from discounts as deep as 30 cents just two weeks ago.

Cargos of Iraqi Basrah Light for loading in October had
cleared, earlier than in recent months, when a backlog
contributed to weaken values into the following trading month.
Traders value Basrah at premiums of about 10 cents to the
grade's official selling price.

Madoff Firm Liquidator Seeks $95 Million From Kuwait Bank, Feeder Fund - Bloomberg

The liquidator of Bernard Madoff’s firm sued the National Bank of Kuwait (NBK) S.A.K. in one of five lawsuits demanding return of about $95 million in funds withdrawn from a so-called feeder fund to the Ponzi scheme.

The Kuwait bank withdrew $18.7 million from Fairfield Sentry Ltd., one of the larger feeder funds, taking money that belonged to customers of the jailed con man, trustee Irving Picard said in a complaint posted on his website yesterday. Separately, he sued Delta National Bank & Trust Co. for $20.6 million and demanded $26.8 million from Unifortune Asset Management Sgr SpA with smaller amounts from two other fund companies.

Picard, who has filed more than 1,000 suits, is pursuing comparatively small amounts from investors who redeemed money from the feeders before Madoff’s 2008 arrest. The trustee’s settlement with Walter Noel’s Fairfield Sentry was approved in court in June.

$1bn sukuk already trading at a discount - The National

Nakheel's new Islamic bond is already trading at a discount to its face value, underscoring investors' continued doubts about the embattled property giant's finances.

The palm islands developer issued the Dh3.8 billion (US$1.03bn) Islamic bond, or sukuk, yesterday as part of its financial restructuring. The sukuk shares went to contractors who were not paid their dues after Nakheel's business experienced difficulties following Dubai's property slump.

Ahmad Alanani, a senior executive officer in the fixed-income department of Exotix in Dubai, said retail buyers were snapping up shares from contractors at about 84 cents on the dollar, sending yields skywards. Many cash-strapped contractors are expected to sell their shares immediately, even though the sukuk returns 10 per cent a year.

gulfnews : Developers keep bonds on hold in deflated market

The UAE's developers and contractors may struggle to tap the bond market until a glut of homes that's weighing on prices is sold off.

Arabtec Holding, the country's biggest construction company, mall-developer Majid Al Futtaim Group and Abu Dhabi's Tourism Development and Investment Co. were forced to delay plans to issue bonds.

The country's non-real estate companies raised about $9 billion (Dh33 billion) from debt sales as yields on Gulf bonds slid to a record 4.55 per cent, the HSBC/Nasdaq Dubai GCC Conventional US Dollar Bond Index shows.