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SHAABAN 27, 1432 AH
halt work on megaport Kuwait ‘dismayed’, says construction to continue
Inflation at 10-mth lows KUWAIT: Kuwait’s annual inflation slowed to a ten-month low of 5 percent in June helped by a fall in food prices, data showed yesterday, but generous government spending is expected to keep levels above those of neighbors this year. Inflation in the world’s fourthlargest oil exporter has been hovering above 5 percent since the beginning of this year, well below double-digit levels seen in 2008. It stood at 5.4 percent year-on-year in May, after climbing to a nearly twoyear peak of 6 percent in December. On a monthly basis, consumer prices in the OPEC member grew 0.2 percent in June, according to data from the Central Statistics office. That was below a 0.3 percent rise in May. Inflation in the Gulf, the world’s top oil exporting region, is expected to creep higher this year on robust global commodity prices, a weak dollar and increased govern-
ment spending following popular unrest in the Arab world. But slow lending growth and ongoing weakness in the property sector in parts of the region are seen keeping consumer price growth well below the record peaks seen in most Gulf states in 2008, despite oil prices above $90 per barrel. In Kuwait, food costs - which account for 18 percent of the consumer basket - fell for the first time in four months, by 0.6 percent month-on-month, the data showed. “Kuwait has one of the highest inflation rates in the GCC for the year. But it’s still not anywhere near of what we saw three years ago,” said Nancy Fahim, Standard Chartered economist in Dubai. “One of the big drivers of inflation this year is government spending and their cash packages that they have provided their citizens, which should be driving overall headline inflation.” — Reuters
BAGHDAD: Baghdad called on Kuwait yesterday to suspend work on a controversial megaport until Iraq is assured its shipping lanes will not be squeezed by the project but Kuwait said work on the project will continue. The $1.1 billion facility, on Kuwait’s Boubiyan Island, is scheduled for completion in 2016. Baghdad fears the Mubarak port will compete with its own Faw and Khor Al-Zubair ports and “strangle” Iraq’s shipping routes. “The Iraqi government asks the Kuwaiti side to stop work on the Mubarak port until we are assured that Iraqi shipping lanes, and free and safe navigation, will not be affected,” government spokesman Ali Al-Dabbagh said in a statement. “There is no information and data to assure the Iraqi government that its navigation interests will not be damaged” by the project, the statement said. It requested Kuwait to “hand over all information needed by Iraq to ensure that its rights will be preserved.” BAGHDAD: Iraq’s Foreign Minister Hoshyar Zebari A Kuwaiti foreign ministry offispeaks to reporters yesterday. — AFP cial expressed “dismay” at the
“statement made by the spokesman of the Iraqi government, who called on the state of Kuwait to halt work in Mubarak Al-Kabir port project”. Kuwait “confirms that construction work at the Mubarak port will continue,” said the unnamed official quoted by the state news agency KUNA, adding that Iraq “has no legal basis” to call for a halt. However, the official said Kuwait was ready to “receive again an Iraqi technical delegation to be briefed on technicalities related to the project” after having done so in May. At a news conference yesterday, Iraqi Foreign Minister Hoshyar Zebari said his country would send an expert mission to Kuwait, but did not specify when. He said Kuwait had agreed to receive a mission of experts and officials from several ministries “to find a solution acceptable to both sides”. “We try to resolve the problem through official channels to guarantee Iraq’s interests and freedom of navigation,” Zebari said. “ We want a positive approach, and do not seek an escalation,” he
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added. Zebari stressed that relations with Kuwait remained delicate. In Aug 1990, troops under Iraqi dictator Saddam Hussein invaded Kuwait and occupied the country until being driven out by an international coalition in early 1991. “August 2 will be the anniversary of the invasion of the state by Iraqi forces and the crimes they committed. In our comments, we must respect the sensitivity of our neighbour,” Zebari added. “Kuwait has every right to build on Boubiyan, which is its territory, and there is no dispute about that. Our problem is the freedom of navigation in the channel leading to Khor Al-Zubair,” a major port Iraq is developing. “Kuwait has the right to lead this project, but we are neighbours, so we need an explanation in defence of our interests,” Zebari said. The Gulf is the main export outlet for I raqi oil, which accounts for the lion’s share of the countr y ’s revenues, and Baghdad has star ted major work to modernise its outdated ports. — AFP