No doubt today?s initiation of the US-led offensive against the Taliban regime in Afghanistan caused an increase in the war risk premium surcharge on goods heading to and from the Red Sea and Persian Gulf. The surcharge was imposed by international insurance firms on September 27 and varies depending on port of destination as well as on the type of cargo and is adjusted every week. According to the al-Hayat newspaper, businessmen in Dubai are calling the increased tariffs ?the bills for the destruction of the Twin Towers in New York.? Indeed, the Saudi Arabian newspaper, al-Sharq al-Awsat, reported that financial markets in the Gulf area lost $10 billion just in one week, following the terrorist attacks in the USA.
Dubai?s Khaleej Times reported about one particular direct effect of the increased security tensions in the Middle East. Leading American and European firms, such as General Motors, have either relocated their operations in the Gulf states or are considering such a move, since the September terrorist attacks in the USA. In another indication of the extent of the damage that commercial interests in the Gulf will face is the fact that, according to the Khaleej Times, senior executives of several oil companies based in the Gulf, including Exxon and British Petroleum, have been advised to cancel plans to travel to the region, for their own safety.
Meanwhile, in Egypt, the mainstream al-Ahram newspaper published an editorial that questioned ?What will happen to the economies of the Middle East should the US decide to wage its new war?? The author of the piece wrote that local economies are already struggling and a new military upheaval, including its economic side effects, could not come at a worse time. Furthermore, the author expressed her concern that since ?three major oil producers - Iraq, Libya, and Iran ? are potentially on the US's 'suspect lists,' there will be continued tension in the oil market??
Official Egyptian sources, however, have denied that there would be any negative impact on the Egyptian economy as a result of the US war on terrorism. The al-Hayat newspaper reported that the Egyptian Federation of Banks said that it was premature to estimate the impact on the Egyptian economy. Other government sources are quoted as having reminded reporters that American investments are not that great in Egypt. In fact, al-Hayat reports, they do not exceed $273 million and $175 million of that sum is in the oil sector.
In contrast, Egyptian businessmen in the private sector emphasized, in al-Hayat, the continuing heavy losses in the tourism industry. The second largest trading partner with Egypt is the United States, the newspaper reports, and that could be affected quite seriously if the present stagnation in the US economy turns into a recession.
Dubai?s Khaleej Times reported about one particular direct effect of the increased security tensions in the Middle East. Leading American and European firms, such as General Motors, have either relocated their operations in the Gulf states or are considering such a move, since the September terrorist attacks in the USA. In another indication of the extent of the damage that commercial interests in the Gulf will face is the fact that, according to the Khaleej Times, senior executives of several oil companies based in the Gulf, including Exxon and British Petroleum, have been advised to cancel plans to travel to the region, for their own safety.
Meanwhile, in Egypt, the mainstream al-Ahram newspaper published an editorial that questioned ?What will happen to the economies of the Middle East should the US decide to wage its new war?? The author of the piece wrote that local economies are already struggling and a new military upheaval, including its economic side effects, could not come at a worse time. Furthermore, the author expressed her concern that since ?three major oil producers - Iraq, Libya, and Iran ? are potentially on the US's 'suspect lists,' there will be continued tension in the oil market??
Official Egyptian sources, however, have denied that there would be any negative impact on the Egyptian economy as a result of the US war on terrorism. The al-Hayat newspaper reported that the Egyptian Federation of Banks said that it was premature to estimate the impact on the Egyptian economy. Other government sources are quoted as having reminded reporters that American investments are not that great in Egypt. In fact, al-Hayat reports, they do not exceed $273 million and $175 million of that sum is in the oil sector.
In contrast, Egyptian businessmen in the private sector emphasized, in al-Hayat, the continuing heavy losses in the tourism industry. The second largest trading partner with Egypt is the United States, the newspaper reports, and that could be affected quite seriously if the present stagnation in the US economy turns into a recession.