Hard times loom for the Middle East

Article Abstract:

The economic outlook for the Middle East has grown dimmer as a result of the Asian economic crisis and falling oil prices. The region is heavily dependent on its enormous oil and gas resources, which account for more than 60% of the world's known oil reserves and about 30% of the world's proven gas reserves. This overdependence has been detrimental to the regional economy because it has resulted in the underdevelopment of the non-oil sector and the neglect of structural weaknesses. Falling oil prices and external balances, combined with growing fiscal deficits and population pressures, are compelling governments in the region to rethink their economic policies and introduce reforms. A number of countries, particularly the poorer ones, are already embracing fiscal discipline, economic diversification, privatization, export promotion and foreign investment.

Petroleum, Petroleum and Coal Products Manufacturing, Petroleum industry, Middle East, Economic development

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Plugging into privatisation

Article Abstract:

Italy's huge state-owned electricity company ENEL is being prepared anew for privatization. It dominates the country's electricity industry, producing 73% of all electricity production and meeting 87% of all electricity demand. It has a monopoly on cross-border trade and owns Italy's national grid. It was supposed to launch its initial public offering in 1996, but this was scuttled by a government crisis that erupted shortly before the issuance. The industry has undergone significant changes since then, including the appointment of an electricity regulator, the approval and impending implementation of the European Unions's electricity directive, and the appointment of a new management team at ENEL. The new senior managers are all firm supporters of the private enterprise and are now working to prepare the company for another launch in the capital market.

Energy, Utilities, Management, Energy industries, Power resources, Energy industry, Privatization, Privatization (Business), Ente Nazionale per l'Energia Elettrica

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Not built in a day

Article Abstract:

The Italian lira finally qualified as a founder currency to the euro in May 1998 following months of uncertainty. Failure to do so would have had disastrous political and economic consequences for the country. Interest rates would soar thereby increasing the budget deficit and jeopardizing Italy's membership in the European Monetary Union. Inward investments would also plunge beyond existing levels and scare away Italian business. However, Italy's economic problems remain despite its qualification to the euro. In 1997, public sector debt stock reached 2,247,804 billion lira or 122% of GDP. Total taxes and social security contributions was 44% of GDP. Pension spending also rose to 16% while unemployment remains high especially in the mezzogiorno or south which reached 22%.

Cover Story, International relations, European Monetary System, Italian foreign relations

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