An Emirati couple walk past the National Bank of Dubai at a shopping center in UAE.

DUBAI, UAE, Dec. 14--Arab bank assets will for the first time top $2 trillion this year as Middle East and North African economies expand, the Union of Arab Banks said.
Combined, lenders from Morocco to Oman are likely to post a 25-percent increase in profit this year to $32 billion, Adnan Yousif, chairman of the union, told reporters in Dubai on Wednesday, Reuters wrote. “The banks are doing very well because of liquidity, and the growth and expansion of economies,“ said Yousif. The union, whose members include 400 financial institutions, coordinates activities between Arab financial services firms and acts as a consultant to the
industry.
Meanwhile, a Reuters poll of economists showed that economic growth in Saudi Arabia, Kuwait and Qatar would probably accelerate next year, The growth forecast is underpinned by greater oil and gas output, and expansion of non-oil businesses such as finance.
Growth in the UAE and Oman will stay relatively high in 2008 at 7.8 percent and 5.7 percent respectively as non-oil industries expand, according to the average of a poll of 12 economists.
“Oil production numbers are a big part of growth and oil production will be positive next year after recording negative growth this year,“ said Caroline Grady, regional economist at Deutsche Bank, who took part in the Dec. 9-12 poll.
Growth in Saudi Arabia may rise to 5.3 percent next year as the world’s biggest oil exporter ramps up output, according to the poll.
The Organization of Petroleum Exporting Countries agreed to a rise in output this year, a 500,000 barrel-per-day increase that went into effect on Nov. 1.
At 9.9 percent, growth will probably be the fastest in Qatar, the poll showed. Qatar plans to boost output of liquefied natural gas to 77 million tons per year in 2010.
A near five-fold increase in oil prices since 2002 has generated a windfall for Persian Gulf Arab governments and companies, which are investing in infrastructure, tourism and real estate. Oil prices almost hit $100 a barrel last month.
“The liquidity spill-over from high oil prices is being invested in other parts of the economy,“ Grady said. Investment in real estate, finance and infrastructure is spurring growth in the UAE, which hit a 10-year high of 12.4 percent in 2000.

A UN security personnel walks past a globe as he patrols around the venue of the UN Climate Change Conference in Nusa Dua, on Bali Island on Dec. 12.

BALI, Indonesia,
Dec. 14--A US-European standoff edged toward a compromise Friday in the final day of the UN climate conference, as the two powers looked to break a deadlock over how ambitious the goal should be in negotiating future cutbacks in global-warming gases.
The outcome may help determine how high the planet’s temperatures rise for decades to come-- stakes big enough to draw UN Secretary-General Ban Ki-moon back to Bali from an East Timor visit to help resolve the impasse, AP wrote.
Delegates sparred over the wording of a conference final document until 2:30 a.m., after which drafters retired to craft new formulations in contentious passages--most notably the European Union’s suggestion of a goal of emissions reductions from 25 percent to 40 percent below 1990 levels by 2020.
Trying to break the deadlock, the conference president, Indonesia’s Environment Minister Rachmat Witoelar, later proposed revised language dropping those mid-range numbers, but still reaffirming that emissions should be reduced at least by half by 2050.
Meanwhile, European nations threatened Thursday to boycott US-sponsored climate talks next month unless the Bush administration compromises and agrees to a ’roadmap’ for reducing greenhouse gases blamed for global warming.
Nobel laureate Al Gore said the United States was “principally responsible“ for blocking progress here toward an agreement on launching negotiations to replace the Kyoto Protocol when it expires in 2012, AP wrote.
The United States, Japan, Russia and several other governments refused to accept language in a draft document suggesting rich nations consider cutting emissions 25 percent to 40 percent by 2020, saying specific targets would limit the scope of future talks.
European nations and others argued that numerical goals are essential reference points in efforts to curb global warming.
All sides agree it is impossible to deal with climate change unless the United States is involved.
President Bush views his own climate talks as the main vehicle for determining action by the US--and, he hopes, by others. The Jan. 30-31 session in Honolulu is a continuation of September talks at the White House called the Major Economies Meeting on Energy Security and Climate Change.
The US has invited 16 major economies, including European countries, Japan, China and India, to discuss a program of what are expected to be nationally determined, voluntary cutbacks in greenhouse gas emissions.

NEW YORK, Dec. 14--Citigroup plans to rescue $49 billion of structured investment vehicles in a move that further strains the biggest US banking group’s capital levels and may scupper a US government-endorsed SIV bailout plan.
Citi is already wrestling with billions of dollars of assets whose market value has declined, prompting Moody’s Investors Service on Thursday to cut the bank’s debt ratings. Lower debt ratings often translate to higher borrowing costs, Reuters wrote.
The Moody’s downgrade hit shares in Asian banks and financial groups early on Friday, with MSCI’s index of regional financial stocks dropping more than 2 percent.
Citi’s decision to move SIV assets to its balance sheet further ties up the bank’s capital in assets likely to produce relatively low returns, potentially hampering profitability.
As the subprime mortgage crisis widens to other credit markets, US banks will have fewer resources to fund corporate activity, and the US economy may suffer.
Citi said in a statement announcing the SIV move that it is still supporting a US Treasury-backed plan for a backup fund for SIVs, but analysts said that fund is less likely to be set up without Citi’s SIV assets.
“The super-SIV idea never made sense economically,“ said Bert Ely, a banking consultant in Alexandria, Virginia, adding that Citi’s SIVs had been seen as the major contributors to the fund.
Citi’s decision to take the SIV assets comes just two days after the bank appointed a new management team led by Chief Executive Officer Vikram Pandit, a former Morgan Stanley executive and hedge fund manager. “The CEO seat has hardly had time to cool off before he acted,“ said Tim Ghriskey, chief investment officer at Solaris Asset Management.

TOKYO, Dec. 14--Confidence among Japan’s largest manufacturers fell more than economists forecast, as a stronger yen eroded exporters’ profits and the rising cost of credit clouded the outlook for global growth.
The Tankan index of manufacturer sentiment fell to 19 points in December from 23 in September, the Bank of Japan said in Tokyo on Friday. The median estimate of economists surveyed by Bloomberg News was for a reading of 21. A positive number means optimists outnumber pessimists.
Canon Inc. and Toyota Motor Corp. are more dependent on markets abroad just as a slowing US economy dims prospects for global growth. Small businesses, which employ 70 percent of the nation’s workers, predicted conditions will deteriorate over the next three months, making it less likely the Bank of Japan will raise interest rates anytime soon.
“Japanese corporations are more concerned about the US situation than before,“ said Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo. “The Bank of Japan is now basically completely boxed in.“
The yen traded at 112.48 per dollar at 5:35 p.m. in Tokyo from 112.33 before the report was published.
Japan’s economic growth is set to slow next year as rising oil prices put pressure on companies, the Cabinet Office said in an annual report on Friday.
Bank of Japan Governor Toshihiko Fukui said last week he’s concerned falling profits at small businesses will hamper wage growth and stymie consumer spending. Fukui says Japan’s key rate needs to rise from 0.5 percent, the lowest among industrial nations, to prevent inefficient investment that could cause problems for the economy later on.
The higher cost of doing business is eating into earnings at Japanese companies, big and small. The yen’s 10 percent gain against the dollar in the past six months has eroded exporters’ profits. Smaller companies, who are unable to pass on higher energy and materials costs to customers, are also being squeezed.
Large manufacturers see business conditions worsening, the Tankan showed. An index measuring expectations for confidence next March sank to 15, which, if realized, would be the lowest in three years.

BEIJING, Dec. 14--China and the US on Thursday ended two days of economic talks stressing the benefits of their massive trade, though little concrete progress was made to deflate Washington’s growing impatience over trading practices it says gives Beijing an unfair advantage.
China’s top negotiator, Vice Premier Wu Yi, called the China-US Strategic Economic Dialogue, held in a resort outside Beijing, a “complete success.“ She cited progress on food safety and environmental protection. “Both sides need to discuss Sino-US economic relations from a strategic point of view and map out a better blueprint for future US-China economic trade relations and cooperation,“ Wu was quoted by AP.
In his closing statement, US Treasury Secretary Henry Paulson said delegates talked about “the importance of balanced growth in both our nations.“ “We also both recognize the need to fight economic nationalism in our two nations,“ he said.
Paulson also met with Chinese President Hu Jintao and Premier Wen Jiabao, who said “frictions and problems that have occurred in the process of economic cooperation are natural,“ according to Chinese Foreign Ministry spokesman Liu Jianchao.
Wen told Paulson that “compared with the huge benefits we have gained from this business relationship, they are less important,“ Liu told reporters at a briefing.
Despite the amicable note, underlying tensions over China’s sizable trade surplus and currency value are long-standing.
So far this year, the US trade imbalance with China is running at an annual rate of $256 billion (174.5 billion euros), on track to surpass last year’s record high for any country of US$233 billion.
On Wednesday, the US Commerce Department said America’s trade deficit with China jumped 9.1 percent to $25.9 billion (17.7 billion euros) in October, a record for a single month.
The rise reflected record imports from China on the back of increased shipments of toys and games and televisions for Christmas. The demand is still strong despite a string of high-profile recalls of Chinese products from toys with lead paint to defective tires and tainted toothpaste.
The deficits have triggered a backlash in the US Congress, with dozens of bills introduced seeking to penalize China for what critics see as unfair trade practices contributing to the loss of 3 million US manufacturing jobs since 2000.

NEW DELHI, India, Dec. 14--India opened its largest-ever auction of oil and gas blocks Thursday, hoping to attract more international investment in exploration and boost domestic production of hydrocarbon resources.
The government invited bids to undertake exploration in 57 oil and gas blocks in an auction that is expected to bring in between $3 billion (2 billion euros) and $3.5 billion (2.4 billion euros ) in investments, AP reported.
It was the seventh round of auctioning since the government introduced a new policy to reduce the country’s dependence on imported oil and encourage foreign and domestic companies in exploration.
India imports about 75 percent of the crude it needs and demand for oil has surged in recent years alongside rapid economic growth.
Petroleum Minister Murli Deora said he expects global oil companies to participate in the auction. “In the previous rounds, companies like ExxonMobil, Chevron and BP didn’t participate,“ Deora told reporters. “We hope they don’t make the same mistake again ... India has shown it has good prospects through recent discoveries.“
India awarded a total of 162 oil and gas blocks in the last six rounds and raked in about US$8 billion (5.5 billion euros) in investment. Bidding for the latest round will close on April 11, and blocks are likely to be awarded within the next six months, he said.
The blocks being auctioned include 19 in deep water, nine in shallow water and 29 on land, the ministry said.

CARACAS, Venezuela, Dec. 14--Brazil and Venezuela have pledged closer trade and energy ties, including building a new oil refinery in Brazil. The announcement followed talks between Venezuelan President Hugo Chavez and Brazilian President Luiz Inacio Lula da Silva in Caracas, BBC wrote.
The refinery in north-eastern Brazil will be 40 percent-owned by Venezuela’s state oil firm PDVSA, while Brazil’s national oil firm Petrobras will hold the rest.
The $4.5 billion (£2.2 billion) scheme, open from 2010, is to be supplied by Venezuela.
The refinery had originally been planned as a 50-50 joint venture between the two nations, but talks had come to a standstill over the summer.
Chavez said, “A joint company will be formed in Brazil for the construction and operation of the 200,000 barrels a day Abreu de Lima refinery in Pernambuco.“
Brazil, which recently announced the discovery of up to 8 million barrels of oil offshore, hopes to become an increasingly important energy supplier, and has even considered the possibility of joining oil group OPEC.
President Lula said he hoped closer links between the two countries would lead to an improved “balance“ between the two countries.
According to Bolivarian news agency AMN, Brazil exports to Venezuela rose to $3.8 billion in the first 10 months of 2007, up nearly 30 percent year-on-year, while Venezuela’s exports to Brazil dropped 44 percent to $269 million in the same period.