FDI flows to the Middle East has contracted by 24 per cent to $68 billion (Dh249.75 billion) in 2009, according to World Investment Report. "Except in the case of Kuwait, Lebanon and Qatar, inward FDI declined across the region. The contraction hit Turkey and the United Arab Emirates the hardest. In Turkey, cross-border mergers and acquisitions plummeted, and export-oriented industries suffered from the impact of the global crisis," the report said.

"We are now, I fear, in the early stages of a third depression," the Nobel Prize winning economist Paul Krugman wrote in his New York Times column, referring to previous U.S. depressions that started in 1873 and 1929. "And this third depression will be primarily a failure of policy."

Labour costs and the value of China’s currency are sending ripples around Asia as countries jostle to lure manufacturers that are re-thinking their Chinese operations, analysts and officials said. Worker unrest at foreign-owned factories and the prospect of higher wage costs are forcing some manufacturers to consider countries such as Bangladesh, India, Indonesia and Vietnam, where wages remain relatively low.

Indian Prime Minister Manmohan Singh has said the Group of 20 major and emerging economies should not rein in budget deficits too fast but co-ordinate policy to ensure a sustained economic recovery. “My own feeling is that early fiscal retrenchment carries very considerable global risks,” Singh said at the G20 summit in Toronto.

“The rise of the east has been one of the defining events over the last decade. The economic crisis has only hardened views that the world’s center of economic gravity is gradually shifting,” said Ben Simpfendorfer, Royal Bank of Scotland’s chief China economist.“If the last decade was about the rise of the East, the next decade will be about the growing linkages between the East,” he said.

“I’ve started micro-credit in a small way in Bangladesh, but if it is practiced around the world it could change the way the people do business both with selfishness and selflessness -- the attributes that are common to human beings,” said Mohamed Yunus, who has also inspired Grameen America, a microfinance institution in the US. Headquartered in New York, it begins to expand nationally to build on its success of the other two branches in Queens, and Brooklyn, New York. Preparations are under way to open a fourth branch, in San Francisco, in August this year.

European banks are battling to recoup monies owed to them by debt-saddled companies in the Middle East. These banks could have as much as $40bn of exposure to Dubai after helping to arrange a string of bonds and loans linked to the city-state, according to analysts at Credit Suisse.

JEDDAH: The board of executive directors of Islamic Development Bank (IDB) has agreed to finance new development projects worth $244.4 million in Sudan, Jordan, Egypt, Mauritania, Cameroon, Kazakhstan and Niger, an IDB statement said.

KUWAIT: Overall net profits of Kuwaiti firms listed on the Kuwait Stock exchange plummeted by more than 90 percent last year due to the global economic meltdown, an economic study said.

Qatar’s inflation fell 0.79% in June mainly on easing of rents and lower prices of food as well as garments. The consumer price index (CPI) for the first six months of this year showed an overall downward trend with the general CPI 2.6% lower than in January, the Qatar Statistical Authority (QSA) said. The average price level fell in June after rising consecutively in April and May.

The Kingdom-based global investment and asset management group, Investcorp said its full-year profits to June slumped by half when compared to the fiscal 2007, as the global credit crisis hit its deal volumes and investment returns.

Omani officials are considering a new law that will address potential problems in the real estate industry arising as a result of the global financial crisis, according to the recent GCC real estate report by Global Investment House.