In Kuwait City Arab states call for greater economic integration but postpone major decisions. Leading Arab petrochemical giant sees net income drop 95 per cent.

Riyadh (AsiaNews/Agencies) – Net income for the Saudi Basic Industries Corp (Sabic), the world’s largest chemical maker by market value, crashed by 95 per cent to 311 million riyals (US$ 82.9 million) from 6.87 billion riyals (US$ 17,75 billion) a year ago. In Kuwait City Arab leaders adopted a declaration in favour of “monetary and fiscal policies to enable Arab nations to face the consequences of the global financial crisis”. They also agreed to a number of economic resolutions in favour of economic integration, including plans for a pan-Arab power grid and a rail network project.

Sabic’s losses (headquarters pictured) are the result of a huge decline in the auto industry and the associated drop in demand for plastics and chemical products from the United States, Japan and Germany.

The Riyadh-based company, also the kingdom’s largest steelmaker, had to cut prices for the metal since October as domestic construction orders slowed.

Renamed Sabic Innovative Plastics, and still specialising in plastics, the company plans to eliminate about 1,000 jobs from its workforce of 10,500.

Just over a year ago it bought General Electric Co.’s plastics business for US$ 11.6 billion; since then it has seen sales for resins and thermoplastic sheets used in cars, roofs and lighting drop substantially.

The credit crunch has indeed hit Arab countries hard, already floored by the drop in oil prices, their main export.

One victim has been Dubai’s real estate market which has lost hundreds of jobs in the last two months.

Local service companies are also cutting staff by 10-15 per cent as the economic downturn shows no signs of ending any time soon.

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