Brussels, Belgium (4E) – The European Commission predicts the eurozone economy will shrink this year as the region’s debt crisis continues to take its toll.

In its spring forecasts, EC officials said that it expects 2012 will see a contractions of 0.3 percent in the economies of the 17 nations that use the euro.

However, it also said that a recovery is in sight and that it expects the eurozone will rebound and grow by 1.0 percent in 2013.

The picture is only slightly brighter when looking at all 27 nations in the European Union. The EC is predicting zero growth, but that is better than a contraction. In addition, the EC expects 1.3 percent growth for the EU region next year.

Nevertheless, the situation remains problematic with disparities in the economies of the eurozone nations, as well as in the economies of the 27 nations in the European Union.

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Dili, Timor-Leste (IRIN) – Support services for women and children trafficked to Timor-Leste have been forced to close or will soon run out of funding, and NGOs worry that the government will not have the resources to fill the gap.

The International Organization for Migration (IOM) says Timor-Leste is primarily a destination country for international human trafficking, with mostly women and children brought across the border with Indonesia.

People are often lured from their villages with promises of jobs to pay off debts or earn large salaries in the country’s US dollar economy, say activists.

IOM assisted 33 women trafficked from 2008 to 2011 – 13 from Myanmar, 8 from Indonesia, 6 from Cambodia, 3 from China and 3 Timorese trafficked from rural areas to cities – but it is unclear exactly how many people have been trafficked into the country. Others speculate that the number could be higher.

The Alola Foundation, a Timorese NGO focusing on women’s issues and prevention of trafficking, reported 50 trafficked women in the same timeframe. “It’s a big issue,” Alzira dos Reis, the organization’s advocacy officer, told IRIN.

“I’m quite sure the number of trafficking victims is much higher than being reported,” said Susan Kendall, an international mentor at PRADET, a local NGO providing psychosocial support. “Nobody really knows what is going on. The border authorities lack resources. The whole system of identifying victims and referrals has broken down.”

The most recent US State Department Trafficking in Persons report notes that Indonesian and Chinese women are trafficked to Timor Leste and often forced to become commercial sex workers, while Cambodian and Burmese men and boys are often forced into labour or onto fishing boats operating in Timorese waters.

With just over 1 million inhabitants, Timor-Leste has nowhere near the volume of trafficking experienced by larger countries, but the number is significant, given the country’s size.

The lack of funding has already taken its toll. Dos Reis said the Alola Foundation’s human trafficking programme, funded by IOM, ended in February, with human trafficking awareness efforts now integrated into other programmes.

A shelter set up to provide temporary safe accommodation, counselling and health care for trafficked people by PRADET, had to close when funding ran out in August 2011. “Even if someone was referred to us, we wouldn’t have a designated place to put them now,” said Kendall.

IOM has cut back all direct trafficking support and has a limited budget for a capacity building and training programme, but that funding looks set to run out in September 2012.

“We have just finished the external funding we had,” noted IOM Chief of Mission Noberto Celistino, who said he was trying to source extra funding and was hoping for a positive response from the US government. The organization would ‘close up shop’ and leave Timor-Leste if additional funding was not forthcoming.

He had ‘little confidence’ that the Ministry for Social Solidarity would have the resources to cope with international trafficking should IOM cease its operations, although “They may have means to support or manage a case of domestic trafficking.”

Timor Leste is classified by the US State Department as a Tier 2 country, which means it does not meet the minimum standards in the internationally recognized Victims of Trafficking and Violence Protection Act of 2000 but is making “significant” efforts to do so.

A comprehensive draft law on trafficking, put forward in 2010, still needs three ministers to sign off on the proposed legislation before it goes to parliament for approval.

mw/ds/he

– Provided by Integrated Regional Information Networks.

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Beijing, China (AHN) – News that economic growth in China fell to 8.1 percent during the first three months of the year caused oil prices to fall on world markets, along with stocks on U.S. exchanges.

China is the world’s second-largest economy.

The 8.1 percent growth in China’s gross domestic product compared to the same period a year ago was its lowest rate of growth since the first quarter of 2009.

However, the news was even worse when looking at quarterly GDP figures. That showed annualized GDP growth of only 7.4 percent, which is below the Communist government’s goal of 7.5 percent growth for the year.

Although the main drag on the economy was real estate prices, retail spending figures were also sluggish.

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Riyadh, Saudi Arabia (The Media Line) – When Reem Muhammad sought a personal loan to pay off some lingering debts, a Saudi bank offered 100,000 riyals ($26,667). The price tag? Repayment of the loan, plus 33,000 riyals.

“I took the loan and repaid it, but I never knew what the 33,000 was for since it wasn’t interest,” Muhammad, 38, told The Media Line. “But it sure felt like interest.”

Muhammad is one of thousands of Saudis taking advantage of Saudi Arabia’s healthy economy and banks’ increasing willingness to offer personal loans and credit cards. Her loan also illustrates the continuing debate in the Saudi banking industry whether some aspects of the loan system contravene shariah, or Islamic law, that guides how Muslims conduct financial transactions.

Personal loans in Saudi Arabia jumped nearly 20-fold to a staggering 219 billion riyals in 2011, up from an estimated 11 billion riyals in 1998. Loans included 27.7 billion riyals in property loans due in part to the passage of the 2011 mortgage law. Credit card debt in 2012 is estimated about nine billion riyals.

Asher Noor, chief financial officer for the Riyadh-based AlTouq Group, a global investment firm, told The Media Line the increase in loans reflects Saudi Arabia’s strong economy.

“I find the increase in line with the growth of the Saudi economy, an emergence of an affluent middle class and creation of more high net worth individuals now than at any time in the past,” says Noor, who emphasizes he was offering a personal opinion. “The surge in personal loans is not just due to proliferation of credit cards in the Saudi economy, although plastic money has clearly made it easy to stack up debts. Real estate loans have also been a big reason for personal loan surge.”

Until about 2000, banks were reluctant to issue personal loans to individuals, preferring to limit their lending to large companies. Consumer credit card use was also relatively rare.

However, the demand for easier access to money has increased as the Saudi middle class has grown more affluent. Banks devised methods to offer credit cards compliant with shariah. Islamic law does not permit usury, charging or paying interest and conducting business contrary to Islamic values, such as operating a casino and selling pork or alcohol.

Saudis pay a fixed monthly fee on credit cards. Banks may require customers to have a savings account with a specific amount of money on deposit. Charges for late payments may be about 3 percent of the outstanding balance. Another way the card issuer earns a profit is to pre-purchase an item a customer plans to buy and then instantly resell it to him at a higher price.

Noor acknowledged there is “cause for concern” over the rapid increase in consumer loan and credit card debt, but the Saudi Arabian Monetary Agency (SAMA) has not allowed it to get out of control. “I think SAMA has not been asleep at the wheel and has kept the commercial banks in check with regulations like limiting loan to deposit ratios.”

SAMA in 2006 established regulations that total loans may not exceed 33 percent of the total salary of employees and 25 percent of the income of retirees. Nabil Al-Mubarak, executive-director of SIMAH, told the Arab News that SIMAH’s policy labels card debtors as defaulters under two conditions: if they have not paid for six consecutive months and if the amount due is SR 500 and more.

Noor said the criteria to issue credit cards is heavily regulated in Saudi Arabia, noting that customers are rarely pre-approved and must prove their eligibility for credit cards. “There are SAMA regulations dictating the credit card and personal loan limits and the central database [Saudi Credit Bureau] SIMAH is monitoring defaults,” he said.

Noor said that given the large expatriate population, whose work and residence permits are linked, banks are very careful in credit card issuances and usually require having a bank account with them, salary transfer and employer letter before a card is issued.

“Since expatriates here are unable to leave the kingdom with credit card debts disproportionate to their earnings or end of service, the banks here have not struggled with staggering default rates as elsewhere,” Noor said.

Yet the explosion in obtaining credit cards and personal loans, and how banks charge fees, has led to consternation among some Islamic scholars whether the high fees are tantamount to paying interest.

Ahmed Alkady, a trainer at the Jeddah-based Islamic Development Bank, told The Media Line that he sees no difference between paying penalty fees and charging interest on credit cards.

“I don’t use or even recommend credit cards,” Alkady said, “It is a hidden type of interest as banks make you pay what they call a fine or a penalty for failing to pay them back on time. The same thing is applied in non-Islamic banks but they call it interest. I see no difference between the two unless you make sure you don’t use it for drawing cash. Or when you buy goods make sure you pay it back before the end of the time limit.”

Alkady also considers Muhammad’s 100,000-riyal loan as contrary to Islamic values with some Saudi banks skirting shariah-compliant regulations.

Islamic banks use an asset-based loan system, such as providing an automobile loan, in which the bank purchases the car, maintains ownership and then rents it to the customer. The customer makes monthly payments that add up to more than what the bank paid for the vehicle. Ownership is then transferred to the customer once all payments are made.

Alkady described Muhammad’s loan as tawreeq, or securitization, meaning the asset is made into a financial tool like a share in a company. The transaction originates with an item, such as equipment or even property bought by the bank and then sold to the customer to be paid for on an installment basis. This allows the bank to raise the price of the item as a way of earning a profit while at the same time providing immediate liquidity for the borrower.

However, the Organization of Islamic Cooperation’s International Council of Fiqh Academy, a group of Islamic scholars, ruled in 2009 that tawreeq is “legal trickery” with roots in interest-based lending.

Alkady said the Islamic Development Bank followed with a similar ruling in April 2011. “The bank’s scholars have issued a decree in which they consider tawreeq un-Islamic simply because the bank is selling goods that it does not actually own,” he said.

Yet most Islamic banks worldwide embrace tawreeq, with many Islamic scholars in Muslim countries endorsing the practice.

Sami Al-Nwaisir, chairman of Al-Sami Holding Group, wrote in the Arab News recently that loans “favor the banks and their regulations” and “the unfair contracts by banks designed for their benefit alone, which victimize and suppress the individual through the systematic brutality of the one-sided agreement.”

Noor faults the banks for not educating borrowers. “Islamic banking is asset-based and borrowers need to understand that to better appreciate it,” he said. “Bankers, however, remain the culprit by complicating documentation and structures, and thus making it difficult for the layman to make a rational choice.”

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Tel Aviv, Israel David Rosenberg / The Med – In Israel’s high tech economy, the local operations of Intel Corp. stand out as a kind of high tech economy all of its own.

The world’s biggest maker of computer chips has been operating in Israel for four decades, long before many of the country’s start-up entrepreneurs were born. It has four research and development centers that have produced some of the company’s best-selling products and, in contrast to most of the technology multinationals present in Israel, also manufactures products in plants in Kiryat Gat and Jerusalem.

With nearly 8,000 people on its payroll, it is the largest private sector employer in Israel, accounting for 10 percent of all the jobs in Israel’s total electronics and software industry. Last year, its exports reached $2.2 billion, making it the country’s biggest single exporter of high technology. It even acts as a venture capitalist.

In 2011 Intel’s Israel operations marked a new milestone by both developing and producing a product entirely inside the country.

“Today Intel Israel is at the core of the global company, with a central role in developing new products like Sandy Bridge and the Ivy Bridge. We ourselves are in sync for the first time, with a product both designed and produced in Israel,” Maxine Fassberg, an Intel vice president and general manager for Israel, told The Media Line on the sidelines of a news conference on Sunday to discuss the company’s 2011.

Sandy Bridge, the code name for the Intel Second-General Core chip, was mainly developed in Israel and is now produced there. The chip, whose original name “Gesher” (“bridge” in Hebrew) was dropped to avoid associating it with a defunct Israeli political party, uses less power and offers integrated graphics. It will be superseded in the next month or so by Ivy Bridge, the development of which Israel Intel also played a central role,

When it was launched last year, Sandy Bridge became the global company’s fastest-selling product ever, with sales of more than 100 million processors. All told, products developed in Israel accounted for 40 percent of worldwide sales for Intel last year, said Muli Eden, who arrived in Israel last week to take up the post of Intel Israel president alongside Fassberg.

Eden had managed Intel Israel’s Haifa R&D center a decade ago before going to the U.S. He and Fassberg defended Intel’s controversial decision to put two people in charge of local operations, saying their task was to increase the company’s business in Israel and pointing to other country units with two chief executives.

Intel’s exports were actually down in 2011 from the year before, when they reached $2.7 billion. But Fassberg and other Intel executives attributed the decline to the retooling of the Kiryat Gat fabrication facility so it can manufacture next-generation products. That has constrained production, but the retooling is slated to be completed in the first part of 2012.

Nevertheless, 2011 was a year of expansion for the company, executives said. The local Intel operation hired 700 new employees during the year and expects to hire 600 more in 2012. It invested $3 billion upgrading its Kiryat Gat plant to 22-nanometer technology, bringing total investment by the company in Israel to almost $9.5 billion.

The Israeli government has contributed $1.38 billion to subsidize Intel’s Israeli investment, which has been a point of controversy over the years. Critics say there is no reason for taxpayers to be subsidizing a wealthy multinational, but Intel and its defenders have responded by asserting that the company pays back the aid in benefits to the broad economy.

In any case, said Fassberg, Intel relies less and less on government grants, with state aid accounting for 7 percent of the total last year.

Total exports by Intel from Israel since 1999 have reached $22.4 billion. Last year as it was re-tooling in Kiryat Gat, Intel made purchases of $628 million in Israel – everything from production equipment to lunchroom napkins – and contributed indirectly as much as $4.5 billion to the economy. The U.S. company has invested in 64 start-ups since 1998.

“Israel is the No.3 foreign country in the world in terms of Intel’s investments. After the U.S., China, India, its Israel. Intel invests more in Israel than in Europe,” said Oren Reiss, the outgoing general manager of the Kiryat Gat plant.

Additionally, ex-Intel employees have formed about 20 start-up companies every year since 2006, creating about 250 workplaces. “We regard ourselves as a school for the Israeli industry,” Fassberg said.

Intel not only benefits from Israel’s high technology prowess, it shares the same security threats as the rest of the country. Its Kiryat Gat plant – known as Fab 28 in the Intel universe – is less than 30 kilometers (19 miles) from the Gaza Strip.

In a four-day exchange of fire last week between Palestinian militants based in Gaza and the Israel Defense Forces, Israelis in the country’s south were forced to scurry to bomb shelters and rockets landed as close as Gadera, which is further north of Gaza than the Intel facility. The Kiryat Gat plant did not halt production.

Nor has it any time since Dov Frohman, the Israeli Intel executive who returned home from the company’s Santa Clara, California, headquarters, to set up Intel’s first R&D unit in Israel in 1974. During the First Gulf War in 1991, when Israel was bombarded by Iraq missiles and Intel’ s Jerusalem plant was a major source of the then best-selling 386 chip, Frohman promised no delays.

“I said the same thing when there were issues in the north and when there were issues in the south, and I say the same thing now,” Fassberg said. “In the 40 years that Intel has been in Israel we have never missed a delivery of a product or a design even though we’ve been in many, many cycles of geopolitical instability.”

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Dallas, TX, United States (AHN) – There is no such thing as a free lunch on short airline flights anymore, and there is no such thing a free leg room, either.

On Thursday, American Airlines made the grand announcement that it is adding some roomier seats to the front of its economy class cabins, offering more leg room. But those opting for the additional space will have to pay for it.

American said it would add four to six inches of leg room to some seats at the front of its economy cabins, charging most customers $8 to $108 for the extra space, depending on the length of the flight, and giving its most elite frequent fliers complimentary access to the seats.

AA said it would remove at least one row of seats from each cabin, a minimum of four-to-nine seats per aircraft, to create the extra leg room.

The program, called Main Cabin Extra, will begin with the hundreds of new aircraft scheduled for delivery starting this year. American will add the new seating to most of its 617 existing aircraft with 18 months.

The extra leg room offering follows similar moves by rivals United and Delta,

American Airlines is unit of AMR Corp., which filed bankruptcy protection November, and had said it hopes to improve annual revenue by $1 billion through restructuring and adding flights.

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Jerusalem, Israel (The Media Line) – A score or more of people are hard at work on a balmy winter afternoon at TechLoft’s big open-area office in the center of Tel Aviv. Most of them are quietly glued to their computer screens. A few are meeting in a conference room whose Plexiglas walls are covered by flowcharts and jottings. Others are quietly consulting with one another. Off in one corner is a mini-kitchen and coffee machine and just outside is a big wooden deck used to host networking events.

It could be the offices of any of hundreds of hi-tech start-ups in the city and its environments, but in fact the TechLoft’s space is the shared home to a dozen or more start-ups — or more accurately, seed-stage companies or even pre-seed companies: businesses that haven’t yet reached start-up status. Some of them aren’t companies at all – just teams of people working to formulate an idea.

”We’re trying to fill the gap for early stage companies who need that $100,000 and $500,000 that their friends and family can’t provide on one hand; while venture capital funds won’t provide on the other. There’s a gap, which we have set out to fill,” Gilad Tuffias, one of TechLoft’s two co-founders, told The Media Line.

The facility represents a new generation of investors coming to fill a dangerous gap that has developed in Israel’s high technology, namely a way for budding entrepreneurs to take the germ of an idea and begin turning it into a product and a company.

While Israel has earned a global reputation as the “Start-Up Nation,” the fact remains that it is tougher than ever for nascent companies to get off the ground. Venture capital (VC) funds, the traditional source of finance for new companies, invested more than $2.1 billion in technology start-ups last year, but just 5 percent of that went into seed stage companies, according to Israel Venture Research.

“Even when VCs were thriving, very, very few were investing in start-ups. Many said they did but only a few really did,” says one fund manager, who spoke on condition of anonymity. “I’m an active chairman of a start up and we’re beating our brains out finding money for the company – and we have a product.”

Seed companies are by their very nature small and many fail, but they are critical to the hi-tech industry in Israel. Few Israeli tech companies stay independent and grow for the long term. Instead, they tend to put themselves and their technology up for sale after a few years, usually to be bought out by a big foreign company. That means the industry needs a steady supply of fresh companies embarking on the path of conceiving an innovative new idea and developing it into a workable product for the industry to remain vibrant and grow.

TechLoft’s strategy is to help these new entrepreneurs by giving them workspace; access to lawyers, accountants and others to help them get their new business in order; and a forum for meeting investors and other entrepreneurs at the same stage in the tech lifestyle. An important component of the TechLoft’s concept is for the entrepreneurs to exchange ideas and advice among themselves. It charges a nominal rent of 1,000 shekels ($263) a month per person for the space.

TechLoft opened its doors last autumn and is already at work to double its capacity to 70 people with a new open office one floor above its current location. Tuffias and his partner Tal Marian are now raising money for a micro-fund, one that will invest sums of about $100,000 in the most promising TechLoft’s tenants.

TechLoft isn’t the only one creating an innovative new environment for seed stage companies.

Google is planning to dedicate a floor at its new research and development center in Tel Aviv to an incubator for as many as 20 pre-seed enterprises. When it opens this August, the center will have places for up to 80 budding entrepreneurs who will be hosted for several months, during which time they will have access to desk space, Internet, meeting rooms as well as technology and advice from Google employees.

“The Israeli developer community is hugely innovative,” Yossi Matias, the head of Google’s Israel R&D center, told The Media Line in an e-mail. “This incubator project was initiated with a desire to encourage entrepreneurship and to provide support at exactly the stage when developers are most often in need of it.”

Google will not invest in the incubator companies, but it does aim to “strengthen” its connections with the developer community, explains Paul Solomon, Google’s spokesman in Israel.

Even the Tel Aviv municipality has gotten into the act as its tries to turn itself into start-up city. In the Migdal Shalom Tower, not far from where the city was founded just over a century ago, part of an underused library branch has been turned into a facility for early-stage entrepreneurs. Twenty-eight people who get approved by a screening committee have access to “hot” desks, a conference room, a panoramic view of the Mediterranean Sea and a standing invitation to events and meet-ups.

The library facility is a part of a wider initiative to turn central Tel Aviv into a nursery, not only for Israel’s hi-tech industry but for all of Europe, by encouraging foreign tech entrepreneurs to set up shop in the city.

“What Tel Aviv is doing here is developing an eco-system that feeds Israel’s hi-tech industry,” says Avner Warner, economic development director for the Tel Aviv Global City initiative. “Tel Aviv concentrates 2,000 of the 4,000 start-ups in Israel. We want to promote that and open up to the international market. We want to be the technology center of Europe.”

These technology nurseries are different from the technology incubators of the last generations, which performed a similar role of proving, space, advice and capital. But when telecoms and hardware were at the core of the hi-tech boom, the time and cost of starting up a new company was high. That is still the case for a lot of areas of high technology.

But, nowadays, when Internet and mobile technologies are the hot new growth area, going from idea to viable company can be a matter of as little as 12 to 18 months. Entrepreneurs start off by working on their kitchen table at home or at a café. The entire company’s intellectual property and operations are uploaded to the Internet cloud. Social media can take care of the marketing at little cost. Start to finish, the budding business might need no more than a few-hundred thousand dollars of investment capital.

”Without a doubt, the innovations in technology have brought us to a new level and given opportunities to people without too many means to get something up and running,” says Tuffias, of TechLoft. “If you have a talented team of developers and just one investor who believes in you, with the globalized economy and having the Internet reach every point on the globe, if it’s a good product and people like it, word of mouth can bring it to millions of people within a matter of even minutes.”

“You don’t have to spend millions and millions of dollars on marketing and traveling overseas,” he says. “You do all of that from your home or from the beach – or from TechLoft.”

Nurseries aren’t the only ways early-stage enterprises can get off the ground. Angel investors- wealthy individuals who alone or in groups back new companies providing the first hundreds of thousands or millions in investment-have come into their own in the past two years in Israel.

The cause for that was a Knesset (parliament) law, popularly known as the Angels Law, which gives them an attractive tax break. Private investors who put anywhere between 25,000 ($6,600) and 10 million shekels ($2.65 million) in hi-tech start-ups have the right to record the amount as a capital loss at the time they make the investment. That can be used to offset other capital gains.

The law has brought new angel investors into the market at a time when the quality of angels has risen. That is important because young, often inexperienced hi-tech entrepreneurs need advice as much they need capital.

“Angels have come back into play and angels have changed in quality here,” Ed Mlavsky, founding partner of the VC Gemini Israel Funds, told The Media Line. “In America angels were people who really understood what they were investing in. Here, they were diamond merchants and didn’t really understand what they were investing in. But now we have a generation of people who made money in hi-tech.”

©2012. The Media Line Ltd. All Rights Reserved.

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New York, NY, United States (AHN) – Stocks opened sharply higher Friday after the Labor Department reported the U.S. economy created jobs at the fastest pace in nine months.

Shortly after the opening bell on Wall Street, the Dow Jones Industrial Average soared 113 points, the Standard & Poor’s 500 Index rose 12 points and the NASDAQ jumped 28 points.

Oil was up 64 cents to $97.13, and gold was lower by $7, last trading at $1,752.50 a troy ounce.

The Labor Department reported that nonfarm payrolls jumped by 243,000 in January, the most since April, and far exceeding economists’ expectations of a gain of just 150,000.

The strong jobs reports put the unemployment rate to a near three-year low of 8.3 percent and buoyed investor sentiment.

Market watchers will also be watching the big game Sunday. For the past 36 of 45 Super Bowls, the stock market has gone up after a win by an original National Football League team, one that traces its roots to before the merger with the American Football League, and gone down when the AFL (or newer team) is victorious.

So, Wall Street wants the Giants to win the Super Bowl.

The measure has an 80 percent accuracy rate based on the Dow Jones Industrial Averages’ annual performance.

There is not any science to it, but it is still as reliable as it gets for stock forecasting.

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United Arab Emirates David Rosenberg (The Medi – Calling the United Arab Emirates (UAE) the world’s “least friendly” place for expatriates-well, those are fighting words. Certainly, they are in a place where non-citizens make up close to 90 percent of the population and are responsible for everything from running the national airline to cleaning up at construction sites.

But a fight is what Forbes magazine and one of its contributing writers, Beth Greenfield, got when they ran a piece putting the Gulf confederation of seven mini-states at the bottom of a list using criteria that hone in on social factors – the ability to befriend natives, fitting into local culture, learning the language and integrating into the community.

The article sparked a furious reaction, a dedicated Twitter hashtag #UAEFriendly and finally, according to local media spin, Forbes “took back” its words and conceded that Greenfield’s list was “non-scientific.” The American magazine also helped smooth ruffled feathers in a posting by Dan Bigman, its managing editor for business news, who called the UAE an “expat paradise.”

Giving advice to the businesspeople, diplomats and others living abroad is a big and important business. What with varying costs of living, standards of schools and housing, and the risk that today’s sleepy posting erupts into revolutionary cauldron, employees and employers alike need a way to compare and decide how much hardship pay one location deserves over another.

One of those measures is published by the expatriate financial-services unit of the British-based bank HSBC, and that was the starting-off point for the controversy.

The Expat Explorer Survey for 2011 survey ranks 31 countries for expat conditions based on a survey of 3,385 people in 100 countries taken last May-July (only 31 countries had enough respondents to make the sampling valid, HSBC says).

Weighing all the criteria HSBC uses – a long list of factors ranging from “nicer/bigger property” to children “spending less time playing video games” – the UAE ranked a respectable third. Last November, Mercer, a British firm that advises companies on compensation for their employees living abroad, ranked Dubai 74 and Abu Dhabi 78.

But Greenfield, citing the views of expat “coach” Heather Markel, isolated four factors from the HSBC survey she said make a place “friendly” for foreigners living and working there.

Suddenly, the UAE plummeted to the bottom of the list, along with much of the rest of the Gulf and India. Greenfield did not dwell much on the UAE’s misfortune: She made only two references to it and one of them refers to its attractions for expats as a place where people enjoy high incomes and good career prospects. Nevertheless, it didn’t take long to elicit a spirited defense of the UAE.

“Dear Forbes, Did you ever visited UAE?” asked AhmadTheFrozen. “We don’t realize how realize how friendly UAE is until we visit Europe,” commented Talib Al Hashimi. “I’ve developed a fantastic social circle and career in UAE. Who did Forbes survey? Not me!” said Brendan Ryan.

Tamim Al Kuttab asked: “If the UAE is unfriendly to expats — as Forbes says — then why are they staging their Global CEO Conference in Dubai in October?” (Good question: The Forbes Foundation, which publishes the magazine, is holding its 12th annual Global CEO Conference in the UAE’s Dubai next October.)

Annabel Kantaria. a journalist based in Dubai, wrote in a blog post for Britain’s Telegraph newspaper that if foreigners find the Emirates an unfriendly place, they have only themselves to blame.

“Is it the fault of the host country if the expats don’t have success learning the local language? Is it the fault of the host country if the expats fail to integrate themselves into the community, don’t manage to befriend locals or don’t find it easy to fit in?” she wrote. “Does that make the host country ‘unfriendly’? Or does it make the expat ‘inadaptable’? On whom does the onus lie?”

Greenfield herself did not respond at length to the complaints on the Forbes website, but a spokesman for the magazine speaking to The National downplayed the affair. “Given the UAE’s reputation as a crossroads for world commerce and culture, we were surprised by the results of HSBC’s survey,” an unnamed spokesman said in the local English-language daily. “The data is [sic], of course, non-scientific and intended only to spur discussion.”

Bigman, without making any apology, called the UAE – as well as Singapore and Hong Kong, two other tiny expat-heavy places – an “expat paradise,” friendlier to resident foreigners than his home country of America.

In fact, Khalid Al-Ameri, an Emirati, pointed out in an op-ed in The National the natives may not seem friendly because it is so hard to find one among the masses of foreigners.

Of the 8.26 million people living in the UAE in 2012, 7.31 million of them are expats, according to the National Bureau of Statistics. When the economy was booming before 2008, the expat population was even bigger, but even today, just one in 12 people are Emiratis and in expat-rich places like Dubai the ratio is even bigger.

“Because of the skewed demographics (about 10 percent of the population is Emirati), getting to know the ‘locals’ can be a tough task for any new expatriate. And in any country within a matter of days, an expatriate will find his or her countrymen, the familiar cuisine and hangout spot,” he wrote. “It is very easy for an expatriate to quickly fall into a comfort zone and go quite a while without actually interacting with an Emirati on a personal level.”

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Riyadh, Saudi Arabia Rob L. Wagner (The Media – Not content with oil, the kingdom wants to make cars as well; skeptics abound.

Two years ago, the Saudi Arabian government announced with great fanfare – and was met with some skepticism – plans to manufacture automobile parts by 2013 and assemble cars by 2021. King Saud University engineering students, who designed an economical sport utility vehicle called the Ghazel, bolstered those plans with a tangible vehicle ready for production.

Saudi economic analysts are optimistic that automobile manufacturing in the kingdom will help reduce the economy’s reliance on oil exports. Yet roadblocks persist. Already the goal to manufacture car parts next year is in jeopardy as infrastructure and a trained labor pool are not in place. It begs the question of whether Saudi Arabia can pull off a massive undertaking within its stated timetable or even come close to it.

“It’s not realistic,” Asaad Jawhar, an economics analyst and professor at Jeddah’s King Abdulaziz University, told The Media Line. Jawhar says manufacturing automobile parts is more likely to get underway within five years.

Saudis love their cars, purchasing an estimated 800,000 in 2011 with an expected 1 million cars to be bought annually by 2020. The Petroleum and Minerals Ministry and the Commerce and Industry Ministry are investing in research and development, design, vehicle assembly and infrastructure to create enough exports to help the kingdom wean itself from oil revenues.

The ministries initiated the National Industrial Clusters Development Program to help achieve those diversification goals by focusing on five industries: automobile manufacturing, solar energy, plastics, home appliances and minerals processing.

The most ambitious challenge is building cars.

Fayez Al-Sharef, chemical project director for Saudi Aramco, told Bloomberg News in October that he expects the nascent Saudi automotive industry to eventually create 100,000 jobs and produce a half-million cars every year.

If the vision of self-sufficiency through diversification sounds familiar, it’s because Saudi Arabia has been down that road before and failed.

Saudi Arabia has been looking since the 1970s for the magic export product that will minimize its dependency on oil. The government implemented an ambitious plan to develop its agricultural industry to become self-sustaining and provide every Saudi household with food grown within its borders.

Production of wheat and rice rose steadily, but so did the expensive proposition of building irrigation systems to bring groundwater to the crops. Between 1984 and 2000, Saudi Arabia spent an astronomical $83.6 billion to irrigate crops and build agricultural infrastructure. The project cost more than twice it would have to import foodstuff, according to the School of Oriental and African Studies at King’s College London.

However, the 1991 Gulf War put a severe strain on the Saudi budget and groundwater – its availability in the desert always an issue – was increasingly difficult to bring to the surface. Efforts to maintain irrigation of 1.12 million hectares, the level irrigated in 2000, is almost an impossible task. The project could not be sustained.

“The most important thing was not to rely heavily on oil, but to rely on agriculture and they (Saudi government) failed in agriculture,” Jawhar says. “And now they are trying to find another way of transforming technology.”

There are signs that creating an automotive industry could work. During the third quarter of 2011, non-oil exports rose by 34 percent, mostly in petrochemicals and plastics, according to the Saudi General Statistics Department. China was the biggest consumer of these products.

Didier J. Vigouroux, vice-president of the Automotive Cluster for the National Industrial Clusters Development Program, told The Media Line that a Saudi automotive industry is capable of matching petrochemicals and plastics as viable exports.

“No one is thinking of giving up oil and gas, but to diversify from oil and gas,” Vigouroux says. “And petrochemicals are a logical continuation. New industries like automobile manufacturing would target the success of petrochemicals and plastics as a goal.”

The brightening picture in exports lays the foundation for developing parts manufacturing plants and ultimately automotive assembly. Isuzu Motors Ltd. has an assembly plant in Dammam for medium- and heavy-duty trucks. The plant is expected to begin this year to produce about 25,000 vehicles annually for export to Asia.

Vigouroux says any timetable to bring other automobile assembly plants online is flexible.

“The only true assembly plant project in Saudi Arabia is the Isuzu plant, but as far as developing other plants we are still talking to certain companies,” he says.

Following its unveiling of the Ghazal sport utility vehicle, King Saud University inked an agreement with the South Korean engineering company Digm Automotive Technology to develop a car priced under $10,000. Saudi Arabia would export the car to neighboring Gulf countries and North Africa.

Jawhar says that producing inexpensive cars makes sense. “Saudi Arabia should approach this step-by-step like Hyundai. They can succeed if they model after Korea. Korea produced small and bad cars at first, but is now doing well,” he says. “By first producing [cheap] cars efficiently, they then build an institution.”

He notes, however, that exporting the Ghazal, or a similar inexpensive automobile, would not be competitive in foreign markets, but sell better domestically. “Perhaps there’s a market in Africa, but even there I’m not sure.”

However, a slow start to get the fledgling industry out of the gate may not only scuttle the 2021 timetable for automobile production but also doom Saudi Arabia’s diversification plans.

While the Saudi government is financing production and logistics facilities through 20-year loans in the remote regions of Najran and Tabuk, the question remains whether employers can find competent Saudi labor. The government’s Nitaqat program requires that companies with more than 3,000 employees must employ Saudis for 30 percent of its workforce.

A Saudi engineering consultant, who asked not to be identified because he is not authorized to speak for his client, told The Media Line that it would be difficult to fill factory jobs with Saudis.

“With Nitaqat, assembly plants will have to fill unskilled labor positions with Saudis and I don’t see that happening,” he says. “Which brings us back to how we always do things, and that’s hiring cheap foreign labor.”

Jawhar says finding Saudis in the skilled labor market is another story. “The world doesn’t know that Saudis are learning fast,” he says. “Saudis between 20- and 25-years-old with engineering education will be producing great cars with high technology 20 years from now.”

Vigouroux agrees. “The right perspective to put on diversification is the significant desire to create employment for young Saudis coming out of universities,” he says. “This means creating new curriculum and the right kinds of training and work ethic.”

But Vigouroux acknowledged that for 2012 Saudi Arabia’s automotive manufacturing infrastructure is minimal, although the know-how for developing automotive zones is available. “We are addressing investment issues and there some impressive botanical parks in Yanbu and Jubail where there is already an expertise for mapping and running industrial cities.”

The key to overcoming infrastructure and labor issues is better cooperation between agencies. Jawhar observed that a successful automotive industry depends on two groups that historically have done a poor job developing marketable exports: the government and private business.

“If the government heads this they will fail and the private sector has not taken [automotive manufacturing] seriously,” Jawhar says. “It’s a matter of trust between the two sectors that determines the outcome.”

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