RIYADH: On Sept. 10, Saudi Arabia’s Crown Prince Mohammed bin Salman announced the signing of a memorandum of understanding between India, the Middle East, and Europe for the construction of a new economic corridor.
The MoU was signed between India, the US, UAE, France, Germany, Italy and the EU.
The ambitious trade and investment initiative includes an eastern corridor that connects India to the UAE, Saudi Arabia, Jordan, and Israel, and a northern corridor linking those Middle Eastern countries to Europe.
Speaking during the G20 Summit in New Delhi, the crown prince said the project seeks to “strengthen economic interdependence” and common interests of the countries involved.
“The world stands at an inflection point in history,” said US President Joe Biden while addressing the India-Middle East-Europe Economic Corridor summit that was held in New Delhi on the sidelines of the G20 summit and called the agreement “historic.”
Indian Prime Minister Narendra Modi said in a recent radio address that IMEC will become the basis of world trade for hundreds of years to come.
The transport corridor serves to further centralize the energy-rich Gulf states within the global economy, placing them at the center of geoeconomic activity.
In so doing, the IMEC represents an economic shift away from the West to the East and the Global South, shifts that have been taking place since the financial crisis in 2008 and which have continued.
The corridor, through its geographical and economic positioning, is likely to accelerate that shift.
It is clear that banks are focusing their lending activities on what is known as ‘productive lending’ such as education and other productive economic sectors.
Talat Zaki Hafez, Economic columnist and banking expert
While the IMEC is in its infancy, it is being lauded for its ability to provide alternative trade routes to thriving markets of the Middle East and Europe, extending India’s reach to North Africa and North America.
“The economic impact on Saudi Arabia and India is great, especially concerning the already strong bilateral economic and trade relationship between the two countries that dates back to 1947 and the bilateral trade between the two countries,” Talat Hafiz, a Saudi economic writer and banking expert told Arab News.
“The volume of trade exchange between Saudi Arabia and India in 2022 reached $52.4 billion and the value of Kingdom’s exports to India amounted to $41.9 billion, of which $8.14 billion are non-oil exports, while the Kingdom imports from India amounted to $10.5 billion,” he added.
In a recent column for Arab News, GCC Assistant Secretary-General for Political Affairs and Negotiation Abdel Aziz Al-Uwaisheg stated that from a Gulf standpoint “the new venture will solidify the region’s historical position as the primary trade route linking Asia, Europe and Africa.”
Al-Uwaisheg highlighted the route’s emphasis in energy trade and how it capitalizes on the region’s comparative advantage in providing cheap and reliable energy to the rest of the world.
The eight IMEC signatories – Saudi Arabia, UAE, India, France, Germany, the US, Italy and the EU – account for approximately half of the world’s economy and 40 percent of its population.
This means, states Al-Uwaisheg, that the corridor has the potential to transform global trade and development as the signatories commit to the right resources.
Talmiz Ahmad, former Indian ambassador to Saudi Arabia, the UAE and Oman, told Arab News that his country is “already a very major trade partner for all the countries of the GCC, including Saudi Arabia.”
He added: “Saudi Arabia is already our number four trade partner in the world globally and the number one supplier of petroleum to India.”
The former diplomat further added how India has substantial trade relationships with all the countries of the GCC.
It will definitely improve and enhance the overall trade activities between Saudi Arabia and South Asia, also simply because it will shorten the trade flow time by six to three days, which in turn will improve the frequency of trade between Saudi Arabia and South Asia.
Talmiz Ahmad, former Indian ambassador to Saudi Arabia, the UAE and Oman
“It is based on the purchase of energy trade and investments. It’s already a very substantial relationship and in South Asia and the Arabian and the Arabian Peninsula are already extremely well connected,” he said.
Ahmad notes how Saudi Arabia has been speaking about having a railway project across the Arabian Peninsula for the past 10 to 15 years.
The corridor, he emphasized, offers the chance to give the Saudi-India economic partnership “new value.”
“It should go beyond business into something which we would call a genuine and substantial strategic partnership,” he told Arab News, adding: “I would recommend, given Saudi Arabia’s important presence in the Gulf as well as in the Red Sea, that there is hope for maritime security cooperation between India, the Middle East and Saudi Arabia. The core partners should be India and Saudi Arabia, and they can bring in other partners as the situation warrants. I am saying this because the most important area for regional interests is the Western Indian Ocean, particularly the Arabian Sea.”
The corridor, which will comprise a 4,800-kilometer trade route linking India to the Arabian Gulf states and Europe, will include pipelines for electricity and hydrogen.
It will comprise two separate routes: an east corridor that links India to the Arabian Gulf, and a northern corridor connecting the Gulf states to Europe.
Additionally, the sea and rail route will foster the transit of goods and services as well as digital and electronic connectivity and export clean hydrogen.
The crown prince has previously said the project intends to enhance trade between the participating countries, boost the import of energy supplies, including hydrogen.
“It will definitely improve and enhance the overall trade activities between Saudi Arabia and South Asia, also simply because it will shorten the trade flow time by six to three days, which in turn will improve the frequency of trade between Saudi Arabia and South Asia,” adds Hafiz.
He further explained how the new corridor is significant for both regions “in the medium and long term, as it will not only shorten the shipping time of goods between the two regions but also save on the cost of shipping and transport.”
It also, states Hafiz, “encourages prompt businesses between the two regions.” IMEC is being established during a time when Saudi Arabia is looking to expand its trade with the world.
“This is opening new routes of business with friendly countries such as India and other parts of the world also as a way to strengthen its economy and diversify it away from a reliance on oil,” explains Hafiz. “[IMEC] will help the Kingdom achieve its Vision 2030 objectives and improve its non-GDP and non-oil exports.”
The corridor does have geopolitical implications. One is the current war between Israel and Hamas raising a question mark on when and how the IMEC is likely to go ahead.
It is also not the first time that a massive trade route with aims to stretch across the globe has been launched.
In 2013, China announced its One Belt One Road initiative, a global infrastructure development strategy adopted by Beijing to invest in more than 150 countries and international organizations.
Yet this project, also known as the Belt and Road initiative, is facing questions over its significance amid China’s slower economic growth.
Hafiz argued that even with these concerns, as well as the boost to the US’ profile in the region given by IMEC, the presence of both projects is a potential “win-win” situation.
“There should be any geopolitical impact of IMEC compared to China’s Belt and Road Initiative, since both of them contribute positively to global trade and serve the trade and economic interest of the countries who are part of the two trade agreements,” he told Arab News, adding that the two projects offer the potential for greater synergies of integration and cooperation through economic means and a way to further expand the already growing avenues for business in the region.
RIYADH: Jeddah Islamic Port has successfully executed Saudi Arabia’s first multimode transit, seamlessly connecting sea and air shipments.
This achievement follows the signing of a memorandum of understanding between the Saudi Ports Authority, also known as Mawani, the General Authority of Civil Aviation, and the Zakat, Tax, and Customs Authority to implement this initiative.
The undertaking was facilitated through the customs authority’s shipment tracking and clearance procedures, transporting commercial cargo from the port to King Abdulaziz International Airport. Subsequently, it was transported via the Saudi Airlines cargo fleet to its final destination.
This accomplishment aligns with the Kingdom’s goal to become the next global logistics hub, serving as a meeting point connecting three continents while advancing a more sustainable and innovative economy.
The experiment aims to enhance logistical services and components, ensuring integrated connectivity between sea and airports in the region.
The success of the initiative underscores the efficiency of the Kingdom’s sea and air freight operations, with ports and airports demonstrating speed, accuracy, and readiness in executing logistical connectivity efforts, according to a Mawani release.
The achievement also reflects the high standard of services provided by the customs authority, which “contributed to raising the efficiency of operations by harmonizing all concerned parties.”
Jeddah Islamic Port, positioned on the global shipping line, stands as the first port on the Red Sea coast in the field of transit maritime trade and the transshipment of containers and goods.
The MoU among the three parties aims to link logistics between air and seaports, supporting the efficient movement of goods by sea and air, in line with the objectives of the national strategy for transport and logistics services as per Saudi Vision 2030.
The agreement’s scope includes examining the possibility of linking sea and airports, conducting realistic experiments for transporting goods between air and seaports and exchanging information and resources to support and activate logistical movement in the Kingdom.
RIYADH: German consultancy firm TÜV Rheinland has unveiled its new regional headquarters in Riyadh, reflecting the Saudi capital’s ongoing success in attracting fresh investments in line with the goals outlined in the Kingdom’s Vision 2030.
In a press statement, Michael Fübi, CEO and chairman of the executive board at TÜV Rheinland Group, emphasized the firm’s long-standing commitment to regional partners.
He said: “For decades, TÜV Rheinland has provided industrial expertise for the local workforce to strengthen and contribute to local businesses. We are proud to build on this progress as we advance these transformational projects together.”
Earlier this month, Saudi Arabia’s Minister of Investment Khalid Al-Falih revealed that over 180 companies have established their regional headquarters in Saudi Arabia, surpassing the previously set target of attracting 160 firms to the Kingdom by the end of this year.
In an interview with Bloomberg, he said that the regional headquarters program is a “long-term journey” and added that the Kingdom is working with international entities to create the “right ecosystem” to open their offices in Saudi Arabia.
“We had a target by year-end to have 160 regional headquarters for global companies. So far, the year is not up yet, and we have issued 180 licenses. In fact, the rate is picking up to the tune of 10 companies per week that are being licensed in Saudi Arabia, and they are being provided with a good set of incentives,” the minister revealed.
RIYADH: Saudi Arabia has increased the disbursement of funds for various insurance benefits for the third consecutive month, with the spending surpassing SR10.7 billion ($2.8 billion) in October, according to recent data from the General Organization for Social Insurance.
In October, GOSI allocated over SR87.2 million to the Saned unemployment insurance scheme, marking an increase from SR85.9 million in September. Additionally, more than SR16.3 million was earmarked for occupational hazard pensions, showing a slight drop from SR16.8 million the previous month.
As part of its digital transformation strategy, GOSI emphasized a complete shift toward reliance on digital platforms for transaction processing.
During the reported month, the organization recorded over 1.8 million transactions, representing a decrease from 2.2 million in September. Despite this decline, its website and online services garnered over 2.1 million visits.
This digital approach extended to the issuance of more than 209,000 electronically issued pension identifications and facilitated over 332,000 downloads of the agency’s mobile application.
The report highlighted the proactive engagement of GOSI’s electronic communication channels, showcasing services like the virtual visit feature and the digital assistant, each serving over 33,000 clients.
Furthermore, the insurance WhatsApp service addressed the needs of more than 23,000 clients, and the customer care service on the X platform managed over 57,000 inquiries.
GOSI also aims to ensure regulatory compliance by conducting over 14,000 insurance compliance visits and 3,400 preventive visits to employers in October alone. This commitment is further strengthened by numerous educational workshops focused on reinforcing the principles of insurance compliance and occupational health and safety standards.
The organization’s efforts in utilizing advanced artificial intelligence technologies are directed toward innovation and enhancing service offerings, ultimately improving customer satisfaction for all stakeholders, including subscribers, retirees, and employers.
This initiative is part of GOSI’s strategy to foster a technologically forward and efficient social insurance system in Saudi Arabia.
The organization is dedicated to tailoring its insurance products and services to better serve its customers, aligning with its strategic objective of customer-centric development, according to a statement in October.
Embracing the concept of electronic participation, GOSI actively implements participatory practices through various digital channels.
These platforms enable contributors, pensioners, employers, partners, and governmental entities to submit their insights and proposals directly to GOSI’s sectors and leadership.
RIYADH: Saudi Arabia is set to increase the production and distribution of fresh commodities as leading food enterprises come together to establish a joint venture company in the Kingdom.
The National Agricultural Development Co., also known as NADEC, and Del Monte Saudi Arabia Factory Co. Ltd. have entered into a memorandum of understanding to launch an initiative specializing in specific goods, including fruits, vegetables, fresh juices, potato processing, and their distribution throughout Saudi Arabia.
In a statement published by the Saudi Stock Exchange, Tadawul, NADEC underscored that the MoU specified ownership percentages for each party. NADEC’s stake will be 37.5 percent of the new company’s capital.
The announcement added that the agreement aims to establish manufacturing facilities to supply fresh products and process french fries, juice, canned fruits and vegetables as well as processed fruits, frozen fruits, and various other items to diversify the company’s products in Saudi Arabia.
RIYADH: Sahara International Petrochemical Co., also known as Sipchem, has initiated the world’s largest calcium chloride operation at their factory.
Based in Saudi Arabia, the Khair Inorganic Chemical Industries Co., also known as InoChem, will operate a greenfield of soda ash and calcium chloride industrial complex spanning over 800,000 sq. meters of land in Ras Al-Khair, according to the Saudi Exchange.
Sipchem, which owns 30 percent of InoChem’s capital, will continue the trial until the testing of the plant equipment is completed and its efficiency is confirmed.
The project’s total cost is estimated at SR2.9 billion ($783 million), with an annual production capacity of 300,000 tons of soda ash and 348,000 tons of calcium chloride in various grades, densities, shapes, and sizes. The production employs the latest advanced technologies and equipment.
The plant is also the first soda ash producer in the Gulf Cooperation Council countries and the largest in the Middle East and North Africa region.
The financial impact will be calculated at the beginning of commercial operations. Any material development will be announced in accordance with relevant laws and regulations.
InoChem is a Saudi closed joint-stock company founded in 2016 by a partnership between the public and private sectors.