A new Saudi Arabia will gradually be emerging

A new Saudi Arabia will gradually be emerging as this seems to be the word that is the leitmotiv of the young and fresh at the helm prince MbS (Mohammed bin Salman).  This latter’s elevation to heir to the crown at the age of 31 that was already showing in quiet and unheard of boldness is now blatantly in full sight.  Would this possibly generalise to a whole generation of leaders in the country’s life and take it towards modernity?  Would a radical reform program as embodied in the prince’s “Vision 2030” generate a new self-sufficient country living in good harmony with its neighbours and for this purpose would it need all that accumulated wealth from oil related revenues since its advent in the 30s to be ploughed in to generate conditions that are perhaps propitious to another vision?  Or would all this just lead to more clinging to Tradition, survival endurance and frictions of all sorts as restricted OPEC oil output and US shale oil production seem to be the other leitmotiv of the time.

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A new Saudi Arabia will gradually be emerging as this seems to be the word that is the leitmotiv of the young and fresh at the helm prince MbS (Mohammed bin Salman).  This latter’s elevation to heir to the crown at the age of 31 that was already showing in quiet and unheard of boldness is now blatantly in full sight.  Would this possibly generalise to a whole generation of leaders in the country’s life and take it towards modernity?  Would a radical reform program as embodied in the prince’s “Vision 2030” generate a new self-sufficient country living in good harmony with its neighbours and for this purpose would it need all that accumulated wealth from oil related revenues since its advent in the 30s to be ploughed in to generate conditions that are perhaps propitious to another vision?  Or would all this just lead to more clinging to Tradition, survival endurance and frictions of all sorts as restricted OPEC oil output and US shale oil production seem to be the other leitmotiv of the time.
In any case, lots of speculative writings are coming to enlighten us on the situation of the country.  Bloomberg’s Donna Abu-Nasr  and Zainab Fattah and published on June 23, 2017.

Saudi Arabia’s New Heir Leads Revolution of Powerful Millennials

The youngest crown prince in living memory represents a broader youth revolution in Saudi Arabia.

While the elevation of Prince Mohammed bin Salman, 31, as heir to the throne this week caught the attention, some of his cousins and relatives whose fathers held key posts in past decades have been installed in the royal court as advisers, sent to the U.S. and Europe as ambassadors and appointed to government institutions in Riyadh.

Together, they are some of the world’s most powerful millennials, increasingly in control of a Gulf kingdom where two-thirds of the population is under 35. The challenge will be to sell Prince Mohammed’s “Vision 2030,” his road map to a post-oil economy that will require social upheaval and financial sacrifices never experienced by this generation.

“Having young princes at the helm, who understand young people’s needs, is the message being sent,” said Sanam Vakil, associate fellow at Chatham House’s Middle East and North Africa program. “Perhaps the princes can talk in the same language as the youth and listen to their concerns so they would be able to address them in more effective ways.”

Prince Mohammed is likely to be among his country’s youngest kings with a potential for his rule to last half a century. He joins a roster of youth wielding more power elsewhere. French President Emmanuel Macron is 39, Jared Kushner and Ivanka Trump in the U.S. are 36 and 35 and Ireland’s new prime minister is 38. Then there’s North Korean dictator Kim Jong Un. He’s thought to be around 33.

The decision by the prince’s father, King Salman, to pick some of his younger children as well as grandsons and great-grandsons of the kingdom’s founder is meant to ensure a smooth transition in the royal household. It also comes under the watchful eye of the older traditionalists.

Saudi Arabia is going through arguably the biggest changes since the kingdom’s founding in 1932. The new crown prince is aiming to effectively tear up a lot of the social contract that’s kept the royal family in power to create jobs and modernize the economy. It was one of state handouts in return for adherence to an autocracy underpinned by an ultra-conservative brand of Islam.

The appointments are a way to protect Prince Mohammed when he becomes monarch, said Nabeel Khoury, a former U.S. State Department official who is now non-resident senior fellow at the Atlantic Council, an American organization focusing on foreign affairs.

It avoids the dangers of the old guard “using their old contacts against the new king,” he said. “The transition to youth is a good story,” but the way it was done “does not necessarily imply good things for the future of the country,” he said.

The new appointees include Prince Khalid bin Bandar, who is being sent to Germany as ambassador. His father, Prince Bandar bin Sultan, was one of the most powerful Saudi envoys to Washington and later was in charge of intelligence. Another is Prince Abdullah, now an advisor to the royal court and son of Prince Khalid, who served as deputy defense minister.

Along with Prince Mohammed, the king has appointed another young son — he is under 30 — as ambassador to the U.S. and another one as minister of state for energy. While other kings have sought to help and encourage their children, “this was the most blatant act of nepotism ever in Saudi Arabia,” said Khoury.

There’s also the new interior minister. Born in 1983, Abdulaziz bin Saud bin Nayef will succeed his uncle, the ousted crown prince who successfully managed to halt al-Qaeda in Saudi Arabia when he headed the ministry.

With so many young faces in charge, change may come faster to Saudi Arabia, but also potentially without the careful deliberation about the effects on society, said Kristian Coates Ulrichsen, Middle East fellow at Rice University’s Baker Institute.

“King Salman has been, for decades, the family ‘enforcer’ of discipline and the keeper of the family secrets,” said Ulrichsen. “If the family files are not picked up by someone of similar stature to Salman, there is a risk that discipline within the Al Saud may begin to fragment if the unifying glue becomes loosened.”

Read More: a QuickTake Explainer on Saudi Arabia

Limited Women’s Rights in Saudi Arabia

Limited Women’s Rights in Saudi Arabia is a fact that is acknowledged throughout the world, but it is also well known that the situation of women in their everyday life generally as well as in their representation in all socio-political and economic institutions in that country would perhaps be understood relatively differently.  For that, we published on March 19, 2016 an article ironically titled Women Pilots Driving Saudi Men Crazy and written by our own .
It remains that women in business or in any other professional commitments whether in education, healthcare, sports if compared to many of the country’s neighbours, Saudi Arabia does not seem to be too much left behind; we would recommend reading this article of National Geographic The Changing Face of Saudi Women published in February 2016 on the subject that is quite of an eye opener in this respect.
Per local media reports, the Saudi King issued recently an order that allows women to benefit from certain government services without the consent of a male guardian. This looks to many observers like a move by Saudi Arabia to give women more control over their life choices by relaxing the prevailing system of male domination that could hopefully to a little more gender equality.
Meanwhile another but recent article of Al Bab written by Brian Whitaker on May 2, 2017 is republished here as another way of looking at the same topic of women’s status in Saudi Arabia.  Apart from the first thing that comes to mind which is who to believe, the issue here seem to be far more concerned about how a country could vote for therefore endorse a country usually depicted as to put it mildly overbearing towards women.  Or is it a matter of how to vote in a country into this or that international institution on the basis of its performance on this or that domain?

Belgium admits backing Saudi Arabia on women’s rights

The Belgian government has admitted supporting Saudi Arabia’s election to a UN body which champions women’s rights – and now says it regrets doing so. Meanwhile, numerous other countries supposedly committed to gender equality are refusing to say how they voted.

Saudi Arabia has a long history of institutionalised discrimination against women and is one of the world’s worst offenders in that respect, but last month it was elected to the UN’s Commission on the Status of Women. The commission is described on its website as “the principal global intergovernmental body exclusively dedicated to the promotion of gender equality and the empowerment of women”.

Commission members are chosen by ECOSOC, the UN’s Economic and Social Council. In a secret ballot, Saudi Arabia won a place on the commission with 47 out of 54 countries voting in its favour and only seven against. The electoral arithmetic means that at least three EU countries (and possibly more) voted in favour.

In the Belgian parliament on Saturday, prime minister Charles Michel said his government had been informed of the ballot “only a few hours” before it took place. He continued:

“Thus, a vote was expressed by our diplomats on behalf of Belgium. I regret this vote. [Applause]. If it could be done again and if it was possible to proceed with a political assessment at the government level, I of course would have pleaded against a favourable vote. There is no ambiguity in this matter …

“I regret this vote. We will draw the consequences of this in the future and I have given instructions for a political assessment to be made at the highest level in order for this not to occur again. In short, we are fully determined to promoting the universal values of human rights.”

A translation of the full statement is here.

The other EU countries casting votes in the election were Britain, the Czech Republic, Estonia, France, Germany, Ireland, Italy, Spain and Sweden. It is still unclear how any of them voted.

In a comment posted on Facebook (translated by UN Watch), Swedish foreign minister Margot Wallström wrote said: “The decision on how Sweden would act in the vote for the Women’s Commission … was not something that was decided at the political level.” She added that the government would reveal how it voted to parliament’s Foreign Policy Committee – but the committee’s meetings are confidential.

A spokesman for Ireland’s mission at the UN mission said “it is not our usual practice to disclose publicly how we vote in such ballots”, claiming that ballot secrecy “facilitates the conduct and management of sensitive international relationships”.

Norway, a non-EU member which boasts of being “one of the foremost advocates for women’s rights in the UN and in the Commission on the Status of Women” is refusing to disclose how it voted – again citing ballot secrecy.

Britain is also refusing to say how it voted.

Last week a freedom of information request was submitted to the British Foreign Office by John Roberts. It said:

“Under the terms of the Freedom of Information Act, I would like to ask for access to the decision on the vote cast by the United Kingdom in ECOSOC regarding the candidature of the Kingdom of Saudi Arabia to CSW.

“Given the salience of the candidature, I assume a decision was taken either at ministerial or at senior official level and instructions were then communicated to the UK Mission in New York. If the decision itself is not recorded in written form (e.g. by endorsement of a submission), I would instead ask for a copy of the instructions sent to the UK Mission.”

This brought a Kafkaesque brush-off from the Foreign Office. It said the request should be redirected to the Government Equalities Office in Manchester – a body which appears to have nothing to do with foreign policy.

Although the UN ballot was secret, there appears to be no rule preventing any country from disclosing how it voted. Vote-trading between countries is a common practice at the UN and would probably embarrass a lot of governments if details became public – hence the desire for secrecy. Britain has previously been suspected of trading votes with Saudi Arabia in connection with membership of the UN Human Rights Council.

 

After the shock and sorrow come the questions

After the shock and sorrow come the questions as put by The Mirror online this morning. The Mirror goes on :
Were there failings by the security services?
Are we doing enough to detect and monitor those at risk of being radicalised?

After the shock and sorrow come the questions as put by The Mirror online this morning. The Mirror   goes on :
Were there failings by the security services?

Are we doing enough to detect and monitor those at risk of being radicalised?

Is the Government’s Prevent strategy working?

Why, when it was known the authorities always feared a Mumbai-style attack, was not more done to improve security at Parliament’s carriage gates?

So far we know little about Kent-born Khalid Masood.
Only by learning why he committed the atrocity and how, as seems likely, he was radicalised can we prevent others from following his warped and deadly path.
There are also questions for companies such as Google and why terror manuals, including guides to using cars as weapons of destruction, are so readily available online.
In all cases, and as elaborated on by AMEinfo in an editorial that deserves pondering on, there are always causes to such atrocities but also unfortunately consequences.

London attack: 5 shocking ways terrorism affects economies

As the world watched, an unnamed assailant went on a rampage on London’s streets on Wednesday. Four people lost their lives in the deadly attack near the Houses of Parliament.

Financial impact of the ugly incident is yet to be ascertained but one can assume it will be colossal as the metropolis came to a standstill as events unfurled.

Unfortunately, the world continues to lose more money than it invests as terrorism and violence increase grossly.

The economic impact of violence on the global economy in 2015 was $13.6 trillion in purchasing power parity (PPP) terms, according to the figures from Global Peace Index (GPI).

To put this in macroeconomic perspective, the figure amounted to 13.3 per cent of the world’s GDP and it was nearly 11 times the size of global foreign direct investment.

If the lost money was distributed equally across the globe, every person would have received $1,876.

Destruction of infrastructure

Any terrorist activity begins with physical damage to properties. Numerous buildings, roads, railways and airports have been destructed in such incidents. These take a very huge share of governments’ fiscal budgets. Also, factories, machines, vehicles, skilled labourers and other resources are eliminated during the course of violence. In addition, damages to utility resources will have both short-term and long-term impacts on economy.

Uncertainty in markets

Markets are highly vulnerable to any development that catches the attention of investors. After the globalisation, markets have been responding to news-making events even if they are taking place miles away in a different country or a region. Shares in stock markets worldwide had fallen in response to militant attacks in Paris last year.

Investor confidence

Insurgent attacks have the highest potential to dampen the confidence of investors. As risk appetite of businesses wanes, they would turn away from investing in new markets or expanding in existing geographies.

Last year Syria, Iraq and Afghanistan incurred the largest economic impact as a percentage of their GDP at 54, 54 and 45 per cent of GDP respectively, according to the GPI 2016 report.

Peacebuilding spending

Governments spend billions of dollars after militant attacks in order to avoid such occurrence in future. For stepping up military strength and acquiring new weapons and technology as well as boosting intelligence many of the countries across the world allocate nearly half of their budget.

Following a suspected bombing of a Russian plane in Sinai in 2015, Egypt invested some $50 million in airport security.

Tourism

The most immediate impact of any violence will be felt on a country’s tourism sector, which is the backbone of economy in many parts of the world.

In 2010, 14.7 million tourists visited Egypt’s beaches and ancient sites but five years later the number of travellers plunged to just 9.3m as the country witnessed popular uprising and an array of terrorist attacks.

People tend to cancel or postpone their holidays which directly affects airlines, tour operators, hotels, restaurants and retailers.

 

Between 1970 and January 2016, there have been more than 160 terrorist attacks targeted at hotels worldwide. Over the past five years alone, more than 40 hotel terrorist attacks have occurred, according to figures from security consultancy firm Restrata.

Botan Osman Managing Director of Restrata says that hotels have been seen as a soft target for terrorist attacks because they tend to have large, open spaces and attract a high number of visitors, many of whom are often foreigners.

“Hospitality targeted attacks may rise unless the industry takes a harder stance. This can be done whilst balancing the business needs of the hotel.”

“Examining the growth in hotel attacks demonstrates a worrying statistic, with a quarter of all hotel attacks since 1970 occurring in the past five years. Documented attacks within the hotel industry focus primarily on North African states where terror levels are already high, yet research suggests a number of hospitality premises in these areas are lacking in basic security design features,” Osman adds.

 

 

16 events that will shape 2017

AMEinfo came up with this formidable vision of next year titled 16 events that will shape 2017; we could not help but reproduce it here all for the benefit of our readers. All comments are welcome but we would advise to address direct to AMEinfo with nevertheless a copy to MENA-Forum.
AMEinfo, is a well known and reliable middle east online medium of information.
Historically as per Wikipedia, AMEinfo.com was initially Arabian Modern Equipment Est., incorporated in Abu Dhabi, in February 1993 by Saif Al-Suwaidi and Klaus Lovgreen. The first version of the AME Info CD-ROM database of 125,000 companies was developed and compiled late 1996 and sold some 10,000 copies.
The listing of the events as proposed by AMEinfo summed up thus.
Many events of 2016 will have repercussions spilling over into 2017
Positive impacts include Saudi Vision 2030, OPEC deal
The fallout of Trump’s presidency, JASTA law, Italy referendum, etc. remain to be seenThe year 2016 was eventful, to say the least, with the world shaken by several momentous events whose repercussions will spill over into 2017. [. . .]

AMEinfo came up with this formidable vision of next year titled 16 events that will shape 2017; we could not help but reproduce it here all for the benefit of our readers.  All comments are welcome but we would advise to address direct to AMEinfo with nevertheless a copy to MENA-Forum.  

AMEinfo, is a well known and reliable middle east online medium of information.

Historically as per Wikipedia, AMEinfo.com was initially Arabian Modern Equipment Est., incorporated in Abu Dhabi, in February 1993 by Saif Al-Suwaidi and Klaus Lovgreen. The first version of the AME Info CD-ROM database of 125,000 companies was developed and compiled late 1996 and sold some 10,000 copies.  

The listing of the events as proposed by AMEinfo summed up thus.

  •  Many events of 2016 will have repercussions spilling over into 2017
  •  Positive impacts include Saudi Vision 2030, OPEC deal
  •  The fallout of Trump’s presidency, JASTA law, Italy referendum, etc. remain to be seen

The year 2016 was eventful, to say the least, with the world shaken by several momentous events whose repercussions will spill over into 2017.

Here are 16 events of 2016 that will most probably shape the coming year:

 

Saudi Vision 2030

This vision, announced in April, is one of the top economic highlights of 2016. Its repercussions are yet to be experienced throughout 2017 and beyond. Some of the biggest follow ups to this event are the Saudi Aramco IPO, expected to take place in 2018, privatising Football Clubs in the kingdom and its green card plan.

 

Trump as president of the United States

President-elect Donald Trump filling posts for his administration, getting ready to officially take office in January. This is when his foreign policy is expected to take its final shape and impact the whole world, starting with countries of the Americas, passing through Europe and the Middle East and reaching Asia.  

(Donald Trump wins US elections 2016: What it means for MENA)

 

Brexit

The United Kingdom voted to exit the European Union last June through a national referendum. Since then, the country underwent several months of economic chaos that it tried to keep under control, especially because it had not yet left the European Union. The chaos is expected to continue until the announcement of an exit plan, expected in March 2017.  

(Brexit: Who’s next?)

 

JASTA

The Justice Against Sponsors of Terrorism Act is a law passed by the United States Congress, allowing survivors and relatives of victims of terrorist attacks to pursue cases against foreign governments in the US federal court. The bill raised tensions with Saudi Arabia – when the bill was introduced, Saudi Arabia threatened to sell up to $750 billion in United States Treasury securities and other US assets if the bill is passed. Saudi Arabia is still lobbying the US over the law.

 

Egypt’s floating of the pound

Egypt’s central bank floated the pound currency in November, devaluing by 32.3 percent to an initial guidance level of EGP 13 to the dollar and hiking interest rates by three per cent to rebalance currency markets following weeks of turbulence. According to many observers, Egypt’s floating of its currency comes in a bid to attract more investors to the country.

 

China’s AIIB development bank

China launched the Asian Infrastructure Investment Bank (AIIB), a new international development bank, seen as a rival to the current, US-led World Bank. Countries such as Australia, Britain, Germany, Italy, the Philippines and South Korea agreed to join the AIIB, recognising China’s growing economic strength.

 

Google Alphabet

Last August, Google announced creating a new public holding company, Alphabet. Alphabet become the mother of a collection of companies, including Google, which includes the search engine, YouTube and other apps; Google X, the Alphabet arm working on big breakthroughs in the industry; Google Capital, the investment arm; as well as Fiber, Calcio, Nest  and Google Ventures.

 

Panama papers leak

Roughly 11.5 million documents were leaked in April, detailing financial and attorney-client information for hundreds of thousands of offshore entities. The documents contained personal financial information about famous, wealthy individuals and public officials.

The documents were created by a law firm in Panama, with some dating back to the 1970s.

 

Iran nuclear deal: lifting of sanctions

Although the framework of this agreement was announced in 2015, economic sanctions started to lift only in January 2016. The year saw the beginning of Iran’s return to international markets and more is expected for 2017 as the country has not yet made a full comeback.

 

Samsung Galaxy Note 7

Samsung Galaxy Note 7 phones, released this year, started to heat up and explode, causing some injuries in different markets around the world and killing the model altogether. This created massive chaos for the South-Korean manufacturer, which withdrew all units from the markets and started a gruelling investigation into the rootcause of the issue.

 

King Salman bin Abdel Aziz Bridge

Last April, Saudi Arabia and Egypt agreed to build a bridge over the Red Sea, linking the two countries together. This was seen as a historic move highlighting the excellent relationship between the allies. The bridge would be called “King Salman bin Abdel Aziz Bridge”.

 

OPEC deal

Members of the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC members as well, reached their first deal since 2001, to curb levels of oil output to ease a global glut after oversupply pressured prices for more than two years. Long-term market reactions to the deal are yet to be felt and will probably be seen throughout 2017.

 

Pokémon Go

The new augmented reality game, developed by Niantic, quickly became a global phenomenon and was one of the most profitable apps of 2016, with more than 500 million downloads worldwide.

 

Italy referendum

Italy’s government, led by then-Prime Minister Matteo Renzi, held a nation-wide referendum proposing reforms and amendments to the country’s constitution. The referendum failed, leading to the resignation of Renzi, tipping the country into potential political turmoil and the rise of the populist, right-wing movement in the country.

Renzi’s resignation and the country’s instability also brought up concerns over a looming banking crisis in Italy, the third-largest national economy in the euro zone.

(Italy referendum: Step 1 to another Brexit?)

 

Fed raises interest rates

The US Federal Reserve raised interest rates, signalling a faster pace of increases in 2017, with central banks adapting to the incoming of a Donald Trump administration, which has promised to cut tax. The year 2017 will probably see the repercussion of that decision.

 

Turkey’s coup

A coup d’état was attempted in Turkey in July against state organisations including the government of President Recep Tayyip Erdogan. The failed coup was carried out by a faction of Turkey’s armed forces, who attempted to seize control of several areas in the capital of Ankara, Istanbul and elsewhere.

The coup, and other terrorist attacks, disturbed Turkey’s peace and stability and harmed its tourism industry, among others.

 

 

Saudi is planning a $10 billion Bond issuance

We have recently heard of the Saudi government considering an initial public offering for its ARAMCO. This set off speculation about the world’s first trillion-dollar-plus company which indeed is more than 10 times Exxon-Mobil’s size in that it pumps over one-tenth of the world’s crude. Now, Saudi is planning a $10 billion bond issuance. Indeed with the fall of prices of oil, the kingdom’s budget got evidently restricted to not known before ‘small times’, despite the recent and flashy rise in the price of a barrel.

This story from The Irish Times illustrates well the Saudi’s frivolity with respect to their diminishing petro-dollar earnings,
Saudi Arabia plans $10bn bond issue
Country is seeking funds to shore up public finances that have been hit by the drop in oil prices to about half their 2014 levels
Oil rose to the highest in more than a year on Monday after Saudi Arabia expressed optimism that OPEC would work out a deal and Russia voiced its support.

We have recently heard of the Saudi government considering an initial public offering for its ARAMCO.  This set off speculation about the world’s first trillion-dollar-plus company which indeed is more than 10 times Exxon-Mobil’s size in that it pumps over one-tenth of the world’s crude. Now, Saudi is planning a $10 billion bond issuance.  Indeed with the fall of prices of oil, the kingdom’s budget got evidently restricted to not known before ‘small times’, despite the recent and flashy rise in the price of a barrel.  

This story from The Irish Times illustrates well the Saudi’s frivolity with respect to their diminishing petro-dollar earnings.  The Photograph above is of : Karen Bleier/AFP/Getty Images.

Saudi Arabia plans $10bn bond issue

Country is seeking funds to shore up public finances that have been hit by the drop in oil prices to about half their 2014 levels

Oil rose to the highest in more than a year on Monday after Saudi Arabia expressed optimism that OPEC would work out a deal and Russia voiced its support.

Saudi Arabia, the biggest oil exporter, sees its crude reserves of 266.5 billion barrels lasting 70 more years and hasn’t sought an independent consultant to review the figures, according to a bond prospectus.

The nation’s wealth is based mainly on oil, with crude sales accounting for 75 percent of total export earnings, according to the prospectus.

Saudi Arabia plans to sell at least $10 billion (€9.05 billion) in bonds maturing in five, 10 and 30 years, and it disclosed plans to hold investor meetings in London, Los Angeles, Boston and New York starting on Wednesday.

The country is seeking funds to shore up public finances that have been hit by the drop in oil prices to about half their 2014 levels.

At the same time, the kingdom plans to wean itself off dependence on oil for state revenue by selling part of its state oil company to help develop industries including auto manufacturing and technology.

Oil slipped from a 15-month high in New York yesterday amid uncertainty over whether Russia would join an OPEC deal to curb supply. Crude fell as much as 1.9 per cent.

Rosneft

Russia’s biggest producer Rosneft  said it won’t cut output, according to Reuters, after president Vladimir Putin said at a conference in Istanbul his country is willing to join efforts by Opec to stabilise the market through a production freeze or cut.

Price declines accelerated as the dollar climbed, curbing the appeal of commodities. Oil rose to the highest in more than a year on Monday..

Brent for December settlement dropped 96 cents, or 1.8 per cent, to $52.18 a barrel on the London-based ICE Futures Europe exchange.

(– Bloomberg)

Will Saudi Arabia’s plans for a new city be successful?

BBC News asked in a TV programme one evening of February 5th, 2016 this question: Will Saudi Arabia’s plans for a new city be successful? The show went on to elaborate how Saudi Arabia’s King Abdullah Economic City (KAEC) is one of the most ambitious construction projects in the world and that would have made sense at a time when oil was $100+ a barrel. A premise of an answer could be found to a certain degree in the location of this new town, i.e. on the western seaboard as opposed to the oil rich eastern one. McKinsey published this article written by the same Fahd Al-Rasheed interviewed by the BBC’s Stephen Sackur in the above mentioned programme. Slight but noticeable different stance could be discerned. Learn from the past, build for the future: Saudi Arabia’s new city on the Red Sea By Fahd Al-Rasheed To build a city from scratch, create a solid economic foundation. Three millennia ago, Akhenaten began construction of the Egyptian city of Amarna—perhaps the first example of planned urban infrastructure in recorded history. Within a decade of Akhenaten’s death, Amarna was abandoned—ancient evidence that building infrastructure and convincing people to use it are two fundamentally different challenges. Building an economic infrastructure King Abdullah Economic City (KAEC) is the world’s largest privately funded city. Located about 100 kilometers north of Jeddah on the coast of the Red Sea, KAEC is a public–private partnership

BBC News  asked in a TV programme one evening of February 5th, 2016 this question: Will Saudi Arabia’s plans for a new city be successful?

The show went on to elaborate how Saudi Arabia’s King Abdullah Economic City (KAEC) is one of the most ambitious construction projects in the world and that would have made sense at a time when oil was $100+ a barrel.  A premise of an answer could be found to a certain degree in the location of this new town, i.e. on the western seaboard as opposed to the oil rich eastern one.

KAEC location
KAEC location

McKinsey published this article written by the same Fahd Al-Rasheed interviewed by the BBC’s Stephen Sackur in the above mentioned programme.  Slight but noticeable different stance could be discerned.

Learn from the past, build for the future: Saudi Arabia’s new city on the Red Sea 

By Fahd Al-Rasheed

To build a city from scratch, create a solid economic foundation.

Three millennia ago, Akhenaten began construction of the Egyptian city of Amarna—perhaps the first example of planned urban infrastructure in recorded history. Within a decade of Akhenaten’s death, Amarna was abandoned—ancient evidence that building infrastructure and convincing people to use it are two fundamentally different challenges.

Building an economic infrastructure

King Abdullah Economic City (KAEC) is the world’s largest privately funded city. Located about 100 kilometers north of Jeddah on the coast of the Red Sea, KAEC is a public–private partnership with the government of Saudi Arabia; it is built with private capital, independently of oil revenue. KAEC is an image of what Saudi Arabia could look like without hydrocarbons: a trade and logistics gateway offering companies access to a fast-growing regional market of 620 million people.

KAEC is master planned to accommodate a population of two million people over an area of 181 square kilometers—about the size of Washington, DC. Today, around 25 percent of the total area is either developed or under development. KAEC could be home to about 10,000 people by the end of the year. By 2020, 40 percent of the planned area will be developed, and the population should be around 50,000 people.

KAEC was conceived to attract new industries to the city by meeting latent demand within Saudi Arabia, which is the largest economy in the region. For example, 80 percent of Saudi Arabia’s pharmaceuticals are imported; KAEC therefore encouraged leading pharmaceutical companies to establish operations in the city. Today, pharmaceuticals is one of its fastest-growing clusters.

More than 100 global and local companies are setting up operations in the city in nonoil industries, including pharmaceutical, automotive, logistics, and consumer goods. One European oil company operates a blending plant for its lubricants business in the city; a carmaker is assembling commercial trucks; an air-conditioner firm is getting ready for production and exports. Next year will see the addition of a bonded zone and sophisticated warehousing operations.

An integral part of KAEC’s economic model is the construction of trade and logistics infrastructure. The city operates King Abdullah Port, a deepwater port and the first in the region to be built entirely with private capital. The port now has the capacity to manage 3 million containers a year. This will increase to 4.5 million by the end of 2016 and 20 million by the time it is finished in 2025.

The port is connected to the national road network to facilitate transportation, thus attracting companies that need improved access to the Saudi market. The port is also adjacent to the city’s Industrial Valley light-manufacturing zone, allowing companies to ship raw materials in to their manufacturing plants and ship product out, either to the Saudi market or the broader region.

This economic infrastructure creates jobs and thus growing demand for residential and civic infrastructure, such as housing, schools, healthcare facilities, and recreation. KAEC builds this civic infrastructure to scale.

The “ghost cities” developed elsewhere are an eloquent example of the risk of building for long-term end use without an economic base. Facilities that lie idle until the population expands to support them are expensive to maintain. In a private-sector model, however, facilities must be economically viable almost from the outset to mitigate maintenance costs. Infrastructure is built to meet near-term projections and then expanded as the economic cycle gains momentum.

KAEC’s main medical center at the moment, for example, is a secondary-care facility providing emergency support, general medicine, laboratory services, and a rotating schedule of specialist clinics. There is insufficient demand for a full hospital in the city today. If built, it would be largely mothballed until the population expanded to accommodate it. Hospital construction is a project for the future.

Building a social infrastructure

A significant challenge with planned cities is creating spaces in which people want to live and interact while keeping the city affordable, particularly in Saudi Arabia, where there is a shortage of affordable housing. It is one thing to build a city that works. It is another thing to build one that lives.

Ultimately, the residents themselves will add color and vibrancy as they begin to define the space in which they live—opening boutique businesses, creating cultural neighborhoods, and initiating community-led programs. KAEC’s residential communities are built to encourage interaction, incorporating green spaces, community centers, cycle paths, and ready access to the city’s recreational facilities.

Social infrastructure also needs to adapt to emerging and future technologies. KAEC is constantly updating its master plan to adapt to the fact that technologies that were prohibitively expensive a decade ago can be installed today at low cost. The original master plan has evolved to incorporate advanced fiber optics, smart-utility networks, and a wide array of sensors to manage city operations.

Technology is also profoundly changing the relationship that people enjoy with their cities and city administrators. Citizens of KAEC can report municipal issues directly to the city management via a dedicated app, allowing information to be acted upon quickly while reducing the time and cost of providing essential community-care services. A central incident-control room monitors more serious issues such as traffic accidents and petty crime, coordinating the emergency and security services through a real-time city-information system.

Technology will be a major factor in city planning far into the future. The adoption of autonomous vehicles (AVs), for example, could have a profound impact on urban design. What will it mean to be able to significantly decrease the number of vehicles on the roads? What do AVs mean for residential spaces? To commuters? To parks and pedestrian areas? These are among the many questions that KAEC is working through today. The widespread use of AVs may be a decade or more away, but planning a new city requires thinking at least that far ahead.

Amarna is an object lesson in the dangers of building cities on little more than a political whim. Every city needs a reason to exist. It’s not enough to build infrastructure: cities need to compete economically and be attractive to all kinds of people. Those that fail in these respects will, like Amarna, disappear into the deserts of history. By focusing on creating and maintaining a sustainable economic cycle, KAEC is applying the lessons of the past to build for the future.

About the author(s)

Fahd Al-Rasheed is the managing director and group CEO of King Abdullah Economic City.

Iraq set to get back to its pre-war Market Share

A piece of information as reported by Reuters yesterday Saturday August 27, 2016 regarding an OPEC member oil producer of importance. That is Iraq set to get back to its pre-war Market Share. Its sight is on expanding its production and would not hear of reducing it at the forthcoming September meeting of Algiers.
A general view shows a lake of oil at Al-Sheiba oil refinery in the southern Iraq city of Basra, in this January 26, 2016 file photo. Iraq set on expanding oil output to gain market share
Flames emerge from a pipeline at the oil fields in Basra, southeast of Baghdad. (Image: Reuters)
Iraq is willing to play an active role within OPEC to support oil prices but will not sacrifice its goal of expanding market share and will continue to ramp up output, its oil minister said on Saturday.
Jabar Ali al-Luaibi, on a visit to the southern oil city of Basra, renewed calls for local and international oil companies in Iraq to increase production and announced plans to double crude storage capacity at the country’s southern export terminals to 24 million barrels in the “coming years” from 12 million barrels currently.
“The ministry has new ambitious plans to develop the oil sector,” he told reporters. “Among them, the most important is to increase crude output to reach a level that suits Iraq’s needs; we don’t want to specify a ceiling for future production like in the past.”

A piece of information as reported by Reuters yesterday Saturday August 27, 2016 regarding an OPEC member oil producer of importance.  That is Iraq set to get back to its pre-war Market Share.  Its sight is on expanding its production and would not hear of reducing it at the forthcoming September meeting of Algiers.   

A general view shows a lake of oil at Al-Sheiba oil refinery in the southern Iraq city of Basra, in this January 26, 2016 file photo. REUTERS/Essam Al-Sudani/Files
A general view shows a lake of oil at Al-Sheiba oil refinery in the southern Iraq city of Basra, in this January 26, 2016 file photo. REUTERS/Essam Al-Sudani/Files

Iraq set on expanding oil output to gain market share

Flames emerge from a pipeline at the oil fields in Basra, southeast of Baghdad. (Image: Reuters)

Iraq is willing to play an active role within OPEC to support oil prices but will not sacrifice its goal of expanding market share and will continue to ramp up output, its oil minister said on Saturday.

Jabar Ali al-Luaibi, on a visit to the southern oil city of Basra, renewed calls for local and international oil companies in Iraq to increase production and announced plans to double crude storage capacity at the country’s southern export terminals to 24 million barrels in the “coming years” from 12 million barrels currently.

“The ministry has new ambitious plans to develop the oil sector,” he told reporters. “Among them, the most important is to increase crude output to reach a level that suits Iraq’s needs; we don’t want to specify a ceiling for future production like in the past.”

Luaibi, who became oil minister this month, said Iraq wants to “strengthen OPEC’s role in achieving a balance in the oil market,” but his comments on continuing to increase output suggested it was not looking to take part in a possible agreement to freeze output.

“Iraq is seeking to play an active role in order to support oil prices while preserving a share that is proportionate to its reserves,” Luaibi said.

Members of the Organization of the Petroleum Exporting Countries are due to meet informally in Algeria next month on the sidelines of the International Energy Forum (IEF). Russia is also expected to attend the IEF.

Iraq’s production currently stands at around 4.6 to 4.7 million barrels per day for the whole country, including the self-rule Kurdish region in northern Iraq, Luaibi said.

Iraq’s Prime Minister Haider al-Abadi on Tuesday said the country has not yet reached its full oil market share, suggesting his government is not willing to restrain crude output.

OPEC’s second-largest producer, trailing Saudi Arabia, Iraq depends on oil sales for 95 percent of its public spending. Its economy is reeling under the double impact of low oil prices and the rising cost of the war on Islamic State militants.

The government has invited international oil companies to express interest in the country’s plan to expand four of its refineries, oil ministry spokesman Asim Jihad said separately on Saturday.

The government would consider investment offers on a build-own-operate or build-operate-transfer basis for the refineries, which are located in Kirkuk, in northern Iraq, and the southern regions of Samawa, Kut and Basra, the spokesman said.

Sources in OPEC and the oil industry this week told Reuters that Iran, OPEC’s third-largest producer, was sending positive signals that it may support joint action to prop up the oil market.

Tehran refused to join an attempt in April to freeze output at January levels, scuppering those talks because Saudi Arabia said it wanted all producers to join the initiative

By Reuters