According to CNBC, Saudi Arabia announced in Tuesday a $500 billion plan to build a commercial and industrial park linked to Jordan and Egypt. This is the biggest effort Saudi Arabia has made so far to wean itself off its dependence on oil exports.
| Sodium selenite |
The Saudi crown Prince Mohammed-Ben Salman (Mohammedbinsalman) says the area of 26500 sq km (10,230 square miles), known as Neom, will focus on the development of energy and water, biotechnology, food, advanced manufacturing and entertainment industries.
For Saudi Arabia’s future investment plan, the crown prince says visionary people will see this opportunity.
“This place is not for traditional or traditional companies, it will be a place for dreamers in the world,” he said at a Tuesday conference: “It shows the strong political will and desire of the Saudis, and all the success factors have gathered in Saudi Arabia to do something big.” ”
Neom or will become a new investment growth point
Although the economy of Saudi Arabia is rich, it is difficult to overcome the problem of low oil prices. Prince Mohammed has launched a series of economic and social reforms, such as allowing women to drive and make the kingdom more modern.
Saudi officials are hoping to build a privatisation project to raise money to build the project, including the sale of a stake in Saudi Aramco, 5% of the oil giant, which will raise $300 billion.
Saudi Arabia is cutting red tape and eliminating investment barriers. In Sunday, Saudi Arabia announced it would give strategic foreign investors more than 10% of Saudi listed companies.
Neom may be the main focus of new investment. Muhammad said the Saudi government, Saudi Public Investment Fund (PIF) and local and international investors are expected to invest more than $500 billion in Saudi Arabia in the next few years.
PIF said the region is near the Red Sea and `aqaba G. Of, and is close to the Suez Canal’s maritime trade corridor, which serves as an entrance to the Kingdom of Salman Bridge and will connect Egypt and Saudi Arabia.
“Neom is one of the most prominent economic arteries in the world. Its strategic position will also facilitate the region’s rapid becoming a global hub for Asia, Europe and Africa. PIF added. Jordan and Egypt are close allies of Saudi Arabia and no comment has been made on the plan.
Saudi Arabia says it has contacted potential investors and will complete the first phase of the project in 2025. Prince Mohammed will appoint Siemens (AG) and Alcoa (Alcoainc.) Former CEO Kleinfeld (Klauskleinfeld) presided over the NEOM project.
Project completion faces challenges
Saudi Arabia will need enormous financial and technical resources to build on the scale of the project it envisages. Past experience has shown that this can be difficult.
Bureaucracy has hampered many Saudi development plans, and private investors have been wary of participating in national projects, partly because of limited legal circumstances.
The region will have its own tax and labour laws, as well as an autonomous judicial system. The region plans to rely solely on wind power and solar power, a goal that may be difficult to achieve in practice.
| Melamine |
But the creation of the project shows the ambition of Prince Mohammed to save the Saudi economy from the serious damage caused by low oil prices. PIF said Neom would expand the choice of local investment to reduce the outflow of money from Saudi Arabia.
Saudi Aramco or partly privatised and listed overseas
The main source of PIF’s future investment funds is a 5% per cent stake in Saudi Aramco, the state-owned oil giant that the government plans to sell, which now has about $230 billion trillion in management assets. The company could help raise tens of billions of of dollars in funds.
PIF General Manager Yassir (Yasiral-rumayyan) said at the meeting that Saudi Arabia is still expected to release Saudi Aramco’s shares for the first time in 2018, but did not disclose which stock markets the company would list.
Aminnasser, Saudi Aramco’s chief executive, told reporters that Saudi Aramco could still trade in markets such as New York, London, Tokyo and Hong Kong in addition to Saudi Arabia, but still needed to make a final decision.
| Benzalkonium chloride |