Saudi Arabia steps up efforts to replace UAE and Qatar as benchmark regional hub

Saudi Arabia has stepped up efforts to overtake the United Arab Emirates and Qatar as the Gulf’s commercial, cultural and / or geostrategic hub.

The kingdom recently expanded its challenge to smaller Gulf states by seeking to position Saudi Arabia as the region’s premier sporting destination once Qatar has had its heyday with the 2022 World Cup and on ensure participation in the management of regional ports. and terminals so far dominated by the United Arab Emirates and to a lesser extent Qatar.

Saudi Arabia kicked off efforts to consolidate its position as the region’s giant by announcing in February that it stop doing business by 2024 with international companies whose regional headquarters were not based in the kingdom.

With the ranking of UAE 16 on the World Bank Ease of Doing Business Index 2020 Unlike Saudi Arabia at number 62, Freewheeling Dubai has long been the preferred regional headquarters for international companies.

The Saudi move “clearly targets the United Arab Emirates” and “calls into question the status of Dubai,” said a United Arab Emirates-based banker.

A laggard in the port control game dominated by Dubai’s DP World which operates 82 marine and inland terminals in more than 40 countries, including Djibouti, Somaliland, Saudi Arabia, Egypt, Turkey and Cyprus, the expansion of the kingdom in the management of ports and terminals seems less motivated by geostrategic considerations.

Instead, Saudi Arabia’s Red Sea Gateway Terminal (RSGT), backed by the Kingdom’s sovereign wealth fund (PIF), said it was targeting ports that would serve vital Saudi imports. such as those related to food security.

PIF and Cosco’s Chinese Shipping Ports each bought a 20 percent stake in RSGT in January.

The Chinese investment is part of the broader China Belt and Road strategy which involves the regional acquisition of stakes in ports and terminals in Saudi Arabia, Sudan, Oman and Djibouti, where China has a military base.

RSGT CEO Jens Floe said the company plans to invest in at least three international ports over the next five years. He said each investment would amount to US $ 500 million.

“We are focusing on the ports in Sudan and Egypt. They were not chosen for this reason, but they are important countries for Saudi Arabia’s food security strategy, ”Floe said.

Saudi Arabia’s increased focus on sports, including a potential candidacy for the organization of the 2030 World Cup serves multiple purposes: it offers the Saudi youth who represent more than half of the kingdom’s population an opportunity for leisure and entertainment, it stimulates the burgeoning development of Crown Prince Mohamed bin Salman of a leisure and entertainment industry , potentially allows Saudi Arabia to polish its image tarnished by human rights abuses, including the 2018 murder of Saudi journalist Jamal Khashoggi, and challenges Qatar’s position as the face of Middle Eastern sports.

A recent Grant Liberty report, a London-based human rights group that focuses on Saudi Arabia and China, estimated that the kingdom has so far invested $ 1.5 billion in hosting several sporting events, including including the final matches of the best Italian and Spanish football leagues; Formula One; boxing, wrestling and snooker matches; and golf tournaments. Qatar has so far been the Middle East’s leader in hosting sporting events, followed by the United Arab Emirates.

Grant Liberty said other offers for sporting events valued at $ 800 million had failed. It did not include US $ 600 million unsuccessful bid to replace Qatar’s sports network beIN tv as the Middle Eastern broadcaster of the UEFA Champions League.

Saudi Arabia reportedly continues to ban beIN from broadcasting in the kingdom despite the 3.5-year-old Saudi-led Saudi deal lifted in January diplomatic and economic boycott of Qatar.

that of Prince Mohammed Vision 2030 plan to diversify and rationalize the Saudi economy and its dependence on oil exports “has made the creation of professional sports and a sports industry one of its objectives … The kingdom is proud to host and support various sporting and sporting events which not only introduce the Saudis to new sports and renowned international athletes, but also showcase the monuments of the kingdom and the welcoming nature of its people to the world ”, declared Fahad Nazer, spokesperson for the Saudi Arabian Embassy in Washington.

The increased focus on sports comes as the kingdom appears to be moving away from its intention to reduce the centrality of energy exports to its economy.

Energy Minister Prince Abdulaziz bin Salman, Prince Mohammed’s brother, recently ridiculed a report by the International Energy Agency (IEA) that “there is no need to invest in new fossil fuel supplies” like “the movie sequel La La Land ”. The Minister then asked, “Why should I take (the report) seriously?” “

Putting its money where its mouth is, Saudi Arabia intends to increase its oil production capacity from 12 million to over 13 million barrels per day assuming global efforts to replace fossil fuels with cleaner energy sources will lead to big reductions in the United States and Russia. production.

The kingdom’s operating assumption is that demand in Asia for fossil fuels will continue to increase even if it decreases in the West. Other Gulf producers, including the United Arab Emirates and Qatar, are following a similar strategy.

“Saudi Arabia is no longer an oil country, it is an energy producing country… a very competitive energy country. We are low cost in oil production, low cost in gas production and low cost in renewable energy production and will certainly be the cheapest hydrogen producer, ”Prince Abdulaziz said.

He seemed to suggest that doubling the kingdom’s oil was part of a strategy to ensure Saudi Arabia is a player in all conventional and unconventional aspects of energy. By implication, Prince Abdulaziz said diversification was likely to expand the kingdom’s energy supply rather than significantly reducing its dependence on energy exports.

“Sports, entertainment, tourism and mining, along with other industries envisioned in Vision 2030, are valuable expansions of the Saudi economy that serve multiple economic and non-economic purposes,” an analyst said. Saudi. “However, it is becoming evident that energy will likely remain the real name of the game.”

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