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Saudi transport and logistics plan intensifies competition with Gulf states – Analysis – Eurasia Review

Recent announcements by Crown Prince Mohammed bin Salman regarding his intention to transform the kingdom into a transport and logistics hub connecting the continents take Saudi efforts to replace the United Arab Emirates and Qatar as the United Arab Emirates to a new level. must-see addresses in the Middle East.

Prince Mohammed’s plans, which include the creation of a new national airline alongside Saudia, currently the kingdom’s aviation flagship, and the construction of a new airport for the capital, Riyadh, aim to position the Saudi Arabia as the hub of the Middle East at the crossroads of Asia and Africa. and European.

The UAE, supported by Emirates and DP World, currently serves as the region’s transportation and logistics hub. DP World handles ten percent of the world’s container traffic and operates some 80 ports as well as marine and inland terminals in more than 40 countries.

Emirates is the world’s fifth largest airline in terms of number of countries served and fourth in terms of brand value and passenger and scheduled freight tonne-kilometers.

Qatar Airways has made the Gulf State a serious competitor as an aviation hub. The airline is giving Emirates a run for its money when it comes to the number of countries served and scheduled freight tonne-kilometers.

Challenging the first mover advantage of the UAE and Qatar is likely to prove to be a big order, but not impossible. This is also true for Turkish Airlines, the other major airline in the Middle East with ambitions similar to those of Emirates and Qatar Airways.

Prince Mohammed said his transportation and logistics plan aims to make Saudi Arabia the country with the fifth highest number of transit passengers served by Saudi airlines that would serve more than 250 international destinations.

Saudia currently serves destinations in 39 countries. According to Prince Mohammed’s plan, it would welcome pilgrims to Mecca and Medina while the new airline would focus on tourists and business travelers.

By comparison, Qatar Airways flies to at least 160 passenger and cargo destinations, Emirates 139 destinations and Turkish Airlines, topping the list with 200 international destinations .

Prince Mohammed further aims to double the capacity of the Saudi air cargo sector to 4.5 million tonnes of cargo per year, through the development of port infrastructure and improved integration with shipping lines and networks. railways and roads in the country.

The rail lines would be extended from 5,330 to 8,080 kilometers and would ensure that Saudi Arabian Sea ports are connected to those in the Red Sea.

Prince Mohammed said his plan was to get Saudi Arabia to the top ten on the Logistics Performance Index. The kingdom is currently connecting to number 55.

Prince Mohammed said he expects transport and logistics to eventually account for 10% of Saudi GDP, up four points from the current 6%.

Prince Mohammed’s efforts to shift geopolitical, infrastructural, economic and trade gravity from the Middle East to the kingdom are part of his Vision 2030 strategy which aims to create jobs, diversify the Saudi economy and reposition the country regionally and global.

“Transport and logistics are a major focus of the Kingdom’s Vision 2030 programs and a vital factor for economic sectors towards sustainable development,” said Prince Mohammed at the launch of the transport and logistics plan.

Vision 2030 appears to be working on a metric amid question marks over the approach of the Crown Prince’s expensive projects such as Neom, a futuristic $ 500 billion city on the Red Sea.

Unemployment among Saudi nationals fell to 11.7% in the first quarter of this year from 12.6% in the fourth quarter of last year, its lowest level in nearly five years.

The problem is that the unemployment rate only tells part of the story. The decline in unemployment was not entirely attributable to job creation in a country that must create at least 150,000 new jobs per year to keep unemployment stable. This was in part the result of the Saudis withdrawing from the labor market.

The kingdom’s General Statistics Authority reported that Saudi labor force participation fell from 51.2% in the fourth quarter of last year to 49.5% in the first three months of this year. , the largest drop since the economic slowdown in 2017.

Prince Mohammed’s expanding competition with the UAE, Qatar and Turkey for transport and logistics follows earlier moves that include challenging the UAE’s position as a regional headquarters international trade, an announcement of plans to operate regional ports and container terminals, and a focus on sport as a tool of soft power, among other things by potentially bidding for the hosting rights of the 2030 World Cup .

Prince Mohammed’s ambitions are beyond doubt. The intensification of competition for regional positioning raises the stakes to ensure that the ambitions of the crown prince ultimately translate into tangible achievements.

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Rodney N.

The author Rodney N.