How Egypt, host of UN Climate Change Conference COP27, is spurring a domestic ‘green economy’

A general view of Sharm El-Sheikh International Convention Center, which is hosting the COP27 climate summit. (AFP)
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Updated 07 November 2022
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How Egypt, host of UN Climate Change Conference COP27, is spurring a domestic ‘green economy’

  • From sea level monitoring to aeroponics, locally led initiatives are spearheading the ambitious campaign
  • National Initiative for Smart Green Projects shortlisted 18 schemes to be exhibited at Sharm El-Sheikh summit

CAIRO: When the Red Sea resort town of Sharm El-Sheikh hosts the COP27 UN Climate Change Conference between Nov. 6 and Nov. 18, the Egyption government will use the occasion to promote its National Initiative for Smart Green Projects.

The initiative, launched in August, is designed to encourage foreign investment in Egypt’s many environmental and quality of life projects as part of its Vision 2030 social and economic reform agenda and its National Climate Change Strategy 2050.

From an initial 6,280 projects submitted to the platform from across Egypt’s 27 governorates, just 162 made it through to the final round of judging. At a conference in Cairo on Nov. 3, Mostafa Madbouly, the Egyptian prime minister, announced the 18 winning projects.




Climate change, pollution and exploitation by man is putting existential unsustainable pressure on the Nile, the world's second longest river on which millions of people depend. (AFP)

These 18 projects will be exhibited for international delegations at COP27 and will benefit from financial and technical support.

The projects were divided into categories, including those related to quality of life, women’s economic empowerment, climate change and sustainability, start-ups, and non-profit community initiatives.

They were also divided into categories based on their size. Projects valued at more than EGP200 million were deemed to be large, from EGP50 million to EGP200 million considered medium, and those below EGP50 million classified as small. 

“The key word for this initiative is localization, since it adopts an all inclusive bottom-up approach targeting all Egyptians,” Hesham Badr, national coordinator for the National Initiative for Smart Green Projects, told Arab News.

“It attempts to reach every Egyptian citizen, man or woman, to be part of the climate change challenge and to include them in the solutions process.”

The initiative included women-focused development projects designed to empower them socially and economically and give them equal opportunities in the green economy.

The National Council for Women launched its own campaigns to encourage and support women looking to participate in the project. As a result, there were more than 1,000 submissions in this category alone.

 

 

To qualify, entries had to fulfill certain green and smart components.

The green component encompassed things such as clean energy, cutting emissions, waste management and recycling, and the ability of participants to provide a climate solution to a particular challenge in their village, province or governorate.

The smart component, meanwhile, included the use of mobile applications, the Internet, artificial intelligence, or any other kind of digital technology. The project, or at least one of its phases, also needed to be at the implementation stage to qualify.

“The whole world is looking for solutions, and these are solutions coming from the heart of the Egyptian community, from different villages, and governorates,” said Badr.

“So these are solutions to problems and challenges facing them. For the first time, we have a database of projects that are green and smart in Egypt. We have a mapping of all these projects and their location, whether they are in Al-Dakahlia, Alexandria or Cairo.”

FASTFACT

The 27th UN Climate Change Conference, more commonly referred to as Conference of the Parties of the UNFCCC, is being held from Nov. 6 to Nov. 18 in Sharm El-Sheikh.

The jury tasked with selecting the winning projects was headed by Mahmoud Mohieldin, the UN Climate Change High-Level Champion for Egypt, alongside key figures in the Egyptian government.

There was also an international jury composed of several UN agencies based in Cairo, including the UN Development Programme, the Food and Agriculture Organization, the World Food Programme, the UN Industrial Development Organization, UN-Habitat and UN Women.

Among the winning entries was a project providing smart facility management systems and modern pumping and irrigation to smallholder farmers to help them use water as efficiently and cost-effectively as possible.

Another winning project focused on soilless farming by promoting the use of aeroponics to manage irrigation, ventilation and cooling systems, saving up to 90 percent of irrigation water while providing safe and healthy food products with just 5 percent waste.

Also among the winning projects was a program that can predict extreme weather events and act as an early warning system for potential climate disasters on the Alexandria coast. The project collects data about sea levels at 24-hour intervals using sensors connected to a collection of floats deployed on the Mediterranean.




Concrete blocks are installed along the Mediterranean coast of Egypt's northern city of Alexandria to break the sea waves. (AFP)

Alexandria is considered extremely vulnerable to rising sea levels, making any technology that can monitor long-term changes or predict flooding able to help protect infrastructure and even save lives.

One successful project originating from the southern governorate of Luxor, called the Egyptian Bank for Waste, collects discarded materials from rural areas and recycles them for residential and agricultural use.

The National Initiative for Smart Green Projects is just one program launched by the Egyptian government to expand the green economy. It was during the COP26 summit in Glasgow, Scotland, last year that it launched its National Climate Change Strategy 2050.




Hesham Badr, national coordinator for the National Initiative for Smart Green Projects, said: “The key word for this initiative is localization, since it adopts an all-inclusive, bottom-up approach targeting all Egyptians.” (Supplied)

The strategy has four main targets. The first is about maintaining sustainable economic growth by reducing carbon emissions and by boosting the adoption of renewable energy sources.

The second target is to eliminate greenhouse gas emissions from non-energy activities, the third is aimed at maximizing energy efficiency, and the fourth encourages local green banking and creative financing methods such as green bonds.

Egypt’s Ministry of Finance issued the first sovereign green bond in the Middle East and North Africa in Sept. 2020, valued at $750 million with a five-year term and an interest rate of 5.25 percent.

Green bonds are defined as debt methods issued to obtain financing for climate or environment-related projects.

Egypt is not the only Arab country that is boosting green initiatives. The UAE and Saudi Arabia have committed themselves to net-zero greenhouse gas emissions by 2050 and 2060, respectively. Bahrain has pledged to meet the same target by 2060.

Since the launch of Saudi Vision 2030 in 2016, the Kingdom has taken significant steps to step up climate action and environmental protection through greater reliance on clean energy and offsetting emissions.

The Kingdom is exploring ways to diversify its economy and decarbonize by producing hydrogen using its vast reserves of fossil fuels, from which carbon capture, or blue hydrogen, is produced.




The Saudi Green Initiative was launched in 2021 with the aim of planting 10 billion trees in the Kingdom over the next few decades. (Supplied) 

Saudi Arabia plans to expand beyond blue hydrogen into other, even cleaner forms, such as green hydrogen, which is made by using renewable energy to split water. The NEOM Green Hydrogen Project, to be commissioned in 2026, will be the world’s largest green hydrogen plant powered entirely by renewables.

The Saudi Green Initiative, launched at the inaugural Green Initiative Forum on Oct. 23, 2021, consists of more than 60 initiatives, the first wave of which entails investments worth SR700 billion ($187 billion) designed to contribute to the growth of a “green economy.”

Crown Prince Mohammed bin Salman launched the first Saudi Green Initiative in 2021 with the aim of planting 10 billion trees in Saudi Arabia over the next few decades to eliminate the greenhouse emissions by 278 metric tons annually by 2030.

The second Middle East Green Initiative Summit and the Saudi Green Initiative Forum will take place in parallel with COP27 this month in Sharm El-Sheikh.

 


Saudi Arabia woos investors with lucrative business environment

Updated 11 May 2024
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Saudi Arabia woos investors with lucrative business environment

  • Vision 2030 aims to reduce the nation’s dependence on oil, diversify its economy, and build a vibrant society

RIYADH: With an average growth rate of 4 percent over the past seven years and an upward trajectory buoyed by a pro-business environment, Saudi Arabia has demonstrated remarkable resilience amid global economic challenges.

Given its strategic location, robust economy, and ambitious Vision 2030, it’s hardly surprising that the Kingdom stands as a beacon of progress and growth in the region.

A key to this has been attracting foreign direct investment, as well as working on agreements with neighboring countries to ensure Saudi Arabia is seen as being open for business.

Economist and policy adviser Mahmoud Khairy told Arab News that the Kingdom has “enhanced trade relations and reduced barriers” in this regard as it seeks to put its Vision 2030 strategy into action.

That plan aims to reduce the nation’s dependence on oil, diversify its economy, and build a vibrant society.

Khairy added: “The Kingdom has already started to take serious steps to capitalize on its exceptional location through the establishment of logistics and free trade zones, coupled with efforts to diversify the economy under Vision 2030, attracts foreign investment and fosters trade partnerships.”

Khairy emphasized that investments in digital infrastructure and e-commerce platforms have further modernized the Kingdom’s trade ecosystem, enhancing its connectivity with global markets.

Furthermore, he said, tremendous efforts have been made to advance the financial ecosystem, with new measures planned to improve the ease of doing business and develop the investment environment further.

Khairy’s analysis was echoed by Saudi-based economist Talat Hafiz, who told Arab News: “One of the main pillars of Saudi Vision 2030 is to create a business environment that supports economic growth in the Kingdom and attract FDI as well as diversify the Kingdom’s economy. The only way to reach such a goal is through facilitating doing business and trade.”

Gateway to global trade

Situated at the crossroads of Europe, Asia, and Africa, Saudi Arabia boasts a strategic geographical location that makes it a natural hub for international trade, giving it a unique advantage when it comes to Asia-Europe commerce channels and distributing goods through the Arabian Peninsula.

With access to over 424 million consumers within a three-hour flight radius, the nation serves as an efficient gateway to markets spanning three continents.

The Saudi freight and logistics industry, supported by state-led investments in infrastructure, is a vital component of the Kingdom’s economic landscape.

Saudi Arabia has undertaken extensive expansion and modernization efforts at its ports, such as the King Abdulaziz Port in Dammam and the King Abdullah Port in Jeddah, incorporating cutting-edge technology for efficient cargo handling.

Khairy said that the development of such modern ports “increases the country’s capacity to handle large volumes of cargo, thereby improving efficiency and reducing transit times for goods entering and leaving the region.” 

When compared to many Western countries, Saudi Arabia’s corporate tax rates are notably lower, with certain industries and regions even benefiting from tax exemptions or reduced rates.

Mahmoud Khairy, Economist and policy adviser

Hafiz added: “With a combined total of 290 berths, Saudi Arabia’s ports comprise the Middle East’s largest seaport network that not only contributes a great deal to national growth but also showcases the Kingdom’s formidable regional and international standing.”

He went on to emphasize that the country’s ports are capable of accommodating any form of vessel, which is what drove the Saudi Port Authority, also known as Mawani, to provide specialized terminals for various types of loads.

Furthermore, substantial investments are being made in expanding rail and road networks to enhance connectivity and streamline the transportation of goods domestically.

According to Khairy, the expansion and improvement of transportation networks, including roads, railways, and airports, enhance connectivity both domestically and internationally.

“This seamless connectivity facilitates the movement of goods and people, supporting supply chain efficiency and enabling businesses to access global markets more effectively,” he added.

Saudi Arabia’s well-established logistics infrastructure offers unparalleled opportunities for logistics companies and manufacturers looking to capitalize on its strategic advantages.

Business-friendly environment 

The Kingdom offers a business-friendly environment characterized by stable economic policies, government incentives, and a youthful, tech-savvy population.

Hafiz noted that Saudi Arabia “jumped significant places in the World Bank’s Ease of Doing Business index and IMD, making the Kingdom among the world’s top improvers.”

Ease of Doing Business index ranked economies from 1 to 190, with the Kingdom standing at number 62 in the final report issued in 2020.  

Saudi Arabia ranked 30 in 2023’s IMD World Digital Competitiveness Ranking, which assesses the capacity and readiness of an economy to adopt and explore digital technologies as a key driver for economic transformation in business, government, and wider society.

The government, through Saudi Arabia’s General Investment Authority, also known as SAGIA, offers various incentives to attract foreign investors. These incentives comprise low corporate tax rates, streamlined business regulations, and robust infrastructure development.

“When compared to many Western countries, Saudi Arabia’s corporate tax rates are notably lower, with certain industries and regions even benefiting from tax exemptions or reduced rates,” Khairy pointed out.

He went on to say that “the digitalization of bureaucratic processes makes it easier for investors to navigate the business environment and set up operations in the country.”

The incentives play a significant role in investor decisions by enhancing the attractiveness of Saudi Arabia as an investment destination.

Businesses are drawn to markets with favorable tax regimes and simplified regulatory frameworks, as they contribute to higher profitability and operational efficiency, according to Khairy.

Hafiz added: “These developments, which are aligned with Saudi Arabia’s Vision 2030, will hopefully increase FDI’s contribution to the Kingdom’s gross domestic product from 3.8 percent in 2016 to 5.7 percent by 2030.”

With this, Saudi Arabia presents lucrative opportunities for foreign investors and entrepreneurs seeking to establish their presence in the region.

Furthermore, initiatives such as the establishment of special economic zones and the growth of the venture capital sector underscore the country’s commitment to fostering innovation and entrepreneurship.

The VC sector has over 80 active firms, with more entering the market, highlighting the commitment to nurturing innovative startups.

Adding to this, the continuous infrastructure development initiatives like NEOM and Red Sea Global underscore the dedication to establishing top-tier business environments and fostering opportunities across diverse industries.

Over 200 international firms, including Northern Trust, PepsiCo from the US, IHG Hotels and Resorts, PwC, and Deloitte from the UK, have opened their regional headquarters in Riyadh.

The Kingdom had previously announced that it would not award any deals to any foreign company or commercial entity with a Middle Eastern base outside Saudi Arabia starting from January 1, 2024.

Driving innovation through technology

Embracing the transformative power of artificial intelligence and machine learning, Saudi Arabia is spearheading initiatives to harness these technologies for economic growth.

Under the leadership of Crown Prince Mohammed bin Salman, the nation is investing in AI research, education, and infrastructure to propel its industries into the digital age.

According to Khairy, collaboration between academia, industry, and government can harness AI’s potential to enhance productivity and competitiveness across sectors.

AI adoption can lead to new products, services, and business models, optimizing operations and decision-making, he explained.

Generative AI, a cutting-edge technology, holds immense potential for revolutionizing supply chain and procurement operations in Saudi Arabia.

The National Strategy for Data and AI, initiated in 2019, outlines the country’s commitment to advancing AI capabilities and data-driven decision-making.

Generative AI, powered by large language models like OpenAI’s ChatGPT and Google’s BERT, stands out as a transformative technology with the potential to revolutionize supply chain and procurement operations.

Within the context of Vision 2030, generative AI aligns with goals of economic diversification, localization, and sustainability, positioning Saudi Arabia as a key player in international supply chain management.

“The new National Industrial Strategy of the Kingdom not only focuses on raising the number of factories in Saudi Arabia to 36,000 but also improves its technological capabilities,” according to Hafiz.

A visionary path forward

As Saudi Arabia continues its journey towards economic diversification and innovation, it remains poised to emerge as a global leader in business and technology.

“I believe that the sky is the limit when it comes to business opportunities in Saudi Arabia, especially in economic sectors that could add value to the Kingdom’s economy such as advanced technologies: AI, digital economy, internet of things and other sectors, especially advanced renewable energies,” Hafiz said.

Saudi Arabia’s youth population, combined with its dedication to education and technological advancement, positions it as a powerhouse of talent and innovation.

In the era of supply chain diversification, Saudi Arabia has emerged as a compelling rival in the global logistics market. The Kingdom presents an attractive proposition for businesses seeking to optimize their supply chains and expand their global footprint.

As Saudi Arabia continues on its path to becoming a global supply chain hub and a leader in AI and machine learning, it is prioritizing programs that equip its youth with the skills and knowledge required for these transformative job opportunities.

By all accounts, Saudi Arabia can leverage generative AI to not only enhance its supply chain and procurement processes but also empower its youth to thrive in the workforce of the future.

“The technology sector is experiencing rapid growth, driven by government initiatives and increasing investment in areas such as digital transformation and artificial intelligence,” Khairy said.


The rise of the Saudi perfume market

Updated 11 May 2024
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The rise of the Saudi perfume market

  • Sector mirrors the Kingdom’s opulent lifestyle and its people’s historical connection to scents

RIYADH: Saudi Arabia, with its rich cultural heritage and burgeoning economy, presents a complex study of contrasts and traditions, particularly in its luxury perfume market.

This sector, deeply ingrained in Saudi society, mirrors the Kingdom’s opulent lifestyle and its people’s historical connection to scents.

With the market’s valuation at $1.8 billion in 2023 and anticipated growth to $2.6 billion by 2032, the Kingdom’s perfume industry is a testament to the cultural significance of fragrance. 

According to data from the Ministry of Commerce, exports amounted to SR416 million ($110.9 million) for 10 months of 2023, compared to imports, mostly from European countries, amounting to SR1.1 billion during the same period.

The rise of locally produced Saudi perfumes poses an opportunity for investors no longer restricted to international brands.

The number of commercial registrations granted to practice the manufacturing and bottling of perfumes in Saudi Arabia further demonstrates the rising tendency of citizens to invest in the industry.

According to data from the ministry, the number of existing commercial records for perfume manufacturing activity in the Kingdom reached 1,263 by the end of 2023.

Moreover, the push for female empowerment and increased tourism are expected to buoy the market further, making it an appealing sector for investors and entrepreneurs.

An inclination toward luxury and tradition

In the heart of Saudi Arabia’s scent market lies a preference for luxury and tradition. Premium products dominate the scene, reflecting a societal penchant for high-quality ingredients and prestigious brand associations. 

Chandra Mohan, the assistant vice president at research firm P&S Intelligence, told Arab News that the demand for premium fragrances is increasing due to rising personal disposable income and surging consumer awareness about the benefits of using extravagant perfumes.

Data gathered by his firm revealed that the luxury category held the larger share of the Kingdom’s scent market in 2022, accounting for almost the entirety of the sector at 90.9 percent. 

With their complex profiles and traditional ingredients, Arabic perfumes command a significant market share. (Shutterstock)

“Premium perfumes are made up of high-quality ingredients, which differentiate them from other cheap products. These are also concentrated and long-lasting and are designed to evolve and offer more sophisticated and refined experience,” Mohan explained.

“Nowadays, people are also becoming more conscious about brands and shifting toward quality and premium products, as they have high spending power. Thus, the growing usage of premium products is contributing to the growth of the market in the country,” he added.

The inherent quality and luxury of the Saudi perfume market, driven by the cultural significance of scents such as oud and musk, have contributed to the industry’s success.

With their complex profiles and traditional ingredients, Arabic perfumes command a significant market share. 

Their popularity is a nod to the region’s cultural heritage, where these fragrances are more than just scents: They are a bridge to the past and a celebration of Arab identity.

Demonstrating this, oriental perfumes accounted for the largest revenue share of the Saudi perfume market, accounting for 65.77 percent in 2022, according to a report by P&S Intelligence. 

The report further noted that this category is expected to grow by 6 percent from 2023 to 2030. 

FASTFACTS

• With the market’s valuation at $1.8 billion in 2023 and anticipated growth to $2.6 billion by 2032, the Kingdom’s perfume industry is a testament to the cultural significance of fragrance.

• The number of commercial registrations granted to practice the manufacturing and bottling of perfumes in Saudi Arabia further demonstrates the rising tendency of citizens to invest in the industry.

The craftsmanship behind these fragrances, often passed down through generations, adds layers of depth and sophistication, making them highly sought after locally and internationally.

The inclination toward premium fragrances connects back to deep-rooted cultural practices where perfumes served as an extension of personal identity and social standing, the owner of Saudi perfume brand “Nabdh,” Zaynah Al-Hamza, told Arab News. 

The digital age and celebrity branding

The digital landscape has transformed how perfumes are marketed and sold in Saudi Arabia. 

E-commerce, bolstered by the pandemic, has become a critical channel for reaching consumers, with many brands expanding their online presence.

“In recent times, developments in information and communication technologies, particularly social media, have revolutionized the way marketing activities take place. Social media has surfaced as a cost-effective and efficient information exchange platform for all,” Mohan said.

“Celebrities are also promoting several brands on social media and people are increasingly buying those products because of celebrity influence,” he added.

In March 2023, Portuguese influencer Georgina Rodriguez starred in social media adverts for Saudi fragrance brand Laverne, which later collaborated with global supermodel Taylor Hill. 

The push for female empowerment and increased tourism are expected to buoy the market further. (Supplied)

Perfume companies partner with celebrities to increase brand awareness and drive website traffic and sales, the P&S global report said, adding that this tactic also aids in generating engagement, creating a community, and serving as a channel for customers.

This shift has made the Saudi luxury perfume market more accessible and has opened up new avenues for brands to engage with their audience through social media and online marketing.

The interplay between tradition and modernity and embracing digital methods sets the stage for a dynamic future in the Saudi fragrance industry.

The unisex phenomenon

Unisex fragrances, capturing the largest market share, indicate a progressive shift in consumer behavior. This trend underscores a growing acceptance of products that transcend traditional boundaries, with scents like oud, musk, and amber being used for scents that appeal to all customers. 

“Another key trend observed in the market is the rising demand for unisex perfumes. This is because people have different tastes and a large number of individuals are looking for an aroma that is not only feminine but also masculine,” the P&S analyst said. 

“Moreover, anyone can wear them, and it allows sharing and swapping collections among different genders. Furthermore, unisex perfumes are neutral in odor and millennial consumers are mostly choosing products with inimitable fragrances in order to build up their personality and individuality,” he added.

These preferences highlight the changing landscape of the Saudi market, which, despite its traditional foundations, is receptive to modern influences.


AlUla’s rise drives economic growth and job creation

Updated 11 May 2024
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AlUla’s rise drives economic growth and job creation

  • AlUla on track to achieve 2 million visitors annually by 2035

RIYADH: Increasing visitor numbers to the cultural and tourism hub of AlUla is already delivering a boost to Saudi Arabia’s economy in line with Vision 2030 ambitions, experts have told Arab News.

Situated in the northwest of Saudi Arabia and covering around 22,000 sq. km, the Kingdom’s historic city also boasts a thriving agricultural sector that plays a pivotal role in its economic development.  

Built upon social, economic, and ecological principles, the Royal Commission for AlUla has outlined a strategic roadmap for the comprehensive development of the area, with the primary objective of assisting the Kingdom in diversifying beyond oil and contributing to the national gross domestic product. 

This strategy encompasses three main pillars: tourism, heritage, and nature; local community; and economic diversification. 

Phillip Jones, chief tourism officer at RCU, told Arab News: “AlUla is an integral part of the tourism objectives driven by Saudi Vision 2030. With AlUla’s regional economy primarily driven by tourism, by 2035, AlUla will contribute a cumulative SR120 billion ($31 billion) to the Kingdom’s GDP.” 

He said the RCU is following a “light-touch” tourism model to ensure the continued conservation of AlUla’s natural and cultural heritage.  

Jones also highlighted that AlUla hosted over 260,000 visitors last year, marking a 43 percent increase from the previous year, and projected that it would welcome more than 290,000 visitors in 2024. 

“We are also on track to achieve 2 million visitors annually by 2035.” 

Tourism infrastructure 

Across the Kingdom, the transformative economic impact of tourism is in full swing. 

In 2024, AlUla is poised to welcome two new hotels: Dar Tantora in the second quarter of the year and Hegra Boutique Hotel in the final quarter.  

These new additions will join Habitas and Banyan Tree, core hotels that opened in 2021 and 2022 respectively.  

Additionally, in the coming years, AlUla will also welcome AZULIK AlUla Resort, Sharaan Resort, and the International Summit Centre, among others. 

“AlUla’s emergence as an expansive archeological, cultural, and tourism hub, equivalent in size to Belgium, is a significant milestone in Saudi Arabia’s economic diversification and global outreach enhancement efforts,” Ali Haider, regional director for Middle East and Africa at Nomadic, a subsidiary of Fragomen, told Arab News. 

With AlUla’s regional economy primarily driven by tourism, by 2035, AlUla will contribute a cumulative SR120 billion ($31 billion) to the Kingdom’s GDP.

Phillip Jones, chief tourism officer at RCU

“As AlUla continues to develop, it is poised to attract a diverse range of visitors, both locally and internationally, in line with Saudi Arabia’s aim of attracting 150 million visitors by 2030 and having the tourism sector contribute $200 billion to the economy,” Haider added. 

This development comes as RCU recently launched its first global brand campaign – “Forever Revitalising” – which Jones described as the embodiment of their vision for AlUla. 

This showcases the commission’s commitment to not just preserving AlUla’s historical essence but also enhancing the region’s eternal appeal, according to the executive. 

“We will continue to see the economic benefits of smart, sustainable development as we welcome more international visitors with new international flights, new luxury accommodations, and our year-round activities and attractions,” RCU’s Jones reiterated. 

Haider emphasized how a surge in tourism will also lead to increased demand for ancillary services such as accommodation, transportation, tour guides, and dining establishments. 

“By investing in destinations such as AlUla, the Kingdom aims to reduce its dependency on oil revenue and create new, sustainable sources of economic growth as well as preserve and promote its cultural heritage,” the Nomadic executive highlighted. 

Workforce and talent acquisition

As the region undergoes development, there will likely be tangible improvements to the Kingdom’s broader talent acquisition and retention metrics across various sectors. 

“While increasing demand for tourism to destinations like AlUla will create jobs locally within the tourism sector and other supporting sectors, visitors to AlUla may also leverage their stay to visit other parts of the Kingdom, or even the broader region, and thereby broaden the economic impact of their visit,” Haider explained. 

He continued by stating that this could foster the development of lesser-known tourism destinations. Additionally, he mentioned that the global uptake of “bleisure travel” might result in visitors staying in the Kingdom for longer periods and potentially exploring the local business landscape.  

He emphasized that due to several recent enhancements, this was more attractive than ever. 

Bleisure travel refers to the blending of business and leisure activities within a single trip. 

“Furthermore, AlUla’s potential to attract international talent will facilitate knowledge exchange and collaboration, leading to the transfer of skills and expertise to the local workforce,” Haider underlined. 

He pointed out that the Kingdom’s ambitious target of creating over 1 million jobs within the tourism industry by 2030 reflects its commitment to leveraging both local and global talent to drive economic growth in multiple ways. 

Additionally, he explained that creating those jobs “hinges on effective implementation strategies and sustained investment in infrastructure and human capital development.”  

Saudi Arabia also has one of the youngest populations globally, with 63 percent of Saudis under the age of 30. 

“The youth represent a significant advantage for the country’s diversification ambitions, offering a skilled, innovative, and cost-effective workforce. Additionally, it fosters entrepreneurship and accelerates technology adoption over the long term,” he emphasized. 

Haider also highlighted how the fresh perspectives and digital proficiency of this demographic have the potential to propel the growth and competitiveness of Saudi Arabia’s economy on a global scale. 

“Considering the Kingdom’s proactive approach to tapping into international talent pools – as evidenced by the recently enhanced Premium Residency Permit scheme – as well as its broader commitment to economic diversification coupled with AlUla’s strategic significance as a tourism destination, there is optimism that this initiative will contribute significantly to job creation,” he explained.  

From RCU’s perspective, the people of AlUla are at the center of their strategy, and they are among the primary beneficiaries of the diversified economy. 

“In the process, we expect to create around 40,000 new jobs by 2035, which will be filled mainly by talent from AlUla and across Saudi Arabia,” Chief Strategy and Digital Officer at RCU, Waleed Al-Dayel, told Arab News. 

He added that RCU has already created “thousands of new jobs, trained thousands of Saudis in critical job skills to match the requirements of the new positions, provided language training and scholarships, and reduced the local jobless rate by more than half.”

Sustainable destination  

There is no doubt that AlUla also plays a vital role in sustainability. 

Al-Dayel explained that RCU’s development of the city into a world-class sustainable destination for tourism and investment was guided by the 12 principles of the AlUla Sustainability Charter, aligning with the goals of Saudi Vision 2030 and the Saudi Green Initiative. 

The executive further elaborated on the increasing number of initiatives registered with the Saudi Ministry of Energy and Ministry of Environment, Water, and Agriculture. These are specifically focused on key sustainable growth initiative objectives. 

“RCU’s comprehensive vision is transforming AlUla into a global sustainable destination where our community of residents, tourists, and future generations can thrive,” Al-Dayel highlighted. 

In terms of transport strategy, the governorate’s residents and visitors prioritize eco-friendly options in line with the AlUla Sustainability Charter, as well as the national transport strategy’s aim to enhance the quality of life through improved transport services. 

Al-Dayel also shed light on how RCU is developing a future transport model for AlUla, with a low-carbon tram line at its core, surrounded by pedestrian, equestrian, and biking trails. This model also supports the needs for individual vehicles and freight. 

“When combined with the increase in open green spaces and revitalized urban design, the future of transport in AlUla will greatly contribute to the improved quality of life,” he concluded.


Johnson Controls Arabia celebrates export milestone of Saudi-made scroll chillers to US 

Updated 10 May 2024
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Johnson Controls Arabia celebrates export milestone of Saudi-made scroll chillers to US 

JEDDAH: A batch of 300 Saudi-made scroll chillers are set to be exported to the US in what is a first for the Kingdom, the CEO of Johnson Controls Arabia has announced.

Speaking to Arab News, Mohamad Al-Shaikh revealed the market value of the products stands at SR100 million ($26.66 million), and the shipment will come from the Johnson Controls Arabia Manufacturing Complex in King Abdullah Economic City.

Though the domestic demand for heating, ventilation, and air conditioning equipment and technology is growing, the total addressable market for Saudi Arabia is still small compared to the global demand, the executive said.

Reflecting on the milestone of the company’s largest export order to date, Al-Shaikh said: “It is a very proud moment for us as a Saudi company to reach a level where our Saudi-made products are compliance competitive to meet all the quality requirements according to the specification for the United States’ market. 

“We have reached the maturity level where we are able to use Saudi talents, Saudi engineering and Saudi supply of chain to ship our fine products to the US market.”

The market value of the products stands at SR100 million ($26.66 million). Arab News

The company plans to increase exports from 30 percent to 60 percent of its total production output over the next three years, aligning with the national industrial strategy and Vision 2030 to enhance economic diversification and local production development.

He said: “We are thrilled also to announce our most ambitious and largest export order of 1,000 YORK Scroll Chillers for next year over three phases.”

The event also housed the signing of a memorandum of understanding between Johnson Controls Arabia and the Saudi Export Development Authority. 

This agreement aims to establish a strategic account for JCA, enhancing Saudi Arabia's non-oil exports capable of competing on a global scale, in line with Vision 2030.

Additionally, Johnson Controls Arabia announced the groundbreaking for a new factory expansion, supported by the Local Content and Government Procurement Authority. The expansion will start manufacturing water-cooled chillers with a high capacity of up to 6,000 tons of cooling, the world’s largest air conditioning product.

During his opening keynote, Al-Shaikh underscored the company’s dedication to innovation, sustainability, and supporting the local content through exports of Saudi-made products.

“This milestone reflects our unwavering commitment to advancing local content and the Saudi-made initiative, which are integral to the Kingdom's economic diversification efforts. By exporting Saudi-made products to the US market and 26 other global markets, we are not only contributing to the growth of our economy but also showcasing the quality and innovation of our Saudi products on a global stage,” he stated.

After commending the long-standing bilateral trade relations between the Kingdom and the US, Al-Shaikh added: “At JCA, we have a vision and a strong commitment to the Saudi Market, where we focus on reinforcing localization and boosting job creation to support the economy while giving back to the community.”

Johnson Controls Arabia has made significant strides in local manufacturing, with 80 percent of its sales coming from locally manufactured products. 

The company’s exports have also grown to account for over 30 percent of its total production, demonstrating its commitment to global expansion and market diversification.


Saudi Arabia to reveal roadmap to turn aviation sector into $2bn industry

Updated 10 May 2024
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Saudi Arabia to reveal roadmap to turn aviation sector into $2bn industry

RIYADH: An ambitious roadmap setting out how Saudi Arabia will grow its aviation sector tenfold into a $2 billion industry will be unveiled at a special event in May.

The plans cover the business jet segment, including charter, private, and corporate aircrafts, and will support Saudi Arabia’s development as a global high-value enterprise and tourist destination. 

Details of the roadmap will be set out at the 2024 Future Aviation Forum, convening 5,000 leaders, including private investors, operators, and service providers, set to be held in Riyadh from May 20 to 22.

The plan comes after Saudi Arabia revised its 2030 tourism target upwards from 100 million to 150 million visitors in October 2023.

The forum is set to be hosted by the General Authority of Civil Aviation, and the organization’s President Abdulaziz-Al Duailej said: “General aviation is vital to growing high-value sectors of the Saudi economy, including tourism, business and entertainment events.

“The General Aviation roadmap will turbocharge the sector within the Kingdom, transforming infrastructure and regulations, simultaneously developing, promoting and enhancing general aviation services in the market.

“GACA looks forward to hosting general aviation investors, operators and service providers at the Future Aviation Forum in May, where we will launch this ambitious plan to global audiences.”

The roadmap will support private aviation aircraft owners, lessors, and investors, as well as operators and service providers, through coordinated infrastructure investment and regulatory streamlining. 

The announcement follows GACA’s removal of “empty-leg restrictions” – which relate to when an aircraft is flying without passengers or cargo on board – and simplification of economic license requirements for operators and investors in October 2023, to boost the general aviation sector.

FAF 2024 will see aviation leaders from over 100 countries, including ministers, regulators, manufacturers, airlines, and airports, gathering in Riyadh. 

It has already been announced that the event will see Saudi Arabia unveil more than $100 billion in investment opportunities to enable its ambitious Saudi Aviation Strategy.

The forum’s investment showcase will highlight projects and incentives including airports, airlines, ground services, cargo and logistics.

Of the $100 billion in investment opportunities, airports account for more than $50 billion, new aircraft orders about $40 billion, while the remaining $10 billion is earmarked for other projects, including $5 billion in special logistics areas around the main airports in Riyadh, Jeddah, and Dammam.

The 2022 edition of the forum saw the signing of more than 50 agreements and $2.7 billion in deals, and the upcoming event will feature commercial announcements, alongside the roadmap and specialist general aviation panel sessions.