COP28 opens in Dubai with calls for accelerated climate action

Up to 200 global leaders will join over 80,000 delegates gathered in Dubai for the UN climate conference. (Abdulrahman Fahad Bin shulhub/AN)
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Updated 30 January 2024
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COP28 opens in Dubai with calls for accelerated climate action

  • Up to 200 global leaders will join over 80,000 delegates gathered in Dubai for the UN climate conference

DUBAI: Up to 200 global leaders will join over 80,000 delegates gathered in Dubai for the UN climate conference as governments prepare for negotiations on whether to agree, for the first time, to phase out fossil fuels – the main source of global warming.

With finance also high on the meeting agenda, the COP28 presidency has published a proposal on the eve of the summit for countries to formally adopt the outlines of a new UN fund to cover losses and damages in poor countries being hit by climate disasters like extreme flooding or persistent drought.

READ MORE: Click here for our coverage of COP28

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COP28 formally approves climate disaster fund arrangements

DUBAI: Countries at the UN COP28 climate summit on Thursday formally approved a deal on a new climate disaster fund.

The deal was adopted following the COP28 opening ceremony, drawing a standing ovation from delegates.

Representatives from developed and developing countries painstakingly crafted the agreement during negotiations this year. It will launch a fund to help vulnerable nations cope with the cost of climate-driven damage from drought, floods and rising seas.

UN weather agency says 2023 is the hottest year on record, warns of further climate extremes ahead

DUBAI: The UN weather agency said Thursday that 2023 is all but certain to be the hottest year on record, and warning of worrying trends that suggest increasing floods, wildfires, glacier melt, and heat waves in the future.

The World Meteorological Organization also warned that the average temperature for the year is up some 1.4°C from pre-industrial times – a mere one-tenth of a degree under a target limit for the end of the century as laid out by the Paris climate accord in 2015.

The WMO secretary-general said the onset earlier this year of El Niño, the weather phenomenon marked by heating in the Pacific Ocean, could tip the average temperature next year over the 1.5°C target cap set in Paris.

WATCH: Opening ceremony of COP28: UN Climate Change conference

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Jim Skea, chairman of the Intergovernmental Panel on Climate Change. (AFP)

“Human activity has led to changes in climate at a magnitude that is unprecedented over centuries and thousands of years,” according to Jim Skea, chairman of the Intergovernmental Panel on Climate Change.

“If we do not find immediate and deep emission reductions across all sectors, we will not meet the goals of the Paris agreement,” he said.

“Our assessments have identified multiple options to reduce greenhouse gas emissions and adapt to climate change, and these can be implemented right now. But they need to be scaled up and mainstreamed through policies and increased financing.”

“As the chair of the IPCC, the scientific community is poised for using the resources available to support the outcomes of COP28, in shaping climate actions based on science. But finally, let us recall, science by itself is no substitute for action,” Skea said.

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Simon Stiell, executive secretary of UNFCCC

“Today, we find ourselves in a rather different position, in humanity’s climate action journey. We are taking baby steps. Stepping far too slowly from an unstable world that lacks resilience, to working out the best responses to the complex impacts we are facing,” Simon Stiell, executive secretary of UNFCCC, said in his remarks at the opening of COP28.

“We must teach climate action to run. Because this has been the hottest year ever for humanity. So many terrifying records were broken. We are paying with people’s lives and livelihoods,” he said.

“If we do not signal the terminal decline of the fossil fuel era as we know it, we welcome our own terminal decline. And we choose to pay with people’s lives. If this transition isn’t just, we won’t transition at all. That means justice within and between countries. Sharing benefits across society. Ensuring that everyone – women, indigenous peoples and youth, in all their diversity - have equal opportunities to benefit from these transitions.”

“In 2024, countries will submit their first Biennial Transparency Report. This will mean the reality of individual progress can’t be concealed… And let this be your first official notice that early in 2025, countries must deliver new Nationally Determined Contributions. Please start working on them now,” Stiell said.

“Science tells us we have around six years before we exhaust the planet’s ability to cope with our emissions. Before we blow through the 1.5°C limit,” the executive secretary of UNFCCC said.

“This is the biggest COP yet – but attending a COP does not tick the climate box for the year. The badges around your necks make you responsible for delivering climate action here and at home... turn the badge around your necks into a badge of honor, and a life belt for the millions of people you are working for. Accelerate climate action. Teach it to run,” added.

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COP28 President designate Sultan Al-Jaber. (Abdulrahman Fahad Bin shulhub/AN)

In his opening speech, COP28 President designate Sultan Al-Jaber urged delegates as well as oil companies to work together at the UN climate summit. He said, “we must ensure that this COP delivers the most ambitious global stocktake possible.”

He stressed that the COP28 is committed to unlocking finance to ensure that the global south does not have to choose between development and climate action.

While Al-Jaber hailed the initiative of national oil companies to step up, he said “it is not enough.” “They can do more. Every nation, every sector and every one of us has an urgent role to play.”

 

 

“We can bring mitigation, adaptation and means of implementation which includes finance under one umbrella,” according to Al-Jaber, who also runs state-run Abu Dhabi National Oil Company.

“I ask you to start this COP with a new mindset, adopt different thinking, be flexible. Ensure the most ambitious global stocktake. I want this COP to be the COP that maximizes mitigation on momentum,” Al-Jaber said.

He stressed that the ‘role of fossil fuels’ must be part of climate deal. “It is essential that no issue is left off the table,” according to the UAE official. He added that “let this be the COP where we deliver our promises from the $100 billion on loss and damage.”




COP28 president Sultan Ahmed Al-Jaber receives a gavel from Egyptian foreign minister and COP27 President Sameh Shoukry during the United Nations Climate Change Conference opening in Dubai on Nov. 30, 2023. (Reuters)

“This is the presidency that made a bold choice to proactively engage oil and gas companies. We had many hard discussions. That was not easy. But today, many of these companies are committing zero methane emissions by 2030 for the first time. And now, many national oil companies have adopted net zero 2050 targets for the first time,” Al-Jaber said in his speech.

“The next two weeks will not be easy. Let us remember, our task is not about only negotiating texts. It is about improving lives, it is about people,” he added.

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Sameh Shoukry, the COP27 president

“Rather than increasing climate finance from developed countries, actually, it is decreasing in relation to growing needs and the increasing growth of financing in developing countries,” said Shoukry, the COP27 president.

The UN’s COP28 climate summit in Dubai opened Thursday with a moment of silence for the victims of the conflict in Gaza.

Sameh Shoukry, the Egyptian foreign minister who chaired the previous COP talks in Egypt last year, urged delegates to “stand for a moment of silence” in memory of two climate diplomats who recently died “as well as all civilians who have perished during the current conflict in Gaza”.

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An early breakthrough on the damage fund — which poorer nations have demanded for years — could help grease the wheels for other compromises to be made during the two-week summit.

The UN and hosts the UAE say the COP28 talks will be the most important since Paris in 2015, when nations agreed to limit global warming to well below 2°Celsius since the preindustrial era, and preferably to a safer limit of 1.5°C.

Scientists say the world is not on track to achieve these targets and nations must make faster and deeper cuts to emissions to avert the most disastrous impacts of climate change.

 

 

A central focus will be a stocktake of the world’s limited progress on curbing global warming, which requires an official response at these talks.

“Right now, we’re taking baby steps where we should be taking great leaps and great strides to get us to where we need to be,” said UN climate chief Simon Stiell on Wednesday.

The COP28 climate conference should aim for a complete “phaseout” of fossil fuels, UN Secretary-General Antonio Guterres earlier said, warning of “total disaster” on humanity’s current trajectory.

“Obviously I am strongly in favor of language that includes (a) phaseout, even with a reasonable time framework,” Guterres said.

Climate change is the biggest threat to human health in Africa and the rest of the world, the head of the continent's public health agency said.

Mitigating that risk was top of his agenda, Jean Kaseya, the director general of the Africa Centres for Disease Control and Prevention, said as he headed to the COP28 climate summit in Dubai.

with agencies


Startup Wrap – International venture capital interest in MENA rises despite global challenges

Updated 23 November 2024
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Startup Wrap – International venture capital interest in MENA rises despite global challenges

RIYADH: International venture capital investors have increased their presence in the Middle East and North Africa region despite a challenging global economic climate, according to a new report by MAGNiTT.

The study highlights significant growth in global participation, with their share of MENA-based startup investments rising from 28 percent in 2020 to 51 percent in 2024.

The global economic climate in recent years has been marked by persistent challenges, including rising inflation, geopolitical tensions, supply chain disruptions, and tightening monetary policies by central banks.

These factors have created a volatile environment for investors, prompting cautious capital deployment and heightened scrutiny of high-risk markets.

In particular, the venture capital landscape has faced headwinds due to declining valuations, slower funding cycles, and a shift toward profitability over rapid growth.

Despite these challenges, regions like MENA, Southeast Asia, and Africa have demonstrated resilience, attracting both local and international capital due to their untapped potential and strategic efforts to foster innovation.

This 23-percentage-point increase underscores MENA’s growing appeal as a destination for venture capital.

The ecosystem continues to be shaped by strong regional investor engagement, driven largely by sovereign wealth fund mandates such as Saudi Arabia’s Saudi Venture Capital Co.

Local investors accounted for 49 percent of the 1,361 unique investors in the region’s startups, with 62 percent of all disclosed capital invested in MENA coming from within the region, MAGNiTT revealed.

However, international interest has surged, with the first nine months of this year marking a 60 percent increase in global investors compared to the previous year.

Philip Bahoshy, CEO of MAGNiTT, attributed the region’s growth to the role of regional Limited Partner programs and high-profile events that spotlight opportunities in emerging markets.

“If you recently attended events like FII in Riyadh, GITEX in Dubai, or Web Summit in Qatar, you would have seen firsthand the growing presence of international investors interested in Emerging Markets. Many of these investors are exploring opportunities but are yet to make substantial commitments,” Bahoshy said.

The UAE has been a standout in the region’s venture growth, with international investor participation climbing from 25 percent in 2020 to 62 percent in 2024, positioning the market as a global hub akin to Singapore.

Saudi Arabia has also seen notable progress, with international investor participation rising from 18 percent in 2020 to 25 percent in 2024, reflecting the Kingdom’s increasing focus on venture capital.

Events such as LEAP and the Future Investment Initiative have played a key role in attracting global attention to Saudi Arabia’s burgeoning venture ecosystem.

In Africa, international development finance institutions have helped foster a growing local investment base.

African investors’ share of total capital deployment increased from 15 percent in 2021 to 35 percent in 2024. This upward trend reflects efforts to strengthen regional ecosystems while still leveraging international expertise.

Internationally, US-based firms such as 500 Global and Y Combinator emerged as the most active of these investors across MENA, Africa, and Southeast Asia between 2020 and 2024.

The influence of American venture capital remains dominant, with US investors topping deal counts in all three regions. However, Southeast Asia attracted the largest capital deployment, with $11.65 billion invested by top international players, compared to $1.177 billion in Africa and $947 million in MENA.

Saudi Arabia-based EdfaPay secures $5m to scale tap-to-pay solution

Fintech startup EdfaPay has closed a $5 million pre-Series A funding round led by OmanTel Innovation Labs, with participation from Aljabr MENA and Waad Investment.

Founded in 2022 by Ghormallah Al-Ghamdi and Nedal Sabbah, EdfaPay offers a tap-to-pay solution that allows small and medium-sized enterprises to use smartphones as point-of-sale devices.

The funding will be used to strengthen the company’s market position in Saudi Arabia and expand its footprint across the MENA region and Pakistan.

The startup previously raised $1.6 million in a pre-seed round in early 2022 and has since entered several new markets, including Tunisia and Morocco.

Social networking app Bubbl raises $350k pre-seed

Saudi social networking platform Bubbl has raised $350,000 in a pre-seed funding round led by angel investor Abdullah Al-Dosari.

Launched in 2024 by Aya Al-Hammoud, the app has already attracted 60,000 daily active users.

The funds will support Bubbl’s plans to scale its user base, with a goal of reaching 1 million daily active users in the near future.

The Public Investment Fund’s Jada Funds of Funds has announced a commitment to invest in SEEDRA Ventures Fund II. (Supplied)

PIF’s Jada commits investment in SEEDRA Ventures Fund II

The Public Investment Fund’s Jada Funds of Funds has announced a commitment to invest in SEEDRA Ventures Fund II, a newly launched venture capital fund managed by SEEDRA Ventures.

The fund aims to invest in early-stage startups with a sector agnostic approach, which coincides with Jada’s strategy.

Bandr Al-Homaly, managing director and CEO of Jada, said: “Our commitment to SEEDRA Ventures Fund II underscores our focus on enabling early-stage businesses that contribute to the Kingdom’s economic transformation in alignment with Vision 2030.”

EFG Hermes launches $300m Saudi education fund

EFG Hermes’s private equity arm has unveiled a $300-million Saudi Education Fund to develop a world-class K-12 operator in Saudi Arabia.

The fund seeks to capitalize on the growing demand for private education, fueled by an expanding student population.

SEF will also acquire a portfolio of international schools in Saudi Arabia, the UAE, and Bahrain, currently managed by GFH under the Britus Education brand.

Amenli secures $2.3m to expand insurtech offerings

Egypt-based insurance tech company Amenli has closed a $2.3 million funding round led by the European Bank for Reconstruction and Development’s Venture Capital arm, with additional participation from Y Combinator.

Founded in 2020 by Adham Nauman, Omar Ezz El-Din, and Shady El-Tohfa, Amenli provides accessible insurance solutions tailored for individuals, families, and SMEs.

The funding will support technology upgrades, product innovation, and market expansion.

Qara raises $2.6m to advance supply chain traceability

Supply chain startup Qara, based in Egypt, has raised $2.6 million from undisclosed investors to fuel its expansion.

Founded in 2021 by Hassan Abouzeed and Khaled Hassan, Qara provides a digital platform enabling product authentication and full traceability for producers.

The company, already active in Egypt, Saudi Arabia, and Kenya, plans to use the funding to expand further into Saudi Arabia under the National Technology Development Programme’s Relocate Initiative.

Logistics startup Locad secures $9m for global growth

Singapore-based logistics platform Locad has raised $9 million in a pre-series B funding round co-led by Global Ventures and Reefknot Investments.

Other participants included Sumitomo Equity Ventures and existing investors such as Antler Elevate and Febe Ventures.

Founded in 2020 by Constantin Robertz, Jannis Dargel, and Shrey Jain, Locad provides a cloud-based logistics engine that helps e-commerce businesses optimize their supply chains.

The funds will support Locad’s international expansion, with a focus on launching in the UAE and Saudi Arabia by the end of 2024.

Egypt-based furniture and home decor e-commerce platform ariika has raised $3 million in a series A extension round. (Supplied)

Furniture e-commerce platform ariika secures $3m to expand

Egypt-based furniture and home decor e-commerce platform ariika has raised $3 million in a series A extension round led by Beltone Venture Capital and Citadel International Holdings.

Founded in 2016 by Khaled Attallah and Shahir Arslan, ariika collaborates with artisans worldwide to design and curate modern home décor products.

Having recently launched in Iraq, ariika plans to enter the Saudi market by January 2025. This follows a previous series A round in which Beltone acquired a 20 percent equity stake.


Natural resources and young population driving Saudi Arabia’s economic growth: BlackRock Investment Institute

Updated 23 November 2024
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Natural resources and young population driving Saudi Arabia’s economic growth: BlackRock Investment Institute

RIYADH: Saudi Arabia can attract global investments and successfully diversify its economy thanks to the Kingdom’s abundant natural resources and youthful workforce, said BlackRock Investment Institute.

In its latest report, the asset management firm said Saudi Arabia offers substantial opportunities across public and private markets, though success will depend on the progress of governance, regulatory improvements, and labor market reforms.

The Kingdom is currently embarking on an economic diversification journey known as Vision 2030 by strengthening the non-oil private sector and reducing its decades-long dependence on oil revenues.

With its predominantly young population and labor reforms, the Kingdom reduced the unemployment rate among Saudi nationals to 7.1 percent by the end of the second quarter of 2024, representing a quarterly drop of 0.5 percentage points and an annual decline of 1.4 percentage points.

By the end of the second period of the year, joblessness among Saudi females also witnessed a sharp quarterly decline of 1.4 percentage points, reaching 12.8 percent.

In terms of natural resources, Saudi Arabia holds abundant mineral wealth estimated at $3 trillion, and Vision 2030 aims to turn the mining sector into the Kingdom’s third pillar of economy.

“Saudi Arabia stands at the crossroads of economic transformation. Unlike many developed economies, we think it benefits from low debt levels, ample energy resources, and a young, expanding workforce — a combination that supports long-term economic growth and creates opportunities in infrastructure and urban development,” said BlackRock.

It added: “However, realizing these opportunities hinges on sustained investment. Historical data shows that Saudi Arabia is already an outlier in terms of population growth and has room to increase investment further.”

A recent report released by the International Monetary Fund also echoed similar views, and said that the Kingdom is expected to witness economic growth of 1.5 percent in 2024 and 4.6 in 2025, driven by activities in the non-oil sector.

In October, the World Bank also projected that the economy of Saudi Arabia will grow by 1.6 percent this year and 4.9 percent in 2025.

Capital investments

According to BlackRock, Saudi Arabia has ramped up capital investments, with about $780 billion invested over the past three years, fueled by a bank lending boom and significant public spending.

The report added that Saudi Arabia is successfully leveraging domestic and foreign private financing, while equity and fixed-income markets are developing rapidly through the rising number of initial public offerings and bond issuances in the Kingdom.

A report released in July by the Kuwait Financial Center, also known as Markaz, revealed that the Kingdom led the Gulf Cooperation Council’s initial public offering market in the first half of 2024, raising $2.1 billion in what was an annual increase of 141 percent.

Another report released by Markaz in October revealed that Saudi Arabia raised $512 million from IPOs in the third quarter.

“Building a large, liquid local-currency corporate bond market is key to boosting non-bank financing across corporate bonds, infrastructure debt, and mortgage-backed securities,” said BlackRock.

Attracting investments

BlackRock revealed that Saudi Arabia’s Vision 2030 aims to establish the Kingdom as a leading hub for infrastructure investment.

The Kingdom’s National Investment Strategy seeks to attract $3.3 trillion over the next decade, spanning sectors from energy to health care to tourism.

“The investments are set to cover energy, water, transportation, logistics, digitalization, and services like waste recycling. The transformation involves three main shifts: transitioning to renewable energy, boosting private sector activity, and expanding non-oil sectors like household spending and tourism,” added BlackRock.

According to the report, the Shareek program launched in 2021 could play a crucial role in fulfilling the investment targets of Saudi Arabia.

Through this initiative, the Kingdom targets $1.3 trillion in funding, representing 40 percent of the Vision 2030 goal.

Foreign direct investment, currently a small share of the Kingdom’s GDP, is also targeted to provide 15 percent of Vision 2030’s total investment.

The report added that regulatory improvements such as simplifying business licensing, reducing red tape, enhancing transparency, and introducing investor rights measures are key to elevating investments in the Kingdom.

“Becoming a major investment destination requires broad economic and societal changes, stronger governance frameworks, and regional security assurances to attract capital,” said the analysis.

It added that global investors will also need confidence in regional stability before committing significant capital, as geopolitical tensions remain a major concern determining the future economic growth in the region.

Reliance on oil

According to the report, Saudi Arabia’s future economic growth and diversification plans will not be without any hurdles, as oil revenues have direct impacts on the country’s progress.

“Saudi Arabia’s economic trajectory remains heavily reliant on oil revenue, making it vulnerable to shifts in global energy markets. A decline in oil prices – potentially influenced by increased US production or a slowdown in global demand – could challenge its reform agenda and economic resilience,” the analysis said.

On a positive note, Blackrock added that the Kingdom is aiming to strengthen its position as a low-cost oil and gas producer.

“The BlackRock Investment Institute Transition Scenario sees rising global oil and gas demand over the next decade, with declines approaching 2050. Saudi Arabia’s low-cost, low-emission production positions it to maintain or grow market share across various demand scenarios,” said the report.

It added: “Diversifying energy exports through natural gas/LNG could enhance its competitive edge, though an accelerated low-carbon transition could pressure oil prices.”

According to the analysis, Saudi Arabia is also making significant efforts to reduce greenhouse gas emissions.

The report said that the Kingdom is planning to shift power generation from 40 percent oil and 60 percent gas to an equal mix of gas and renewables by 2030.

“Saudi Arabia’s solar installation costs are 40 percent lower than the global average, boosting energy security, reducing emissions, and freeing up oil for export. Investments in carbon capture and hydrogen production could further support decarbonization,” said BlackRock.


Saudi 2034 World Cup goals include jobs boost and GDP growth

Updated 23 November 2024
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Saudi 2034 World Cup goals include jobs boost and GDP growth

  • Saudi Arabia is the only country to submit a bid to host the football tournament

JEDDAH: Saudi Arabia’s hosting of the 2034 FIFA World Cup will not only showcase the Kingdom’s cultural and administrative capabilities but also serve as a catalyst for significant job creation and infrastructure development, according to experts.

Saudi Arabia is the only country to submit a bid to host the football tournament, and the decision will be rubber stamped by FIFA on Dec. 11.

It will be the second time the global event has been held in the Middle East, with Qatar staging the competition in 2022.

Experts told Arab News that Saudi Arabia could expect a GDP boost of between $9 billion and $14 billion, the creation of 1.5 million new jobs, and the construction of 230,000 hotel rooms developed across five host cities to accommodate visiting fans and dignitaries.

Yaseen Ghulam, an associate professor of economics and director of research at the Riyadh-based Al-Yamamah University, emphasized that the World Cup will provide a unique platform to attract foreign direct investment, diversify income sources, and boost tourism, aligning seamlessly with Saudi Arabia’s Vision 2030 objectives.

However, he asserted that the associated costs and logistical challenges must be managed strategically to maximize long-term benefits for the nation.

“The event will help the Kingdom to not only get noticed for its administrative capabilities and cultural depth but, more importantly, will help it to showcase the investment opportunities that currently exist in Saudi Arabia,” he told Arab News.

Ghulam pointed out that the event demands a significant commitment to quickly building state-of-the-art facilities, including stadiums, hotels, and roads, as well as training facilities, transportation networks, and tourist attractions. 

Ghulam noted that Brazil’s World Cup cost $18 billion, while Russia spent $13 billion, with half allocated to infrastructure, including 12 stadiums, as well as hospitals, airports, train stations, motorways, and hotels.

He said that while Qatar invested $200 billion to $300 billion over a decade ahead of its 2022 hosting, the amount spent on stadiums was no more that $7 billion, with the rest on infrastructure developments. 

Ghulam explained that hosting the World Cup offers both direct and indirect benefits, with economists estimating short-term gains from visitor spending and broadcasting rights to be about 1 percent of global GDP.

For Qatar, he said, visitor expenditure on tourism and revenue from event-related programming is believed to have been between $2.3 billion and $4.1 billion. 

“Considering the gross value added, this amounts to $1.6 billion to $2.4 billion, which represents 0.7 percent to 1 percent of Qatar’s GDP in 2022,” Ghulam said, adding that South Korea also experienced the same numbers in 2002.

The associate professor believes Saudi Arabia could expect to see a GDP boost of $9 billion to $14 billion, based on previous events, the Kingdom’s geographical location, and Saudi Arabia’s growing tourism infrastructure.

“Qatar attracted around a million spectators, and Saudi Arabia could double this number due to the religious tourism potential of Muslim spectators alongside the geographic diversity of the country,” he said.

Ghulam stressed the importance of affordability when it comes to accommodation for traveling fans, noting that Qatar’s hotels saw only 59 percent occupancy during the 2022 World Cup due to high prices, with many spectators opting to stay in neighboring countries and use shuttle services.

The economics professor noted that indirect benefits could arise before and after the tournament through higher foreign direct investment and increased tourism from improved experiences during the event. He also mentioned emerging evidence of increased FDI following World Cup hosting.

“For most of the countries that have hosted the same event, the impact started immediately after the announcement. One recent study estimates the magnitude of such an impact, concluding that an average increase in inward foreign direct investment of $4.33 billion is linked to hosting the FIFA World Cup,” he said.

Ghulam added that FDI has increased by a greater amount in well-governed countries, indicating that governance quality is a significant moderating element. 

“The evidence shows that Qatar managed to increase the contribution of non-hydrocarbon income by 40 percent during the decade of preparation for the World Cup by investing in infrastructure and other diversification related activities alongside attracting FDI,” he said.

He noted that the multiplier effect of these investments has boosted other income sources, emphasizing that Saudi Arabia’s current non-hydrocarbon income of $453 billion could significantly rise over the next decade in preparation for the event.

Ghulam highlighted that the event would significantly influence Saudi Arabia’s infrastructure development, with stadiums and fan zones benefiting local communities and contributing to the non-hydrocarbon GDP share in line with Vision 2030. 

He emphasized the importance of maintaining and utilizing these stadiums for long-term gains, noting that maintenance costs could be significant.

Highlighting the long-term economic impact of the World Cup on local businesses and tourism, he noted that Saudi Arabia topped the UN’s list for significant foreign tourism growth in 2023. 

When it comes to job creation, the academic cited a report from Knight Frank which estimated the 2022 World Cup contributed to the creation of almost 850,000 additional jobs in Qatar’s residential sector between 2010 and 2022.

“Since the event in Saudi Arabia is expected to be prestigious and in fact better than previous events, one could extrapolate to more than 1.5 million new jobs, equating to 10 percent of the currently employed workforce,” Ghulam said.

Infrastructure boost

Waleed Al-Thabi, founder and CEO of Aljdwa, a leading Saudi firm specializing in project feasibility studies and development, told Arab News that hosting the 2034 FIFA World Cup is key to Saudi Arabia’s Vision 2030 initiative aimed at achieving significant economic growth.

Discussing how the preparation for the event would impact the Kingdom’s infrastructure development, he said that hosting the World Cup will establish a legacy of stadiums and sports facilities for future generations.

He added that over 130 training facilities will support players, teams, referees, and administrative staff participating in this event.

“Moreover, Saudi Arabia has developed logistics services, expanding the rail network, such as the Riyadh Metro project, which serves as the backbone of public transport in the capital. Initially designed to accommodate 1.2 million passengers daily, the network is projected to reach nearly 3.6 million passengers in its final phase,” Al-Thabi said.

The CEO noted that several regional and international airports are being developed, including King Salman International Airport in Riyadh, which will cover approximately 57 sq. km and rank among the largest airports globally, adding that the new Abha International Airport is also expected to serve around 10 million passengers annually by the end of 2027.

He highlighted that these advancements will enhance travel experiences for fans, improve transportation efficiency, and ensure maximum comfort and accessibility during the tournament.

The CEO expected that event will attract millions of tourists from around the world, leading to a significant increase in demand for hospitality facilities.

“Approximately 230,000 hotel rooms will be developed across the host cities. To maximize the Kingdom’s geographical advantages and diverse areas, the hosting plan will extend to ten supporting cities that will accommodate some of the participating teams’ training camps before and during the tournament,” he said.

With anticipated growth in tourism and commercial activity, Al-Thabi stressed the need for efficient Saudi companies in these sectors to capture a significant share of the cash flow generated during the event.

“Such cash flows contribute to reducing unemployment rates and stimulate the flow of funds within the economy, directly impacting the Kingdom’s GDP,” he said.

Al-Thabi added that jobs will primarily be in event management, security, hospitality, and transportation, as well as facility service and operations coordination, allowing employees to benefit from longer hours and higher incomes, thus enhancing living standards. 

“Additionally, the construction sector will expand, creating jobs for engineers, architects, and construction workers, further advancing the Kingdom’s economic development,”

FDI rise

Abdullah Al-Maghlouth, a member of the Saudi Economic Association, stated that the Kingdom’s hosting of the 2034 World Cup will showcase an exceptional and unprecedented version of the tournament, harnessing Saudi strengths to delight football fans globally.

He pointed out that all the stadiums are designed to meet the Kingdom’s long-term infrastructure needs, noting that Saudi Arabia is also developing railway plans to connect with Gulf nations, enhancing the movement of fans and teams.

“While the opening and final matches of the 2034 World Cup will be held in the capital, Riyadh, the maximum distance a fan will need to travel within the Kingdom is two hours,” Al-Maghlouth said.

The Saudi economist further noted that the event will play a pivotal role in attracting foreign direct investment, as hosting plans include the construction of 11 new world-class stadiums and the development of 15 existing ones.

“These projects are expected to draw substantial foreign investment in construction and related services, such as transportation, accommodation, entertainment, and technology. This increased economic activity is anticipated to encourage more foreign companies to enter the Saudi market, thereby enhancing the volume of foreign direct investment,” he said.

Beyond the direct economic benefits, he continued, hosting the event represents an opportunity to develop infrastructure in the host cities.

“These cities will witness significant developments, including improvements to public transportation, roads, and public facilities. These enhancements will elevate the quality of life for residents and leave a sustainable legacy after the tournament concludes, strengthening the long-term competitiveness of these cities.” Al-Maghlouth said.

Furthermore, the event will enhance innovation and entrepreneurship, driving entrepreneurs to devise rapid solutions to challenges faced by organizers, he added.


Moody’s upgrades Saudi Arabia’s rating on strong diversification progress and fiscal prudence

Updated 23 November 2024
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Moody’s upgrades Saudi Arabia’s rating on strong diversification progress and fiscal prudence

  • Saudi Arabia’s local and foreign currency medium-term note program ratings was also upgraded to (P)Aa3 from (P)A1

RYADH: Global credit ratings agency Moody’s Ratings upgraded Saudi Arabia’s long-term local and foreign currency issuer and senior unsecured ratings to Aa3 from A1, taking note of the Kingdom’s progress in diversifying its economy.

Saudi Arabia’s local and foreign currency medium-term note program ratings was also upgraded to (P)Aa3 from (P)A1.

“Continued progress will, over time, further reduce Saudi Arabia’s exposure to oil market developments and long-term carbon transition,” the ratings agency said.

“The recent fiscal space exercise and recalibration and reprioritization of diversification projects – which will be regularly reviewed – will provide a more conducive environment for sustainable development of the kingdom’s non-hydrocarbon economy and help preserve the relative strength of the sovereign’s balance sheet.”

Moody’s expects Saudi Arabia’s non-hydrocarbon private sector GDP to continue expanding by about 4 percent to 5 percent in the coming years, among the highest in the Gulf region, as its diversification strategy reduces the Kingdom’s exposure to oil market developments and long-term carbon transition over time.

“Our baseline projections assume there will be no significant downward pressure to oil prices or production over the next few years. We also assume that heightened geopolitical tensions in the region, which are having a limited impact on Saudi Arabia so far, will not escalate into a full-scale military conflict between Israel and Iran with collateral effects that could affect the kingdom’s ability to export oil or deter private sector investment supporting the diversification momentum,” Moody’s said.

Saudi Arabia has invested heavily to induce growth in the non-hydrocarbon private sector, particularly that of the Public Investment Fund’s (PIF) outlays for capital expenditure and domestic investments.

“We estimate that the total spending on projects and long-term investments by the government and PIF will continue to exceed 20 percent of non-hydrocarbon GDP. Private consumption growth will also be strong, as the design of many ongoing projects, including the PIF’s giga projects and other large-scale projects of the government, incorporates commercialization phases that will boost supply-side capacity in the services sector, particularly in hospitality, leisure and entertainment, retail and restaurants,” Moody’s said.

The ratings agency also noted while Saudi Arabia’s fiscal prudence as well as recalibration and reprioritization of projects may affect project implementation and the development of the non-hydrocarbon sectors, “the focus on macroeconomic and fiscal sustainability is credit positive.”

“Regularly reviewing projects to maximize the economic impact on the domestic economy and develop a domestic industrial base and related ecosystems will help the non-hydrocarbon economy develop more sustainably,” Moody’s said.


Citi gets license for regional headquarters in Saudi Arabia, memo shows

Updated 22 November 2024
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Citi gets license for regional headquarters in Saudi Arabia, memo shows

  • Wall Street giant received the approval from the Ministry of Investment Saudi Arabia

RIYADH: US bank Citigroup has received approval to establish its regional headquarters in Saudi Arabia’s Riyadh, according to an internal memo seen by Reuters on Friday.
The Wall Street giant received the approval from the Ministry of Investment Saudi Arabia (MISA), according to the memo.
“This marks a significant leap forward for our franchise in Saudi Arabia and we look forward to our continued growth in the kingdom,” Citi Saudi Arabia CEO Fahad Aldeweesh said in the memo.
Bloomberg News reported the development earlier in the day.
Wall Street titan Goldman Sachs also received a license in May to set up its regional headquarters in Saudi Arabia’s Riyadh.