Saudi Arabia, Türkiye Agree to Create Favorable Business Environment, Empower Private Sector

Crown Prince Mohammed bin Salman meets with President Recep Tayyip Erdogan at the al-Salam Palace in Jeddah (SPA)
Crown Prince Mohammed bin Salman meets with President Recep Tayyip Erdogan at the al-Salam Palace in Jeddah (SPA)
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Saudi Arabia, Türkiye Agree to Create Favorable Business Environment, Empower Private Sector

Crown Prince Mohammed bin Salman meets with President Recep Tayyip Erdogan at the al-Salam Palace in Jeddah (SPA)
Crown Prince Mohammed bin Salman meets with President Recep Tayyip Erdogan at the al-Salam Palace in Jeddah (SPA)

Saudi Arabia and Türkiye stressed the importance of enhancing cooperation between the two sides in the economic, trade, and investment fields by reviewing the significant challenges facing the global economy and the role of Saudi Arabia and Turkiye in addressing them.

Crown Prince Mohammed bin Salman bin Abdulaziz met with Turkish President Recep Tayyip Erdogan at the Royal Court at al-Salam Palace in Jeddah.

During the meeting, they conducted official talks, reviewing the historical relations between the two brotherly countries and discussing ways to enhance them.

They also exchanged views on the current regional and international situation.

The Crown Prince congratulated President Erdogan on his recent election victory in Turkiye.

The Turkish delegation appreciated the efforts of the Saudi government, the Custodian of the Two Holy Mosques, and the Crown Prince in serving the Two Holy Mosques, pilgrims, Umrah performers, and visitors.

They commended the high level of coordination between the two countries, which contributed to the comfort of Turkish pilgrims.

Furthermore, the Turkish side expressed gratitude for the support extended by the Kingdom of Saudi Arabia following the catastrophic earthquake that occurred on February 6, 2023.

Both parties praised the positive outcomes of the Crown Prince's visit to Turkiye in June 2022 and the President of Turkiye's visit to Saudi Arabia in April 2022.

The visits expanded cooperation between the two nations across various fields and strengthened their close relations.

A joint statement was issued after the official visit of Erdogan to Saudi Arabia.

They emphasized the importance of accelerating cooperation in the commercial and investment sectors, underscoring their commitment to supporting opportunities for economic integration in various targeted sectors, such as infrastructure, construction, engineering, environment, and renewable energy.

The two sides discussed strategies to enhance and diversify intra-trade by fostering communication between the private sectors of both countries.

They focused on developing an enabling investment environment for the private sector and exploring prominent investment opportunities, including empowering the private sector, creating a favorable business environment, equipping with necessary capabilities, and addressing any challenges they may face.

Both parties stressed the private sector's pivotal role in strengthening economic relations and reaching higher levels of cooperation.

The statement commended the outcomes of the Saudi-Turkish Investment Forum, which took place during the visit of the Saudi Minister of Investment in December 2022.

The Investment Forum saw participation from over 280 prominent Saudi and Turkish companies, signing 12 agreements and memoranda of understanding (MoU) across the government and private sectors.

Both sides also welcomed the upcoming Saudi-Turkish Investment Forum (focused on tourism) scheduled to be held in Istanbul in August 2023.

They emphasized the significance of maintaining stability in global energy markets.

Türkiye appreciated the Kingdom's role in supporting the balance of global oil markets, which serves the interests of both producing and consuming countries and promotes sustainable economic growth.

They expressed a mutual desire to strengthen cooperation in the energy field, including renewable energy, including initiatives such as electrical interconnection between the two countries, exporting electricity from the Kingdom to Turkiye and Europe, energy efficiency, innovation, clean technologies for hydrocarbon resources, and low-carbon fuels, including hydrogen.

The talks also addressed opportunities for cooperation in the peaceful use of nuclear energy and its regulatory aspects and enhancing collaboration in developing projects and supply chains in the energy sectors to ensure their sustainability.

Moreover, both sides underscored the importance of enhancing cooperation in various energy-related fields. It includes the supply of petroleum, petroleum derivatives, and petrochemicals.

Discussions were held on potential joint venture opportunities across the entire petrochemical sector value chain, including innovative and specialized uses of hydrocarbons.

The two sides stressed the importance of finalizing the procedures for activating the Saudi-Turkish Coordination Council. Both sides affirmed the need to work together to develop joint projects and initiatives within the framework of the Council.

Both reaffirmed the significance of adhering to the UN Framework Convention on Climate Change principles and the Paris Agreement.

Turkiye expressed its support for the Kingdom's endeavors in addressing climate change.

They acknowledged the importance of cooperation in developing circular carbon economy applications.

It involves promoting policies that employ the circular carbon economy as a tool to manage emissions and work towards achieving climate change objectives while considering individual priorities and varying national circumstances.

The two sides stressed strengthening cooperation in the industrial and mining sectors, working to activate the signed MoU in the fields of export and import, attracting investments in the industrial sector, and enhancing future areas of cooperation in the industrial and metal sector.

Both sides welcomed the private sector's involvement in investment partnerships in the agriculture and food industries.

They agreed on the importance of cooperation in the environment, water, agriculture, and food security.

The two sides wanted to strengthen cooperation and partnership in telecommunications, technology, the digital economy, innovation, and space.

They also stressed the importance of activating and strengthening cooperation in the various fields of transport and logistics and discussed increasing the number of flights between the two countries.

The two delegations expressed their determination to enhance cooperation and coordination in the defense and military industry and activate the agreements signed between them to serve common interests and contribute to achieving regional and global security and peace.

The two sides agreed on strengthening existing security cooperation and coordination on combating all forms of crimes, enhancing cooperation in tackling terrorism and extremism, and exchanging information, expertise, and training in a way that contributes to achieving security and stability in the two countries.

They affirmed their determination to strengthen cooperation in combating cross-border corruption crimes in all its forms and their keenness to enhance effective communication between concerned authorities, especially in investigating corruption cases.

The two sides also confirmed the importance of strengthening cooperation against violent extremism, which leads to terrorism, extremism, hatred discourse, and terrorism in all its forms and manifestations, and the importance of spreading the culture of moderation and tolerance.

The two sides expressed aspirations to enhance cooperation in tourism, sustainable tourism, and tourism development between the two countries, explore tourism attractions in each country, and exchange expertise in industry development.

The Saudi and Turkish sides expressed their aspirations to enhance cooperation in scientific and educational fields, encourage their universities to bolster direct relations, increase research and scientific cooperation levels in vital areas, use modern technologies in education, conduct joint research, and develop educational materials, e-learning, and distance learning.

They discussed opportunities to develop media cooperation in radio and television, news sharing, and exchange of visits between the two countries.

In the health field, the two sides expressed keenness to enhance cooperation supporting global initiatives to combat current and future pandemics, risks, and challenges.

They also agreed to work with international organizations and G20 countries to face global health challenges, cooperate in developing vaccines, medicines, and diagnostic tools and coordinate global efforts to combat antimicrobial resistance.

The Turkish side welcomed the Kingdom's hosting of the Fourth Ministerial Conference on Antimicrobial Resistance (AMR), scheduled to be held in November 2024.

The two sides stressed the importance of cooperation and coordination between the two countries in international forums and organizations such as the International Monetary Fund (IMF), the World Bank, and the G20 to support international efforts in facing global economic challenges.

They welcomed signing the executive plan for cooperation in defense capabilities, industries, research and development, two acquisition contracts between the Ministry of Defence and the Turkish defense firm Baykar, MoU for collaboration in direct investment, media, and energy.

They also lauded the signing of nine memoranda of understanding between both countries public and private sectors during the Saudi-Turkish Investment Forum, held on the sidelines of the visit.

Both parties are determined to continue coordinating and increasing their efforts to uphold international peace and security.

The parties discussed various regional and global issues of mutual concern. They emphasized their commitment to strengthening cooperation and coordination to promote regional and international peace and stability.

Furthermore, the two sides once again condemned the deliberate abuse of the Holy Quran. They emphasized the significance of concerted efforts to promote values such as dialogue, tolerance, coexistence, and the rejection of hatred and extremism.

The two sides addressed the Yemeni issue and underscored the importance of fully supporting the UN and regional initiatives to achieve a comprehensive political solution to the Yemeni crisis.

The Turkish delegation praised the Kingdom's extensive efforts and initiatives in promoting dialogue and reconciliation among the Yemeni parties and its role in facilitating the delivery of humanitarian aid to all regions of Yemen.

Both parties expressed their unwavering support for the Presidential Leadership Council of Yemen.

They also commended the UN's efforts to strengthen compliance with the ceasefire and stressed the importance of the Houthis engaging constructively with international and UN efforts to end the Yemeni crisis.

The Turkish side welcomed the resumption of diplomatic relations between the Kingdom and Iran, hoping it would strengthen regional security and stability in a way that preserves the sovereignty of states and non-interference in their internal affairs.

The two sides stressed the importance of Iran's adherence to the peaceful nature of its nuclear program, transparent cooperation with the International Atomic Energy Agency (IAEA), and active participation in comprehensive negotiations involving regional countries.

The negotiations addressed the sources of threats to regional and international peace and security.



European Central Bank Cuts Interest Rates Amid Sluggish Economic Growth, Cooling Inflation

European Central Bank (ECB) president Christine Lagarde (AFP)
European Central Bank (ECB) president Christine Lagarde (AFP)
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European Central Bank Cuts Interest Rates Amid Sluggish Economic Growth, Cooling Inflation

European Central Bank (ECB) president Christine Lagarde (AFP)
European Central Bank (ECB) president Christine Lagarde (AFP)

The European Central Bank (ECB) on Thursday has cut interest rates by a quarter percentage point to 3.5% in response to falling Eurozone inflation and signs that the bloc’s economy risks grinding to a halt.

The decision came while ECB president Christine Lagarde warned that the recovery is continuing to face some headwinds.

She said Thursday’s decision to lower the benchmark deposit rate for the second time this year was “unanimously decided.”

The decision also comes less than a week before the Federal Reserve is widely tipped to begin loosening US monetary policy. The Bank of England, which has reduced rates once so far, meets a day later.

Experts forecast that the ECB will likely lower interest rates again in its upcoming two meetings this year.

The ECB cut once in June and then hit pause in July before going on summer break in August.

The rate-setting council led by Lagarde has to juggle concerns about a disappointing outlook for growth against – which argues for cuts – against the need to make sure inflation is going to reach the bank’s 2% target and stay there – which would support keeping rates higher for a bit longer.

Inflation in the 20 countries that use the euro currency fell to 2.2% in August, not far from the ECB’s 2% target, down from 10.6% at its peak in October 2022.

At her post-decision news conference, Lagarde said recent data had confirmed “our confidence that we are heading towards our target in a timely manner.”

Following Lagarde’s comments, the performance of euro to US Dollar rose about 0.27%, selling at 1.1041.

ECB Staff see headline inflation averaging 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026, as in the June projections.

Also, inflation is expected to rise again in the latter part of this year, partly because previous sharp falls in energy prices will drop out of the annual rates.

“Inflation should then decline towards our target over the second half of next year,” Lagarde said.

However, she declined to detail the bank's future rate-cutting path, only saying that decisions would be made “meeting by meeting” based on economic data, without committing to a fixed rate path.

Lagarde said, “We are determined to ensure that inflation returns to our two per cent medium-term target in a timely manner. We will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim.”

She added that the ECB board will continue to follow a data-dependent and meeting-by-meeting approach to determining the appropriate level and duration of restriction.

“In particular, our interest rate decisions will be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission. We are not pre-committing to a particular rate path,” the ECB President said.

Wage Growth

Lagarde said negotiated wage growth will remain high and volatile in 2025. However, overall labor costs are slowing, and the growth of compensation per employee is expected to markedly slow again next year.

She said staff expect unit labor cost growth to continue declining over the projection horizon owing to lower wage growth and a recovery in productivity.

Finally, profits are continuing to partially offset the inflationary effects of higher labor costs.

Lagarde noted that the labor market remains resilient. The unemployment rate was broadly unchanged in July, at 6.4%. At the same time, employment growth slowed to 0.2% in the second quarter, from 0.3% in the first.

Recent survey indicators point to a further moderation in demand for labor, and the job vacancy rate has fallen closer to pre-pandemic levels, the ECB president said.

According to survey indicators, Lagarde said the recovery is continuing to face some headwinds.

“We expect the recovery to strengthen over time, as rising real incomes allow households to consume more. The gradually fading effects of restrictive monetary policy should support consumption and investment,” she said.

ECB staff project that the economy will grow by 0.8% in 2024, rising to 1.3% in 2025 and 1.5% in 2026. This is a slight downward revision compared with the June projections, mainly owing to a weaker contribution from domestic demand over the next few quarters.